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gao_GGD-95-90	gao_GGD-95-90_0	To meet our first objective of determining how widely unit values for identical types of commodities varied, we used the Import Detailed Data Base for fiscal year 1992 to compute and analyze unit values and to develop statistical profiles for each of the eight commodities. While Customs could correct these errors if it knew of them, the current parameters used to detect unit value anomalies are so broad that they identify only those errors involving extremely high or low unit values. However, the errors raise questions about the accuracy of trade statistics and Customs’ ability to use unit values as a screening mechanism in ACS to detect data errors or to identify problems, such as quota violations or improper payment of duties and fees. The report made a number of recommendations for improving the entry, use, and screening of valuation data. Recommendation We recommend that the Secretary of the Treasury direct the Commissioner of Customs to determine the feasibility of adding narrower unit value ranges to Customs’ ACS that will allow the filer to identify and correct more errors at the point of data entry. These data, extracted from Customs’ Automated Commercial System (ACS) for use by Census in developing trade statistics, include all import transactions for the year. Because we did not randomly sample the commodities or transactions, we cannot generalize about the overall level of errors in the Import Detailed Data Base. No effect on fees.	Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the importation of eight classifications of commodities in fiscal year 1992, focusing on why unit values for identical types of imported commodities varied. What GAO Found GAO found that: (1) unit values for identical imports varied widely because of overly broad commodity classifications and product misclassifications; (2) although Customs used Census Bureau-developed parameters to screen filers' entries and detect possible unit value errors that could adversely affect the quality of trade data, most of the parameters were so broad that Customs only detected errors involving extremely high or low unit values; (3) the errors that were noted had little effect on quotas, duties, and fees for the 80 transactions reviewed; (4) although generalizations about the overall level of errors in the Import Detailed Data Base could not be made, the high number of errors found indicated the need to improve Automated Commercial System (ACS) data accuracy; (5) a high error rate could threaten the accuracy of U.S. trade statistics and Customs ability to screen transactions for errors or illegal activities; and (6) adding narrower unit value ranges to ACS would allow filers to identify and correct more errors during data entry.
gao_GAO-11-143	gao_GAO-11-143_0	Computer Models Provide Critical Information to EM’s Environmental Cleanup Decision- Making Process EM uses computer models to provide critical information for its decision- making process. Following these actions, EM used computer models to simulate the movement of the remaining contamination through the soil and groundwater over the next 1,000 years. EM Uses Computer Models to Assess the Performance of Selected Cleanup Activities After a particular cleanup alternative is selected, EM also uses computer modeling to demonstrate that the cleanup activity will result in reduced future contamination levels that meet regulatory requirements. Under the order, this performance assessment is to document that the disposal facility is designed, constructed, and operated in a manner that protects workers, the public, and the environment. For example, at Hanford, a computer model known as the Hanford Tank Waste Operations Simulator is designed to track the retrieval and treatment of over 55 million gallons of radioactive waste held in underground storage tanks. EM Has General Quality Policies for Its Computer Models, but It Has Not Regularly Assessed Contractors’ Implementation of Quality Assurance Procedures Although EM uses general departmental quality assurance policies and standards that apply to computer models and relies on contractors to implement specific procedures that reflect these policies and standards, these policies and standards do not specifically provide guidance on ensuring the quality of the computer models used in cleanup decisions. Moreover, EM officials have not regularly performed periodic quality assurance assessments, as required by DOE policy to oversee contractors’ development and use of cleanup models and the models’ associated software. For example, the state of Washington has cited flaws in a model EM uses to analyze soil and groundwater contamination and has told EM that it will no longer accept the use of this model for chemical exposure analysis at Hanford. In our review of eight cleanup decisions at Hanford and SRS, we found EM had conducted only three quality assurance assessments that addressed quality standards for the models used in those decisions. EM Does Not Have an Overall Strategy and Guidance for Managing Its Cleanup Models Although EM has recently begun some efforts to promote consistency in the use of models across its various sites, these efforts are still in early stages and, to date, some have had limited involvement of modeling officials at the sites and federal, state, and local stakeholders who are affected by decisions made using the output of computer models. For example, EM, in fiscal year 2010, began developing a set of state-of-the-art computer models to support soil and groundwater cleanup across the nuclear weapons complex. Similar comprehensive, coordinated efforts are lacking within EM and, as a result, EM may be losing opportunities to improve the quality of its models, reduce duplication, keep abreast of emerging computer modeling and cleanup technologies, and share lessons learned across EM’s sites. Although the importance of comprehensive guidelines for managing computer models is well established, according to its officials, EM does not have such overarching guidance. For a number of years, other federal agencies and offices within DOE have recognized the importance of a comprehensive guidance for managing computer models. Recommendations for Executive Action To help EM increase confidence in the quality of information provided to the public and its stakeholders resulting from the use of computer modeling, we recommend the Secretary of Energy take the following three actions: Clarify specific quality assurance requirements for computer models used in environmental cleanup decisions, including to analyze the potential effectiveness of cleanup alternatives, assess the performance of selected cleanup activities, and assist in planning and budgeting cleanup activities. Ensure that the models are assessed for compliance with these requirements. Appendix I: Scope and Methodology To determine how the Department of Energy’s (DOE) Office of Environmental Management (EM) uses computer modeling in cleanup decisions, we focused on cleanup decisions EM has made at its Hanford Site in Washington state and Savannah River Site (SRS) in South Carolina because together these two sites account for more than one-half of EM’s annual cleanup spending and approximately 60 percent of the total estimated cost of approximately $275 billion to $329 billion to clean up the entire nuclear weapons complex. To address EM’s overall strategy for managing computer models that are used in cleanup decisions, we interviewed DOE officials from headquarters and from each site.	Why GAO Did This Study The Department of Energy's (DOE) Office of Environmental Management (EM) is responsible for one of the world's largest cleanup programs: treatment and disposal of radioactive and hazardous waste created as a by-product of nuclear weapons production and energy research at sites across the country, such as EM's Hanford Site in Washington State and the Savannah River Site (SRS) in South Carolina. Computer models--which represent physical and biogeochemical processes as mathematical formulas--are one tool EM uses in the cleanups. GAO was asked to (1) describe how EM uses computer models in cleanup decisions; (2) evaluate how EM ensures the quality of its computer models; and (3) assess EM's overall strategy for managing its computer models. GAO analyzed the use of selected models in decisions at Hanford and SRS, reviewed numerous quality assurance documents, and interviewed DOE officials as well as contractors and regulators. What GAO Found EM uses computer models to support key cleanup decisions. Because the results of these decisions can cost billions of dollars to implement and take decades to complete, it is crucial that the models are of the highest quality. Computer models provide critical information to EM's cleanup decision- making process, specifically to: (1) Analyze the potential effectiveness of cleanup alternatives. For example, computer models at SRS simulate the movement of contaminants through soil and groundwater and provide information used to predict the effectiveness of various cleanup strategies in reducing radioactive and hazardous material contamination. (2) Assess the likely performance of selected cleanup activities. After a particular cleanup strategy is selected, EM uses computer modeling to demonstrate that the selected strategy will be designed, constructed, and operated in a manner that protects workers, the public, and the environment. (3) Assist in planning and budgeting cleanups. EM also uses computer models to support lifecycle planning, scheduling, and budgeting for its cleanup activities. For example, a Hanford computer model simulates the retrieval and treatment of radioactive waste held in underground tanks and provides information used to project costs and schedules. EM uses general departmental policies and industry standards for ensuring quality, but they are not specific to computer models used in cleanup decisions. EM has not regularly performed periodic quality assurance assessments, as required by DOE policy, to oversee contractors' development and use of cleanup models and the models' associated software. In our review of eight cleanup decisions at Hanford and SRS that used computer modeling as a critical source of information, GAO found EM conducted required assessments of the quality of computer models in only three cases. In addition, citing flaws in a model EM uses to analyze soil and groundwater contamination, regulators from Washington state have told EM that it will no longer accept the use of this model for chemical exposure analysis at Hanford. EM does not have an overall strategy for managing its computer models. EM has recently begun some efforts to promote consistency in the use of models. For example, it is developing a set of state-of-the-art computer models to support soil and groundwater cleanup decisions across its sites. However, these efforts are still in early stages and are not part of a comprehensive, coordinated effort. Furthermore, although other federal agencies and DOE offices have recognized the importance of comprehensive guidance on the appropriate procedures for managing computer models, EM does not have such overarching guidance. As a result, EM may miss opportunities to improve the quality of computer models, reduce duplication between DOE sites, and share lessons learned across the nuclear weapons complex. What GAO Recommends GAO recommends that DOE (1) clarify specific quality assurance requirements for computer models used in environmental cleanup decision making; (2) ensure that the models are assessed for compliance with these requirements; and (3) develop a comprehensive strategy and guidance for managing its models. DOE agreed with our recommendations.
gao_GAO-14-58	gao_GAO-14-58_0	Background Disaster Relief Act The Disaster Relief Act included approximately $50 billion in supplemental appropriations for fiscal year 2013 to 19 agencies for 61 specific programs for expenses related to the consequences of Hurricane Sandy. Agencies Did Not Consistently Apply OMB M-13-07 in Preparing Their Sandy Disaster Relief Internal Control Plans In accordance with M-13-07, each of the 19 agencies that received funds under the act submitted a Sandy disaster relief internal control plan with specific program details using the template provided by OMB. OMB guidance directed agencies to develop internal control plans based on incremental risk. Specifically, agencies’ plans ranged from providing most of the required information to not providing any information on certain programs. Agencies did not discuss improper payments for 12 programs. Several weaknesses limited the effectiveness of this guidance in providing a comprehensive oversight mechanism for these funds. Specifically, the guidance (1) focused on the identification of incremental risks without adequate linkages to demonstrate that known risks had been adequately addressed, (2) provided agencies with significant flexibility without requirements for documentation or criteria for claiming exceptions, and (3) resulted in certain agencies’ developing their internal control plans at the same time that funds needed to be quickly distributed. Linkage to Known Control Risks Could Help Ensure That All Risks Are Considered The internal control plans prepared by the agencies under M-13-07 were intended to mitigate incremental risk, and therefore they did not provide comprehensive information on all known risks and internal controls that may affect the programs that received the Sandy disaster funding. When we compared the incremental risks identified by the agencies receiving funds for Sandy disaster relief with risks identified in prior GAO, IG, and financial statement audit reports related to grants management, contract management, improper payments, and other internal control weaknesses for programs receiving Sandy funding, we determined that some of the risks in these reports were not included in the Sandy disaster relief internal control plans. However, the guidance included language that allowed agencies significant flexibility in deciding whether they needed to design additional internal controls. M-13-07 did not provide specific criteria for agencies to follow to claim exemptions from requirements, and the guidance did not require agencies to document their rationales for not including additional internal controls in their internal control plans. OMB had a short time frame to develop and issue the internal control guidance. The Disaster Relief Act required agencies to submit their internal control plans by March 31, 2013, and agencies reported that they had already obligated approximately $4.6 billion as of that date. Further, linking the additional risks identified in incremental plans to the complete set of known risks and related internal controls can help agency management and external entities, including Congress, to provide effective oversight of the funds. Recommendation for Executive Action To proactively prepare for oversight of future disaster relief funding, we recommend that the Director of OMB develop standard guidance for federal agencies to use in designing internal control plans for disaster relief funding. Appendix I: Objectives, Scope, and Methodology The Disaster Relief Appropriations Act, 2013 (Disaster Relief Act),mandated GAO to review the design of the internal control plans prepared by federal agencies receiving funds under the Disaster Relief Act. This report addresses the extent to which (1) the internal control plans prepared by federal agencies complied with Office of Management and Budget (OMB) guidance and (2) OMB’s guidance was effective for providing comprehensive oversight of the internal control risks for the programs receiving funds for Sandy disaster relief. To determine the extent to which OMB’s guidance was effective for providing comprehensive oversight of the internal control risks for the programs receiving funds for Sandy disaster relief, we reviewed the internal control plans and M-13-07 against Standards for Internal Control in the Federal Government.	Why GAO Did This Study In late October 2012, Hurricane Sandy devastated portions of the Mid-Atlantic and northeastern United States, leaving victims of the storm and their communities in need of financial assistance for disaster relief aid. On January 29, 2013, the President signed the Disaster Relief Appropriations Act, 2013, which provided approximately $50 billion in supplemental appropriations, before sequestration, to 61 programs at 19 federal agencies for expenses related to the consequences of Hurricane Sandy. The act required agencies to submit internal control plans for the funds in accordance with OMB criteria by March 31, 2013. The act mandated GAO to review the design of agencies' internal control plans. This report addresses the extent to which (1) the internal control plans prepared by federal agencies complied with OMB guidance and (2) OMB's guidance was effective for providing comprehensive oversight of the internal control risks for the programs receiving funds for Sandy disaster relief. To address these objectives, GAO reviewed agencies' Sandy disaster relief internal control plans; M-13-07; and relevant GAO, inspector general, and financial statement audit reports. GAO also reviewed the internal control plans and M-13-07 against internal control standards. What GAO Found In response to the Disaster Relief Appropriations Act, 2013, agencies prepared Hurricane Sandy disaster relief internal control plans based on Office of Management and Budget (OMB) guidance but did not consistently apply the guidance in preparing these plans. OMB Memorandum M-13-07 (M-13-07), Accountability for Funds Provided by the Disaster Relief Appropriations Act, directed federal agencies to provide a description of incremental risks they identified for Sandy disaster relief funding as well as an internal control strategy for mitigating these risks. Each of the 19 agencies responsible for the 61 programs receiving funds under the act submitted an internal control plan with specific program details using a template provided by OMB. Agencies' plans ranged from providing most of the required information to not providing any information on certain programs. For example, each of the 61 programs was required to discuss its protocol for improper payments; however, GAO found that 38 programs included this information, 11 included partial information, and 12 included no information. OMB's guidance was an important step in the oversight of Sandy disaster funding, addressing internal controls, improper payments protocol, and unexpended grant funds. However, several weaknesses limited its effectiveness in providing a comprehensive oversight mechanism for these funds. Specifically, the guidance (1) focused on the identification of incremental risks without adequate linkages to demonstrate that known risks had been adequately addressed, (2) provided agencies with significant flexibility without requirements for documentation or criteria for claiming exceptions, and (3) resulted in certain agencies developing their internal control plans at the same time that funds needed to be quickly distributed. GAO found that OMB guidance: Asked agencies to focus on mitigating incremental risk, so the resulting plans did not provide comprehensive information on all known risks and internal controls that may affect the programs that received funding. Linking the additional risks identified in the plans to the complete set of known risks and related internal controls can help agency management and Congress to provide effective oversight of the funds. Allowed agencies significant flexibility in deciding whether they needed to design additional internal controls, and did not provide specific criteria for agencies to claim exemptions from requirements. GAO found that some agencies did not discuss certain additional internal controls in their plans, despite having identified incremental risks. Did not require agencies to document their rationales for not including additional internal controls in their plans. As a result, it was not apparent from the internal control plans the extent to which the agencies considered the need for these additional internal controls. Was developed and issued in a short time frame in response to the act. By the time that the agencies submitted their internal control plans on March 31, 2013, they reported that they had already obligated approximately $4.6 billion. Standard internal control guidance for disaster funding could help ensure that controls are designed timely. What GAO Recommends GAO recommends that OMB develop more robust guidance for agencies to design internal control plans for future disaster relief funding. OMB staff generally agreed with GAO's recommendation.
gao_GAO-14-310	gao_GAO-14-310_0	Service providers that provide managed account services to a plan may be required to provide certain disclosures about the compensation they will receive to plan sponsors offering a managed account service under different DOL disclosure requirements. The eight providers in our case studies use different investment options, employ varying strategies to develop and adjust asset allocations for participants, incorporate varying types and amounts of participant information, and rebalance participant accounts at different intervals. Absent explicit requirements or additional guidance from DOL, some managed account providers may choose to structure the services they provide to limit their fiduciary liability, which could ultimately provide less liability protection for sponsors for the consequences of provider investment management choices. Managed Accounts Offer Advantages for Some Participants, But Fees and Lack of Standardized Reporting Requirements from DOL Can Offset These Advantages Various Industry Representatives Report that Managed Accounts Can Provide a Number of Advantages for Participants Increase Diversification Some managed account providers and plan sponsors have said that increased diversification of retirement portfolios is the main advantage of the managed account service for 401(k) plan participants. The additional managed account fees, which are charged to participants over and above investment management and administrative fees, can vary substantially, and as a result, some participants pay no fees, others pay a flat fee each year, and still others pay a comparatively large percentage of their account balance for generally similar services from managed account providers. One managed account provider charges a flat rate and fees for the other seven providers ranged from 0.08 to 1 percent of the participant’s account balance annually, or $8 to $100 on every $10,000 in a participant’s account. By requiring sponsors to provide participants with performance data and benchmarking information for 401(k) investments, DOL intends to reduce the time required for participants to collect and organize fee and performance information and increase participants’ efficiency in choosing investment options that will provide the highest value. Without performance and benchmarking information presented in a format designed to help participants compare and evaluate their managed account, participants cannot make informed decisions about the managed account service. However, absent DOL requirements that plan sponsors use standard metrics to report on the performance of managed accounts for participants who are defaulted into the service as a QDIA, it would be potentially difficult for these participants to evaluate the effect that additional fees could have on the performance of their managed accounts, including how the additional fees could affect returns and retirement account balances, possibly eroding the value of the service over time for those participants. The absence of similar guidance specific to managed accounts has led to inconsistency in sponsors’ procedures for selecting and overseeing providers and may inhibit their ability to select a provider who offers an effective service for a reasonable fee. In addition, even though participants generally pay an additional fee for managed account services, not all of the sponsors we interviewed said that they monitor fees. DOL maintains that sponsors need this information in order to make better decisions when selecting and monitoring providers for their plans. However, DOL regulations generally do not require managed account providers to furnish sponsors with performance and benchmarking information for managed accounts because, as previously noted, managed accounts are not considered to be designated investment alternatives. Without this information, sponsors cannot effectively compare different providers when making a selection or adequately determine whether their managed account offerings are having a positive effect on participant retirement savings, as they can currently determine with the designated investment alternatives available in the plan. To help sponsors who offer managed account services or who are considering doing so better protect their 401(k) plan participants, we recommend that the Secretary of Labor direct the Assistant Secretary for EBSA to: c) Provide guidance to plan sponsors for selecting and overseeing managed account providers that addresses: (1) the importance of considering multiple providers when choosing a managed account provider, (2) factors to consider when offering managed accounts as a QDIA or on an opt-in basis, and (3) approaches for evaluating the services of managed account providers. As stated in its letter, DOL agreed with our recommendations and will consider each of them as it moves forward with a number of projects. Providing guidance to sponsors for selecting and overseeing managed account providers, as suggested by our third recommendation, may help sponsors understand their fiduciary responsibilities with respect to managed accounts. We reviewed relevant research and federal laws, regulations, and guidance on managed accounts in 401(k) plans. According to our estimates, the eight managed account providers we included in the case studies represented over 95 percent of the managed account industry in defined contribution plans, as measured by assets under management in 2013. Semi-Structured Interviews with Plan Sponsors To identify the advantages and disadvantages of managed accounts for 401(k) plan participants and any challenges sponsors face in selecting and overseeing managed account providers, we conducted semi- structured interviews with 12 plan sponsors.	Why GAO Did This Study 401(k) plan sponsors have increasingly offered participants managed accounts— services under which providers manage participants' 401(k) savings over time by making investment and portfolio decisions for them. These services differ from investment options offered within 401(k) plans. Because little is known about whether managed accounts are advantageous for participants and whether sponsors understand their own role and potential risks, GAO was asked to review these services. GAO examined (1) how providers structure managed accounts, (2) their advantages and disadvantages for participants, and (3) challenges sponsors face in selecting and overseeing providers. In conducting this work, GAO reviewed relevant federal laws and regulations and surveyed plan sponsors. GAO interviewed government officials, industry representatives, other service providers, and 12 plan sponsors of varying sizes and other characteristics. GAO also conducted case studies of eight managed account providers with varying characteristics by, in part, reviewing required government filings. What GAO Found GAO's review of eight managed account providers who, in 2013, represented an estimated 95 percent of the industry involved in defined contribution plans, showed that they varied in how they structured managed accounts, including the services they offered and their reported fiduciary roles. Providers used varying strategies to manage participants' accounts and incorporated varying types and amounts of participant information. In addition, GAO found some variation in how providers reported their fiduciary roles. One of the eight providers GAO reviewed had a different fiduciary role than the other seven providers, which could ultimately provide less liability protection for sponsors for the consequences of the provider's choices. The Department of Labor (DOL) requires managed account providers who offer services to defaulted participants to generally have the type of fiduciary role that provides certain levels of fiduciary protection for sponsors and assurances to participants of the provider's qualifications. DOL does not have a similar explicit requirement for providers who offer services to participants on an opt-in basis. Absent explicit requirements from DOL, some providers may actively choose to structure their services to limit the fiduciary liability protection they offer. According to providers and sponsors, participants in managed accounts receive improved diversification and experience higher savings rates compared to those not enrolled in the service; however, these advantages can be offset by paying additional fees over time. Providers charge additional fees for managed accounts that range from $8 to $100 on every $10,000 in a participant's account. As a result, some participants pay a low fee each year while others pay a comparatively large fee on their account balance. Using the limited fee and performance data available, GAO found that the potential long-term effect of managed accounts could vary significantly, sometimes resulting in managed account participants paying substantial additional fees and experiencing lower account balances over time compared to other managed account participants. Further, participants generally do not receive performance and benchmarking information for their managed accounts. Without this information, participants cannot accurately evaluate the service and make effective decisions about their retirement investments. Even though DOL has required disclosure of similar information for 401(k) plan investments, it generally does not require sponsors to provide this type of information for managed accounts. Sponsors are challenged by insufficient guidance and inconsistent performance information when selecting and overseeing managed account providers. DOL has not issued guidance specific to managed accounts on how sponsors should select and oversee providers, as it has done for other funds. GAO found that the absence of guidance for managed accounts has led to inconsistency in sponsors' procedures for selecting and overseeing providers. Without better guidance, plan sponsors may be unable to select a provider who offers an effective service for a reasonable fee. In addition, DOL generally does not require providers to furnish sponsors with performance and benchmarking information for managed accounts, as it does for investments available in a plan, although some providers do furnish similar information. Without this information, sponsors cannot effectively compare providers when making a selection or determine whether managed accounts are positively affecting participants' retirement savings. What GAO Recommends Among other things, GAO recommends that DOL consider provider fiduciary roles, require disclosure of performance and benchmarking information to plan sponsors and participants, and provide guidance to help sponsors better select and oversee managed account providers. In response, DOL agreed with GAO's recommendations and will consider changes to regulations and guidance to address any issues.
gao_GAO-08-759	gao_GAO-08-759_0	However, key practices are not being fully implemented at three agencies: Commerce, Homeland Security, and the U.S. Nuclear Regulatory Commission. Agencies that do not address such gaps in transition planning and follow through on their plans risk delaying their transitions and increase the likelihood that the government will incur unnecessary costs. Table 1 summarizes the extent to which transition planners have established telecommunications inventories at the U.S. Army Corps of Engineers (ACE), Department of Homeland Security (DHS), Department of Commerce (DOC), U.S. Nuclear Regulatory Commission (NRC), Small Business Administration (SBA), and U.S. Department of Agriculture (USDA). Homeland Security does not plan to develop such a process. The Agencies Have Generally Established Transition Plans, but None Have Established Measures of Success The sound transition planning practices we identified include developing a transition plan that identifies transition objectives, measures of success, and risks, and that approaches the transition planning process as a critical project with a detailed time line. GSA Is Taking Action to Identify and Resolve Common Transition Challenges GSA is working with agencies and various forums to identify and resolve transition challenges facing agencies in making the transition to the Networx contracts. To resolve the challenges, GSA has, among other things, modified incumbent FTS2001 contracts to help ensure contractor support during the transition, developed guidance to clarify agencies’ information security responsibilities, and established support teams to assist agencies in using the inventory application developed by GSA. GSA’s actions should help ensure that information security during the transition will be adequately addressed. To assist in this effort, GSA required agencies to validate their inventory using a GSA inventory application. Our report indicates that the department has established lines of communication in its charter, but as previously discussed, it had not identified local and regional points of contact. Appendix I: Objectives, Scope, and Methodology Our objectives were to determine (1) the extent to which federal agencies are following sound transition planning practices and (2) the actions the General Services Administration (GSA) is taking to identify and resolve common transition challenges affecting agencies. To determine the actions that GSA is taking to identify and resolve common transition challenges affecting agencies, we reviewed transition guidance and other Networx documentation developed by GSA and the Transition Working Group (TWG) of the Interagency Management Council (IMC), including presentations, meeting minutes, projected time lines, GSA’s “Fair Opportunity and Statement of Work Guide,” and the TWG’s “Networx Transition Guide (Pre-Award)”; interviewed FTS2001 incumbent vendors and Networx vendors (AT&T, Level3 Communications, Qwest, Sprint, and Verizon Business) and the six agencies selected for review; and interviewed GSA officials to identify challenges, guidance, and GSA current and planned actions for the Networx transition. NRC has not performed this activity for the transition.	Why GAO Did This Study The General Services Administration (GSA) is responsible for ensuring that federal agencies have access to the telecommunications needed to meet mission requirements. GSA's current telecommunications program, called FTS2001, has contracts in place that will expire by June 2010. Thus, agencies face the difficult task of transitioning their services to a successor program, known as Networx. GAO was asked to determine (1) the extent to which agencies are following sound transition planning practices and (2) the actions GSA is taking to identify and resolve common transition challenges affecting agencies. In performing this work, GAO selected six agencies based on, among other things, their FTS2001 charges; reviewed transition planning at these agencies and GSA; and analyzed GSA documentation of actions to address transition challenges. What GAO Found Selected agencies--the Departments of Homeland Security, Commerce, and Agriculture and the Small Business Administration, U.S. Army Corps of Engineers, and the U.S. Nuclear Regulatory Commission--are generally following sound transition planning practices previously identified by GAO. For example, all have established telecommunications inventories, and most have established transition plans that include transition preparation tasks and time lines. However, other key practices are not being fully implemented at three agencies. For example, Commerce does not plan to clearly define all key transition roles and responsibilities, Homeland Security does not plan to identify local and regional points of contact, and the Nuclear Regulatory Commission does not plan to establish measures of success based on its transition objectives. With limited time available to finalize planning and begin transitions, agencies that do not address gaps in their planning or follow through on plans risk delaying their transitions and increase the likelihood of incurring unnecessary costs. As facilitator for all transition management activities, GSA has identified numerous common challenges that agencies face in making the transition to Networx, and it is taking action to resolve them. GSA uses various forums to identify these challenges, which include ensuring cooperation from incumbent contractors, defining agencies' responsibilities for information security during the transition, and the use of a transition inventory application developed by GSA. To resolve these challenges, GSA has, among other things, modified FTS2001 contracts to help ensure contractor cooperation, developed guidance to clarify information security responsibilities, and established support teams to assist agencies in using the inventory application developed by GSA. GSA's actions should reduce the likelihood that these challenges will hinder transition efforts.
gao_GAO-11-22	gao_GAO-11-22_0	DAU’s certification training program has a formal process in planning and front-end analysis to ensure that strategic and tactical changes are promptly incorporated into training; use of centralized and decentralized training approaches in design and development; data collection during implementation to ensure feedback on its training programs; and appropriate analytical approaches to assess its training during evaluation. However, DOD lacks complete information on the skill sets of the current acquisition workforce for planning and front-end analysis and does not have metrics to assess results achieved in enhancing workforce proficiency and capability through training efforts during evaluation. We recommended and DOD agreed to identify and update on an ongoing basis the number and skill sets of the total acquisition workforce—including civilian, military, and contractor personnel—that the department needs to fulfill its mission. The assessments completed to date represent approximately one-fifth of the personnel and career fields. DAU plans the number and location of its classes based on data submitted by the Directors of Acquisition Career Management (DACM). However, DOD acquisition and training officials noted that data are generally incomplete when submitted and additional steps must be taken during the year to meet new requirements as they are identified. DAU has identified the need for an integrated student information system to improve the quality of the data and to provide greater insight into the workforce it supports. Even though 90 percent of the acquisition personnel who required certification training for their current position received training on time or were within allowed time frames to do so, DAU acknowledges that requests for acquisition workforce training as a whole submitted by the DOD components and military departments exceed what DAU can provide. DAU has supported more classes than in the past, seeing an increase from 1,279 classroom courses in fiscal year 2005 to 1,505 in fiscal year 2009. DOD Has Addressed Most Previous Training Recommendations, However, Some Remain to Be Implemented DOD reports that most of the training-related recommendations from previous reviews—the Gansler Commission, the Panel on Contracting Integrity, and our prior report—have been fully implemented. Two of the four Gansler Commission Report recommendations have been implemented; however, the Army and Office of the Secretary of Defense (OSD) need to take additional steps to ensure the Army “trains as it fights” and that DAU has the resources it needs to train the acquisition workforce. Nine of the 11 Panel on Contracting Integrity recommendations have been fully implemented. While the Panel reported that all of the recommended actions had been completed, we determined that two of the recommended actions pertaining to training had not been fully implemented; we determined that one was not implemented, but action was taken, and one has been partially implemented. DOD did not concur with our recommendation that it should develop milestones for the development of metrics to demonstrate and track how acquisition certification training improves the acquisition workforce performance. To determine the efficacy of DOD’s acquisition and audit workforce training, we assessed (1) DOD’s capability to provide defense acquisition workforce certification training, (2) the extent that such training reaches members of DOD’s acquisition workforce, and (3) the extent that training recommendations from previous reviews, including the Gansler Commission, have been implemented. To assess DOD’s capability to provide defense acquisition workforce certification training, we compared DOD’s certification training programs and processes with the attributes of effective training and development programs identified in GAO’s 2004 guide for assessing strategic training and development efforts in the federal government, which we identified as the most comprehensive source for attributes of effective training programs for our purpose. (2) Partially Implemented. We conducted this performance audit from December 2009 to September 2010 in accordance with generally accepted government auditing standards.	Why GAO Did This Study The President has announced his intention to improve the acquisition process, particularly given the half a trillion dollars the federal government spent in fiscal year 2009 on acquiring goods and services. The Department of Defense (DOD) spent $384 billion in fiscal year 2009 on goods and services--double what it spent in 2001. A high-quality workforce with the right competencies and skill sets will be critical to improving DOD acquisitions. GAO was mandated to determine the efficacy of DOD's certification training for its acquisition workforce. GAO assessed (1) DOD's capability to provide certification training, (2) the extent that such training reaches members of the workforce, and (3) the extent that previous training recommendations have been implemented. To conduct this work, GAO compared DOD's certification training to GAO guidance for effective training programs and analyzed policies, data, and previous reports on acquisition training. What GAO Found DOD's certification training program--provided by the Defense Acquisition University (DAU)--generally demonstrates the capability to provide effective training, though some attributes of an effective training program are lacking. DAU ensures that strategic and tactical changes are promptly incorporated into training; uses centralized and decentralized training approaches in design and development; collects data during implementation to ensure feedback on its training programs; and analyzes its training during evaluation. However, DOD lacks complete information on the skill sets of the current acquisition workforce and does not have outcome-based metrics to assess results achieved in enhancing workforce proficiency and capability through training efforts. In 2009, GAO recommended that the Secretary of Defense identify and update on an ongoing basis the number and skill sets of the total acquisition workforce--including civilian, military, and contractor personnel--that the department needs to fulfill its mission. DOD agreed and to date has completed about one-fifth of its workforce competency assessments. At the end of fiscal year 2009, 90 percent of DOD's acquisition workforce personnel had completed required certification training or were within required time frames to do so, according to DAU data. However, DAU reports that it cannot provide for all training requested for the entire acquisition workforce. DAU has offered more courses in recent years, and high-priority personnel--those needing to complete classes for certification in their current position--constitute the majority in DAU classes. DAU plans the number and location of its classes based on data that DOD officials noted are generally incomplete when submitted, and DAU must adapt during the year to support new requirements as they are identified. DAU has identified the need for a new, integrated student information system that will provide better insight into the workforce it supports and is in the early stages of its procurement. DOD reports that most of the training-related recommendations from previous reviews--the Gansler Commission, the Panel on Contracting Integrity, and a prior GAO report--have been fully implemented and some actions are still under way. DOD has either fully or partially implemented 15 of the 19 recommendations GAO reviewed. Both the Army and the Office of the Secretary of Defense have taken steps to respond to the Gansler Commission recommendations. Most of the recommendations made by the Panel on Contracting Integrity have been implemented, with the exception of two recommendations related to assessing guidance and reviewing a specific training topic. GAO made four recommendations pertaining to the Defense Contract Audit Agency's government auditing standards training and expertise, of which one has been partially implemented and three have not been implemented, but some actions have been taken. What GAO Recommends GAO recommends DOD establish milestones for developing metrics to measure how certification training improves acquisition workforce capability and a time frame for acquiring and implementing an integrated information system. DOD concurred with the second but not the first recommendation. GAO continues to believe DOD needs to develop additional metrics.
gao_GAO-08-924	gao_GAO-08-924_0	Implementation of Sexual Assault Prevention and Response Programs Is Hindered by Inconsistent Support, Training That Is Not Consistently Effective, and Limitations on Access to Mental Health Services DOD has taken positive steps to respond to congressional direction by establishing policies and a program to prevent, respond to, and resolve reported sexual assault incidents involving servicemembers and the Coast Guard, on its own initiative, has taken similar steps; however, DOD’s guidance may not address some important issues. Specific steps that DOD has taken include: establishing a standardized departmentwide definition of sexual assault; establishing a confidential option to report sexual assault incidents, known as restricted reporting; establishing a Sexual Assault Prevention and Response Office to serve as the single point of accountability for sexual assault prevention and response; requiring the military services to develop and implement their own policies and programs, based on DOD’s policy, to prevent, respond to, and resolve sexual assault incidents; establishing training requirements for all servicemembers on preventing and responding to sexual assault; and reporting data on sexual assault incidents to Congress annually. During the course of our review we found that concerns over a shortage of mental health providers persist. Survey Data Suggest That Occurrences of Sexual Assault May Exceed Rates Reported We found, based on responses to our nongeneralizable survey and a 2006 DOD survey, the most recent available, that occurrences of sexual assault may be exceeding the rates being reported, suggesting that DOD and the Coast Guard have only limited visibility over the incidence of these occurrences. Of the 103 servicemembers who responded to our survey indicating that they had been sexually assaulted within the preceding 12 months, 52 indicated that they did not report the sexual assault incident. Commonly cited reasons by survey respondents at the installations we visited included: (1) the belief that nothing would be done; (2) fear of ostracism, harassment, or ridicule by peers; and (3) the belief that their peers would gossip about the incident. For example: A junior enlisted female observed that in her opinion servicemembers will be more likely to report an incident anonymously, commenting “I’m glad the options are there.” A female senior officer commented that “giving the victim a choice of making a or report is a positive change and allows that person the level of privacy they require.” A male senior officer observed that as awareness of SARCs increases, there has been a corresponding increase in reporting, commenting that he believes “word is getting out and reports are beginning to filter in, troops seem to be gaining confidence to report incidents.” DOD and the Coast Guard Have Established Some Mechanisms for Overseeing Reports of Sexual Assault, but Lack an Oversight Framework, and DOD Lacks Key Information from the Services While DOD and the Coast Guard have established some mechanisms for overseeing reports of sexual assaults involving servicemembers, they lack an oversight framework, and DOD lacks key information from the services needed to evaluate the effectiveness of the department’s sexual assault prevention and response program. Without an oversight framework, as well as more complete data, decision makers in DOD, the Coast Guard, and Congress lack information they need to evaluate and oversee the programs. For example, they have found that some servicemembers may not be aware of the reporting options and, in the past, some commands had not supported the program. Like DOD, the Coast Guard has not developed an oversight framework that includes clear objectives, milestones, performance measures, and criteria for measuring progress, nor has the Coast Guard developed performance measures to assess its program. However, DOD does not include these data in its annual report and the Coast Guard does not provide these incident data to Congress because neither is required to do so. As a result, Congress does not have visibility over the extent to which sexual assaults involving Coast Guard members occur. Congressionally Directed Defense Task Force on Sexual Assault in the Military Services Has Not Yet Begun Its Review To provide further oversight of DOD’s sexual assault prevention and response program, the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 required the Defense Task Force on Sexual Assault in the Military Services to conduct an examination of matters relating to sexual assault in cases in which members of the Armed Forces are either victims or offenders. However, as of July 2008 this task force has yet to begun its review. 3. 3.	Why GAO Did This Study In 2004, Congress directed the Department of Defense (DOD) to establish a comprehensive policy to prevent and respond to sexual assaults involving servicemembers. Though not required to do so, the Coast Guard has established a similar policy. In response to congressional requests and Senate Report No. 110-77, GAO evaluated the extent to which DOD and the Coast Guard (1) have developed and implemented policies and programs to prevent, respond to, and resolve sexual assault incidents involving servicemembers; (2) have visibility over reports of sexual assault involving servicemembers; and (3) exercise oversight over reports of sexual assault involving servicemembers. To conduct this review, GAO reviewed legislative requirements and DOD and Coast Guard guidance; analyzed sexual assault incident data; and obtained through surveys and interviews the perspective on sexual assault matters of more than 3,900 servicemembers. What GAO Found DOD and the Coast Guard have established polices and programs to prevent, respond to, and resolve reported sexual assault incidents involving servicemembers; however, implementation of the programs is hindered by several factors. GAO found that (1) DOD's guidance may not adequately address some important issues, such as how to implement its program in deployed and joint environments; (2) most, but not all, commanders support the programs; (3) required sexual assault prevention and response training is not consistently effective; and (4) factors such as a DOD-reported shortage of mental health care providers affect whether servicemembers who are victims of sexual assault can or do access mental health services. Left unchecked, these challenges can discourage or prevent some servicemembers from using the programs when needed. GAO found, based on responses to its nongeneralizable survey administered to 3,750 servicemembers stationed at military installations in the United States and overseas and a 2006 DOD survey, the most recent available, that occurrences of sexual assault may be exceeding the rates being reported, suggesting that DOD and the Coast Guard have only limited visibility over the incidence of these occurrences. At the 14 installations where GAO administered its survey, 103 servicemembers indicated that they had been sexually assaulted within the preceding 12 months. Of these, 52 servicemembers indicated that they did not report the sexual assault. GAO also found that factors that discourage servicemembers from reporting a sexual assault include the belief that nothing would be done; fear of ostracism, harassment, or ridicule; and concern that peers would gossip. Although DOD has established some mechanisms for overseeing reports of sexual assault, and the Coast Guard is beginning to do so, neither has developed an oversight framework--including clear objectives, milestones, performance measures, and criteria for measuring progress--to guide its efforts. In compliance with statutory requirements, DOD reports data on sexual assault incidents involving servicemembers to Congress annually. However, DOD's report does not include some data that would aid congressional oversight, such as why some sexual assaults could not be substantiated following an investigation. Further, the military services have not provided data that would facilitate oversight and enable DOD to conduct trend analyses. While the Coast Guard voluntarily provides data to DOD for inclusion in its report, this information is not provided to Congress because there is no requirement to do so. To provide further oversight of DOD's programs, Congress, in 2004, directed the Defense Task Force on Sexual Assault in the Military Services to conduct an examination of matters relating to sexual assault in the Armed Forces. However, as of July 2008, the task force had not yet begun its review. Without an oversight framework, as well as more complete data, decision makers in DOD, the Coast Guard, and Congress lack information they need to evaluate the effectiveness of the programs.
gao_GAO-09-37	gao_GAO-09-37_0	The legislation authorizing the VALE program also provides a means for airports to receive credits for the emission reductions achieved through VALE projects and use these credits to comply with federal CAA air quality standards. A Small Number of Eligible Airports Have Used VALE Funding to Help Reduce Airport Emissions, but Participation in the Program Is Increasing While the number of airports that have undertaken VALE projects since 2004 is relatively small compared with the number of eligible commercial airports—9 of 160—the number of participants is increasing, as are the range of projects being conducted and the amount of money spent on them. Few Eligible Airports Have Initiated VALE Projects, but FAA Expects Participation to Increase Participation in the VALE program has been limited to date, although the number of airports applying for the program is increasing, and FAA expects more airports to seek VALE funding as they become more familiar with the program. About 160 of the 524 commercial service airports are eligible to participate in the VALE program; however, as of September 2008, 9 airports had received VALE program funding. For example, in 2005, the first year of the program, FAA approved VALE projects for 2 airports. Although FAA may be correct in its assumption that VALE will follow the Part 150 program’s experience of participation levels gradually increasing as the program matures, we found several reasons that airports are not currently participating in VALE. FAA officials stated that these airports have a misperception of VALE AIP grants in that VALE projects do not compete with most other types of AIP-eligible projects at airports, because VALE projects are funded through a 35 percent set aside earmarked for noise-abatement and emission-reduction projects. Participating Airports Have Initiated a Range of VALE Projects The VALE projects initiated at airports have ranged from purchases of small numbers of fuel-efficient, low-emitting vehicles to projects that help decrease aircraft ground emissions. In fiscal years 2005 and 2006, VALE funding for projects totaled less than $400,000, but has increased to nearly $20 million for projects funded through fiscal year 2008, including the airports’ required share for AIP-funded projects. About 56 percent of these expenditures occurred in fiscal year 2008. According to FAA officials and officials of the seven participating airports we contacted, because there is more flexibility in using PFC funds for airport projects than in using AIP funds, participating airports use AIP funds for VALE projects and apply PFCs to other types of projects, such as terminal improvement projects, that may not be eligible for any type of AIP grants. While VALE Projects Reduce Emissions, FAA Plans to Assess the Program’s Overall Performance as Participation Increases, and Two Airports Have Used Emissions Credits VALE projects have reduced emissions at participating airports, according to FAA officials, and FAA plans to assess the overall performance of the VALE program in reducing emissions across airport activities as participation in the program increases. Thus far, two airports have taken advantage of emission credits available through the program to offset emissions from planned construction projects. According to FAA officials, the emission reductions resulting from VALE projects, although relatively large in the case of some projects, represent a small portion of total emissions at the participating airports. FAA officials stated that based on the number and size of VALE projects funded to date, they believe more history and experience with the VALE program is needed before they can develop other performance measures, such as setting goals for the number of projects implemented and the amount of reductions achieved through these projects. To date, two airports have obtained these credits to help mitigate the increases in emissions resulting from airport development projects. FAA generally agreed with the report’s findings.	Why GAO Did This Study In 2003, Congress established a program to reduce airport ground emissions at commercial service airports in areas failing to meet or maintain air quality standards. The Federal Aviation Administration (FAA) administers the Voluntary Airport Low Emissions (VALE) Program and oversees the program's two sources of funding: Airport Improvement Program (AIP) federal grants or Passenger Facility Charges (PFC), which airports can collect from passengers. Participating airports also receive credits for the emission reductions achieved through VALE projects in accordance with the law and guidance. Airports can use these credits to offset emissions resulting from development projects to comply with federal Clean Air Act requirements. GAO was asked to determine (1) how the VALE program has been implemented, including airport participation levels, types of projects, and program expenditures, and (2) the outcomes attributable to the VALE program. To do this, GAO reviewed FAA data on VALE projects for all nine participating airports; visited two of these airports; obtained information from the remaining seven participating airports and four nonparticipating airports; and interviewed officials from FAA, Environmental Protection Agency (EPA), and airport associations. FAA generally agreed with the report's findings, and FAA and EPA offered technical clarifications. What GAO Found While the number of airports that have undertaken VALE projects is relatively small compared with the number of eligible airports, the number of participants in the program is increasing, as are the range and scope of projects being conducted and the amount of money spent on them. As of September 2008, 9 of the 160 airports that were eligible had or were planning to initiate a VALE project, which is up from 2 participating airports in VALE's initial year of operation in 2005. FAA expects participation in VALE to increase as more airports become familiar with the program. Although FAA may be correct in its assumption about participation, officials GAO interviewed from 4 nonparticipating airports, and others, such as representatives of airport associations, indicated various reasons for airports not wanting to participate in the program, which is funded through the same sources of funds--AIP grants or PFCs--as other airport development projects. One reason is that some airports have a misperception that VALE projects compete with other projects, such as runways or terminals, for AIP funding. According to FAA officials, this is usually not the case because VALE projects are funded through a discretionary AIP set-aside for noise and emission projects. FAA officials want to increase FAA's outreach to airports regarding VALE, but noted that the regional staff who are responsible for outreach have limited time for this purpose. VALE projects have ranged from airports' purchase of fuel-efficient vehicles to projects that help decrease aircraft ground emissions. Expenditures for the VALE program have been nearly $20 million for 20 projects through fiscal year 2008 (with 56 percent of these expenditures occurring in fiscal year 2008). All participating airports have used AIP grants to fund VALE projects for various reasons, mainly because their PFCs have already been committed for high-priority, large-scale terminal improvement projects that may not be eligible for any type of AIP grants. FAA has yet to assess the outcomes and overall performance of the VALE program. However, VALE projects are expected to reduce emissions at participating airports, and two airports have taken advantage of the program to obtain emission credits for planned construction projects. According to FAA data, the VALE projects initiated to date will reduce emissions of such pollutants as nitrogen oxide and carbon monoxide by over 5,700 tons estimated over the projects' lifetime, which range from 10 to 40 years. According to FAA, the emission reductions resulting from VALE projects, although large in some cases, such as equipping gates with electricity and air conditioning outlets for aircraft, represent a small fraction of total emissions at participating airports. FAA plans to assess the overall performance of the VALE program as participation increases. FAA officials have begun developing cost-effectiveness measures, such as the amount of emission reductions per dollar spent. FAA officials stated that based on the number and size of VALE projects funded to date, they believe more history and experience with the program is needed before the agency develops other performance measures, such as setting goals for the number of VALE projects
gao_GAO-08-77	gao_GAO-08-77_0	In addition, applicable agencies are required by OMB guidance to report their efforts to recoup contract-related improper payments under section 831 of the National Defense Authorization Act for Fiscal Year 2002, commonly referred to as the Recovery Auditing Act. USAID’s and NASA’s Risk Assessment Processes and Documentation Could Be Improved For the first 3 years of IPIA implementation—fiscal years 2004 through 2006—both agencies performed various procedures to conduct their risk assessments. Many of these procedures are positive steps to address the requirements of IPIA. At the same time, we identified numerous deficiencies in the procedures that warrant further improvement. For example, USAID and NASA had not developed a standardized process to evaluate the results of their reviews, such as weighting and scoring the results of risk conditions to determine susceptibility. Furthermore, risk assessment documentation maintained by USAID and NASA was lacking or insufficient to support their conclusions that no programs or activities were susceptible to significant improper payments. This continued into fiscal year 2005 for both agencies. A lack of detailed written guidance may have contributed to the deficiencies we identified. As part of its risk assessment, USAID reported conducting a review of OIG and external audits, while NASA did not. Because of the lack of guidance and insufficient review, USAID and NASA cannot be certain that these payment reviews adequately support that payments made were not susceptible to significant improper payments. Weaknesses Found in Recovery Auditing Procedures Raise Questions About the Validity and Accuracy of Reported Recovery Audit Amounts Although USAID and NASA have reported on steps taken to recoup improper contract payments, we found several weaknesses in their recovery auditing procedures for fiscal years 2004 through 2006. In particular, USAID and NASA did not report recovery auditing information for each fiscal year, documentation was lacking or not adequately supported, and neither agency adhered to all of the reporting requirements outlined in OMB’s implementing guidance. Due to a lack of, or insufficient, documentation, along with identified weaknesses, the validity and accuracy of the reported recovery amounts are questionable. USAID and NASA Have Taken Steps to Strengthen Their Risk Assessment Processes and Recovery Auditing Procedures, but Challenges Remain While USAID and NASA have experienced significant challenges in their first 3 years of IPIA implementation, both agencies have taken steps to strengthen their risk assessment processes and ultimately, IPIA reporting. Actions are also under way to improve recovery auditing efforts. However, improvements are still needed to address some of the weaknesses related to conducting risk assessments and performing recovery auditing procedures. Specifically, we recommend that the Administrator, USAID, expand existing IPIA guidance to include detailed procedures for addressing the four key steps—perform risk assessment, estimate improper payments, implement a corrective action plan, annually report—that OMB requires agencies to perform in meeting the improper payment reporting requirements; develop a risk assessment tool, such as a risk assessment matrix, to determine if risks exist, what those risks are, and the potential or actual impact of those risks on program operations; use the risk assessment tool to institute a systematic approach to identify programs and activities susceptible to significant improper payments under IPIA; maintain documentation of actions performed to address IPIA and the Recovery Auditing Act requirements; develop a comprehensive recovery auditing program that is specifically designed to identify overpayments to contractors that are due to payment errors; and adhere to OMB’s guidance for reporting recovery auditing information in the annual PAR. Appendix I: Objectives, Scope, and Methodology The objectives of this review were to determine (1) the extent to which USAID and NASA performed the required risk assessments to identify programs and activities that were susceptible to significant improper payments for fiscal year 2004 through fiscal year 2006, (2) steps USAID and NASA have taken to recoup improper payments through recovery audits, and (3) actions USAID and NASA have under way to improve their IPIA and recovery audit reporting. Payments to Other Agencies. This payment stream consists of all payments made to other federal agencies for services and/or goods received. Contract. Grant.	Why GAO Did This Study Agencies are required to report improper payment information under the Improper Payments Information Act of 2002 (IPIA) and recovery auditing information under section 831 of the National Defense Authorization Act for Fiscal Year 2002, commonly known as the Recovery Auditing Act. Since the first year of implementation, fiscal year 2004, limited improper payments reporting by the United States Agency for International Development (USAID) and the National Aeronautics and Space Administration (NASA) and concerns raised by NASA's auditors about its risk assessment process prompted scrutiny from the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security, during several oversight hearings. Because the subcommittee noted that USAID's and NASA's performance and accountability report (PAR) reporting on improper payments and recovery auditing was minimal, GAO was asked to review both agencies' IPIA risk assessment methodologies, recovery auditing procedures, and actions under way to improve their IPIA and recovery audit reporting. What GAO Found For the first 3 years of IPIA implementation, fiscal years 2004 through 2006, USAID and NASA performed various procedures to conduct their risk assessments. Many of these procedures are positive steps to address the requirements of IPIA. At the same time, GAO identified numerous deficiencies in the procedures that warrant further improvement. For example, neither USAID nor NASA had developed a systematic process to (1) identify risks that exist in their payment activities or (2) evaluate the results of their payment stream reviews, such as weighting and scoring the effectiveness of existing internal control over payments made and results from external audits. Furthermore, risk assessment documentation maintained by USAID and NASA was lacking or insufficient to support their conclusions that no programs or activities were susceptible to significant improper payments. A lack of detailed written guidance for both agencies may have contributed to the deficiencies identified. Due to inadequacies in their risk assessment process, USAID and NASA cannot be certain that they had no programs or activities susceptible to significant improper payments, and ultimately, had effectively implemented IPIA. Although USAID and NASA have reported on steps taken to recoup improper contract payments, GAO found several weaknesses in their recovery auditing procedures for fiscal years 2004 through 2006. In particular, USAID and NASA did not report recovery auditing information for each fiscal year, documentation was lacking or not adequately supported, and neither agency adhered to all of the reporting requirements outlined in Office of Management and Budget's (OMB's) implementing guidance. Other weaknesses noted were agency-specific. For example, USAID recovery auditing procedures were comprised of reviews of certain Office of Inspector General and external audit reports over USAID grant and contract programs. However, the methodology used for conducting those audits may not have constituted a recovery auditing program as defined by OMB guidance, and thus may be insufficient for this purpose. NASA, on the other hand, used IPIA contract payment review results to report amounts recovered for fiscal year 2005. However, the payment reviews were limited in scope and did not provide an adequate representation of the extent of contract overpayments. Due to a lack of, or insufficient, documentation, along with identified weaknesses, the validity and accuracy of the reported recovery amounts are questionable. While USAID and NASA have experienced significant challenges in their first 3 years of IPIA implementation, both agencies have taken steps to strengthen their risk assessment process and, ultimately, IPIA reporting. For example, USAID has developed an agencywide payment database that will be used to research and data mine for potential improper payments. NASA hired two different contractors to develop a methodology for conducting a risk assessment and testing of payment transactions. Actions are also under way to improve recovery auditing efforts. However, improvements are still needed to address some of the weaknesses identified related to conducting risk assessments and performing recovery auditing procedures.
gao_GAO-11-932T	gao_GAO-11-932T_0	Background Over the years, DOD has initiated several broad-based reform efforts to address its long-standing financial management weaknesses. The plan focuses on three goals: (1) achieve and sustain assurance on the effectiveness of internal controls, (2) develop and implement financial management systems that support effective financial management, and (3) achieve and sustain financial statement audit readiness. The DOD Comptroller directed the DOD components—including the Departments of the Army, Navy, and Air Force and the Defense Logistics Agency—to use a standard process to implement the FIAR Plan and aggressively modify their activities to support and emphasize achievement of the priorities. For each assessable unit, a component is required to prepare a FIP in accordance with the steps outlined in the FIAR Guidance. In our report issued this week, we concluded that the FIAR Guidance provides a reasonable methodology for the DOD components to follow in developing and implementing their FIPs. The FIAR Guidance details the roles and responsibilities of the DOD components, and prescribes a standard, systematic process that components should follow to assess processes, controls, and systems, and identify and correct weaknesses in order to achieve auditability for each of their assessable units. The FIAR Guidance also requires the components to prepare and implement corrective action plans for resolving the deficiencies identified during testing and to document the results, which is consistent with federal internal control standards and Office of Management and Budget (OMB) guidance. Challenges for DOD Components’ Implementation of FIAR Guidance Although the FIAR Guidance provides a reasonable methodology for improving financial management within the department, DOD’s ability to achieve audit readiness is highly dependent on the components’ ability to effectively develop and implement FIPs in compliance with the FIAR Guidance. Our reviews of various DOD component efforts to achieve audit readiness found that the components faced challenges in effectively implementing the FIAR Guidance, resulting in unsupported conclusions of audit readiness for Navy Civilian Pay, Air Force Military Equipment, and the Marine Corps SBR. Our report includes recommendations for DOD to ensure that components’ FIPs comply with the FIAR Guidance. However, the DOD IG issued a disclaimer of opinion on the Marine Corps’ fiscal year 2010 SBR because the Marine Corps did not provide timely and relevant supporting documentation for accounting transactions and disbursements in key areas, which prevented the auditors from completing the audit by the November 15, 2010, reporting deadline. Further, in addressing the 70 audit findings and related 139 recommendations, we found that the Marine Corps did not develop an effective overall corrective action plan that identified risks, prioritized actions, and identified required resources in order to help ensure that actions adequately respond to recommendations. Further details on the Navy’s comments and our evaluation of them can be found in our report. Issues with Navy and Marine Corps Processes for Reconciling Fund Balance with Treasury (FBWT) Reconciling the FBWT account is a key financial management control. Issues with Implementation of Two of DOD’s Enterprise Resource Planning (ERP) Systems The implementation of an integrated, audit-ready systems environment through the deployment of ERP systems underlies all of DOD’s financial improvement efforts and is crucial to achieving departmentwide audit readiness. Improved Monitoring and Oversight of Component Financial Improvement Plans (FIP) Are Needed In one report we issued this week, we found that weaknesses in the Navy and Air Force FIAR Plan implementation efforts indicate that the monitoring and oversight of such efforts have not been effective. Although we found that DOD and its military components had established appropriate organizational structures for monitoring and oversight of audit readiness efforts, oversight responsibilities were not always effectively carried out. Specifically, for these two FIPs that we reviewed, neither individual officials nor the executive committees took sufficient action to ensure that the FIPs were accurate or complied with the FIAR Guidance. In their reviews, both organizations identified issues with the FIPs that were similar to those we had identified. Effective oversight and monitoring would also help ensure that lessons learned from recent efforts would be sufficiently disseminated throughout the department and applied to other financial improvement efforts. For example, the results of the Marine Corps’ SBR audit effort provide valuable lessons on preparing for a first-time financial statement audit. As we recently testified, lessons learned from this audit effort can provide a roadmap to help other DOD components achieve audit readiness. Concluding Observations With the FIAR Plan and related FIAR Guidance, DOD has established a reasonable strategy and methodology for improving its financial management.	Why GAO Did This Study The Department of Defense (DOD) has initiated several efforts over the years to address its long-standing financial management weaknesses and ultimately achieve unqualified (clean) opinions on its financial statements. In 2005, the DOD Comptroller first issued the Financial Improvement and Audit Readiness (FIAR) Plan for improving financial management and reporting. In May 2010, the DOD Comptroller issued the FIAR Guidance to provide standardized guidance to DOD components for developing Financial Improvement Plans (FIP) to implement the FIAR Plan. GAO's testimony focuses on (1) progress made by the DOD Comptroller in developing and issuing the FIAR Guidance, (2) challenges faced by DOD components in implementing the FIAR Guidance, and (3) improvements needed in DOD's oversight and monitoring of FIAR implementation efforts. This statement is based on four audits that were undertaken at the request of this subcommittee and other congressional requesters to evaluate the progress DOD is making in implementing its FIAR Plan and FIAR Guidance. GAO addresses findings and recommendations from two reports being issued this week ( GAO-11-830 and GAO-11-851) and preliminary information from two ongoing audits. Each audit demonstrates some of the challenges DOD faces in improving its financial management and achieving the goal of auditable financial statements by 2017.. What GAO Found In a report issued this week, GAO concluded that the FIAR Guidance provides a reasonable methodology for the DOD components to follow in developing and implementing their FIPs. It details the roles and responsibilities of the DOD components, and prescribes a standard, systematic process components should follow to assess processes, controls, and systems, and identify and correct weaknesses in order to achieve auditability. The FIAR Guidance also requires the components to prepare and implement corrective action plans for resolving the deficiencies identified during testing and to document the results, which is consistent with federal internal control standards and related guidance. DOD's ability to achieve audit readiness is dependent on the components' ability to effectively develop and implement FIPs in compliance with the FIAR Guidance. However, GAO's review of various DOD component efforts to achieve audit readiness found that the components experienced challenges in implementing the FIAR Guidance. Specifically: (1) The Navy and the Air Force had not adequately developed the two FIPs that GAO reviewed in accordance with the FIAR Guidance. As a result, they did not conduct sufficient control and substantive testing, and reached conclusions that were not supported by the testing results. (2) Auditors of the Marine Corps' Statement of Budgetary Resources (SBR) issued a disclaimer of opinion because the Marine Corps did not provide timely and relevant supporting documentation for accounting transactions and also reported that internal control weaknesses should be addressed. (3) GAO's preliminary work on the Navy's and Marine Corps' Fund Balance with Treasury (FBWT) reconciliation processes identified issues with their ability to reconcile FBWT--a key step in preparing the SBR. (4) Based on preliminary results, GAO identified issues in the implementation of two enterprise resource planning (ERP) systems by the Army and the Air Force. DOD has acknowledged that effective implementation of integrated systems is crucial to achieving departmentwide audit readiness. Although DOD and its military components had established organizational structures for monitoring and oversight of audit readiness efforts, GAO found that oversight responsibilities were not effectively carried out, resulting in the ineffective implementation of FIPs and unsupported conclusions of audit readiness. For the two FIPs that GAO reviewed, neither the designated officials nor the executive committees took sufficient action to ensure that the FIPs complied with the FIAR Guidance. Effective oversight would also help ensure that lessons learned from recent efforts would be disseminated throughout the department so that others could avoid similar problems. For example, the Marine Corps' SBR audit effort provide valuable lessons that, if effectively communicated and implemented, can provide a roadmap to help other DOD components achieve audit readiness. What GAO Recommends GAO recommends actions for components to comply with the FIAR Guidance, for the Marine Corps to develop appropriate corrective action plans, and for DOD to ensure that the services consider lessons learned. DOD concurred with GAO's recommendations related to implementing the component FIPs and with three of four recommendations related to the Marine Corps SBR. Further details on DOD's comments can be found in GAO's reports.
gao_GAO-03-285	gao_GAO-03-285_0	Exemptions in EPA’s Rules Allowed Most Animal Feeding Operations to Avoid Regulation Two exemptions in CAFO regulations have allowed large numbers of animal feeding operations to avoid obtaining discharge permits. However, EPA believes that many of these operations may degrade water quality. As a result, waste discharges from facilities in Michigan remained unregulated under the CAFO program. EPA officials acknowledged that until the mid-1990s the agency had placed little emphasis on and directed few resources to the CAFO program and that this inattention has contributed to inconsistent and inadequate implementation by authorized states. Instead, the agency gave higher priority and devoted greater resources to its permit program for the more traditional point sources of pollution—industrial and municipal waste treatment facilities. States will therefore need to increase their efforts to identify, permit, and inspect animal feeding operations and, most likely, will have to increase their enforcement actions. EPA’s Oversight of States Will Need to Increase While the burden of implementing the revised regulations will fall primarily on the states, EPA will need to increase its oversight of state programs to ensure that the states properly adopt and implement the new requirements. This oversight effort will be especially important in light of the large number of animal feeding operations that will need permits under the revised regulations. Appendix I: Scope and Methodology To determine the problems EPA faced in administering the CAFO program and the potential challenges the states and EPA may face when implementing revisions to its CAFO regulations, we surveyed all 10 EPA regional offices.	Why GAO Did This Study Congress is concerned that waste from animal feeding operations continues to threaten water quality. In light of this concern, GAO was asked to review the Environmental Protection Agency's (EPA) administration of its regulatory program for animal feeding operations and to determine the potential challenges states and EPA may face when they begin to implement the revisions to this program. GAO surveyed all EPA regional offices and four states with large numbers of animal feeding operations that may be subject to EPA regulations. What GAO Found Until the mid-1990s, EPA placed little emphasis on and had directed few resources to its animal feeding operations permit program because it gave higher priority to other sources of water pollution. In addition, regulatory exemptions have allowed many large operations to avoid regulation. As a result of these problems, many operations that EPA believes are polluting the nation's waters remain unregulated. Implementation of revised regulations raise management and resource challenges for the states and the agency. For example, because the number of animal feeding operations subject to the regulations will increase dramatically, states will need to increase their efforts to identify, permit, and inspect facilities and take appropriate enforcement actions against those in noncompliance. For its part, EPA will need to increase its oversight of state programs to ensure that the new requirements are adopted and implemented. Neither the states nor EPA have determined how they will meet these challenges.
gao_GAO-12-992	gao_GAO-12-992_0	Background VA and DOD have distinct missions and health care systems to provide services to their respective beneficiaries. 1.) According to VA and DOD department-level officials, the departments do not require that all collaboration sites develop and use performance measures to assess the collaborations’ effectiveness and efficiency, in particular to measure their progress in meeting the departments’ shared goals of improved health care access, quality, and costs. In particular, VA officials told us they do not want to overburden sites with performance measures and monitoring requirements, which they said may discourage future collaborations. In the absence of a department-level requirement for performance measures for all collaboration sites, some sites we reviewed have developed their own performance measures. VA and DOD Face Several Significant Barriers That Hinder Collaboration, Despite Taking Some Actions to Address Those Barriers VA and DOD face a number of significant barriers that hinder their collaboration efforts. Without additional department-level actions to address incompatible policies and practices, those barriers will continue to hinder collaboration efforts and lead to inefficiencies at the local level. However, because VA and DOD collect, store, and process health information in different IT systems, providing access to the information needed to best treat those patients has proved problematic. 3.) At the department level, VA and DOD officials said VA and DOD have taken some steps to address reimbursement issues, but that sites will still need to find ways to bridge VA and DOD’s differences. In addition, some DOD providers who treat patients at the Biloxi VA facility now separately enter workload information into DOD’s IT system. Joint VA and DOD Planning for Construction of Medical Facilities VA and DOD department-level officials reported that several barriers hinder their efforts to jointly plan construction of medical facilities to serve both departments’ beneficiaries, and sometimes lead to missed opportunities to collaborate. VA and DOD Do Not Have a Fully Developed Process for Systematically Identifying New and Enhanced Collaboration Opportunities VA and DOD do not have a fully developed process for systematically identifying opportunities for new or enhanced collaboration that could facilitate the departments’ shared goals of improving access, quality, and costs. Instead, the identification of new or enhanced collaboration opportunities is largely left to local medical facility leadership. Although the departments do have a process for jointly identifying a select number of sites where there are opportunities for new or expanded collaboration, that process does not address all options for collaboration across both health care systems, nor is there a requirement that the sites identified by that process move forward with collaboration. Until VA and DOD fully develop a joint process to systematically identify and pursue potential collaboration opportunities, the departments may miss opportunities to improve patients’ access to and quality of care, and to reduce costs, such as by addressing overlap and duplication of services that may exist between the two health care systems. In particular, the departments have not taken sufficient actions to: develop and use performance measures to assess the effectiveness and efficiency of collaboration, overcome key barriers to collaboration, and identify new or enhanced collaboration opportunities. Recommendations for Executive Action To help assess progress, identify areas for improvement, and make informed decisions about health care collaborations, we recommend that the Secretaries of Veterans Affairs and Defense require collaboration sites to develop and implement a process for using performance measures to gauge their progress in achieving goals related to access, quality of care, and costs. Specifically, we recommend that the Secretaries of Veterans Affairs and Defense take the following three actions: expedite and communicate a plan with time frames for when iEHR solutions will be made available to joint ventures and other collaboration sites; take steps to resolve problems with collaboration sites’ incompatible business and administrative processes, including reimbursement for services, collection of workload information, dual credentialing, and computer security training; and clarify, as part of the newly initiated joint efforts to address base access, departmental guidance regarding collaboration to include a discussion of base access issues that local officials should consider when discussing and planning collaboration efforts; this could include a discussion of successful approaches that current collaboration sites have adopted to facilitate base access for veterans and their escorts.	Why GAO Did This Study VA and DOD operate two of the nation's largest health care systems at estimated annual costs of about $53 billion and $49 billion, respectively, for fiscal year 2013, and have established collaboration sites to deliver care jointly with the aim of improving access, quality, and cost-effectiveness of care. In addition, collaborations could help reduce duplication and overlap between the two health care systems, potentially saving tax dollars and helping VA and DOD provide more efficient and effective services. A committee report accompanying the Consolidated Appropriations Act, 2012, directed GAO to report on aspects of VA and DOD collaboration. This report examines the extent to which (1) VA and DOD assess effectiveness and efficiencies at collaboration sites; (2) barriers exist that affect collaboration; and (3) VA and DOD identify opportunities for collaboration. GAO conducted site visits to selected VA and DOD collaboration sites; reviewed VA and DOD documents such as sharing agreements; and interviewed VA and DOD officials. What GAO Found The Department of Veterans Affairs (VA) and Department of Defense (DOD) do not require that all collaboration sites--locations where the two departments share health care resources through hundreds of agreements and projects--develop and use performance measures to assess their effectiveness and efficiency. Officials cited several reasons for this, including not wanting to overburden sites with measures and monitoring requirements. Although VA and DOD require some limited performance information--such as the return on investment for pilot projects--without comprehensive performance measures, they lack information that could help decision makers assess collaboration sites' overall progress in meeting the departments' shared goals of improved health care access, quality, and costs; identify areas for improvement; and make informed decisions. Also, the departments cannot document the overall cost effectiveness of their collaboration efforts. In the absence of required measures for all sites, some have developed their own, but these fragmented efforts do not provide sufficient information about the overall results of collaborations. The departments face a number of key barriers that hinder collaboration efforts. In particular, GAO identified incompatible policies and practices in four areas: Information technology (IT) systems . Because VA and DOD collect, store, and process health information in different IT systems, providing access to information needed to best treat patients has proved problematic. Business and administrative processes . Different billing practices, difficulties capturing patient workload information, and overlapping efforts in credentialing providers and computer security training reduce efficiency. Access to military bases . Balancing base security needs with veterans' needs to access medical facilities on base creates some difficulties. Medical facility construction . Misaligned construction planning processes hinder efforts to jointly plan facilities to serve both VA and DOD beneficiaries. Although VA and DOD officials have taken some steps to address these areas, such as efforts to improve data sharing, without additional department-level actions, barriers will continue to hinder collaboration and lead to inefficiencies. VA and DOD do not have a fully developed process for systematically identifying all opportunities for new or enhanced collaboration. Instead, the identification of those collaboration opportunities is largely left to local medical facility leadership. Although the departments have a process for jointly identifying a select number of sites with opportunities for new or expanded collaboration, that process does not address all opportunities for collaboration across both health care systems and there is no requirement that sites identified by that process move forward to implement collaboration. Without a fully developed process to systematically identify and select additional collaboration opportunities, the departments may miss opportunities to achieve their shared goals and reduce duplication of services, such as through additional sharing agreements. What GAO Recommends GAO recommends several actions, including that VA and DOD: require collaboration sites to develop performance measures related to access, quality, and costs; address barriers hindering collaboration; and develop a process to more systematically identify new or expanded collaboration opportunities. VA and DOD generally concurred with GAO's recommendations and noted steps they are taking to address them.
gao_GAO-02-873T	gao_GAO-02-873T_0	Cultural resistance to change and military service parochialism have played a significant role in impeding past attempts to implement broad-based management reforms at DOD. For DOD we previously identified the lack of incentives as one of the major underlying causes for the failure of past reform efforts within the department. Conclusion The JSLIST and purchase card case studies clearly demonstrate that DOD’s current business operations are inefficient and ineffective. These case studies are small examples of the broader financial and inventory management and systems modernization challenges facing DOD that were highlighted in our June 2, 2002 testimony before this Subcommittee. In addition, continued congressional oversight such as the hearing today will be critical to successfully reforming DOD’s business operations.	Why GAO Did This Study This testimony reviews two case studies that clearly demonstrate the need for the Department of Defense (DOD) to reform its business operations. What GAO Found These two case studies are microcosms of the broad management challenges facing DOD that were highlighted in GAO's June 2002 testimony (See GAO-02-784T). GAO provided views on the underlying or root causes of DOD's long-standing inability to successfully reform its business operations, including a lack of sustained top-level leadership, cultural resistance to change, and military service parochialism. In addition, GAO found seven key elements necessary for successful reform, including approaching DOD's broad array of management challenges using an integrated, enterprisewide approach.
gao_GAO-07-481T	gao_GAO-07-481T_0	Background The Medicaid drug rebate program, the 340B drug pricing program, and the Medicare Part D program help pay for or reduce the costs of prescription drugs for eligible individuals and entities. The Medicaid Drug Rebate Program Medicaid is the joint federal-state program that finances medical services for certain low-income adults and children. CMS, an agency of the Department of Health And Human Services (HHS), administers and oversees the program. CMS provides additional guidance to manufacturers regarding the calculation of these amounts. The state Medicaid programs use the information to determine the amount of rebates to which they are entitled from the manufacturers based on the volume of drugs paid for by the programs. Oversight Inadequacies in the Medicaid Drug Rebate Program Raise Concerns about the Accuracy of Rebates Paid to States We and others have reported inadequacies in CMS’s oversight of the price information reported by manufacturers under the Medicaid drug rebate program, including a lack of clarity in CMS’s guidance to the manufacturers for calculating prices. This rule is intended to provide more clarity to manufacturers in determining AMPs reported to CMS, by indicating which sales, discounts, rebates, and price concessions are to be included or excluded. Oversight Inadequacies and Lack of Transparency in the 340B Drug Pricing Program Raise Concerns about Overpayments to Drug Manufacturers We and others have reported inadequacies in HRSA’s oversight of the 340B drug pricing program, problems related to the lack of transparency in the 340B prices, and overpayments to drug manufacturers. In addition, we recently reported that HRSA did not routinely compare 340B prices with prices paid by certain eligible entities. We also found that the prices of the eligible entities using the rebate option reported to HRSA did not reflect all rebates they later received from manufacturers, and thus we could not determine whether these entities paid prices that were at or below the ceiling established by the 340B prices. Because the 340B prices are not disclosed to eligible entities, the entities cannot know how the prices they pay compare with the 340B prices. HRSA has made changes to its oversight of the 340B drug pricing program that are intended to address some of the concerns we and OIG raised in our respective reports. Medicare Part D Shares Features with Other Federal Programs and Has Certain Features That Suggest Potential Oversight Challenges The Medicare Part D program shares in common certain features with other federal programs that help pay for or reduce the cost of prescription drugs. Two other features of the Medicare Part D program suggest potential oversight challenges. The second feature relates to the Part D program’s reliance on contracts with private PDP sponsors. The PDP sponsors provide prescription drug coverage to beneficiaries through a complex set of relationships and transactions among insurers, PBMs, and drug manufacturers. These relationships have similarities to the Federal Employees Health Benefits Program (FEHBP), the health care program for federal employees, in which the federal government contracts with private organizations to provide drug benefits, and these organizations often contract with PBMs to negotiate with manufacturers and provide other administrative and clinical services. Thus, concerns about prescription drug pricing inaccuracies in the Medicaid drug rebate and 340B drug pricing programs and overpayments to drug manufacturers highlight the importance of federal oversight of prices reported by drug manufacturers under these programs. As the Committee develops its oversight agenda relating to federal programs that help pay for or lower the costs of prescription drugs, it may wish to consider the following areas. The extent to which federal agencies will take steps to systematically ensure the accuracy of price data associated with federal programs, specifically, the extent to which CMS will ensure that AMP and best prices reported by manufacturers under the Medicaid drug rebate program include all appropriate transactions and price concessions—particularly once the proposed rule is finalized; the extent to which HRSA will ensure the completeness and accuracy of the 340B prices it maintains, obtain final prices paid by all covered entities, and more systematically compare prices paid by entities with the 340B prices; and the measures CMS will take to ensure that the price information Part D sponsors report to CMS include aggregate price concessions sponsors negotiate with PBMs and drug manufacturers. The extent to which cognizant federal agencies will monitor for and detect abuses in the reporting of drug price information that affects federal programs.	Why GAO Did This Study Several federal programs help pay for or reduce the costs of prescription drugs for eligible individuals and entities. Three examples are the Medicaid drug rebate program, part of the joint federal-state Medicaid program that finances medical services for certain low-income people; the 340B drug pricing program, which provides discounted drug prices to certain eligible entities such as community health centers; and the Medicare Part D program, which provides a Medicare drug benefit for the elderly and certain disabled people. The price information drug manufacturers report under these federal programs affects related federal spending. Spending is also affected by the extent to which federal oversight ensures the accuracy of this information. GAO was asked to provide information related to the oversight of prescription drug pricing practices that affect these federal programs. This testimony focuses on the oversight of drug pricing related to the three programs and the implications for future congressional oversight. This testimony is based on recent GAO reports examining these programs and related work by the Department of Health and Human Services Office of Inspector General and others. What GAO Found Regarding the Medicaid drug rebate program, GAO and others have reported inadequacies in the Centers for Medicare & Medicaid Services' (CMS) oversight of the prices manufacturers report to CMS to determine the statutorily required rebates owed to states. For example, GAO and others have reported a lack of clarity in CMS's guidance to manufacturers for calculating these prices. Several recent legal settlements under which manufacturers agreed to pay hundreds of millions of dollars to states because they were alleged to report inaccurate prices to CMS highlight the potential for abuse under the program. CMS recently issued a proposed rule intended to provide more clarity to manufacturers in determining the prices they report. GAO and others have reported inadequacies in the Health Resources and Services Administration's (HRSA) oversight of the 340B drug pricing program and problems related to the lack of transparency in the maximum prices, called 340B prices, charged to eligible entities. GAO reported that HRSA did not routinely compare the prices actually paid by certain eligible entities with the 340B prices and that many of these eligible entities paid prices higher than the 340B prices. Because these prices are not disclosed to the entities, the entities are unable to determine whether the prices they pay are at or below these prices. In addition, because 340B prices are based on information reported by drug manufacturers for the Medicaid drug rebate program, inaccuracies under that program affect these prices. HRSA has made changes to its oversight of the program intended to address some of these concerns. The Medicare Part D program shares in common with other federal programs certain features that led to federal agency oversight challenges. For example, Part D relies on multiple private organizations to report to CMS certain price concessions from manufacturers, similar to the Medicaid drug rebate program. Also, Part D relies on CMS's oversight to ensure that price information reported to it by private organizations are accurate, similar to the Medicaid drug rebate and 340B drug pricing programs. Other features of Part D, such as its reliance on contracts with private insurers to provide drug coverage to beneficiaries through a complex set of relationships and transactions with private entities, also suggest potential oversight challenges. Oversight inadequacies, inaccurate prices, lack of price transparency, and the potential for abuse suggest areas the Committee may wish to consider as it develops its oversight agenda. The Committee may wish to consider the extent to which CMS and HRSA will systematically take steps to ensure the accuracy of prices reported and charged by private organizations that participate in federal programs. The Committee may also wish to consider the extent to which federal agencies will effectively monitor for and detect abuses in the reporting of drug price information that affect these three federal programs.
gao_GAO-04-562T	gao_GAO-04-562T_0	However, the stocks must be (1) available in sufficient quantities to meet the needs of deploying forces and (2) in good condition. It also began an afloat program in the 1990s, using large ships to keep equipment and supplies available to support operations around the world. Figure 1 shows the location of Army and Marine Corps prepositioned equipment prior to OIF. Prepositioned Equipment Performed Well in OIF, Despite Shortfalls and Other Logistical Challenges The Army and Marine Corps reported that their prepositioned equipment performed well during OIF but that some problems emerged. Moreover, the U.S. Central Command, in an internal lessons-learned effort, concluded that prepositioned stocks “proved their worth and were critical in successfully executing OIF.” Some Prepositioned Equipment Was Out-of-Date or Did Not Match Unit Needs Some of the Army’s prepositioned equipment was outdated or did not match what the units were used to at home station. M113 Personnel Carriers—The prepositioned stocks contained many older model M113A2 vehicles. The U.S. forces had months to prepare for OIF, and plenty of time to adjust to the equipment they had available. The theater supply-and-distribution system became overwhelmed. Instead of bringing their own equipment, these troops are continuing to use prepositioned stocks. Thus, it may be several years—depending on how long the Iraqi operations continue—before these stocks can be reconstituted. Most of the equipment that the Army used for OIF is still in use or is being held in theater in the event it may be needed in the future. Thus, it may be 2006 or later before this equipment becomes available to be reconstituted to refill the prepositioned stocks. Officials also told us that, after having been in use for years in harsh desert conditions, much of the equipment would likely require substantial maintenance and some will be worn out beyond repair. The Army has estimated that the cost for reconstituting its prepositioned equipment assets is about $1.7 billion for depot maintenance, unit level maintenance, and procurement of required parts and supplies. Army Materiel Command officials said they have thus far received only a small part of the amount funded in the 2004 supplemental for reconstitution of the prepositioned equipment, but they noted that not much equipment has been available. Since much of the equipment is still in Southwest Asia, it is unclear how much reconstitution funding for its prepositioned equipment the Army can use in fiscal year 2005. Issues Facing the Prepositioning Program The defense department faces many issues as it rebuilds its prepositioning program and makes plans for how such stocks fit into the transformed military. In the near term, the Army and the Marine Corps must focus on supporting current operations and reconstituting their prepositioning sets. In the long term, however, DOD faces fundamental issues as it plans the future of its prepositioning programs. These include ensuring that it has adequate equipment and spare parts and sustainment supplies in its prepositioning programs, giving priority to afloat and Korea stocks; selectively modernizing equipment so that it will match unit equipment and better meet operational needs; and planning and conducting training to practice drawing and using prepositioned stocks, especially afloat stocks. Determine the role of prepositioning in light of the efforts to transform the military. Establish sound prepositioning requirements that support joint expeditionary forces. Ensure that the program is resourced commensurate with its priority, and is affordable even as the force is transformed. Congress will have a key role in reviewing the department’s assessment of the cost effectiveness of options to support DOD’s overall mission, including prepositioning and other alternatives for projecting forces quickly to the far reaches of the globe.	Why GAO Did This Study Since the Cold War, the Department of Defense (DOD) has increased its reliance on prepositioned stocks of military equipment and supplies, primarily because it can no longer plan on having a large forward troop presence. Prepositioned stocks are stored on ships and on land in the Persian Gulf and other regions around the world. Prepositioning allows the military to respond rapidly to conflicts. Ideally, units need only to bring troops and a small amount of materiel to the conflict area. Once there, troops can draw on prepositioned equipment and supplies, and then move quickly into combat. Today's testimony describes (1) the performance and availability of Army and Marine Corps prepositioned equipment and supplies to support Operation Iraqi Freedom (OIF); (2) current status of the stocks and plans to reconstitute them; and (3) key issues facing the military as it reshapes these programs to support DOD's force transformation efforts. What GAO Found The importance of prepositioned stocks was dramatically illustrated during OIF. While they faced some challenges, the Army and Marine Corps relied heavily on prepositioned combat equipment and supplies to decisively defeat the Iraqi military. They both reported that prepositioned stocks were a key factor in the success of OIF. Prepositioned stocks provided most of the combat equipment used and, for the most part, this equipment was in good condition and maintained high readiness rates. However, the Army's prepositioned equipment included some older models of equipment and shortfalls in support equipment such as trucks, spare parts, and other supplies. Moreover, the warfighter did not always know what prepositioned stocks were available in theater, apparently worsening an already overwhelmed supply-and-distribution system. The units were able to overcome these challenges; fortunately, the long time available to build up forces allowed units to fill many of the shortages and adjust to unfamiliar equipment. Much of the prepositioned equipment is still being used to support continuing operations in Iraq. It will be several years--depending on how long Iraqi Freedom operations continue--before these stocks will be available to return to prepositioning programs. And, even after they become available, much of the equipment will likely require substantial maintenance, or may be worn out beyond repair. The Army has estimated that it has an unfunded requirement of over $1 billion for reconstituting the prepositioned equipment used in OIF. However, since most prepositioned equipment is still in Southwest Asia and has not been turned back to the Army Materiel Command for reconstitution, most of the funding is not required at this time. When the prepositioned equipment is no longer needed in theater, decisions will have to be made about what equipment can be repaired by combat units, what equipment must go to depot, and what equipment must be replaced with existing or new equipment to enable the Army to reconstitute the prepositioned sets that were downloaded for OIF. DOD faces many issues as it rebuilds its prepositioning program and makes plans for how such stocks fit into its future. In the near term, the Army and Marines must necessarily focus on supporting ongoing OIF operations. While waiting to reconstitute its program, the Army also has an opportunity to address shortfalls and modernize remaining stocks. For the longer term, DOD may need to (1) determine the role of prepositioning in light of efforts to transform the military; (2) establish sound prepositioning requirements that support joint expeditionary forces; and (3) ensure that the program is resourced commensurate with its priority and is affordable even as the force is transformed. Congress will play a key role in reviewing DOD's assessment of the cost effectiveness of various options to support its overall mission, including prepositioning and other alternatives for projecting forces quickly.
gao_GAO-03-1034T	gao_GAO-03-1034T_0	Although the specific duties police officers perform may vary among police forces, federal uniformed police officers are generally responsible for providing security and safety to people and property within and sometimes surrounding federal buildings. Another component of DHS is TSA, a former component of the Department of Transportation. During fiscal year 2002, the Federal Air Marshal Program increased its recruiting significantly in response to the terrorist attacks of September 11, 2001. During recent years, the federal government has implemented many human capital flexibilities to help agencies attract and retain sufficient numbers of high-quality employees to complete their missions. Most Forces Experienced Recruitment Difficulties Eight of the 13 police forces reported difficulties recruiting officers from a moderate to a very great extent. Despite recruitment difficulties faced by many of the police forces, none of the police forces used important human capital recruitment flexibilities, such as recruitment bonuses and student loan repayments, in fiscal year 2002. U.S. There were sizable differences in turnover rates among the 13 police forces during fiscal year 2002. The most significant increases in turnover occurred at the Bureau of Engraving and Printing Police (200 percent) and the Secret Service Uniformed Division (about 152 percent). More than half (316) of the 599 officers who voluntarily separated from the police forces in fiscal year 2002 went to TSA—nearly all (313 of 316) to become Federal Air Marshals where they were able to earn higher salaries, federal law enforcement retirement benefits, and a type of pay premium for unscheduled duty equaling 25 percent of their base salary. Data we gathered from the 13 police forces since we issued our report indicate that fiscal year 2003 turnover rates will drop significantly at 12 of 13 forces--even below historical levels at most of the forces—if patterns for the first 9 months of fiscal year 2003 continue for the remaining months. In addition, prospective fiscal year 2003 turnover rates at 8 of the 13 forces are below historical levels. For example, officials at 4 of the 13 police forces reported that they were able to offer retention allowances, which may assist the forces in retaining experienced officers, and 3 of these police forces used this tool to retain officers in fiscal year 2002. The average retention allowances paid to officers in fiscal year 2002 were about $1,000 at the Pentagon Force Protection Agency, $3,500 at the Federal Protective Service, and more than $4,200 at the NIH Police. Annual pay for entry-level police officers ranged from $28,801 to $39,427, as of September 30, 2002. Entry-level officers at 12 of the 13 police forces (all but the U.S. These pay raises received by entry-level officers from October 1, 2002, through April 1, 2003, narrowed the entry-level pay gap for some of the 13 forces. In our report on homeland security issued last December, we recommended that OPM, in conjunction with the Office of Management and Budget and the agencies, should develop and oversee the implementation of a long- term human capital strategy that can support the capacity building across government required to meet the objectives of the nation’s efforts to strengthen homeland security. TSA agreed with this recommendation. Related GAO Products Law Enforcement Personnel Federal Uniformed Police: Selected Data on Pay, Recruitment, and Retention at 13 Police Forces in the Washington, D.C., Metropolitan Area (GAO-03-658, June 13, 2003).	Why GAO Did This Study Many federal agencies in the Washington, D.C., metropolitan area have their own police forces to ensure the security and safety of the persons and property within and surrounding federal buildings. In the executive branch, for example, the Secret Service has over 1,000 uniformed officers protecting the White House, the Treasury Building, and other facilities used by the Executive Office of the President. The Interior Department's Park Police consists of more than 400 officers protecting parks and monuments in the area. The Pentagon Force Protection Agency has recently increased its force to over 400 officers. Even the Health and Human Services Department maintains a small police force on the campus of the National Institutes of Health (NIH) in Bethesda, Maryland. In addition, there are federal uniformed police forces in both the Legislative and Judicial Branches of the federal government. We have continued to examine the transformation of 22 agencies with an estimated 160,000 civilian employees into the Department of Homeland Security. What GAO Found After the terrorist attacks of September 11, 2001, and the government's subsequent efforts to increase airline security, many of these local police forces began experiencing difficulties in recruiting and retaining officers. Police force officials raised concerns that the newly created Transportation Security Administration (TSA) and its Federal Air Marshal Program were luring many prospective and experienced officers by offering better starting pay and law enforcement retirement benefits. Former Congresswoman Morella asked us to look into these concerns. Most forces reported experiencing recruitment difficulties. Officials at 8 of the 13 forces told us they experienced moderate to very great recruiting difficulties. Despite this, none of the 13 forces used available human capital flexibilities, such as recruitment bonuses or student loan repayments in fiscal year 2002, to try to improve their recuiting efforts. In fiscal year 2002, many of the local forces experienced sizable increases in turnover, mostly due to voluntary separations. About half of the officers who left voluntarily went to the TSA. Some of the forces provided retention allowances and incentive awards to try to retain more of their officers. Entry-level pay at the 13 agencies during fiscal year 2002 ranged from $28,801 to $39,427, a gap that narrowed for some of the forces in fiscal year 2003 because officers at 12 of the 13 agencies received increased entry-level pay. However, information we have gathered since we issued our report indicates that turnover in most of the police forces has dropped significantly during fiscal year 2003. The increase in turnover that occurred at 12 of the 13 police forces during fiscal year 2002 appears to be associated with the concurrent staffing of the TSA Federal Air Marshal Program. TSA's hiring of air marshals during fiscal year 2003 has been pared back.
gao_GGD-96-21	gao_GGD-96-21_0	Objectives, Scope, and Methodology Our objectives were to (1) determine how IRS addressed the problems discussed in our 1994 TCMP status report and, if the problems persist, how they will affect final TCMP results; (2) identify informational resources other than TCMP that IRS could use to target its audits more effectively; and (3) assess the value of TCMP data for alternative tax system proposals. Basically, these concerns centered on IRS being able to (1) meet major milestones for starting audits, (2) collect audit adjustment data on partners and S corporation shareholders, (3) collect data on potentially misclassified workers, (4) develop data collection systems, (5) make it easier for researchers to access TCMP audit workpapers, and (6) develop a TCMP research plan. IRS attributed the delay to the uncertainties about its fiscal year 1996 budget. The delay in the start of the audits could allow IRS to complete various TCMP database testing, which has not been completed as originally scheduled. We are not aware of any other available data that can be used to develop return selection formulas that would allow IRS to target its audits as effectively as TCMP data. To determine the relevancy of TCMP data to these alternative tax systems, we analyzed the tax return elements IRS plans to examine in its tax year 1994 TCMP and published documents on the systems. Relevancy of TCMP Results for Designing and Administering Alternative Tax System Proposals Potentially, data obtained from TCMP audits could be used to guide both the final design and administration of a new tax system. There is still time for IRS to develop a research plan so that it could analyze final TCMP results more quickly. A recorded menu will provide information on how to obtain these lists. Address Correction Requested	Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the Internal Revenue Service's (IRS) Taxpayer Compliance Measurement Program (TCMP) for tax year 1994, focusing on: (1) how IRS addressed the problems identified in a previous GAO report; (2) how persistent problems affect final TCMP results; (3) other informational sources that IRS could use to target its audits more effectively; and (4) the relevancy of TCMP data for alternative tax system proposals. What GAO Found GAO found that: (1) IRS has taken appropriate actions to correct the previously identified problems in the implementation of TCMP; (2) due to uncertainties about its fiscal year 1996 budget, IRS has delayed TCMP audits until December 1, 1995; (3) the audit delay will allow IRS to complete testing of TCMP database components and data collections systems; (4) the audits could be further delayed if the tests reveal additional problems; (5) IRS plans to collect data on partners, shareholders, and misclassified workers which should allow it to better measure compliance levels and TCMP audit results; (6) computerized auditor comments should make it easier for researchers to analyze TCMP results and allow IRS to collect data on other tax issues that are not a part of TCMP; (7) IRS still needs to develop a research plan that would allow it to more timely analyze TCMP data; (8) no alternative information sources exist that could help IRS better target its audits; (9) IRS is developing a new identification system for tax return audits, but it will not be available until after year 2000; and (10) TCMP could be useful in designing and administering a new tax system and identifying compliance trends.
gao_RCED-99-74	gao_RCED-99-74_0	Also, disease-causing bacteria—or pathogens—may develop resistance spontaneously. As a pesticide for disease treatment and prevention, antibiotics are generally sprayed onto plants. However, data are not available on the quantities of specific antibiotics used in agriculture and the purposes for which they are used. However, each year several thousand persons have severe illnesses resulting in hundreds of deaths. In addition to the direct foodborne transfer of antibiotic resistance from these three specific organisms, some research suggests that the use of antibiotics in food animals may reduce the effectiveness of related antibiotics used to treat humans. FDA approves all antibiotics used for food-producing animals; the Environmental Protection Agency (EPA) approves antibiotics used as pesticides on produce and plants. FDA has approved many antibiotics for use on food-producing animals; EPA has approved two antibiotics for use on plants. The U.S. Department of Agriculture’s (USDA) Food Safety and Inspection Service (FSIS) operates a program to ensure that antibiotic residues in food products are within established limits. FSIS’ National Residue Program tests meat and poultry products for antibiotic residues. Debate Is Ongoing Over the Potential Risk to Human Health From the Agricultural Use of Antibiotics The debate over whether to further regulate or restrict the use of antibiotics in agriculture centers around the risk their use may pose to human health relative to their benefits to agriculture. They also believe that the research does not warrant restricting the use of antibiotics in agriculture. CDC researchers believe that some antibiotics should not be used in animal feed to promote growth. Recommendation to the Secretaries of Agriculture and Health and Human Services In light of the emergence of antibiotic resistance in humans, questions about the extent that the agricultural use of antibiotics contributes to the human health burden, and the debate over whether further regulation or restriction of use in agriculture is needed, we recommend that the Secretaries of Agriculture and of Health and Human Services develop and implement a plan that contains specific goals, time frames, and resources needed to evaluate the risks and benefits of the existing and future use of antibiotics in agriculture, including identifying and filling critical data gaps and research needs. Noting that preventive action is needed now, the Department stated, “steps need to be taken to decrease the use in agriculture of antibiotics that contribute to the development of resistant strains of human pathogens.” It also pointed out that the public health community is concerned not only with the growth promotion uses of antibiotics in agriculture but also with uses to treat and prevent disease, which “can be significant contributors to the pool of resistant microorganisms that enter the food chain” and often involve “critical drugs of last resort in treating a variety of human infections.” While the Department believes no further research is needed to prove the link for foodborne pathogens, it does believes more research would be beneficial in assessing agricultural practices that can reduce antimicrobial use, identifying the types of use that are high or low risk, and better understanding the potential risks of resistance transfer from animal organisms other than typical foodborne pathogens. Major contributors to the report are listed appendix V. Objectives, Scope, and Methodology This report examines (1) how antibiotics are used in agriculture and the implications of that use for human health; (2) federal roles and responsibilities for overseeing the use of antibiotics in agriculture; and (3) issues surrounding the debate over whether to further regulate or restrict the use of antibiotics in agriculture. 2. 3. 4. HHS states that the Food and Drug Administration’s (FDA) proposal: Proposed Framework for Evaluating and Assuring the Human Safety of the Microbial Effects of Antimicrobial New Animal Drugs Intended for Use in Food-Producing Animals will address all uses of antibiotics in agriculture. 5. 6. 7. 8. 9. 10. 11.	Why GAO Did This Study Pursuant to a congressional request, GAO provided information on antibiotic resistance issues that may stem from the use of antibiotics in agriculture, focusing on the: (1) use of antibiotics in agriculture and the implications of that use for human health; (2) federal roles and responsibilities for overseeing the use of antibiotics in agriculture; and (3) issues surrounding the debate over whether to further regulate or restrict the use of antibiotics in agriculture. What GAO Found GAO noted that: (1) antibiotics are used in agriculture to treat and prevent diseases in animals and in food plants and as a feed additive to improve the growth rate in animals; (2) data are not available on the quantities of specific antibiotics used in agriculture and the purposes for which they are used; (3) research has linked the use of antibiotics in agriculture to the emergence of antibiotic-resistant strains of disease-causing bacteria; (4) although the ill effects of these foodborne pathogens are generally mild to moderate, each year several thousand persons have severe illnesses resulting in hundreds of deaths; (5) in addition to the direct transfer of antibiotic-resistant organisms through animal products, some research suggests that the use of antibiotics in food animals may reduce the effectiveness of related antibiotics when used to treat humans; (6) approving antibiotics and setting allowable levels for antibiotic residues in food products is determined by the Food and Drug Administration (FDA) for animals and the Environmental Protection Agency for food plants; (7) testing for antibiotic levels in foods is performed by the Food Safety and Inspection Service for meat and poultry and by FDA for eggs, milk, and food plants; (8) monitoring the development of resistance to antibiotics in humans is conducted under a program run jointly by the Department of Agriculture (USDA), FDA and the Centers for Disease Control and Prevention; (9) the debate over whether to further regulate or restrict the use of antibiotics in animals and plants centers around the risk their use may pose to human health relative to their benefits to agriculture; (10) this concern has prompted several European countries to ban the use in animal feed of four antibiotics that are considered very important in treating humans; (11) beef, pork, and poultry producers and pharmaceutical manufacturers believe agricultural use is only one potential contributor to antibiotic resistance in humans; they claim that research does not warrant restricting antibiotic use in agriculture; (12) USDA believes that more research is needed before decisions are made regarding the further regulation or restriction of antibiotic use in food animals; (13) the Department of Health and Human Services believes that based on the scientific evidence, steps are needed now, not at some time in the future, to decrease such use; and (14) FDA's recently proposed framework for evaluating the safety of antibiotics for use in food-producing animals does not include specific timeframes for reevaluating approved antibiotics.
gao_GAO-06-372	gao_GAO-06-372_0	As mandated by the MMA, we conducted a hospital survey and provided HHS with information about prices hospitals paid for SCOD products. MMA Required Us to Survey Hospitals to Determine Their Acquisition Costs for SCOD Products As directed by the MMA, we conducted a survey of a large sample of hospitals to determine their acquisition costs for SCOD products. MMA Defined ASP, Which Is Reported by Manufacturers and Used to Set Rates for Drug SCODs ASP is a price measure established in the MMA to provide a basis for payment rates for physician-administered drugs and now used by CMS in setting rates for drug SCODs. Our analysis indicates that large, urban, major teaching hospitals generally paid lower prices, on average, for all SCOD products than did hospitals grouped by other combinations of factors. For example, compared with small urban hospitals with other teaching programs, large major teaching hospitals in urban areas paid prices, on average, that were an estimated 4 percent lower for drugs and 3 percent lower for radiopharmaceuticals. However, for CMS to use such a survey to routinely collect data in the future for SCOD rate-setting, the burden could outweigh the benefit. We found that, as a data source for estimating hospitals’ SCOD acquisition costs, hospitals offered a key advantage: our average purchase prices obtained from hospitals, by definition, represent actual prices paid by hospitals. As collectors of data on SCOD prices, we also experienced difficulties obtaining the information needed from hospitals. CMS Faces Challenges in Future Data Collection Efforts to Set SCOD Payment Rates Accurately CMS will face important challenges in its efforts to collect accurate data for setting SCOD payment rates. Validating ASP Would Pose Challenges for CMS Because of Lack of Detail in Data Under CMS’s current policy, manufacturers are required to report only summary ASP data, limiting CMS’s ability to validate the data’s accuracy. CMS instructs manufacturers to average together prices for each drug paid by all U.S. purchasers. In its final rule, CMS did not present evidence that hospitals and physicians pay similar prices for these radiopharmaceutical drugs nor, if these prices differ, whether using these physician data would be appropriate for use in setting hospital outpatient rates. In contrast, we found that the diversity of forms in which radiopharmaceutical SCODs can be purchased—ready-to-use unit doses, multidoses, or separately purchased radioactive and nonradioactive components—complicates CMS’s efforts to select a data source that can provide reasonably accurate price data efficiently. Our experience suggests that the best option available to CMS, in terms of accuracy and efficiency, is to collect price data on radiopharmaceuticals purchased in ready-to-use unit doses, the form in which an estimated three-quarters of hospitals purchase these products. Recommendations for Executive Action To ensure that Medicare payments for SCOD products are based on sufficiently accurate data, we recommend that the Secretary of Health and Human Services take the following two actions: validate, on an occasional basis, manufacturers’ reported drug ASPs as a measure of hospitals’ acquisition costs using a survey of hospitals or other method that CMS determines to be similarly accurate and efficient; and use unit-dose prices paid by hospitals when available as the data source for setting and updating Medicare payment rates for radiopharmaceutical SCODs. Other things equal, a rural hospital paid prices for radiopharmaceutical SCODs that were an estimated 4.4 percent higher than urban hospitals, while large hospitals paid prices an estimated 3.1 percent lower than small hospitals.	Why GAO Did This Study In 2003, the Medicare Modernization Act required the Centers for Medicare & Medicaid Services (CMS) to establish payment rates for a set of new pharmaceutical products--drugs and radiopharmaceuticals--provided to beneficiaries in a hospital outpatient setting. These products were classified for payment purposes as specified covered outpatient drugs (SCOD). The legislation directed CMS to set 2006 Medicare payment rates for SCODs equal to hospitals' average acquisition costs and included requirements for GAO. As directed, GAO surveyed hospitals and issued two reports, providing information to use in setting 2006 SCOD rates. To address other requirements in the law, this report analyzes SCOD price variation across hospitals, advises CMS on future surveys it might undertake, and examines both lessons from the GAO survey and future challenges facing CMS. What GAO Found Analyzing pharmaceutical price data collected from its 2004 survey of hospitals, GAO found that prices hospitals paid for SCOD products varied across hospitals. Certain factors--namely, whether the hospital had a major teaching program or not, was in an urban or rural area, and had a large or small hospital outpatient department--were associated with whether hospitals paid higher or lower prices for SCOD products. Major teaching hospitals paid prices that were an estimated 3.2 percent lower than those paid by nonteaching hospitals for drug SCODs; rural hospitals paid prices an estimated 4.4 percent higher than those paid by urban hospitals for radiopharmaceutical SCODs; and large hospitals paid prices an estimated 1.4 percent lower than those paid by small hospitals for drug SCODs and 3.1 percent lower for radiopharmaceutical SCODs. Combining these factors, GAO found that large, urban, major teaching hospitals--compared with other hospitals--generally paid lower prices, on average, for all SCOD products. From conducting its hospital survey, GAO learned a key lesson that CMS could use in the future: such a survey would not be practical for collecting the data needed to set and update SCOD rates routinely but would be useful for validating, on occasion, CMS's rate-setting data. GAO's survey produced accurate hospital drug price data, but it also created a considerable burden for hospitals as the data suppliers and considerable costs for GAO as the data collector. Nonetheless, the benefit of collecting actual prices paid by hospitals could make such surveys advantageous for occasionally validating CMS's proxy for SCODs' average acquisition costs--the average sales price (ASP) data that manufacturers report. CMS will face important challenges as it seeks to obtain accurate data on hospitals' acquisition costs for drug and radiopharmaceutical SCODs. Regarding drugs, CMS lacks the detail on manufacturers' ASP data needed to determine if rates developed from these data are appropriate for hospitals. Manufacturers report ASP as a single price paid by all purchasers, making it impossible to distinguish the price paid by hospitals alone. CMS instructs manufacturers to report ASP net of rebates but does not specify how to allocate individual product rebates when several products are purchased. Regarding radiopharmaceuticals, GAO found that the diversity of forms in which they can be purchased--ready-to-use unit doses, multidoses, or separately purchased radioactive and non-radioactive substances--complicates CMS's efforts to select a data source that can provide reasonably accurate price data efficiently. Efficiency as well as accuracy is a factor in selecting a data source because radiopharmaceuticals account for only 1.5 percent of Medicare hospital outpatient spending. GAO's experience suggests that the best option available to CMS, in terms of accuracy and efficiency, is to collect price data on radiopharmaceuticals purchased in ready-to-use unit doses, the form in which an estimated three-quarters of hospitals purchase these products.
gao_GAO-04-711T	gao_GAO-04-711T_0	Background The Broadcasting Board of Governors oversees the efforts of all nonmilitary international broadcasting, which reaches an estimated audience of more than 100 million people each week in more than 125 markets worldwide. Created by the Bush administration and the Board, the Middle East Television Network draws its mission from the core purpose of U.S. international broadcasting, which is to promote and sustain freedom by broadcasting accurate and objective news and information about the United States and the world to audiences overseas. Figure 1 illustrates the Board’s current organizational structure. Currently, 42 of the Board’s 74 language services (or 57 percent) target the same audiences in the same languages. Among the broadcast entities, funds are roughly equally divided among VOA and the four other U.S. broadcasting entities. Disparate Structure of Broadcast Operations Remains an Ongoing Challenge The Board’s major organizational challenge is the need to further consolidate and streamline its operations to better leverage existing resources and generate greater program impact in priority markets. New Initiatives Address Marketing Challenges The Board’s strategic plan comments openly on the marketing challenges facing U.S. international broadcasters, specifically that many language services lack a unique reason for listeners or viewers to tune in; few language services have identified their target audiences—a key first step in developing a broadcast strategy; many language services have outmoded formats and programs with an antiquated, even Cold War, sound and style; and three-quarters of transmitted hours have poor or fair signal quality. These initiatives include the Afghanistan Radio Network, Radio Farda service to Iran, and the Alhurra satellite service to the Middle East. Although we have not validated available research data, the Board claims that implementation of these marketing improvements has led to dramatic increases in audience listening rates. Language Service Review Used to Reallocate Millions to Higher- Priority Broadcast Needs The Board manages its limited resources through its annual language service review process, which is used to address such issues as how resources should be allocated among services based on their priority and impact, how many broadcast services should be carried, what degree of overlap and content duplication should exist among services, and whether services should be eliminated because they have fulfilled their broadcast mission. Since 1999, the Board has identified more than $50 million in actual or potential savings through the language service review process by moving resources from lower- to higher-priority services, by eliminating language services, and by reducing language service overlap and transmission costs. Strategic Planning and Performance Management System Revised to Place a Greater Focus on Results Mr. Chairman, the Board has revised its strategic planning and performance management system to respond to the recommendations in our July 2003 report aimed at improving the measurement of its results. Reaching Large Audiences in Key Markets In response to our recommendation for a goal that would measure progress in reaching large audiences in markets of strategic interest to the United States, the Board replaced the seven strategic goals in its plan with a single goal focused on this core objective. Audience Awareness In response to our finding that the Board lacked a measure of audience awareness, the Board has added such a measure to its performance management system.	Why GAO Did This Study The terrorist attacks of September 11, 2001, were a dramatic reminder of the importance of cultivating a better understanding of the United States and its policies with overseas audiences. U.S. public diplomacy activities include the efforts of the Broadcasting Board of Governors, which oversees all nonmilitary U.S. international broadcasting by the Voice of America (VOA) and several other broadcast entities. Such broadcasting helps promote a better understanding of the United States and serves U.S. interests by providing overseas audiences with accurate and objective news about the United States and the world. GAO has issued three reports over the past 4 years examining the organizational, marketing, resource, and performance reporting challenges faced by the Board. Our recommendations to the Board have included the need to address the long-standing issue of overlapping language services (i.e., where two services broadcast in the same language to the same audience) and to strengthen the Board's strategic planning and performance by placing a greater emphasis on results. The Board has taken significant steps to respond to these and other recommendations. What GAO Found The Broadcasting Board of Governors has responded to a disparate organizational structure and marketing challenges by developing a new strategic approach to broadcasting which, among other things, emphasizes reaching large audiences through modern broadcasting techniques. Organizationally, the existence of five separate broadcast entities has led to overlapping language services, duplication of program content, redundant newsgathering and support services, and difficulties coordinating broadcast efforts. Marketing challenges include outmoded program formats, poor signal delivery, and low audience awareness in many markets. Alhurra television broadcasts to the Middle East and Radio Farda broadcasts to Iran illustrate the Board's efforts to better manage program content and meet the needs of its target audiences. Although we have not validated available research data, the Board claims that the application of its new approach has led to dramatic increases in listening rates in key Middle East markets. To streamline its operations, the Board has used its annual language service review process to address such issues as how resources should be allocated among language services on the basis of their priority and impact, what degree of overlap should exist among services, and whether services should be eliminated because they have fulfilled their broadcast mission. Since 1999, the Board has identified more than $50 million in actual or potential savings through this process. In response to our recommendations on the Board's strategic planning and performance management efforts, the Board revised its strategic plan to make reaching large audiences in strategic markets the centerpiece of its performance reporting system. The Board also added broadcaster credibility and audience awareness to its array of performance measures and plans to add a measure of whether VOA is meeting its mandated mission.
gao_GAO-01-299	gao_GAO-01-299_0	States are to report detailed highway data for sampled highway sections. FHWA Developed the HERS-ST Model as an Investment Analysis Tool for Highway Planning at the State Level After its positive experience with the national-level HERS model and the model’s successful adaptation in Oregon and Indiana, FHWA began to formally develop HERS-ST in 1999. FHWA officials believe that states could use the HERS-ST model to perform benefit-cost analysis on highway improvements and to forecast the future condition and performance of state highway systems. FHWA Provided HERS- ST to States Through a Pilot Project FHWA distributed the prototype HERS-ST model software to 20 states volunteering to participate in its pilot project, which is intended to gauge interest in the model and to further identify potential uses for and revisions to it. FHWA Plans to Upgrade HERS-ST According to FHWA officials, if the pilot participants find the HERS concept attractive, FHWA will, as appropriate, provide for revising the HERS-ST model so that it will benefit from upgrades to the national-level version of the model. FHWA officials agreed that a menu-driven program would make the model easier for states to use. Officials from four of the states we spoke with reported that they collect both roughness index data and serviceability rating data. Scope and Methodology To determine why the Department of Transportation’s (DOT) Federal Highway Administration (FHWA) developed a state-level version of the Highway Economic Requirements System (HERS) computer model and how FHWA expects that states will use the model, we first reviewed our work and resulting June 2000 report on the strengths, limitations, and uses of the national HERS model.	What GAO Found The Federal Highway Administration (FHWA) developed the state-level version of the Highway Economic Requirements System (HERS-ST) model as an investment-analysis tool for highway planning at the state level. FHWA officials believe that some state departments of transportation will find the analysis that the HERS-ST model produces useful because it demonstrates the potential results of highway investment decisions from an economic point of view. FHWA is conducting a pilot project for its prototype HERS-ST model with states that volunteered to test the model. FHWA distributed to these states HERS-ST software, technical manuals, and sets of state highway data with which to run the model. FHWA then provided an overall orientation and technical training and addressed states' questions during a workshop. Officials from a sample of the states planning to participate reported that they are primarily interested in taking advantage of the model's use of benefit-cost analysis to assess alternative highway improvements. If the pilot project shows that states view the HERS-ST model as a useful tool, FHWA expects to upgrade the model for future users. In doing so, it would consider both enhancements that have already been planned for the national-level HESR model and changes targeted specifically to HERS-ST. Changes to improve the HESR-ST model's usefulness to states include converting the model to a menu-driven system to improve its ease of use or revising the model's data input format so that it matches FHWA's current state highway data reporting requirements.
gao_GAO-11-587	gao_GAO-11-587_0	IT plays a critical role in enabling IRS to carry out its mission and responsibilities. Of this requested amount, about $2.67 billion is for IT investments. In commenting on a draft of this report, IRS stated it would review the recommendations and provide a detailed corrective action plan to address them. IRS has established most of the foundational practices needed to manage its IT investments. Specifically, the department has executed 30 of the 38 key practices identified by the ITIM as foundational for successful IT management (Stage 2), including all the practices needed to provide investment oversight and capture investment information, and most of those needed to ensure that projects support business needs. Specifically, IRS does not have an enterprisewide IT investment board with sufficient representation from IT and business units that is responsible for the entire investment management process, and the agency has not fully documented its investment management process. Despite these strengths, IRS has not fully documented its investment management process. Specifically, the select phase is primarily carried out by two senior executives (the Executive Review Team), working with several individuals, rather than a larger body composed of representatives from IRS’s IT and business units, and as a result, the perspective and expertise represented are not as broad as they would be with a larger board. Further, the responsibility for the select and control phases lies with two different groups rather than a single body, and it is not clear whether or how these groups are coordinating to ensure that the results of one phase are used to inform decisions made in the other, as would happen with a single board responsible for implementing all phases of the investment management process. The agency has developed written policies and procedures for management oversight of its investments. Considering the size of IRS’s IT budget, not having a process for reselecting ongoing projects could result in potentially millions of dollars being spent with no assurance that the funds are being used wisely.  ensure that the investment management guidance that is expected to be updated by the end of the fiscal year fully documents the preselect and select phases and the role of the Executive Review Team, and specifies the manner in which IT investment-related processes will be coordinated;  assign investment management responsibilities to optimize the decision-making process by ensuring that (1) selection decisions are made by a group that includes sufficient representation from business and IT units to provide broad perspective and expertise, and (2) investment decisions are fully informed by the results of relevant phases of the investment management process;  define and implement a process for taking corrective actions when ongoing projects are not aligned with strategic goals and objectives; and  define and implement a process, including defined criteria, for reselecting ongoing projects. Appendix I: Objective, Scope, and Methodology The objective of our review was to assess the Internal Revenue Service’s (IRS) capabilities for managing its information technology (IT) investments. Our analysis was based on practices contained in GAO’s Information Technology Investment Management (ITIM) framework and the framework’s associated evaluation methodology, and focused on the agency’s implementation of critical processes and key practices for managing its business systems investments.	Why GAO Did This Study The Internal Revenue Service (IRS) relies extensively on information technology (IT) to carry out its mission. For fiscal year 2012, IRS requested about $2.67 billion for IT. Given the size and significance of these investments, GAO was asked to evaluate IRS's capabilities for managing its IT investments. To address this objective, GAO reviewed IRS policies and procedures and assessed them using GAO's IT investment management (ITIM) framework and associated methodology, focusing on the framework's stage relevant to building a foundation for investment management (Stage 2). GAO also interviewed officials responsible for IRS's investment management process. What GAO Found IRS has established most of the foundational practices needed to manage its IT investments. Specifically, the agency has executed 30 of the 38 key practices identified by the ITIM framework as foundational for successful IT investment management, including all the practices needed to provide investment oversight and capture investment information. For example, IRS has defined and implemented a tiered governance structure to oversee its projects and has several mechanisms for the boards to regularly review IT investments' performance. The agency has also established procedures for identifying and collecting information about its investments to inform decision making. Despite these strengths, IRS can improve its investment management process in two key areas. First, IRS does not have an enterprisewide IT investment board with sufficient representation from IT and business units that is responsible for the entire investment management process, and as a result may not be optimizing its decision-making process. Specifically, project selection is carried out by a team of two senior executives representing IRS's deputy commissioners, rather than a larger body composed of representatives from both IT and business units, and as a result, the perspective and expertise represented are not as broad as they would be with a larger board. Further, because the responsibility for the select and control phases lies with different groups rather than a single body, results of one process are not used to inform decisions made in the other, as would happen with a single board responsible for implementing all phases of the investment management process. IRS stated that it plans to address this coordination issue. Second, IRS does not have a process, including defined criteria, for reselecting (i.e., deciding whether to continue funding) ongoing projects. Given the size of its IT budget, IRS could be spending millions of dollars with no assurance that the funds are being used wisely. What GAO Recommends GAO is making recommendations to the Commissioner of Internal Revenue, including assigning responsibilities for implementing the investment management process to optimize decision making, and defining and implementing a process for deciding whether to continue funding ongoing projects. In commenting on a draft of this report, IRS concurred with GAO's recommendations.
gao_GAO-01-963	gao_GAO-01-963_0	The Corps carried out most of the renovation work for the school system from fiscal years 1999 through 2001. GSA Concerns With School System’s Use of the Contract After we raised questions about the school system’s use of the Washington Gas contract, the GSA contracting officer responsible for the contract sent a May 2001 letter to the school system’s contracting officer stating that (1) the contract is not intended to provide general facility improvements and maintenance that are not energy-related and (2) continued use of the contract for services outside the scope and intent would jeopardize the school system’s ability to continue using the contract. The school system failed to adhere to review and oversight requirements. The District of Columbia has controls in place to ensure that it obtains fair and reasonable prices and to provide contract oversight. Such requirements are in place to ensure that the District obtains the best price and service, contracts are legally sound, payments to contractors are justified, and work has adequately been competed. In addition, we checked to see whether the subcontractor had been paid by Washington Gas. Here, there is a material difference between GSA’s contract with the Washington Gas Light Company for gas utility and energy management services and the orders placed by the school system under the contract. These subcontractors included general contractors and heating and plumbing contractors.	Why GAO Did This Study By the mid 1990s, most of the District of Columbia's public schools were more than 50 years old and in poor condition. Deferred maintenance had led to a host of safety problems, from fire code violations to leaky roofs. What GAO Found GAO found that the D.C. school system mismanaged a contract with the Washington Gas Light Company. GAO found the use of the gas contract to obtain school renovation services, including painting, carpeting, plumbing, and electrical work, was outside the scope of the contract. In addition, in carrying out the renovation work, the D.C. school system failed to adhere to controls and procedures intended to (1) ensure that the District obtained the best price and services and (2) maintain a proper relationship between the contractors and the D.C. government. These problems raise serious doubts about whether the District obtained fair and reasonable prices on the renovations and whether the school system should continue the gas utility contract.
gao_GAO-05-43	gao_GAO-05-43_0	Steps Taken by CMS and Its Contractors Did Not Deter Improper Payments for Power Wheelchairs Beginning in 1997 and continuing over the next 6 years, CMS’s contractors repeatedly communicated their concerns to the agency about rapid increases in Medicare spending for power wheelchairs. During this period, the contractors, however, took a variety of steps, including conducting medical reviews of claims and investigating suspected instances of power wheelchair fraud. However, CMS did not begin to lead efforts to address the underlying problems contributing to potentially improper payments for power wheelchairs until September 2003. CMS Did Not Act on Contractors’ Early Warnings about Escalating Power Wheelchair Payments In 1997, CMS’s SADMERC—its data analysis contractor—alerted CMS and the DME regional carriers about rapid increases in the spending for, and utilization of, power wheelchairs in the Medicare program. In a joint April 1998 memorandum sent to CMS officials, the medical directors requested CMS’s assistance in addressing power wheelchair spending growth and proposed implementing changes in the coverage policy for power wheelchairs. Funding for Claims Review Declined as Power Wheelchair Spending Rose Because annual funding for the DME regional carriers to conduct medical reviews declined, while power wheelchair spending rose, the DME regional carriers’ capacity to conduct medical review was affected. Second, the 21 standards that NSC uses to evaluate suppliers lack the specificity needed to screen out illegitimate suppliers and do not provide guidance on appropriate marketing practices. CMS requires NSC to conduct a site visit to assess compliance with the 21 supplier standards before authorizing a new supplier to bill Medicare. Other than constraining suppliers’ communications with beneficiaries by telephone, the 21 supplier standards do not provide guidance on appropriate marketing practices. Recommendations for Executive Action To help ensure that improper payments are identified and addressed in a timely manner and that Medicare pays properly for power wheelchairs and other items of DME, we recommend that the Administrator of CMS take four actions: Develop a process within CMS to focus on trends in Medicare spending and disproportionate or suspicious Medicare payments; develop strategies to address the trends that may indicate possible improper payments for DME; and take timely action, when warranted. Appendix I: Scope and Methodology We assessed the early and more recent steps taken by the Centers for Medicare & Medicaid Services (CMS) and its contractors to respond to improper payments for power wheelchairs.	Why GAO Did This Study Medicare spending for power wheelchairs--one of the program's most expensive items of durable medical equipment (DME)--rose more than fourfold from 1999 through 2003, while overall Medicare spending rose by about 11 percent for the same period, according to the Centers for Medicare & Medicaid Services (CMS). This spending growth has raised concerns that some of the payments may have been improper. In May 2003, the Department of Justice indicted several power wheelchair suppliers in Texas alleged to have fraudulently billed Medicare. GAO was asked to examine the early and more recent steps taken by CMS and its contractors to respond to improper payments for power wheelchairs. What GAO Found Starting in 1997 and over the next 6 years, CMS's contractors repeatedly communicated with CMS officials about escalating spending for power wheelchairs, and the contractors took steps to respond to improper payments for this Medicare benefit. In 1997, one contractor warned the agency about rapid increases in power wheelchair spending. In 1998 and in 2000, medical directors at the four contractors that pay DME claims suggested steps that could be taken and sought CMS's help in curbing power wheelchair spending growth. However, while contractors continued to conduct in-depth medical reviews of claims for power wheelchairs and to investigate cases of suspected fraud, CMS did not begin to assume an active role in addressing the identified problems until September 2003. Problems included Medicare supplier standards that did not provide adequate guidance on appropriate marketing practices and the predictability of visits to screen suppliers, which made it relatively easy for illegitimate suppliers to prepare for, and pass, site inspections. Since September 2003, CMS has taken steps to prevent fraudulent suppliers from entering the Medicare program, clarify coverage policy, ensure appropriate pricing for power wheelchairs, provide education on coverage rules, conduct detailed claims reviews where power wheelchair fraud was prevalent, and coordinate with law enforcement agencies. Although CMS has made progress, it has not implemented a revised form to collect better information for power wheelchair claims review, clarified guidance for suppliers on appropriate marketing, or required its contractor to routinely conduct less predictably timed site visits. Further, CMS's response to power wheelchair spending highlighted the lack of a process within the agency to rapidly address indications of potentially improper DME payments.
gao_GAO-14-476	gao_GAO-14-476_0	contracts, loans and grants). Data on financial assistance awards (e.g., grants) are received from reports submitted by agencies in a file format called Federal Assistance Award Data System PLUS (FAADS+). GAO, Electronic Government: Implementation of the Federal Funding Accountability and Transparency Act of 2006, GAO-10-365 (Washington, D.C.; Mar. USASpending.gov website, we recommended, among other things, that the Director of OMB revise guidance to federal agencies on reporting federal awards to clarify the requirement that award titles describe the award’s purpose and requirements for validating and documenting agency award data submitted by federal agencies; and include information on the city where work is performed in OMB’s public reporting of the completeness of agency data submissions. Agencies Generally Reported Contracts, but Many Assistance Programs Were Not Reported Although agencies generally reported information for contracts to USASpending.gov, they did not properly report information on assistance awards, totaling nearly $619 billion. One agency, the Millennium Challenge Corporation, reported an ongoing inability to report its awards because its recipients are foreign governments or non-governmental organizations. However, OMB’s guidance describes how to report foreign In June 2013, OMB assistance and other agencies report such awards.issued a memorandum directing agencies to establish procedures to ensure that financial data reported on USASpending.gov is consistent with agency financial records. If properly implemented, these procedures could better ensure that agencies fully report future assistance awards. Of the 37 agencies with budget authority of at least $400 million each in fiscal year 2012, the website includes information on at least one contract awarded by 33 of the agencies. Specifically, of our sample of 385 awards, 4 percent contained information that was fully consistent with agency records for all 21 data elements. determine whether the remaining data elements were significantly consistent or inconsistent, in large part because of incomplete or inadequate agency records. Eight Data Elements Had Information That Was Significantly Inconsistent with Information in Agency Records While only one data element contained information that was significantly consistent with agency records, eight were significantly inconsistent for fiscal year 2012 awards, with estimated rates on inconsistency of at least 10 percent (see table 4). OMB did this twice. Four data elements in particular exhibited a significant amount of unverifiable information, meaning that at least 10 percent of awards contained unverifiable information for these data elements. By not capturing this information in some authoritative source, the information displayed on the website is not verifiable. Without more specific guidance on how agencies are to substantiate the information required to be reported to USASpending.gov and a process to ensure adherence to that and existing guidance, agencies will be constrained in their ability to comply with OMB guidance requiring agency validation of award information. While OMB placed additional responsibilities on agencies to ensure their reported information was accurate, our testing of the 2012 awards shows that this approach has had limited effect on the overall quality of the data. However, the ongoing inaccuracies in reported non-financial award information reinforce the need for a more comprehensive oversight process. Finally, gaps in records used to validate the data on the website continue to exist. Until these issues are addressed, any effort to validate USASpending.gov data will be hampered by uncertainties about the accuracy of the data. Recommendations for Executive Action To improve the completeness and accuracy of data submissions to the USASpending.gov website, we recommend that the Director of the Office of Management and Budget, in collaboration with Treasury’s Fiscal Service, take the following two actions: clarify guidance on: agency responsibilities for reporting awards funded by non-annual appropriations; the applicability of USASpending.gov reporting requirements to non-classified awards associated with intelligence operations; the requirement that award titles describe the award’s purpose (consistent with our prior recommendation); agency maintenance of authoritative records adequate to verify the accuracy of required data reported for use by USASpending.gov; and develop and implement a government-wide oversight process to regularly assess the consistency of information reported by federal agencies to the website other than the award amount. OMB generally agreed with our recommendations. The Millennium Challenge Corporation and Treasury neither agreed nor disagreed with our recommendations. Appendix I: Objectives, Scope, and Methodology Our objectives were to determine the extent to which (1) federal agencies report required award data and (2) inconsistencies exist between the data on USASpending.gov and records at federal agencies.	Why GAO Did This Study The Federal Funding Accountability and Transparency Act was enacted in 2006 to increase the transparency over the more than $1 trillion spent by the federal government on awards annually. Among other things, the act requires OMB to establish a website that contains data on federal awards (e.g., contracts and grants) and guidance on agency reporting requirements for the website, USASpending.gov. GAO's objectives were to determine the extent to which (1) agencies report required award data and (2) the data on the website are consistent with agency records. To assess reporting, GAO reviewed laws and guidance, analyzed reported award data, and interviewed agency officials. To assess inconsistency, GAO selected a representative sample of 385 fiscal year 2012 awards and traced them back to agency source records. What GAO Found Although agencies generally reported required contract information, they did not properly report information on assistance awards (e.g., grants or loans), totaling approximately $619 billion in fiscal year 2012. Specifically, 33 of 37 agencies with a budget authority of at least $400 million reported at least one contract. The other four claimed exemptions from reporting, such as the use of non-appropriated funds, but gaps in Office of Management and Budget (OMB) guidance make it unclear whether such exemptions are appropriate. Also, agencies reported required information for at least one assistance award for 1,390 of 2,183 programs listed in a federal catalog. Another 451 programs did not make an award subject to USASpending.gov reporting. However, agencies did not appropriately submit the required information for the remaining 342 programs, although many reported the information after GAO informed them of the omission. Officials with the Millennium Challenge Corporation said that they could not report because its recipients are foreign. However, OMB's guidance describes how to report foreign assistance and other agencies report such awards. OMB has taken steps to improve the completeness of assistance awards on the website, including issuing a memorandum in June 2013 directing agencies to ensure that data on USASpending.gov are consistent with agency financial records. If properly implemented, these procedures could better ensure that agencies report future assistance awards. Few awards on the website contained information that was fully consistent with agency records. GAO estimates with 95 percent confidence that between 2 percent and 7 percent of the awards contained information that was fully consistent with agencies' records for all 21 data elements examined. The element that identifies the name of the award recipient was the most consistent, while the elements that describe the award's place of performance were generally the most inconsistent. GAO could not determine whether the remaining data elements were significantly consistent or inconsistent, in large part because of incomplete or inadequate agency records. Four data elements in particular (e.g., program source information and the state of performance) had inadequacies that were significant. This means that for each of the four data elements, at least 10 percent of awards contained unverifiable information. While OMB placed responsibilities on agencies to ensure their reported information is accurate and substantiated by supporting documentation, this approach has had limited effect on the overall quality of the data on the website, reinforcing the need for a more comprehensive oversight process by OMB and more specific guidance from OMB on how agencies are to validate information reported to USASpending.gov. Until these weaknesses are addressed, any effort to use the data will be hampered by uncertainties about accuracy. What GAO Recommends To improve reliability of information on the USASpending.gov website, GAO is making recommendations to the Director of OMB to (1) clarify guidance on reporting award information and maintaining supporting records, and (2) develop and implement oversight processes to ensure that award data are consistent with agency records. GAO also recommends that the Chief Executive Officer of the Millennium Challenge Corporation report its award information, as required. OMB generally agreed with GAO's recommendations. While the Millennium Challenge Corporation neither agreed nor disagreed with the recommendation, GAO believes it is needed, as discussed in this report.
gao_GAO-02-806	gao_GAO-02-806_0	Background VA has two basic cash disability benefits programs. If the Board denies benefits or grants less than the maximum benefit available under the law, veterans may appeal to the U. S. Court of Appeals for Veterans Claims. The accuracy measure used by the Board understates its true accuracy rate because the Board’s accuracy rate calculations include certain deficiencies that would not result in either a reversal or a remand by the court. VA Does Not Systematically Assess Consistency of Decision Making Even though evidence suggests decision making across regional office and Board adjudicators may not be consistent, VA does not systematically assess decision making consistency to determine the degree of variation that occurs for specific impairments and to provide a basis for identifying steps that could be taken, if considered necessary, to reduce such variation. In its 2003 performance plan, VA acknowledged that veterans are concerned about the consistency of disability claims decisions across the 57 regional offices. VA, however, does not assess variation in decision making. Accordingly, we recommend that the Secretary of VA direct the Chairman of the Board of Veterans’ Appeals to: Revise the quality assurance program so that, similar to VBA, the calculation of accuracy rates will take into account only those deficiencies that would be expected to result in a reversal of a Board decision by the U.S. Court of Appeals for Veterans Claims or result in a remand by the court. In 3,657 of these cases, veterans go on to file appeals with the Board. After regional offices resubmitted denied cases to the Board for a final decision, the Board granted at least one of the requested benefits in about 26 percent of the cases, denied all benefits in about 49 percent, and remanded about 25 percent once again to regional offices for further rework. Appendix III: Comments from the Department of Veterans Affairs	What GAO Found For fiscal year 2002, the Department of Veterans Affairs (VA) will pay $25 billion in cash disability benefits to 3.3 million disabled veterans and their families. Veterans who are dissatisfied with VA's 57 regional offices' decisions may file appeals with VA's Board of Veteran's Appeals. In about half of such appeals, the Board has either granted the benefits denied or returned the cases to regional offices for rework. Additionally, VA reported an accuracy rate of less than 70 percent for regional office disability decisions when it tested a new quality assurance program in fiscal year 1998. When the Board itself denies benefits, veterans may appeal to the U.S. Court of Appeals for Veterans Claims. In over half of these appeals, the Court has either granted the benefits denied by the Board or returned the decisions to the Board for rework. In fiscal year 1998, the Board of Veteran's Appeals established a quantitative evaluation program to score its decisionmaking accuracy and collect data to improve decisionmaking. The accuracy measure used by the Board understates its true accuracy rate because the calculations include certain deficiencies, such as errors in a written decision's format, which would not result in either a reversal or a remand by the Court. VA does not assess the consistency of decisionmaking across the regional office and Board disability adjudicators even though VA acknowledges that in many cases adjudicators of equal competence could review the same evidence but render different decisions. Although available evidence indicates that variations in decisionmaking occur across all levels of VA adjudication, VA does not conduct systematic assessments to determine the degree of variations that occurs for specific impairments and to provide a basis for determining ways to reduce such variations.
gao_GAO-07-914	gao_GAO-07-914_0	FFMIA requires the departments and agencies covered by the CFO Act to implement and maintain financial management systems that comply substantially with (1) federal financial management systems requirements, (2) applicable federal accounting standards, and (3) the SGL at the transaction level. Most agency systems, though, are not yet substantially in compliance with FFMIA’s requirements. As shown in figure 3, IGs and their contract auditors reported for fiscal year 2006 that 17 of the 24 CFO Act agencies did not substantially comply with at least one of FFMIA’s three requirements—federal financial management systems requirements, applicable federal accounting standards, or the SGL at the transaction level. Problems Reported by Agency Auditors Based on our review of the fiscal year 2006 audit reports for the 17 agencies reported to have systems not in substantial compliance with one or more of FFMIA’s three requirements, we identified six primary reasons for agency systems not being compliant: nonintegrated financial management systems, inadequate reconciliation procedures, lack of accurate and timely recording of financial information, noncompliance with the SGL, lack of adherence to federal accounting standards, and weak security controls over information systems. Some agencies have made little progress addressing these areas. The CFO Act calls for agencies to develop and maintain integrated accounting and financial management systems that comply with federal systems requirements and provide for (1) complete, reliable, consistent, and timely information that is responsive to the financial information needs of the agency and facilitates the systematic measurement of performance; (2) the development and reporting of cost management information; and (3) the integration of accounting, budgeting, and program information. This problem is particularly serious at the Department of Defense. To help provide a governmentwide solution, OMB has developed the financial management line of business (FMLOB) initiative. As shown in figure 11, all of the agencies’ summarized remediation plans included corrective actions. However, these efforts far too often result in systems that do not meet their cost, schedule, and performance goals. Furthermore, modernization efforts at DHS and DOJ have been hampered because these agencies did not follow best practices in systems development and implementation efforts (commonly referred to as disciplined processes). VI) on a draft of this report, OMB agreed with our assessment that while federal agencies have continued to make progress in financial management, many agencies still need to improve their financial systems so that reliable, useful, and timely financial management information is available for day-to-day operations. A-123 initiatives. We are also sending copies to the Director of the Office of Management and Budget, the heads of the 24 CFO Act agencies in our review, and agency CFOs and inspectors general.	Why GAO Did This Study The Federal Financial Management Improvement Act of 1996 (FFMIA) requires the 24 Chief Financial Officers (CFO) Act agencies to implement and maintain financial management systems that comply substantially with (1) federal financial management systems requirements, (2) federal accounting standards, and (3) the U.S. Government Standard General Ledger (SGL). FFMIA also requires GAO to report annually on the implementation of the act. This report, primarily based on GAO and inspectors general reports, discusses (1) the problems that continued to affect agencies systems' FFMIA compliance in fiscal year 2006 and (2) the initiatives under way to help move federal financial management toward FFMIA compliance. What GAO Found Federal agencies have continued to make progress in meeting the requirements of FFMIA since the passage of the law in 1996. Most agencies though, have not yet progressed to the stage that their systems are substantially compliant, and some agencies have made little progress. Accordingly, agencies continue to fall short in their attempts to establish the financial systems needed to create the full range of information needed for effective day-to-day management. In fiscal year 2006, auditors for 17 of the 24 CFO Act agencies reported that agencies' financial management systems did not substantially comply with at least one of the three FFMIA requirements. Based on audit reports, GAO identified six types of problems primarily related to agencies' systems. These problems with agency financial systems remain a significant obstacle to supporting effective management of the federal government. With regard to improvement initiatives, GAO noted continued progress in two key areas: (1) agencies' required remediation plans and (2) the Office of Management and Budget's (OMB) efforts to address system implementation problems. All 12 of the remediation plans GAO reviewed included corrective actions, but several were missing key elements. Moreover, agencies continue to struggle with efforts to modernize their financial management systems. This problem is particularly acute at the Department of Defense. Agency modernization efforts have been consistently hampered by failure to follow best practices in systems development and implementation, commonly referred to as disciplined processes. As a result, these efforts far too often do not meet cost, schedule, and performance goals. To help address these problems, OMB has demonstrated continued progress in the implementation of the financial management line of business initiative. However, additional steps forward are needed to provide a foundation for this initiative.
gao_GAO-08-760	gao_GAO-08-760_0	Control of Fraud, Waste, and Abuse in Medicare Part D The MMA includes a requirement that all Part D sponsors have a program to control fraud, waste, and abuse in Part D; CMS regulations establish the requirements for comprehensive compliance plans for Part D plan sponsors. The Part D Sponsors We Reviewed Had Not Completely Implemented CMS’s Required Elements and Selected Recommended Measures for Part D Fraud and Abuse Programs The five Part D sponsors we reviewed had not completely implemented all of CMS’s seven required compliance plan elements and selected recommended measures for Part D fraud and abuse programs. However, Part D sponsors varied in their implementation of the remaining required elements and selected recommend measures. CMS’s Activities Have Been Limited to the Initial Review and Approval of the Plans for Part D Sponsors’ Fraud and Abuse Programs CMS’s oversight activities to date have been limited to review and approval of Part D sponsors’ compliance plans detailing their fraud and abuse program plans submitted as part of their initial Part D sponsor applications. Rather than disapproving these sponsors’ fraud and abuse program plans, CMS officials reported that they worked with the sponsors to help them develop fraud and abuse program plans that would be approved in that first year. In spite of this risk and 3 years after the start of the Part D program, CMS has not conducted oversight activities to monitor sponsors’ implementation of fraud and abuse programs. In particular, the agency reported that it would conduct audits of fraud and abuse programs in 2007. CMS disagreed with our finding that the agency’s oversight has been limited. Appendix I: Methodology for Examining Certain Sponsors’ Implementation of Fraud and Abuse Programs for Part D To examine the extent to which certain Part D sponsors implemented programs to control fraud, waste, and abuse, we conducted on-site reviews at five Part D sponsors. For these on-site reviews, we developed a data collection instrument based on: (1) the required compliance plan elements and certain recommended measures for fraud and abuse programs outlined in regulations and chapter 9 of the Part D Prescription Drug Benefit Manual and (2) additional input provided by the Centers for Medicare & Medicaid Services (CMS).	Why GAO Did This Study The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) established a voluntary outpatient prescription drug benefit, known as Medicare Part D. The Centers for Medicare & Medicaid Services (CMS) contracts with private companies to serve as Part D sponsors and administer the Part D prescription drug benefit plans. To protect beneficiaries and the fiscal integrity of the program, the MMA requires Part D sponsors to implement programs to control for fraud and abuse in Part D. Subsequent regulations and guidance from CMS contain requirements and recommended measures for these programs. This report examines (1) the extent to which certain Part D sponsors have implemented programs to control fraud, waste, and abuse and (2) the extent of CMS's oversight of Part D sponsors' programs to control fraud, waste, and abuse. GAO conducted on-site reviews of five of the largest Part D sponsors' fraud and abuse programs. GAO also interviewed officials from CMS and reviewed CMS documents. What GAO Found The five Part D sponsors in GAO's review had not completely implemented all of CMS's required compliance plan elements and selected recommended measures for Part D fraud and abuse programs. All Part D sponsors had completely implemented the requirements and selected recommendations for three of the seven required compliance plan elements. However, Part D sponsors varied in their implementation of the remaining required elements and selected recommended measures. CMS oversight of Part D sponsors' fraud and abuse programs has been limited. To date, CMS's activities have been limited to the review and approval of sponsors' fraud and abuse program plans submitted as part of the initial Part D applications. For example, CMS officials reported that they worked with sponsors to help them develop fraud and abuse program plans that met the agency's compliance plan requirements and recommendations specific to fraud and abuse. However, CMS has not conducted oversight to assess Part D sponsors' implementation of fraud and abuse programs. Officials from CMS stated that the agency had not audited sponsors' implementation of fraud and abuse programs in 2007, and as of April 2008, no audits of these programs had been conducted.
gao_GAO-06-1076	gao_GAO-06-1076_0	MegaCenters Provide Alarm and Radio Monitoring and Dispatch from Four Locations FPS MegaCenters provide federal agencies with three primary security services—alarm monitoring, radio monitoring, and dispatch—through four locations using a variety of IT systems. The MegaCenters are located in Battle Creek, Denver, Philadelphia, and Suitland. MegaCenter managers assess MegaCenter operations through a variety of means, including reviewing data about volume and timeliness of operations, listening to and evaluating a sample of calls between operators and FPS police officers and contract guards, and receiving informal feedback about customer satisfaction. Conclusions FPS MegaCenters play a key role in protecting federal facilities, those who enter these facilities, and the FPS police officers and contract guards whose calls the MegaCenters respond to and monitor. Recommendations for Executive Action We recommend that the Secretary of Homeland Security direct the Director of the Federal Protective Service to take the following three actions: establish MegaCenter performance measures that meet the attributes of successful performance measures we have identified; develop a performance measure for the MegaCenters that is directly linked to the FPS-wide response time measure and covers the scope of the MegaCenters’ operations, from alarm to dispatch; and routinely assess the extent to which the MegaCenters meet established performance measures. The Department of the Interior did not provide comments on this report. (2) Determine how FPS assesses and measures the performance of MegaCenter operations and how FPS links MegaCenter performance measures to FPS-wide performance measures. Remote monitoring of building alarm systems, radio monitoring, and dispatching of FPS police officers and contract guards are the primary services FPS MegaCenters provide. These and other services are provided around the clock from four locations across the country. In addition, the MegaCenters have a fiscal year 2006 budget of $23.5 million and use a variety of information technology (IT) systems and other equipment to provide their services. FPS managers have also developed performance measures for assessing MegaCenter operations. Although these MegaCenter measures reflect some attributes of successful performance measures, they also contain some weaknesses because they are not always clearly stated or measurable, and do not address governmentwide priorities of efficiency, cost of service, and outcome. The nine selected organizations offer some of the MegaCenters’ primary services, and they deliver and assess the services they offer in a generally similar manner to the MegaCenters. For example, like the MegaCenters, many of these organizations have centralized their control center operations, have backup capability, allocate workload among control centers based on geographic location, and use regular call reviews as well as volume and time measures to assess the quality of the services they provide. One difference between the MegaCenters and the selected organizations is that three of these organizations use a CAD system, which the MegaCenters do not have.	Why GAO Did This Study The Department of Homeland Security's Federal Protective Service (FPS) through its control centers (MegaCenters) helps provide for the security and protection of federally owned and leased facilities. This report (1) identifies the services MegaCenters provide, (2) determines how FPS assesses MegaCenter performance and whether FPS links MegaCenter performance measures to FPS-wide measures, and (3) examines how MegaCenters and selected organizations compare in the services they provide. To address these issues, GAO reviewed FPS's performance measures and past MegaCenter assessments, assessed the MegaCenters' performance measures, and interviewed officials and collected relevant information at FPS, the four MegaCenters, and nine selected security organizations. What GAO Found FPS MegaCenters provide three primary security services--alarm monitoring, radio monitoring, and dispatching of FPS police officers and contract guards. These and other services are provided around the clock from four locations--Battle Creek, Michigan; Denver, Colorado; Philadelphia, Pennsylvania; and Suitland, Maryland. With a fiscal year 2006 budget of $23.5 million, the MegaCenters monitor alarms at over 8,300 federal facilities, covering almost 381 million square feet, and have available for dispatch over 7,800 FPS police officers and contract guards. FPS MegaCenter managers assess MegaCenter operations through a variety of means, including reviewing data about volume and timeliness of operations, listening to and evaluating a sample of calls between operators and FPS police officers and contract guards, and receiving informal feedback about customer satisfaction. FPS managers have also developed performance measures for assessing MegaCenter operations. However, these measures are of limited use because they are not always clearly stated or measurable and do not address governmentwide priorities of efficiency, cost of service, and outcome--which are among the attributes that GAO has identified for successful performance measures. In addition, the MegaCenters do not measure a key activity--the time from alarm to officer dispatch--that would link MegaCenter performance to an FPS-wide performance measure. Without this measure, FPS is limited in its ability to evaluate the MegaCenters' contribution to the FPS-wide measure of response time. Nine selected security organizations--including federal and local police and private entities--offer some of the MegaCenters' services as well as provide and assess these services in a manner that is generally similar to the MegaCenters. Like the MegaCenters, many of the selected organizations have centralized their operations. They also use regular call reviews and volume and time measures to assess the quality of the services they provide. A major difference between the MegaCenters and some selected organizations is the use of a computer-aided dispatch system, which enables these organizations to automate many functions.
gao_GAO-12-797	gao_GAO-12-797_0	Background In the United States, the national inventory of commercial spent nuclear fuel amounts to nearly 70,000 metric tons, which is stored at 75 sites in 33 states (see fig. 1). DOE established the commission, which studied alternatives including options for interim storage of spent fuel and permanent disposal. Large Quantities of Spent Nuclear Fuel Are Expected to Remain at Commercial Reactor Sites for Decades The amount of spent fuel accumulating at commercial reactor sites is expected to increase by about 2,000 metric tons each year until it can begin to be shipped off-site and, even then, shipping it off-site will be a decades-long process. Spent Nuclear Fuel Could Nearly Double before Being Transported to a Storage or Disposal Facility The amount of spent fuel is expected to more than double to about 140,000 metric tons by 2055, when the last of currently operating reactors is expected to retire, according to the Nuclear Energy Institute, but it may take at least that long to ship the spent fuel off-site. The Key Risk of Stored Spent Fuel Is Difficult to Quantify, but Some Mitigating Actions Have Been Taken According to several studies on spent fuel storage, the key risk of storing spent fuel at reactor sites is radiation exposure from spent fuel that has caught fire when it is stored in a pool, but it is difficult to quantify the probability of such an event. Radiological Release from a Pool Fire Is the Key Risk Posed by Spent Fuel Storage, but Quantifying This Probability Is Difficult Radiation exposure—from a minor dose resulting from a work-related accident to a severe, widespread release of radiation from a spent fuel fire—is the key concern about the hazard of storing spent nuclear fuel. These early fatalities could be reduced or eliminated, according to the study, if the radiation release was less severe and if there were an early evacuation of the affected population. Spent Fuel in Dry Storage Is Less Susceptible to a Significant Radiological Release Than Is Spent Fuel Stored in Pools Spent nuclear fuel in dry storage is less susceptible to a radiological release of the magnitude of a zirconium fire in a spent fuel pool, according to documents we reviewed and interviews we conducted with officials from NRC, the National Academy of Sciences, and the Nuclear Waste Technical Review Board; officials from industry; and representatives of community action groups. Such mechanisms would require energy, such as a fire. If an accident or attack involving a spent fuel pool causes a loss of water, the fuel assemblies can heat up and produce steam. NRC Has No Centralized Mechanism to Help Identify, Locate, and Access Classified Studies on Spent Fuel In conducting our work, we found that NRC does not have a mechanism to ensure that it can easily identify and locate all classified studies conducted over the years. To identify studies, we interviewed numerous NRC and other officials and identified studies through references in other studies we reviewed. Once spent fuel is in dry storage, additional challenges may arise, such as costs for repackaging should it be needed. Accelerating Transfer of Spent Fuel from Wet to Dry Storage Presents Challenges and Some Risk Accelerating the transfer of spent fuel from wet to dry storage entails some operational challenges, and some industry representatives told us that they have questioned whether the cost of overcoming these challenges is worth the benefit, particularly considering the low probability of a catastrophic release of radiation. Furthermore, in a 2003 response to a recommendation by the Institute of Policy Analysis to accelerate the transfer of spent fuel from wet to dry storage to reduce the likelihood and potential consequences of a pool fire, NRC reported that accelerating the transfer of spent fuel is not justified, particularly given the billions of dollars it will cost, with no appreciable increase in safety. In commenting on a draft of this report, NRC reiterated this position, stating that it does not require the accelerated transfer of spent fuel to dry storage, particularly considering the small increase in safety that could be achieved, because it considers both wet and dry storage to be safe under current regulations. Increasing costs. Managing Spent Fuel after Transfer from Wet to Dry Storage at Reactor Sites Presents Additional Challenges Reactor operators had never intended to leave spent fuel on their sites for extended periods, but even if the United States began to develop an off- site centralized storage or disposal facility today, spent fuel—which has already been stored on-site for several decades—would be stored on-site for several decades more. As a result, the following challenges could affect decisions on managing spent fuel. Continued storage of spent fuel may be costly. Moreover, because storage or disposal facilities may take decades to develop, in managing spent fuel, NRC and DOE officials and others with appropriate clearances and a need to know may need to review classified studies conducted by and for NRC on the safety and security of spent fuel. Recommendation for Executive Action To help facilitate decisions on storing and disposing of spent nuclear fuel over the coming decades, we recommend that the Chairman of the Nuclear Regulatory Commission direct agency staff to develop a mechanism that allows individuals with appropriate clearances and the need to know to easily identify and access classified studies so as to help ensure that institutional knowledge is not lost. In written comments, which are reproduced in appendix IV, NRC generally agreed with the findings and the recommendation in our report.	Why GAO Did This Study Spent nuclear fuel, the used fuel removed from nuclear reactors, is one of the most hazardous substances created by humans. Commercial spent fuel is stored at reactor sites; about 74 percent of it is stored in pools of water, and 26 percent has been transferred to dry storage casks. The United States has no permanent disposal site for the nearly 70,000 metric tons of spent fuel currently stored in 33 states. GAO was asked to examine (1) the amount of spent fuel expected to accumulate before it can be moved from commercial nuclear reactor sites, (2) the key risks posed by stored spent fuel and actions to help mitigate these risks, and (3) key benefits and challenges of moving spent nuclear fuel out of wet storage and ultimately away from commercial nuclear reactors. GAO reviewed NRC documents and studies on spent fuels safety and security risks and industry data, interviewed federal and state government officials and representatives from industry and other groups, and visited reactor sites. What GAO Found The amount of spent fuel stored on-site at commercial nuclear reactors will continue to accumulateincreasing by about 2,000 metric tons per year and likely more than doubling to about 140,000 metric tonsbefore it can be moved off-site, because storage or disposal facilities may take decades to develop. In examining centralized storage or permanent disposal options, GAO found that new facilities may take from 15 to 40 years before they are ready to begin accepting spent fuel. Once an off-site facility is available, it will take several more decades to ship spent fuel to that facility. This situation will be challenging because by about 2040 most currently operating reactors will have ceased operations, and options for managing spent fuel, if needed to meet transportation, storage, or disposal requirements, may be limited. Studies show that the key risk posed by spent nuclear fuel involves a release of radiation that could harm human health or the environment. The highest consequence event posing such a risk would be a self-sustaining fire in a drained or partially drained spent fuel pool, resulting in a severe widespread release of radiation. The Nuclear Regulatory Commission (NRC), which regulates the nations spent nuclear fuel, considers the probability of such an event to be low. According to studies GAO reviewed, the probability of such a fire is difficult to quantify because of the variables affecting whether a fire starts and spreads. Studies show that this low-probability scenario could have high consequences, however, depending on the severity of the radiation release. These consequences include widespread contamination, a significant increase in the probability of fatal cancer in the affected population, and the possibility of early fatalities. According to studies and NRC officials, mitigating procedures, such as replacement water to respond to a loss of pool water from an accident or attack, could help prevent a fire. Because a decision on a permanent means of disposing of spent fuel may not be made for years, NRC officials and others may need to make interim decisions, which could be informed by past studies on stored spent fuel. In response to GAO requests, however, NRC could not easily identify, locate, or access studies it had conducted or commissioned because it does not have an agencywide mechanism to ensure that it can identify and locate such classified studies. As a result, GAO had to take a number of steps to identify pertinent studies, including interviewing numerous officials. Transferring spent fuel from wet to dry storage offers several key benefits, including safely storing spent fuel for decades after nuclear reactors retireuntil a permanent solution can be foundand reducing the potential consequences of a pool fire. Regarding challenges, transferring spent fuel from wet to dry storage is generally safe, but there are risks to moving it, and accelerating the transfer of spent fuel could increase those risks. In addition, operating activities, such as refueling, inspections, and maintenance, may limit the time frames available for transferring spent fuel from wet to dry storage. Once spent fuel is in dry storage, there are additional challenges, such as costs for repackaging should it be needed. Some industry representatives told GAO that they question whether the cost of overcoming the challenges of accelerating the transfer from wet to dry storage is worth the benefit, particularly considering the low probability of a catastrophic release of radiation. NRC stated that spent fuel is safe in both wet and dry storage and that accelerating transfer is not necessary given the small increase in safety that could be achieved. What GAO Recommends To help facilitate decisions on storing and disposing of spent nuclear fuel over the coming decades, GAO recommends that NRC develop a mechanism for locating all classified studies. NRC generally agreed with the findings and the recommendation in the report.
gao_GAO-02-441T	gao_GAO-02-441T_0	Since 1992, Medicare has paid for physician services using a fee schedule. The SGR target for total spending is based on spending in an initial, or base, year and the estimated growth in real per capita GDP each year and three other factors that affect overall spending on physician services—the changes in the cost of inputs used to produce physicians’ services (as measured by the Medicare Economic Index (MEI)), the number of Medicare beneficiaries in the traditional fee-for-service program, and expenditures that result from changes in laws or regulations. Several Factors Associated With 2002 Fee Reductions The application of the SGR system in 2002 resulted in a 5.4 percent reduction in physician payment rates, despite an estimated 2.6 percent increase in the costs of inputs used to provide physician services. The reduction occurred because estimated cumulative physician services spending since 1996 exceeded the target for cumulative spending by approximately $8.9 billion, or 13 percent of projected 2002 spending. The SGR system sets spending targets for physician services and adjusts payment rates to bring spending in line with those targets. In setting payment rates for 2002, CMS updated its estimates of past spending and recalculated past targets. The reduction would have been almost 4 percentage points greater, but the SGR system limits how much fees can be adjusted for the differences between actual and target spending. Modifying how spending targets are set could also reduce year-to-year fluctuations in rates. But health care needs of Medicare beneficiaries are not cyclical. Any changes to the SGR must balance the desire for greater rate stability with the need for fiscal discipline. Monitoring Beneficiary Access to Physicians Ensuring that the use of spending targets does not compromise appropriate access to services is a key concern. Concluding Observations The SGR mechanism uses information about physician spending in relation to cost increases, changes in the number of beneficiaries, and growth in the overall economy to impose fiscal discipline on Medicare outlays for these services.	What GAO Found Congress implemented a physician fee schedule and a fee update formula to moderate spending growth relative to specified Medicare spending targets. These spending targets increase annually to reflect higher costs for physician services, the growth in the overall economy, and changes in the number of Medicare beneficiaries. Physician fees are adjusted for changes in the costs of providing services and on actual cumulative spending compared to the cumulative targets. Physician fees are updated to reflect higher costs to provide services. These updates are adjusted up or down on actual spending either falling below or exceeding the targets. In November 2001, the Centers for Medicare and Medicaid announced that updating Medicare's fees will decline 5.4 percent from what was paid in 2001, despite an estimated 2.6 percent increase in the cost of physician inputs. This reduction accounts for historical cumulative spending that exceeded the target by $8.9 billion, or 13 percent of estimated 2002 spending. Several factors contributed to the disparity between actual and targeted spending, including the correction of substantial errors in past spending estimates and the revision of targets for prior years. The current update mechanism could be modified to moderate fluctuations in physician fees and to ensure adequate payments, while retaining the fiscal discipline created by having a spending target. Such modifications would need to balance concerns about preserving fiscal discipline on physician spending with the need to maintain adequate payment rates to ensure that beneficiaries have access to physician services. Because the paramount consideration in setting payment rates is ensuring appropriate beneficiary access to services, timely and detailed data on Medicare beneficiary service use are essential to achieving this balance.
gao_GAO-10-489	gao_GAO-10-489_0	The obligations cited most frequently were (1) establishing an effective legislative and regulatory framework (laws and regulations) and a strong, effective, and independent nuclear regulatory body and (2) preparing a national report every 3 years that describes the measures the country has taken to achieve the Convention’s safety goals. The requirement to prepare a national report describing the steps parties have taken to meet the Convention’s nuclear safety obligations also plays a large role in strengthening the safety of civilian nuclear power programs, according to survey respondents. Confidentiality among the Parties to the Convention Has Been Key to the Success of the Peer Review Process According to most parties we surveyed and interviewed, maintaining the confidentiality of information obtained during the Convention’s meetings is critical to the peer review process. Concerns Exist about Some Aspects of the Convention’s Implementation While the parties’ perceptions of the value of the Convention are generally very positive, some concerns were raised about the lack of information provided to the general public about the Convention’s proceedings, some countries’ lack of resources to fully participate in the review meetings, and the absence of performance metrics. Officials from NRC and State told us that the United States has always made its national report available on the Internet. However, the U.S. approach has been to lead by example rather than taking an active role in encouraging other parties to the Convention to post their national reports to the Internet. Half the parties responding to our survey indicated that it did. Neither State nor NRC has formally proposed the adoption of performance metrics. In their view, without Iran’s participation in the Convention, the international community has limited or no insight on, or access to, how Iran is developing, operating, and maintaining its burgeoning civilian nuclear power program. Russia is helping Iran build the civilian nuclear power reactor at Bushehr, which is expected to be commissioned in the near future. Russian Ministry of Foreign Affairs officials told us that Russia’s continued assistance to Iran’s civilian nuclear program may be conditioned on Iran’s becoming a party to the Convention. An NRC official told us that this change has made the process more open and accessible to all of the parties. IAEA’s Technical Cooperation Program, Safety Standards, and Peer Review Missions Play an Important and Growing Role in Promoting Nuclear Safety Worldwide IAEA provides assistance to its member states to promote peaceful uses of nuclear energy in several ways, including providing technical cooperation, establishing safety standards, and conducting advisory and peer review missions. IAEA’s TC program supports, among other things, nuclear safety and the development of nuclear power. These missions evaluate the operations of a member state’s nuclear regulatory system and civilian nuclear power plant operational safety, respectively. Recommendations for Executive Action To further enhance the usefulness of the Convention in promoting the safety of civilian nuclear power programs worldwide, we recommend that the Secretary of State, in coordination with the Chairman of the Nuclear Regulatory Commission, work with other parties to the Convention to take the following three actions: Encourage parties to include performance metrics in national reports to better track safety in civilian nuclear power plants and help countries more systematically measure where and how they have made progress in improving safety. NRC generally agreed with our report but did not specifically agree or disagree with the report’s recommendations, and State generally agreed with the recommendations to (1) encourage parties to the Convention to include performance metrics in their national reports to better track safety in civilian nuclear power plants, (2) increase the number of parties’ national reports made available to the public by posting them to IAEA’s public Web site, and (3) promote greater public dissemination of parties’ written answers to questions about their nuclear power programs by posting this information to IAEA’s public Web site. Specifically, we assessed (1) parties’ views on the perceived benefits and limitations of the Convention; (2) efforts to improve the implementation of the Convention; and (3) how International Atomic Energy Agency (IAEA) programs complement the Convention’s safety goals and objectives. To assess parties’ views of the perceived benefits and limitations of the Convention and efforts to improve implementation, we (1) interviewed representatives of 17 nuclear and nonnuclear parties to the Convention as well as officials from NRC and State responsible for representing the United States at the Convention; (2) analyzed various Convention-related documents from NRC, State, IAEA, and EU; and (3) conducted a Web- based survey of 64 parties to the Convention.	Why GAO Did This Study Currently, 437 civilian nuclear power reactors are operating in 29 countries, and 56 more are under construction. After the Chernobyl accident, representatives of over 50 nations, including the United States, participated in the development of the Convention on Nuclear Safety, a treaty that seeks to promote the safety of civilian nuclear power reactors. The Convention has been in force since 1996. GAO was asked to assess (1) parties' views on the benefits and limitations of the Convention, (2) efforts to improve implementation of the Convention, and (3) how International Atomic Energy Agency (IAEA) programs complement the Convention's safety goals. GAO surveyed the 64 parties to the Convention for which it was in force at the time of GAO's review and analyzed the responses of the 32 that completed it, analyzed relevant documents, and interviewed U.S. and foreign officials. What GAO Found The Convention on Nuclear Safety plays a useful role in strengthening the safety of civilian nuclear power reactors worldwide, according to most parties to the Convention that responded to GAO's survey and representatives of parties GAO interviewed. In particular, parties indicated that the Convention's obligations to (1) establish effective legislative and regulatory frameworks and strong, independent nuclear regulatory bodies and (2) prepare a national report every 3 years that describes the measures the country has taken to achieve the Convention's nuclear safety goals, are among its most useful contributions. The countries present their national reports at review meetings, address questions that may arise about the reports, and assess and ask questions about the reports of other parties. This is known as the peer review process. Some concerns were raised about limited public access to Convention proceedings, some countries' lack of resources to fully participate in the review meetings, and the absence of performance metrics in the national reports to gauge progress toward meeting safety goals and objectives. Half of the parties responding to GAO's survey stated that the lack of performance metrics limited the usefulness of the Convention. Neither the Department of State nor the Nuclear Regulatory Commission (NRC) has formally proposed the adoption of performance metrics. However, NRC officials told GAO that performance metrics could be useful. In addition, the number of parties posting their national reports to IAEA's public Web site has declined since 2005. NRC and Department of State officials told GAO that the United States has always made its national report available on the Internet. However, the U.S. approach has been to lead by example rather than taking an active role in encouraging other parties to post their reports. Further, universal participation would advance achievement of the Convention's goals. Several representatives from countries who are parties to the Convention told GAO that Iran should ratify the Convention. In their view, without Iran's participation, the international community has limited or no insight on, or access to, Iran's civilian nuclear power program. Russia, which is helping Iran build the nuclear reactor at Bushehr, may condition continued assistance on Iran becoming a party to the Convention, according to Russian officials. The parties have taken some actions to improve the Convention's implementation, and more proposals are being considered. Steps have been taken to make the process for asking questions during peer review meetings more open and to increase the amount of time available for preparing for the review meetings. IAEA nuclear safety programs, which predate the Convention, complement the Convention's safety goals through the Technical Cooperation program, safety standards, and peer review missions. The Technical Cooperation program supports, among other things, the development of nuclear power. IAEA has established nuclear safety standards and also promotes nuclear safety through peer review missions that evaluate the operations of a member state's nuclear regulatory system and nuclear power plant operational safety
gao_RCED-95-9	gao_RCED-95-9_0	Concerned about FmHA’s high losses in its direct loan program and the potential for similar losses in its guaranteed loan program, we reviewed the guaranteed loan program to determine (1) the extent of losses under the guaranteed farm loan program compared with those under the direct loan program, (2) the extent to which the guaranteed farm loan program has graduated FmHA’s direct loan borrowers to commercial credit, and (3) ways to make the guaranteed farm loan program more of a source for funding direct loan borrowers. Specifically, FmHA allows guaranteed or direct loan borrowers who have defaulted on previous loans to obtain new guaranteed loans. FmHA Has Not Routinely Used the Guaranteed Loan Program to Help Viable Direct Loan Borrowers Progress to Commercial Credit A logical step in graduating borrowers from direct loans to commercial credit would be to promptly replace their direct loans with guaranteed loans when a borrower qualifies. As table 3.1 shows, only about 7,300 FmHA direct loan borrowers, or 4 percent of the total number during fiscal years 1991-93, obtained guaranteed loans. FmHA Officials and Lenders Believe That Few Direct Loan Borrowers Qualify for Guaranteed Loans FmHA’s headquarters and field office officials believe that few direct loan borrowers can meet the credit standards required by commercial lenders to qualify for guaranteed loans. VIII), FmHA agreed that it has not emphasized the graduation of direct loan borrowers to commercial credit through the use of the guaranteed loan program.	Why GAO Did This Study GAO reviewed the Farmers Home Administration's (FmHA) guaranteed farm loan program, focusing on: (1) the extent of losses under the guaranteed loan program compared with those under the FmHA direct loan program; (2) the extent to which the guaranteed loan program has graduated FmHA direct loan borrowers to commercial credit; and (3) ways to make the guaranteed farm loan program more of a source for funding direct loan borrowers. What GAO Found GAO found that: (1) the guaranteed farm loan program has substantially lower delinquency and default rates than the direct loan program because its borrowers present fewer financial risks; (2) FmHA increases the government's risk exposure by permitting borrowers who have defaulted on past loans to obtain new guaranteed loans and by failing to follow FmHA loan servicing standards; (3) FmHA has not effectively used the guaranteed loan program to graduate direct loan borrowers to commercial credit; (4) only 4 percent of direct loan borrowers obtained guaranteed loans in fiscal years 1991 through 1993, partially because FmHA did not fully implement its procedures for identifying and graduating qualified direct loan borrowers; (5) Congress has required FmHA to propose regulations to improve borrowers' transition to commercial credit; (6) FmHA and commercial lenders believe that many direct loan borrowers will never qualify for guaranteed loans; and (7) commercial lenders believe that FmHA should provide incentives for borrowers to seek commercial credit and make the guaranteed loan program more attractive to commercial lenders.
gao_GAO-16-379	gao_GAO-16-379_0	The Coast Guard has nine districts that report to the Area Commands. Coast Guard Management Tools for Aligning Personnel to Meet Mission Needs The Coast Guard has also developed management tools to help it align its personnel with its missions. The Coast Guard’s Process for Allocating Assets Has Limitations that Constrain Its Strategic Effectiveness Coast Guard Headquarters’ Strategic Planning Directions Reflect Asset Performance Capacities Rather Than Achievable Goals Coast Guard headquarters does not provide field units with strategic, realistic goals for allocating assets, by mission. As a result, as shown in figure 4, the asset resource hours allocated in the Strategic Planning Directions have consistently exceeded the asset resource hours actually used by Coast Guard field units during fiscal years 2010 through 2015. Until the Coast Guard implements CG-LIMS or another system for asset allocation, using current and accessible information from field units, such as Operational Performance Assessment Reports and Planning Assessments, to inform asset hour allocations in the annual Strategic Planning Directions—in addition to the asset performance capacities currently used—will better ensure that the Coast Guard is effectively communicating strategic intent to its field units, realistically identifying any operational limitations of its assets, and making more informed asset resource hour allocation decisions that are aligned with its strategic goals. The Coast Guard uses the Standard Operational Planning Process (SOPP) to allocate asset resource hours to its field units for meeting their missions, but this planning process allocates maximum asset resource hour capacities and does not also include more realistic operational targets. However, by incorporating data that field units provide to Coast Guard headquarters on assets’ performance—such as Operational Performance Assessment Reports and Planning Assessments—to inform asset hour allocations in headquarters’ annual Strategic Planning Directions, the Coast Guard would be better positioned to ensure it is identifying any operational limitations of its assets, making more informed asset resource hour allocation decisions, and more effectively communicating strategic intent to its field units. The Coast Guard has developed management tools, such as manpower requirements determinations, to help it strategically align its personnel with its missions, but Coast Guard officials state they cannot meet the demand for these analyses and have not established a process to prioritize them because they do not have sufficient staff and lack a system to help analyze the MRA workload. Because the Coast Guard does not have a systematic process for identifying and prioritizing the most important manpower requirements analyses to complete, it does not have reasonable assurance that the highest priority missions are fully supported with the appropriate number of staff possessing the requisite mix of skills and abilities. Further, with regard to the third recommendation, the Department stated that the Coast Guard would be prioritizing manpower requirements analyses of unstudied units and incorporating all available manpower data into future personnel decisions, as resources permit, by October 2016.	Why GAO Did This Study Following the terrorist attacks of September 11, 2001, the Coast Guard has been charged with expanded missions. Further, constrained budgets in recent years have underscored the importance of strategically allocating its assets and personnel to meet these missions. GAO was asked to review the Coast Guard's resource allocation process. This report addresses the extent to which the Coast Guard: (1) employs an effective process to strategically allocate assets to meet its missions, and (2) has determined workforce requirements and addressed identified personnel needs. GAO reviewed Coast Guard planning and workforce requirements documents and asset performance data for fiscal years 2010 through 2015. GAO also discussed the planning process and personnel needs with Coast Guard officials at headquarters; as well as at the two Area and nine District Commands. What GAO Found The Coast Guard developed and uses the Standard Operational Planning Process to annually allocate asset (aircraft and vessels) resource hours to field units for meeting missions, but the headquarters' Strategic Planning Directions used in this process do not provide field units with strategic, realistic goals. Rather, headquarters' Strategic Planning Directions allocate maximum resource hour capacities for each asset—such as 700 hours per Jayhawk helicopter per year. As shown below, these asset allocations have consistently exceeded actual asset resource hours used by field units. By better incorporating data on assets' actual use that field units provide to Coast Guard headquarters—such as Operational Performance Assessment Reports —to inform asset allocation goals in its Strategic Planning Directions, the Coast Guard would better ensure that it effectively communicates strategic intent to its field units and makes more informed asset allocation decisions that are aligned with its strategic goals. The Coast Guard has developed management tools, such as manpower requirements analyses, to help it determine workforce requirements and help align its personnel with its missions. However, a Coast Guard official responsible for these analyses stated that the Coast Guard cannot meet the demand for these analyses because it does not have sufficient staff and a system to help analyze and prioritize the manpower requirements analyses that need to be completed. Without a systematic process for prioritizing the most important manpower requirements analyses to complete, consistent with leading program management practices, the Coast Guard does not have reasonable assurance that the highest priority missions are fully supported with the appropriate number of staff possessing the requisite mix of skills and abilities. What GAO Recommends GAO is making three recommendations to the Coast Guard, including to incorporate field unit input to inform its allocation decisions and to develop a systematic process that prioritizes the most critical manpower requirements analyses to complete. DHS concurred with the recommendations and stated it is taking actions, such as including field unit input into its planning process and prioritizing manpower requirements analyses of unstudied units, as resources permit.
gao_AIMD-99-2	gao_AIMD-99-2_0	We also identified vulnerabilities in certain controls that detect unauthorized access to BPD’s systems. However, we verified that corrective actions resolving these vulnerabilities had been completed by BPD subsequent to September 30, 1997. Application Controls Can Be Strengthened In addition to testing general controls, we tested application controls for two key BPD financial applications maintained and operated at the BPD data center. We identified the following areas where improvements could be made: (1) strengthening access controls by further restricting system access rights and improving security monitoring and (2) managing accuracy controls more effectively by ensuring that established procedures are followed to prevent the unauthorized deletion of exception reports. However, we found several vulnerabilities in general and application controls that require FRB management’s attention and action. We will review the status of FRBs’ other corrective actions as part of our fiscal year 1998 financial audits. The Commissioner of the Bureau of the Public Debt indicated that he was pleased that the review of BPD’s general controls over financial systems did not identify any reportable conditions. Further, he stated that in most cases, BPD has corrected or is already taking actions to resolve the vulnerabilities identified in this report.	Why GAO Did This Study Pursuant to a legislative requirement, GAO reviewed the general and application controls that support key automated financial systems maintained and operated by the Bureau of the Public Debt (BPD). What GAO Found GAO noted that: (1) overall, GAO found that BPD implemented effective computer controls; however, GAO identified certain vulnerabilities in general controls involving: (a) access to data and programs; (b) physical access; (c) contingency planning; and (d) security management; (2) GAO also identified vulnerabilities in the controls for two key BPD financial applications maintained and operated at the BPD data center in Parkersburg, West Virginia; (3) addressing these vulnerabilities requires: (a) strengthening access controls by further restricting system access rights and improving security monitoring; and (b) managing accuracy controls more effectively by ensuring that established procedures are followed to prevent unauthorized deletion of exception reports; (4) in most cases, BPD has corrected or is correcting the vulnerabilities that GAO identified; (5) GAO provided a general summary of the vulnerabilities that existed on September 30, 1997; (6) those that GAO verified had been fully resolved subsequent to September 30, 1997, GAO has so noted; and (7) GAO will review the status of BPD's other corrective actions as part of its fiscal year 1998 financial audits.
gao_GAO-01-744	gao_GAO-01-744_0	Since then, WMATA has been responsible for planning, financing, constructing, and operating a comprehensive mass transit system for the Washington metropolitan area. In order to evaluate the extent to which WMATA followed best practices in planning, selecting, and budgeting for its capital investments, we compared WMATA’s practices with those of leading public and private organizations that we studied in 1998. Metrorail has experienced vehicle, escalator, elevator, and other system equipment and infrastructure problems over the past several years. Metrorail also faces another significant operating challenge brought about by ever-increasing ridership. WMATA Has Established Safety and Security Programs WMATA has established programs to address safety and security risks that affect its rail and bus systems. In the safety and security area, WMATA has established programs to identify, evaluate, and minimize risks throughout its bus and rail systems; and it has upgraded its safety organization in recent years to improve its internal management and oversight of safety problems. Now in its second year, this program has a number of goals, including reducing train delays and passenger offloads by 50 percent. Appendix III: WMATA Is Addressing its Major Capital Requirements But Could Benefit From a More Formal Capital Planning Process In a December 1998 report, GAO identified capital decision-making principles and practices used by outstanding state and local governments and private sector organizations. Appendix IV: Scope and Methodology Our overall approach in reviewing WMATA’s capital investment, operations and maintenance, and safety and security activities was to determine (1) how WMATA is organized and what policies, procedures, and practices the agency uses to carry out the activities in each of the three areas; (2) the nature and extent of any problems WMATA faces in each area, the factors that have contributed to those problems, and the actions WMATA is taking to address them; and (3) the role of other organizations in influencing WMATA’s decision-making processes and providing oversight of WMATA actions in the three areas.	Why GAO Did This Study In recent years, the Washington Metropolitan Area Transit Authority's (WMATA) public transit system has experienced problems with the safety and reliability of its transit services, including equipment breakdowns, delays in scheduled service, unprecedented crowding on trains, and some accidents and tunnel fires. At the same time, WMATA's ridership is at an all time high and WMATA managers expect the number of passengers to double during the next 25 years. This report reviews (1) the challenges WMATA faces in operating and maintaining its Metrorail system; (2) efforts WMATA has made to establish and monitor safety and security within its transit system; and (3) the extent to which WMATA follows established best practices in planning, selecting, and budgeting for its capital investments. What GAO Found GAO found that WMATA is addressing significant challenges brought about by the agency's aging equipment and infrastructure and its ever-increasing ridership. WMATA has established programs to identify, evaluate, and minimize safety and security risks throughout its rail and bus systems. WMATA has also adopted several best capital practices used by leading public and private sector organizations, but it could benefit by establishing a more formal, disciplined framework for its capital decision-making process. GAO summarized this report in testimony before Congress; see Mass Transit: WMATA Is Addressing Many Challenges, but Capital Planning Could Be Improved, by JayEtta Z. Hecker, Director of Physical Infrastructure Issues, before the Subcommittee on the District of Columbia, House Committee on Government Reform. GAO-01-1161T , Sept. 21 (17 pages).
gao_GAO-17-324	gao_GAO-17-324_0	Background LB&I is responsible for the tax compliance of partnerships and S and C corporations with assets of $10 million or more, as well as individuals with high wealth or international tax implications. In 2015, IRS reported that LB&I completed audits on more than 11 percent of large corporations—those with assets in excess of $10 million. The term “selection methods” refers to all of the programs that LB&I uses to identify and review tax returns to include in the pool of possible audits, as well as the decisions made to audit tax returns by auditors and audit managers in LB&I field offices. LB&I uses a variety of methods to select returns for audit. LB&I is in the process of changing the way it addresses compliance including how it identifies tax returns for audit and is moving toward implementing issue-based projects it calls “campaigns.” According to LB&I, a campaign is a compliance project focused on a specific compliance issue, such as partnerships underreporting income, rather than on using characteristics of the whole tax return for audit consideration. LB&I Documentation on Audit Selection Methods We Reviewed Generally Reflected Some, but Not All, Internal Control Principles In reviewing LB&I’s methods for identifying and selecting tax returns for audit, we determined that LB&I’s related documentation generally reflected 4 of the 10 internal control principles we reviewed but was incomplete for the remaining 6 principles. Documentation Generally Reflected Internal Control Principles on Ethics, Organizational Structure, Commitment to Competence, and Implementation of Control Activities for Selection Methods Reviewed Internal Control Principles that LB&I Documentation Generally Reflected in Audit Selection Methods Reviewed LB&I has documented a commitment to promoting ethical behavior among staff, which provides some high-level assurance that the way it selects returns for audit may contribute to its strategic goal of treating taxpayers with integrity and fairness. For example, classifiers who identify whether a tax return should be considered for audit and which items on the return merit audit attention are prohibited from auditing those returns and from assigning them to specific auditors. All LB&I staff were certified as successfully completing the training in 2015, the latest available data. In terms of training, LB&I’s procedures and manuals generally documented its training to help assure the competence of staff involved in audit selection. LB&I Does Not Have a Standard Process for Monitoring Audit Selection Decisions LB&I does not have a process to monitor the final decisions about which tax returns will be audited. Lacking a standard monitoring process for audit selection decisions is not consistent with internal control standards for monitoring. LB&I Efforts to Plan and Implement New Compliance Approach to Audits Remain Incomplete LB&I plans to conduct issue-based projects it calls “campaigns” to address taxpayer compliance. However, gaps in documentation related to six of the principles leave LB&I without reasonable assurance that its selection methods are being implemented as designed and whether tax return selection supports the division’s audit objectives Ensuring that policies and procedures of audit selection methods are fully documented will continue to be important for LB&I as it implements its new campaign approach for selecting audits. LB&I’s efforts to plan and implement its new compliance approach have partially met five key principles for effectively planning projects. Without taking the steps to fully meet all five planning principles in implementing its new approach, LB&I management will lack reasonable assurance that its new compliance approach will succeed in accomplishing LB&I’s overall audit objective of encouraging voluntary compliance and fair treatment of taxpayers. To further ensure that the new campaigns under LB&I’s new approach for addressing tax compliance are implemented successfully, we recommend that the Commissioner take these actions: create a timetable with specific dates for implementing its new compliance approach; establish metrics to help determine whether the campaign effort overall meets LB&I’s goals; finalize and document plans to evaluate the human resources expended on campaign activities; document lessons learned from stakeholder input and past monitor overall performance across future campaigns, not just individual compliance projects, and in doing so ensure that the data used for monitoring accounts for the costs beyond the auditor’s time can clearly be linked with specific selection methods, including the Discriminant Analysis System (DAS) method, to the extent that the selection methods continue to operate; develop and document criteria to use in choosing selection methods for campaigns using audits; and set a timetable to analyze and mitigate risks and document specific metrics for assessing mitigation of identified risks. Appendix I: Objectives Scope and Methodology This report (1) assesses the extent to which the Large Business and International (LB&I) division’s documented procedures and policies on audit selection methods generally reflect relevant internal control principles; (2) assesses the extent to which LB&I has a standard process to monitor audit selection decisions; (3) describes statistical information on audit starts and closures for LB&I’s selection methods, including LB&I’s use of audit referrals, and assesses how the Internal Revenue Service (IRS) evaluates its audit results from its selection methods; and (4) assesses to what extent LB&I has planned and implemented its new approach to address compliance. The internal control principles we used for our evaluation are noted below. Principle 7: Identify, analyze, and respond to risks to achieving the objectives. Principle 17: Evaluate issues and remediate deficiencies. IRS agreed with these principles during April 2016. Given the status of LB&I’s plans, we did not assess LB&I’s decision to create the approach. LB&I said that it has developed a training strategy for this campaign.	Why GAO Did This Study LB&I audits large partnerships and corporations with $10 million or more in assets and high wealth individuals. These entities pose compliance challenges. For example, IRS reported that the gross underreported income tax of large corporations alone averaged an estimated $28 billion annually between 2008 and 2010, the most recent data. It is important for LB&I to have adequate controls for its audit procedures and to properly plan and implement its new approach to address noncompliance. GAO was asked to evaluate how IRS selects returns and is implementing its new compliance approach. Among other objectives, this report (1) assesses the extent that LB&I's documented procedures and policies for its audit selection methods generally reflected relevant internal control principles, (2) assesses the extent that LB&I has a standard process to monitor audit selection decisions, and (3) assesses the extent that LB&I has planned and implemented its new approach to address compliance. GAO reviewed LB&I procedures and policies for eight selection methods that involved the use of discretion and its plans for implementing a new compliance approach. Given the status of LB&I's plans for and implementation of its new approach, GAO did not assess LB&I's decision to create the approach. GAO held focus groups with LB&I staff responsible for selecting audits, and interviewed IRS official What GAO Found The Internal Revenue Service's (IRS) Large Business and International division (LB&I) uses a variety of methods, such as computer models and staff reviews of returns, to identify tax returns for audit consideration. From the returns identified, managers and auditors in LB&I field offices select the returns to be audited. For the eight methods LB&I uses for identifying and selecting tax returns for audit (selection methods) that GAO analyzed, LB&I documentation on its procedures and policies generally reflected 4 of the 10 internal control principles GAO reviewed. For example: Related to the internal control principle of demonstrating commitment to integrity and ethical values, LB&I auditors who identify tax returns for audit consideration are prohibited from auditing those returns themselves or assigning them to specific individuals for audit. In addition, all LB&I staff completed a required training on ethics and impartiality in 2015, the latest available data. Related to the internal control principle of demonstrating a commitment to competence, LB&I's procedures and manuals generally documented its training to help assure the competence of staff involved in audit selection. This training included courses on basic skills as well as instruction on more specific topics. However, for the other 6 internal control principles GAO reviewed, there were gaps in documentation that limit LB&I's assurance that its selection methods are being implemented as designed and are supporting its objectives. For example: Related to the internal control principle of identifying, analyzing, and responding to risk, LB&I documentation did not specify procedures or a process for how to respond to changing circumstances, such as a change in the law, in selecting returns for audit. Related to the internal control principle of reporting on issues and remediating related deficiencies, LB&I documentation indicated that problems identified with selection methods were discussed in meetings, but not that corrective action was taken to address them. GAO also found that LB&I has monitoring directives, but it does not have a standard process for monitoring field staff's audit selection decisions. Without such a process, LB&I lacks reasonable assurance that decisions are made consistently. LB&I is in the process of implementing a new approach for addressing taxpayer compliance, including how it identifies tax returns for audit. LB&I plans to implement what officials call “campaigns,” which are projects focused on a specific compliance-related issue, such as partnerships underreporting certain income, rather than projects focused on the characteristics of whole tax returns. According to LB&I officials, campaigns could include conducting audits as well as other efforts, such as reaching out to taxpayers and tax professionals, issuing guidance, and participating in industry events. LB&I officials said certain audit selection methods that existed prior to the development of campaigns will operate while LB&I implements its campaign approach, and campaigns may subsume some of those methods. GAO found that LB&I made some progress in implementing its new compliance approach, such as by involving stakeholders in plans and implementing the process for submitting proposals for campaigns. However, LB&I has not fully met five project planning principles set forth in prior GAO work (see table below). Until it fully meets these principles, LB&I management lacks reasonable assurance that its new compliance approach will succeed in accomplishing its overall objectives of encouraging voluntary compliance and fair treatment of taxpayers. What GAO Recommends GAO recommends that IRS address documentation gaps in its selection method procedures and policies related to six internal control principles, develop a standard process to monitor field staff's audit selection decisions, and take seven actions to fully address planning principles in its efforts to implement its new compliance approach. In commenting a draft of this report, IRS agreed with all of the recommendations.
gao_GAO-06-1006T	gao_GAO-06-1006T_0	Pervasive Financial and Business Management Problems Affect DOD’s Efficiency and Effectiveness Since the first GAO report on the financial statement audit of a major DOD component over 16 years ago, we have repeatedly reported that weaknesses in business management systems, processes, and internal controls not only adversely affect the reliability of reported financial data, but also the management of DOD operations. To date, none of the military services or major DOD components has passed the test of an independent financial audit because of pervasive weaknesses in internal control and processes and fundamentally flawed business systems. DOD’s financial management problems are pervasive, complex, long- standing, deeply rooted in virtually all of its business operations, and challenging to resolve. Improved Oversight of DOD Business Systems Needed The department is provided billions of dollars annually to operate, maintain, and modernize its stovepiped, duplicative, legacy business systems. Many of the problems related to DOD’s inability to effectively implement its business systems on time, within budget, and with the promised capability can be attributed to its failure to implement the disciplined processes necessary to reduce the risks associated with these projects to acceptable levels. Defense Travel System (DTS). We have previously reported on DOD’s long-standing architecture management weaknesses. DOD’s top management has demonstrated a commitment to transforming the department and has launched key initiatives to improve its financial management processes and related business systems, as well as made important progress in complying with legislation pertaining to its business systems modernization and financial management improvement efforts. While this progress better positions the department to address the business systems modernization and financial management high-risk areas, significant challenges remain, particularly in implementing its tiered accountability investment approach. DOD Issued Its Financial Improvement and Audit Readiness Plan A major component of DOD’s business transformation strategy is its FIAR Plan, issued in December 2005. The FIAR Plan was issued pursuant to section 376 of the National Defense Authorization Act for Fiscal Year 2006, which for fiscal year 2006 limited DOD’s ability to obligate or expend funds for financial improvement activities until the department submitted a comprehensive and integrated financial management improvement plan to congressional defense committees that (1) described specific actions to be taken to correct deficiencies that impair the department’s ability to prepare timely, reliable, and complete financial management information; and (2) systematically tied such actions to process and control improvements and business systems modernization efforts described in the business enterprise architecture and transition plan. DOD Developed an Initial Standard Financial Information Structure Another key initiative is SFIS, which is DOD’s enterprisewide data standard for categorizing financial information to support financial management and reporting functions. We reiterate two major elements necessary for successful business transformation: (1) a comprehensive, integrated, and enterprisewide business transformation plan and (2) a CMO with the right skills and at the right level of the department for providing the sustained leadership needed to achieve a successful and sustainable transformation effort. DOD’s leadership has recognized the need to transform the department’s business operations. Because of the complexity and long-term nature of DOD’s business transformation efforts, we reiterate the need for a CMO to provide sustained leadership and maintain momentum. The CMO also would develop and implement a strategic plan for the overall business transformational efforts. Until DOD resolves the numerous problems and inefficiencies in its business operations, billions of dollars will continue to be wasted every year.	Why GAO Did This Study The Department of Defense (DOD) bears sole responsibility for eight DOD-specific high-risk areas and shares responsibility for six governmentwide high-risk areas. These high-risk areas reflect the pervasive weaknesses that cut across all of DOD's major business operations. Several of the high-risk areas are inter-related, including, but not limited to, financial management, business systems modernization, and DOD's overall approach to business transformation. Billions of dollars provided to DOD are wasted each year because of ineffective performance and inadequate accountability. DOD has taken some positive steps to successfully transform its business operations and address these high-risk areas, but huge challenges remain. This testimony discusses (1) pervasive, long-standing financial and business management weaknesses that affect DOD's efficiency; (2) some examples that highlight a need for improved business systems development and implementation oversight; (3) DOD's key initiatives to improve financial management, related business processes, and systems; and (4) actions needed to enhance the success of DOD's financial and business transformation efforts. What GAO Found DOD's pervasive financial and business management problems adversely affect the economy, efficiency, and effectiveness of its operations, and have resulted in a lack of adequate accountability across all major business areas. These problems have left the department vulnerable to billions of dollars of fraud, waste, and abuse annually, at a time of increasing fiscal constraint. Further evidence of DOD's problems is the long-standing inability of any military service or major defense component to pass the test of an independent financial audit because of pervasive weaknesses in financial management systems, operations, and controls. To support its business operations, DOD invests billions of dollars each year to operate, maintain, and modernize its business systems. But despite this significant annual investment, GAO has continued to identify business system projects that have failed to be implemented on time, within budget, and with the promised capability. For example, in January 2006, GAO reported on problems with the implementation of the Defense Travel System--a project that was initiated in September 1998. DOD's many high-risk challenges are years in the making and will take time to effectively address. Top management has demonstrated a commitment to transforming the department's business processes. In December 2005, DOD issued its Financial Improvement and Audit Readiness Plan to guide its financial management improvement efforts. Also, DOD has developed an initial Standard Financial Information Structure, which is DOD's enterprisewide data standard for categorizing financial information. Because of the complexity and long-term nature of DOD transformation efforts, GAO would like to reiterate two missing critical elements that need to be in place if DOD's transformation efforts are to be successful. First, DOD should develop and implement a comprehensive, integrated, and enterprisewide business transformation plan. Second, GAO continues to support the creation of a chief management officer, with the right skills and at the right level within the department, to provide the needed sustained leadership to oversee the department's overall business transformation process.
gao_GAO-11-940T	gao_GAO-11-940T_0	DHS Continues to Implement and Strengthen Its Mission Functions, but Key Operational and Management Challenges Remain Since DHS began operations in March 2003, it has developed and implemented key policies, programs, and activities for implementing its homeland security missions and functions that have created and strengthened a foundation for achieving its potential as it continues to mature. DHS Has Made Progress in Implementing its Mission Functions, but Program Weaknesses and Management Issues Have Hindered Implementation Efforts DHS has made important progress in implementing and strengthening its mission functions over the past 8 years, including implementing key homeland security operations and achieving important goals and milestones in many areas. The department’s accomplishments include developing strategic and operational plans across its range of missions; hiring, deploying and training workforces; establishing new, or expanding existing, offices and programs; and developing and issuing policies, procedures, and regulations to govern its homeland security operations. For example:  DHS issued the QHSR, which provides a strategic framework for homeland security, and the National Response Framework, which outlines guiding principles for disaster response.  DHS successfully hired, trained, and deployed workforces, such as a federal screening workforce which assumed security screening responsibilities at airports nationwide, and the department has about 20,000 agents to patrol U.S. land borders.  DHS created new programs and offices, or expanded existing ones, to implement key homeland security responsibilities, such as establishing the United States Computer Emergency Readiness Team to, among other things, coordinate the nation’s efforts to prepare for, prevent, and respond to cyber threats to systems and communications networks. However, more work remains for DHS to address gaps and weaknesses in its current operational and implementation efforts, and to strengthen the efficiency and effectiveness of those efforts to achieve its full potential. For example, DHS has not yet developed a set of target capabilities for disaster preparedness or established metrics for assessing those capabilities to provide a framework for evaluating preparedness, as required by the Post-Katrina Emergency Management Reform Act. Table 1 provides examples of key progress and work remaining in DHS’s functional mission areas, with an emphasis on work we completed since 2008. Moreover, DHS has not yet established performance measures to assess the effectiveness of its programs for investigating alien smuggling operations and foreign nationals who overstay their authorized periods of admission to the United States, making it difficult for these agencies to determine progress made in these areas and evaluate possible improvements. In addition, DHS took action to develop and deploy new technologies to help meet its homeland security missions. Key Themes Have Impacted DHS’s Progress in Implementing Its Mission Functions Our work at DHS has identified several key themes—leading and coordinating the homeland security enterprise, implementing and integrating management functions for results, and strategically managing risks and assessing homeland security efforts—that have impacted the department’s progress since it began operations. DHS made progress and has had successes in all of these areas, but our work found that these themes have been at the foundation of DHS’s implementation challenges, and need to be addressed from a departmentwide perspective to position DHS for the future and enable it to satisfy the expectations set for it by the Congress, the administration, and the country. While DHS is one of a number of entities with a role in securing the homeland, it has significant leadership and coordination responsibilities for managing efforts across the homeland security enterprise. Eight years later, DHS remains on our high-risk list. Strategically managing risks and assessing homeland security efforts. Key threats, such as attempted attacks against the aviation sector, have impacted and altered DHS’s approaches and investments, such as changes DHS made to its processes and technology investments for screening passengers and baggage at airports. These accomplishments are especially noteworthy given that the department has had to work to transform itself into a fully functioning cabinet department while implementing its missions—a difficult undertaking for any organization and one that can take years to achieve even under less daunting circumstances. This is a work of the U.S. government and is not subject to copyright protection in the United States.	Why GAO Did This Study The terrorist attacks of September 11, 2001, led to profound changes in government agendas, policies and structures to confront homeland security threats facing the nation. Most notably, the Department of Homeland Security (DHS) began operations in 2003 with key missions that included preventing terrorist attacks from occurring in the United States, reducing the country's vulnerability to terrorism, and minimizing the damages from any attacks that may occur. DHS is now the third-largest federal department, with more than 200,000 employees and an annual budget of more than $50 billion. Since 2003, GAO has issued over 1,000 products on DHS's operations in such areas as transportation security and emergency management, among others. As requested, this testimony addresses DHS's progress and challenges in implementing its homeland security missions since it began operations, and issues affecting implementation efforts. This testimony is based on a report GAO issued in September 2011, which assessed DHS's progress in implementing its homeland security functions and work remaining. What GAO Found Since it began operations in 2003, DHS has implemented key homeland security operations and achieved important goals and milestones in many areas to create and strengthen a foundation to reach its potential. As it continues to mature, however, more work remains for DHS to address gaps and weaknesses in its current operational and implementation efforts, and to strengthen the efficiency and effectiveness of those efforts to achieve its full potential. DHS's accomplishments include developing strategic and operational plans; deploying workforces; and establishing new, or expanding existing, offices and programs. For example, DHS (1) issued plans to guide its efforts, such as the Quadrennial Homeland Security Review, which provides a framework for homeland security, and the National Response Framework, which outlines disaster response guiding principles; (2) successfully hired, trained, and deployed workforces, such as a federal screening workforce to assume security screening responsibilities at airports nationwide; and (3) created new programs and offices to implement its homeland security responsibilities, such as establishing the U.S. Computer Emergency Readiness Team to help coordinate efforts to address cybersecurity threats. Such accomplishments are noteworthy given that DHS has had to work to transform itself into a fully functioning department while implementing its missions--a difficult undertaking that can take years to achieve. While DHS has made progress, its transformation remains high risk due to its management challenges. Examples of progress made and work remaining include: Border security. DHS implemented the U.S. Visitor and Immigrant Status Indicator Technology program to verify the identities of foreign visitors entering and exiting the country by processing biometric and biographic information. However, DHS has not yet determined how to implement a biometric exit capability and has taken action to address a small portion of the estimated overstay population in the United States (individuals who legally entered the country but then overstayed their authorized periods of admission). Aviation security. DHS developed and implemented Secure Flight, a program for screening airline passengers against terrorist watchlist records. DHS also developed new programs and technologies to screen passengers, checked baggage, and air cargo. However, DHS does not yet have a plan for deploying checked baggage screening technologies to meet recently enhanced explosive detection requirements, a mechanism to verify the accuracy of data to help ensure that air cargo screening is being conducted at reported levels, or approved technology to screen cargo once it is loaded onto a pallet or container. Emergency preparedness and response. DHS issued the National Preparedness Guidelines that describe a national framework for capabilities-based preparedness, and a Target Capabilities List to provide a national-level generic model of capabilities defining all-hazards preparedness. DHS is also finalizing a National Disaster Recovery Framework. However, DHS needs to strengthen its efforts to assess capabilities for all-hazards preparedness, and develop a long-term recovery structure to better align timing and involvement with state and local governments' capacity. Chemical, biological, radiological and nuclear (CBRN) threats. DHS assessed risks posed by CBRN threats and deployed capabilities to detect CBRN threats. However, DHS should work to improve its coordination of CBRN risk assessments, and identify monitoring mechanisms for determining progress made in implementing the global nuclear detection strategy. GAO's work identified three themes at the foundation of DHS's challenges: Leading and coordinating the homeland security enterprise; Implementing and integrating management functions for results; and Strategically managing risks and assessing homeland security efforts. This testimony contains no new recommendations.
gao_GAO-11-114	gao_GAO-11-114_0	In fiscal year 2009, VA compensated 1.2 million claims for veterans with either tinnitus or hearing loss injuries, representing an annual federal expenditure exceeding $1.1 billion for disability compensation payments. Services Are Employing Strategies to Identify and Mitigate Hazardous Noise, but Inconsistent Practices and Limited Training Weaken Their Efforts Services Use a Risk-Based Approach to Monitor Sites for Hazardous Noise Levels, but Lack Reliable Notification for Interim Changes According to services’ policies, the services monitor noise levels at various sites on a periodic basis according to the level of risk these sites pose to servicemembers, but they do not provide guidance for a reliable notification system for changes to site conditions that may occur in the interim. For example, at sites we visited, high-risk areas, such as firing ranges and flight decks, thought to pose the greatest chance of exposure to hazardous noise are surveyed annually. For example, Navy officials told us they conduct noise surveys every 4 years for their administrative offices, whereas Army officials conduct them every 5 years. These strategies include engineering noise to safer levels, setting time limits on noise exposure, and requiring the use of protective equipment; however they are not consistently practiced. DOD’s Approach to Evaluating Hearing Conservation Has Key Weaknesses, While Some Services Have Taken Steps to Review and Improve Their Own Programs DOD Lacks Adequate Performance Indicators DOD delegates most program evaluation to the services, but lacks adequate performance indicators to proactively assess how well services are reducing hearing loss among servicemembers. At the time of our review, DOD policy required that services evaluate their hearing conservation programs on an annual basis based on two annual performance indicators both targeted for servicemembers enrolled in a hearing conservation program—(1) the percentage of servicemembers that take a required annual hearing test and (2) the rate of significant hearing loss. Limitations in Information System Processes Hinder Program Evaluation Efforts Program evaluation is also hindered by limitations in the processes used to capture, track, and use hearing-related performance data. Services Have Made Efforts to Review and Improve Their Own Hearing Programs Each service has taken some steps to review their own hearing conservation programs and identify opportunities for improvement. These include scheduled reviews of hearing loss data and hearing test audits, among other efforts. Plans Are Almost Complete for Both the Hearing Center of Excellence and a System to Facilitate DOD and VA Data Sharing A Plan for the Center Has Been Submitted for Final Department Approval DOD has developed, but not yet finalized, its planning for the DOD Hearing Center of Excellence that Congress mandated in October 2008 to be established. Neither Congress nor DOD set a date for when planning should be formally approved to implement the center, but a key DOD official estimated that the concept of operations may get final DOD approval in the near future. Furthermore, the interim director told us that the focus of the center will be to research and support field testing of the best available protection and communication devices currently available, as well as developing improved hearing protection, along with better education and training on its use; create best practice guidelines for improving hearing outcomes after injury and explore new lines of therapy to protect or restore hearing loss or injury; determine how many hazardous noise exposures are too many for a servicemember and the level of hearing needed for selected jobs to facilitate appropriate job assignments; develop and implement better restorative and rehabilitative devices; promote standards for implementing hearing awareness and treatment into medical air evacuations for injured troops; and collaborate with academic centers and industry in all these pursuits to mitigate or restore hearing loss. Recommendations for Executive Action To position DOD and the services to better protect servicemembers from hearing loss, we recommend that the Under Secretary for Personnel and Readiness work with the Assistant Secretary for Health Affairs and take the following four actions to ensure that: DOD and the services improve upon the type, timing, and tracking of training and education provided to servicemembers on hearing protection, by providing information that is more comprehensive and training that is more frequent and possibly earlier in servicemembers’ careers. DOD and the services address limitations in the processes used to capture, track, and use performance data. VA did not provide formal written comments, but both DOD and VA submitted technical changes to the draft of the report, which we incorporated into the report as appropriate. To review how well the services identify and mitigate hazardous noise and evaluate their hearing conservation programs, we visited nine military installations across the country—with at least two locations for each of the armed services, to review hearing conservation activities and interviewed officials both responsible for and participating in each base’s hearing conservation program. To determine the status of the DOD Hearing Center of Excellence and its registry and efforts to share information to improve hearing protection, we interviewed officials from DOD, including the center’s interim director and the representatives of the armed services and VA involved in these efforts.	Why GAO Did This Study Exposure to hazardous noise can have negative implications for both servicemember health and readiness. Moreover, in fiscal year 2009, some of the most common impairments for veterans receiving Veterans Affairs (VA) disability benefits were hearing related, as annual payments for such conditions exceeded $1.1 billion. To examine Department of Defense (DOD) efforts to prevent hearing loss, GAO is reporting on (1) how well the DOD and armed services identify and mitigate hazardous noise; (2) how well the military evaluates hearing conservation program performance; and (3) the status of DOD's Hearing Center of Excellence and the extent that DOD and VA are sharing information to inform this and other efforts. GAO reviewed DOD and services' policies and guidance, reviewed DOD performance data, interviewed officials and servicemembers, and conducted site visits to nine military bases. What GAO Found Each of the armed services is taking steps to monitor hazardous noise, but inconsistencies in some hearing protection strategies and limited training weaken mitigation efforts. Services monitor noise periodically, depending on the level of risk servicemembers have in being exposed to hazardous noise (for example, annually for firing ranges and flight decks, and every 5 years for administrative offices). However, they lack a reliable system for detecting changes in noise levels that may occur outside the scheduled review cycle. Although DOD requires that noise be controlled by setting exposure limits and requiring the use of hearing protection, these strategies are not consistently used. For example, servicemembers told us that they do not always wear hearing protection, citing concerns with comfort and communication. Annual hearing-related training is required for at-risk servicemembers, but services are not able to fully determine who has completed annual training, and many servicemembers told GAO that training is not necessarily well timed. DOD's evaluation of services' hearing conservation programs has key weaknesses, but some services have taken steps to review and improve their own programs. First, DOD performance indicators are not sufficiently comprehensive. One key indicator--the rate of hearing loss among servicemembers in the hearing conservation programs--only measures program performance after hearing loss has occurred. Second, evaluation is limited by weaknesses in the processes used to capture, track, and use performance data. For example, the data may not accurately capture the number of servicemembers enrolled in the respective programs--a number required to calculate compliance rate. Third, audiologists, and other key stakeholders do not, on some bases GAO visited, routinely coordinate to share and evaluate hearing loss data to identify and mitigate noise hazards. Individual services have, at times, conducted reviews of their own programs and made some improvements. For example, once the Army decided that soldiers would not be deployed if the individual had not completed a required hearing test, the number of hearing tests rose significantly. DOD has developed, though not yet finalized, a plan for a Hearing Center of Excellence to improve hearing loss prevention and treatment as well as a plan for its registry to track and share information with VA on injured military personnel and veterans. Neither Congress nor the DOD set a date for when planning should be formally approved to implement the center, but a key DOD official estimated that plans may receive final DOD approval in the near future. In the meantime, an interim director for the center has begun to lay the groundwork for implementation of both the center and the registry. While data sharing between DOD and VA has been very limited to date, military and VA officials said the registry should ultimately facilitate sharing and development of best practices. What GAO Recommends GAO recommends that to improve hearing conservation programs, DOD should address issues with the type, timing, and tracking of training and education; develop an appropriate set of performance indicators; improve processes to collect and use performance data; and examine services' reviews to identify opportunities for program improvement. In reviewing a draft of this report, DOD concurred with GAO's recommendations. DOD and VA provided technical comments, which GAO incorporated as appropriate.
gao_T-GGD-96-130	gao_T-GGD-96-130_0	Tax Administration: Issues in Classifying Workers as Employees or Independent Contractors Madam Chairman and Members of the Subcommittee: We are pleased to be here to assist the Subcommittee in its inquiry into the classification of workers either as employees or independent contractors for federal tax purposes. Under its Employment Tax Examination Program (ETEP), IRS has completed 12,983 audits, resulting in $830 million in recommended tax assessments and 527,000 workers reclassified to “employee” status between fiscal years 1988 and 1995. IRS has adopted 20 common law rules to help employers classify workers (see appendix I). If workers are determined to be employees, employers must withhold and deposit income and social security taxes from wages paid as well as pay unemployment taxes and the employers’ share of social security taxes. Employers do not have these responsibilities if the workers are independent contractors. Ultimately, the decision to classify a worker as an employee or independent contractor depends on each employer’s circumstances. And, the extent to which a worker accepts the classification and understands its consequences plays a role. This noncompliance produced an estimated tax loss for 1984, after accounting for taxes paid by the misclassified independent contractors, of $1.6 billion in social security tax, unemployment tax, and income tax that should have been withheld from wages. For example, IRS is revising its training to better ensure consistent application of the rules. IRS has circulated a draft of its training program so that employers know how IRS intends to interpret the rules. Further, IRS is testing ways to expedite and improve the settlement of disputes with employers over misclassification.	Why GAO Did This Study GAO discussed the classification of workers as employees or independent contractors for federal tax purposes. What GAO Found GAO noted that: (1) the Internal Revenue Service (IRS) has adopted 20 common law rules to help employers classify workers; (2) the rules require employers to withhold and deposit income and social security taxes, and pay the unemployment and social security taxes for workers determined to be employees; (3) employers that use independent contractors do not have these responsibilities because they pay their own social security and income taxes; (4) classifying a worker as an employee or independent contractor depends on the employer's circumstances, and the extent to which the worker accepts the classification; (5) in 1984, IRS estimated that about 756,000 employers misclassified their workers as independent contractors; (6) this noncompliance resulted in an estimated tax loss of $1.6 billion; (7) misclassifications occur because it is cheaper to hire independent contractors, but the rules for doing so are unclear; (8) IRS completed 12,983 employment tax examination program audits from 1988 to 1995, and recommended $830 million in employment tax assessments and that 527,000 workers be reclassified as employees; and (9) IRS is revising its training program to better ensure consistent application of common law rules, circulating a draft of its training program so that employers know how to interpret the rules, and testing ways to expedite disputes over worker misclassifications.
gao_GAO-05-879	gao_GAO-05-879_0	Many States Moving toward Using A Definition That Follows Students over Time; Education’s Guidance Regarding NCLBA Requirements Is Limited A majority of states used or planned to use a graduation rate definition based on the group of students entering high school who graduate on time, referred to as the cohort definition. A Majority of States Used or Planned to Use a Definition That Follows Students over Time According to state plans, 12 states used a definition that followed a group of students over time from when they entered high school until they left— referred to as the cohort definition. Figure 4 shows the definitions each state used as April 2005 and planned to use by school year 2007-08. Education’s approach has been to provide such information on a case-by-case basis rather than to all states. Another state planned to count such students as graduates without requesting approval to do so. Several Factors Affected the Accuracy of Graduation Rates, and Data Quality Remains a Key Challenge State, school district, and school officials and experts we interviewed reported several factors that affect the accuracy of data used to calculate graduation rates, especially student mobility. Data Inaccuracies May Affect Schools’ Meeting State Graduation Rate Goals We analyzed data from one state to estimate the effect of errors of various sizes in reporting dropouts on school graduation rates and found that such errors could raise or lower a school’s graduation rate substantially. Education Has Taken Some Steps to Help States with Data Issues, but Data Accuracy Remains a Key Challenge Education has taken steps to help states address data collection issues. For these states, Education reported that it was unable to meaningfully examine the reliability of data used to calculate the graduation rate because such definitions of such rates had not been in place for a sufficient number of years necessary to determine whether the rate would produce consistent results. Department officials said that the guide it is developing is planned to address these issues. Few Interventions Have Been Rigorously Evaluated, and Education Has Done Little to Evaluate and Disseminate Existing Research While states and school districts have implemented numerous interventions designed to increase high school graduation rates, few of these programs have been rigorously evaluated, and Education has done little to evaluate and disseminate existing research. Recommendations for Executive Action To assist states in improving their definitions of high school graduation rates and enhancing the consistency of these rates, we recommend that the Secretary of Education make information available to all states on modifications available to account for students in special programs and students with disabilities in their graduation rate calculations. This assessment could include specific criteria that demonstrate that states’ data systems can produce accurate data. We analyzed the plans states were required to submit to Education to identify the graduation rate definitions states used and graduation rate indicators set by states, reviewed updates to plans submitted through July 2005 and reviewed letters from Education to states regarding its decisions about state plans and updates. To identify interventions with the potential to increase graduation rates, we used a “snowballing” approach. We also visited schools that had implemented 13 other interventions that experts and research showed promise in affecting factors that may improve grad rates. 1, no. What Can We Do?	Why GAO Did This Study About one third of students entering high school do not graduate and face limited job prospects. The No Child Left Behind Act (NCLBA) requires states to use graduation rates to measure how well students are being educated. To assess the accuracy of states' graduation rates and to review programs that may increase these rates, GAO was asked to examine (1) the graduation rate definitions states use and how the Department of Education (Education) helped states meet legal requirements,(2) the factors that affect the accuracy of graduation rates and Education's role in ensuring accurate data, and (3) interventions with the potential to increase graduation rates and how Education enhanced and disseminated knowledge of intervention research. What GAO Found As of July 2005, 12 states used a graduation rate definition--referred to as the cohort definition--that tracks students from when they enter high school to when they leave, and by school year 2007-08 a majority plan to use this definition. Thirty-two states used a definition based primarily on the number of dropouts over a 4-year period and graduates. The remaining states used other definitions. Because the cohort definition is more precise, most states not using it planned to do so when their data systems can track students over time, a capability many states do not have. Education has assisted states primarily on a case-by-case basis, but it has not provided guidance to all states on ways to account for selected students, such as for students with disabilities, thus creating less consistency among states in how graduation rates are calculated. The primary factor affecting the accuracy of graduation rates was student mobility. Students who come and go make it difficult to keep accurate records. Another factor was whether states verified student data, with fewer than half of the states conducting audits of data used to calculate graduation rates. Data inaccuracies can substantially raise or lower a school's graduation rate. Education has taken steps to help states address data accuracy issues. However, Education officials said that they could not assess state systems until they had been in place for a while. Data accuracy is critical, particularly since Education is using state data to calculate graduation rate estimates to provide consistency across states. Many interventions are used to raise graduation rates, but few are rigorously evaluated. GAO identified five that had been rigorously evaluated and showed potential for improving graduation rates, such as Project GRAD. In visits to six states, GAO visited three schools that were using such interventions. Other schools GAO visited were using interventions considered by experts and officials to show promise and focused on issues such as self esteem and literacy at various grades. Education has not acted on GAO's 2002 recommendation that it evaluate intervention research, a recommendation the agency agreed with, and has done little to disseminate such research.
gao_GAO-02-963	gao_GAO-02-963_0	Background Under the Medicare inpatient PPS, hospitals receive a fixed, predetermined payment for each hospital stay. The combination of all these adjustments and additional payments may result in widely varying per-stay payments across different types of hospitals or geographic areas. Medicare Labor Cost Adjustment Does Not Adequately Account for Wage Differences within Certain Areas The geographic areas that Medicare uses for the labor cost adjustment include hospitals that pay wages that may be quite different from the average wage in the entire geographic area. Other variation in average wages across the statewide nonmetropolitan areas is associated with the type of community. Some of the hospitals that were reclassified in 2001 but that did not satisfy the standard wage criterion were part of countywide reclassifications. Budget Neutrality Adjustments Are Relatively Modest, but Would Vary under a State-Specific Option While geographic reclassification increases the labor cost adjustment, and thus Medicare payments, to hospitals that reclassify, it does not raise total Medicare outlays because any payment increases must be offset by an across-the-board reduction to Medicare payments for all hospitals. If the budget neutrality adjustment were calculated and applied on a state- specific basis, the payment reductions would be different in each state. A state-specific adjustment would reduce payments less in states in which hospitals do not benefit as much from geographic reclassification as the average. In 2002, Medicare payments to nonreclassified metropolitan hospitals were about 1 percent lower due to the budget neutrality provision than they would have been in the absence of any geographic reclassifications (see table 5). Payments to nonreclassified nonmetropolitan hospitals were about 0.6 percent lower. Effect of State-Specific Budget Neutrality Adjustment Would Depend on Benefits of Reclassification for State’s Hospitals A state-specific adjustment would reduce payments less than a national adjustment in states where reclassified hospitals account for a smaller share of the state’s Medicare inpatient hospital spending than the national average. Conclusions Medicare’s PPS for inpatient services provides incentives to hospitals to deliver care efficiently by allowing them to keep any difference between their Medicare payments and their costs, and by making them responsible for their costs that exceed Medicare payments. The adjustment used to account for geographic differences in wages—the labor cost adjustment—does not adequately account for these cost differences because the geographic areas used to define labor markets are too large in many instances. As a result, refinements are needed to address systematic problems in defining hospital labor markets.	What GAO Found The Medicare program's prospective payment system (PPS) for inpatient hospital services provides incentives for hospitals to operate efficiently by paying them a predetermined, fixed amount for each inpatient hospital stay regardless of the actual costs incurred in providing the care. Although the fixed amount is based on national average costs, actual per stay payments vary widely across hospitals, primarily because of two payment adjustments in the PPS. One adjustment accounts for cost differences across patients due to their care needs and the other accounts for the substantial variation in labor costs across the country. The Medicare program's labor cost adjustment may not adequately account for geographic differences in hospital wages because of problems with the definition of labor markets. The geographic areas used by Medicare to approximate hospital labor markets often encompass large areas in which hospitals in different parts of an area or different types of communities pay widely varying wages. Geographic reclassification does not systematically address inadequacies in the way the Medicare program defines geographic areas, although it allows some, but not all, hospitals that may be in distinct labor market and pay wages above the average in their area to receive a higher labor cost adjustment. Geographic reclassification reduces payments to hospitals that do not reclassify because of the budget neutrality requirement, and the amount of this reduction would vary across hospitals under a state-specific budget neutrality approach depending on their location. In 2002, payments to metropolitan hospitals that were not reclassified were 1 percent lower and payments to nonmetropolitan hospitals that were not reclassified were 0.6 percent lower because of geographic reclassification. If the budget neutrality provision were calculated and applied within individual states instead of nationally, the adjustment would be smaller in those states in which hospitals did not benefit much from reclassification and higher in states where a higher proportion of hospitals reclassified.
gao_GAO-01-786T	gao_GAO-01-786T_0	Manufacturing Problems Caused Temporary Shortages and Spikes in Price Although the eventual supply of vaccine in the 2000-01 flu season was about the same as the previous year’s—about 78 million doses— production delays of about 6 to 8 weeks limited the amount that was available during the peak vaccination period. Two main factors contributed to last year’s delay. Consequently, when a purchaser received vaccine depended to some extent on which manufacturer’s vaccine it had ordered. Those who purchased vaccine in the fall found themselves paying much higher prices. Despite efforts by CDC and others to encourage people to seek flu shots later in the season, providers still reported a drop in demand in December. However, when the supply is not sufficient, there is no mechanism currently in place to establish priorities and distribute flu vaccine first to high-risk individuals. Some physicians and public health officials were upset when their local grocery stores, for example, were offering flu shots to everyone when they, the health care providers, were unable to obtain vaccine for their high-risk patients. In addition, many physicians reported that they felt they did not receive priority for vaccine delivery, even though nearly two- thirds of seniors—one of the largest high-risk groups—generally get their flu shots in medical offices. We need to recognize that flu vaccine production and distribution are private-sector responsibilities, and as such options are somewhat limited. This meeting was a good first step, and continued efforts should be made to achieve consensus among the public- and private-sector entities involved in vaccine production, distribution, and administration.	Why GAO Did This Study Until the 2001 flu season, the production and distribution of influenza vaccine generally went smoothly. Last year, however, several people reported that they wanted but could not get flu shots. In addition, physicians and public health departments could not provide shots to high-risk patients in their medical offices and clinics because they had not received vaccine they ordered many months in advance, or because they were being asked to pay much higher prices for vaccine in order to get it right away. At the same time, there were reports that providers in other locations, even grocery stores and restaurants, were offering flu shots to everyone--including younger, healthier people who were not at high risk. This testimony discusses the delays in production, distribution, and pricing of the 2000-2001 flu vaccine. What GAO Found GAO found that manufacturing difficulties during the 2000-2001 flu season resulted in an overall delay of about six to eight weeks in shipping vaccine to most customers. This delay created an initial shortage and temporary price spikes. There is no system in place to ensure that high-risk people have priority for receiving flu shots when supply is short. Because vaccine purchases are mainly done in the private sector, federal actions to help mitigate any adverse effects of vaccine delays or shortages need to rely to a great extent on collaboration between the public and private sectors.
gao_GAO-08-286T	gao_GAO-08-286T_0	With regard to covert operations specifically, FSI has developed our own internal procedures detailing the requirements related to the planning, execution, and reporting phases of the operations. Planning a Covert Test FSI, in conjunction with senior-level GAO management, decides on a case- by-case basis whether to accept written congressional requests requiring covert operations or whether to incorporate covert testing into existing engagements. We also identify the specific aspects of the security system or the government program that are particularly vulnerable to terrorist threats or fraudulent activities. Once the use of covert operations is accepted, the first step in FSI’s process involves using the training and experience of our investigators to develop a written investigative plan. All counterfeit documents that FSI uses are manufactured by FSI using hardware, software, and materials that are available to the general public—this allows us to demonstrate that any security vulnerabilities we find could be exploited by a criminal or terrorist with moderate means and resources and would not require sophisticated insider knowledge or access to sophisticated equipment. In general, FSI’s investigators are the only staff allowed to participate in actual testing activities, although audit and analyst staff are often involved in planning and operational support. Importantly, if investigators discover vulnerabilities that pose a significant and immediate threat to public safety, FSI immediately discontinues its investigation and alert the appropriate government law enforcement agency. Reporting the Results of Covert Testing Once the operation is complete, investigators immediately brief the congressional requester. Next, FSI conducts a “corrective action briefing” with officials at the tested entity to inform them that they have been the subject of a covert operation, share the results of the testing , and, if necessary, suggest potential remedies for any identified control weaknesses or security vulnerabilities. Using counterfeit documents and posing as employees of a company with an NRC license, FSI investigators successfully crossed the northern and southern borders with the type of radioactive materials that could be used to make a dirty bomb. Sale of Sensitive and Surplus Military Equipment Posing as private citizens, FSI investigators purchased sensitive military equipment—including ceramic body armor inserts, guided missile radar test sets, and microcircuits used in F-14 fighter aircraft— on the Internet from the Department of Defense’s (DOD) liquidation sales contractor. Public Safety Using bogus driver’s licenses, FSI investigators successfully gained entry to all 24 Department of Transportation regulated urine collection sites that we tested, which are responsible for providing drug testing of commercial truck drivers in safety sensitive transportation positions. Using entirely false documents and an erroneous IRS taxpayer identification number, FSI pretended to be a charity and applied to three of the Combined Financial Campaign’s local 2006 campaigns. This is a work of the U.S. government and is not subject to copyright protection in the United States.	Why GAO Did This Study GAO's Forensic Audits and Special Investigations team (FSI), which was created in 2005 as an interdisciplinary team consisting of investigators, auditors, and analysts, conducts covert tests at the request of the Congress to identify vulnerabilities and internal control weaknesses at executive branch agencies. These vulnerabilities and internal control weaknesses include those that could compromise homeland security, affect public safety, or have a financial impact on taxpayer's dollars. FSI conducts covert tests as "red team" operations, meaning that FSI does not notify agencies in advance about the testing. Recently, concerns have arisen as to whether top management at the U.S. Transportation Security Administration (TSA) were negatively impacting the results of red team operations by leaking information to security screeners at the nation's airports in advance of covert testing operations. Consequently, GAO was asked to (1) briefly explain FSI's processes and procedures concerning covert testing and (2) provide examples of covert activities performed What GAO Found FSI has strict internal procedures related to the planning, execution, and reporting of covert activities. First, FSI and senior GAO management decide on a case-by-case basis whether engagements requiring covert tests are within the scope of GAO's authority. Next, FSI identifies the aspects of the security system or the government program that are particularly vulnerable to terrorist threats or fraudulent activities and relies on the experience of its investigators to develop a written investigative plan. This plan typically includes the creation of fictitious identities and counterfeit documentation. All counterfeit documents that FSI uses are manufactured using hardware, software, and materials that are available to the general public--this allows FSI to demonstrate that any security vulnerabilities it finds could be exploited by a criminal or terrorist with moderate means and resources and would not require sophisticated insider knowledge. FSI's investigators are the only GAO staff allowed to participate in the execution phase of testing, although audit and analyst staff are often involved in planning and operational support. Importantly, if investigators discover vulnerabilities that pose a significant and immediate threat to public safety, FSI immediately will discontinue its investigation and alert the appropriate government law enforcement agency. Once the operation is complete, FSI conducts a "corrective action briefing" with officials at the tested entity to report that they have been the subject of a covert operation, share the results of the testing and, if necessary, suggest potential remedies for any identified control weaknesses or security vulnerabilities. The following summarize recent FSI red team operations. These operations provided the Congress with irrefutable evidence about the actual ability of federal agencies under "live" conditions to deal with security threats and to protect government assets from fraudsters. Using counterfeit documents and posing as employees of a company with a Nuclear Regulatory Commission license, FSI investigators successfully crossed the U.S. northern and southern borders with the type of radioactive materials that could be used to make a dirty bomb. Posing as private citizens, FSI investigators purchased sensitive military equipment--including ceramic body armor inserts, guided missile radar test sets, and microcircuits used in F-14 fighter aircraft--on the Internet from the Department of Defense's liquidation sales contractor. Using bogus driver's licenses, FSI investigators successfully gained entry to all 24 Department of Transportation regulated urine collection sites that FSI tested, which are responsible for providing drug testing of commercial truck drivers in safety sensitive transportation positions. Using false documents and an erroneous IRS taxpayer identification number, FSI pretended to be a charity and successfully applied to three of the Combined Financial Campaign's local 2006 campaigns.
gao_GAO-09-523	gao_GAO-09-523_0	Appendix III provides additional details on the agency’s mission-critical systems and infrastructure. He added that in the future, FDA plans to focus on more long- term modernization projects for supporting the agency’s regulatory responsibilities. Effective IT Management Is Key to Successful Modernization Key to an agency’s success in modernizing its IT systems, as our research and experience at federal agencies has shown, is institutionalizing a set of interrelated IT management capabilities, among which are strategic planning to describe an organization’s goals, strategies it will use to achieve desired results, and performance measures; developing and using an agencywide enterprise architecture, or modernization blueprint, to guide and constrain IT investments; establishing and following a portfolio-based approach to investment implementing information security management that ensures the integrity and availability of information; and building and sustaining an IT workforce with the necessary knowledge, skills, and abilities to execute this range of management functions. FDA Is Pursuing Systems Modernization, but It Has Not Developed an IT Strategic Plan to Guide Its Initiatives FDA is pursuing numerous initiatives to modernize its IT systems and infrastructure, including at least 16 enterprisewide initiatives. In summary, an IT strategic plan would provide a comprehensive picture of what the organization seeks to accomplish, identify the strategi use to achieve desired results, provide results-oriented goals andperformance measures that permit it to determine whether it is succeeding, and describe interdependencies that these can be understood and managed. FDA’s Projects and Plans Are Intended to Address Most Previously Identified Limitations As reflected by its projects and high-level plans, FDA intends to address most of the limitations in its IT systems and infrastructure that had been previously identified by the agency’s Science Board, its contractors, and us. Further, although these projects, activities, and high-level plans are intended to address most of the limitations, successfully overcoming the limitations depends in part on the agency’s developing and implementing appropriately detailed plans. FDA Has Made Mixed Progress in Key IT Management Practices An agency’s chance of success in modernizing its IT systems is improved if it institutes critical IT management capabilities, including strategic planning (discussed in the previous section), investment management, information security, enterprise architecture, and human capital. Although FDA is making progress in these areas, it has considerable work to do. Finally, it is not effectively managing its IT human capital. Until it begins managing IT human capital strategically, FDA cannot be assured that it will have the workforce it needs to carry out its modernization projects. However, FDA does not have such a plan guiding its modernization efforts. That is, it has begun implementing an enterprisewide approach to IT management, and it has put into place a foundation for investment management. Recommendations for Executive Action To help ensure the success of FDA’s modernization efforts, we recommend that the Commissioner of FDA require the CIO to take expeditious actions to set milestones and a completion date for developing a comprehensive IT strategic plan, including results-oriented goals, strategies, milestones, performance measures, and an analysis of interdependencies among projects and activities, and use this plan to guide and coordinate its modernization projects and activities; develop a documented enterprise architecture program management plan that includes a detailed work breakdown of the tasks, activities, and time frames associated with developing the architecture, as well as the funding and staff resources needed; complete the criteria for setting priorities for the segment architecture and accelerate development of the segment and enterprise architecture, including “as is,” “to be,” and transition plans, and in the meantime develop plans to manage the increased risk to modernization projects of proceeding without an architecture to guide and constrain their development; and develop a skills inventory, needs assessment, and gap analysis, and develop initiatives to address skills gaps as part of a strategic approach to IT human capital planning. GAO staff who made major contributions to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology Our objectives were to (1) evaluate the Food and Drug Administration’s (FDA) overall plans for modernizing its systems, including the extent to which the plans address identified limitations or inadequacies in the agency’s information technology (IT) capabilities, and (2) assess to what extent the agency has put in place key IT management policies and processes to guide the implementation of its modernization projects. We analyzed the agency’s two main high-level planning documents that address IT, the agency’s Strategic Action Plan and the Prescription Drug User Fee Act (PDUFA) IV IT Plan, to determine whether they included elements of an IT strategic plan.	Why GAO Did This Study The Food and Drug Administration (FDA) relies heavily on information technology (IT) to carry out its responsibility for ensuring the safety and effectiveness of certain consumer products. Recognizing limitations in its IT capabilities that had been previously identified in studies by FDA and others, the agency has begun various initiatives to modernize its IT systems. GAO was asked to (1) evaluate the agency's overall plans for modernizing its IT systems, including the extent to which the plans address identified limitations or inadequacies in the agency's capabilities, and (2) assess to what extent the agency has put in place key IT management policies and processes to guide the implementation of its modernization projects. GAO analyzed FDA's plans to determine whether they followed best practices and addressed capability limitations, reviewed key management policies and processes, and interviewed agency officials. What GAO Found In response to federal law and guidance and urgent mission needs, FDA is pursuing numerous modernization projects (including 16 enterprisewide initiatives), many of which are in early stages. However, FDA does not have a comprehensive IT strategic plan to coordinate and manage these initiatives and projects. Such a plan would describe what the agency seeks to accomplish, identify the strategies it will use to achieve desired results, and provide results-oriented goals and performance measures that permit it to determine whether it is succeeding. FDA has developed two high-level planning documents that include some of these elements, but not all: (1) The agency's Strategic Action Plan provides high-level goals and objectives related to modernization of infrastructure and systems, but it does not provide details on IT initiatives, such as milestones and performance measures. (2) An IT plan for FDA's user fee program for drugs and biological products focuses on selected projects in greater detail, but these projects are only a subset of the agency's modernization initiatives. As reflected by its projects and high-level plans, FDA intends to address most of the limitations in its IT systems and infrastructure that had been previously identified. However, successfully overcoming these limitations depends in part on the agency's developing and implementing appropriately detailed plans. A comprehensive IT strategic plan, including results-oriented goals and performance measures, is vital for guiding and coordinating the agency's numerous ongoing modernization projects and activities. Until it develops such a plan, the risk is increased that the agency's IT modernization may not adequately meet the agency's urgent mission needs. FDA has made mixed progress in establishing important IT management capabilities that are essential in helping ensure a successful modernization. These capabilities include investment management, information security, enterprise architecture development, and human capital management. For example, as part of a move to an enterprisewide approach to IT management, FDA has put policies in place for investment management and project management, and it is making progress in addressing information security. However, significant work remains with regard to enterprise architecture (that is, establishing modernization blueprints describing the organization's operation in terms of business and technology), particularly its "to be" architecture--a blueprint of where it wants to go in the future. Further, the agency is not strategically managing IT human capital--it has not determined its IT skills needs or analyzed gaps between skills on hand and future needs. In both these areas (enterprise architecture and human capital management), the agency's vision for the future, as captured in an IT strategic plan, would be an important asset. Without an effective enterprise architecture and strategic human capital management, FDA has less assurance that it will be able to modernize effectively and will have the appropriate IT staff to effectively implement and support its modernization efforts.
gao_GAO-11-883T	gao_GAO-11-883T_0	Background The nation’s economy and security are heavily dependent on oil, natural gas, and other energy commodities. Federal Agency Roles As the lead federal agency for maritime security, the Coast Guard seeks to mitigate many kinds of security challenges in the maritime environment. The FBI shares responsibility with the Coast Guard for preventing and responding to terrorist incidents in the maritime environment, including incidents involving energy tankers. The U.S. Maritime Administration and the Coast Guard have issued guidance for commercial vessels to stay 200 miles away from the Somali coast. Progress Made Addressing Our Recommendations, but Additional Actions Could Help Improve Tanker Security In 2007, we assessed Coast Guard and FBI efforts to ensure the security of energy tankers and respond to terrorist incidents involving energy tankers. The Coast Guard and the FBI have made progress in implementing these recommendations—two have been implemented, and the Coast Guard is in the process of implementing a third—but actions have not yet been taken to address the remaining two recommendations. Regarding our recommendation that the Coast Guard and the FBI coordinate to help ensure that a detailed operational plan be developed that integrates the different spill and terrorism sections of the National Response Framework, DHS is in the process of revising this document and did not have further information regarding whether or how the spill and terrorism response annexes may be revised. Further, the FBI has not taken independent action to implement this recommendation, in part because it did not concur with the need to develop a separate operational plan. Regarding our recommendation that DHS develop performance measures for emergency response capabilities, DHS has begun to revise its grant programs, but it is too early in that process to determine whether and how performance measures will be incorporated into those revisions. Coast Guard Had Not Assessed Risks to All OCS Facilities In accordance with federal statutes and presidential directives, the Coast Guard assesses security risks as part of its responsibilities for ensuring the security of OCS facilities and deepwater ports. In doing so, the Coast Guard, among other things, uses a tool called the Maritime Security Risk Analysis Model (MSRAM). The Coast Guard’s efforts to assess security risks to OCS facilities and deepwater ports are part of a broader effort by DHS to protect critical infrastructure and key resources. To inform analysts’ inputs into MSRAM, the Coast Guard has coordinated efforts with the intelligence community and key stakeholders. Coast Guard analysts also use information from other stakeholders, such as reports produced by the Department of the Interior’s Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), which contain oil and gas production data, to inform their evaluations of vulnerabilities and consequences. Challenges in Data and Scope Hinder Risk Assessments The Coast Guard faces complex and technical challenges in assessing security risks. The Coast Guard recognizes these challenges and generally has actions underway to study or address them.  Vulnerability-related data: The Coast Guard does not have data on the ability of an OCS facility to withstand an attack, which is defined in MSRAM as target hardness. While the Coast Guard plans to update its policies and procedures for inspecting and ensuring the security of OCS facilities in the future, the current set of policies and procedures do not call for an updated list of OCS facilities to be provided to MSRAM analysts to assess the security risks to such facilities annually. Developing such procedures could help ensure that the Coast Guard carries out its risk assessment requirements for such security- regulated OCS facilities.  Challenges in assessing security risks to offshore energy infrastructure that is not subject to security requirements: With respect to OCS facilities, analysts only use MSRAM to assess security risks associated with those OCS facilities that are regulated for security under 33 C.F.R. However, the Coast Guard’s work is this area is in its infancy and there is uncertainty regarding the way in which the Coast Guard will move forward in measuring “network effects.” Conclusions The threat of terrorism against energy tankers and offshore energy infrastructure highlights the importance of the Coast Guard having policies and procedures in place to better ensure the security of energy tankers, OCS facilities, and deepwater ports. The Coast Guard has taken steps to implement prior GAO recommendations to enhance energy tanker security, and it continues to work towards implementing the three outstanding recommendations. However, given that the list of security-regulated facilities may change each year based on factors such as production volume, it is important to ensure that any facilities added to the list in the future will be assessed for security risks in MSRAM. Recommendations for Executive Action To strengthen the Coast Guard’s efforts to assess security risks and ensure the security of OCS facilities, we recommend that the Commandant of the Coast Guard revise policies and procedures to ensure that MSRAM analysts receive the annual updated list of security- regulated OCS facilities to ensure that risk assessments have been conducted on all such OCS facilities. This testimony concludes our work on Coast Guard efforts to assess security risks for offshore energy infrastructure. Maritime Security: Federal Efforts Needed to Address Challenges in Preventing and Responding to Terrorist Attacks on Energy Commodity Tankers.	Why GAO Did This Study The nation's economy and security are heavily dependent on oil, natural gas, and other energy commodities. Al-Qa'ida and other groups with malevolent intent have targeted energy tankers and offshore energy infrastructure because of their importance to the nation's economy and national security. The U.S. Coast Guard--a component of the Department of Homeland Security (DHS)--is the lead federal agency for maritime security, including the security of energy tankers and offshore energy infrastructure. The Federal Bureau of Investigation (FBI) also has responsibilities for preventing and responding to terrorist incidents. This testimony discusses the extent to which (1) the Coast Guard and the FBI have taken actions to address GAO's prior recommendations to prevent and respond to a terrorist incident involving energy tankers and (2) the Coast Guard has taken actions to assess the security risks to offshore energy infrastructure and related challenges. This testimony is based on products issued from December 2007 through March 2011 and recently completed work on the Coast Guard's actions to assess security risks. GAO reviewed documents from the Coast Guard's risk model and relevant laws, regulations, policies, and procedures; and interviewed Coast Guard officials. What GAO Found The Coast Guard and the FBI have made progress implementing prior recommendations GAO made to enhance energy tanker security. In 2007, GAO made five recommendations to address challenges in ensuring the effectiveness of federal agencies' actions to protect energy tankers and implement response plans. The Coast Guard and the FBI have implemented two recommendations, specifically: (1) the Coast Guard, in coordination with U.S. Customs and Border Protection, developed protocols for facilitating the recovery and resumption of trade following a disruption to the maritime transportation system, and (2) the Coast Guard and the FBI participated in local port exercises that executed multiple response plans simultaneously. The Coast Guard has made progress on a third recommendation through work on a national strategy for the security of certain dangerous cargoes. It also plans to develop a resource allocation plan, starting in April 2012, which may help address the need to balance security responsibilities. However, the Coast Guard and the FBI have not yet taken action on a fourth recommendation to develop an operational plan to integrate the national spill and terrorism response plans. According to DHS, it plans to revise the National Response Framework, but no decision has been made regarding whether the separate response plans will be integrated. Also, DHS has not yet taken action on the final recommendation to develop explicit performance measures for emergency response capabilities and use them in risk-based analyses to set priorities for acquiring needed response resources. According to DHS, it is revising its emergency response grant programs, but does not have specific plans to develop performance measures as part of this effort. The Coast Guard has taken actions to assess the security risks to offshore energy infrastructure, which includes Outer Continental Shelf (OCS) facilities (facilities that are involved in producing oil or natural gas) and deepwater ports (facilities used to transfer oil and natural gas from tankers to shore), but improvements are needed. The Coast Guard has used its Maritime Security Risk Analysis Model (MSRAM) to examine the security risks to OCS facilities and deepwater ports. To do so, the Coast Guard has coordinated with the intelligence community and stakeholders, such as the Department of the Interior's Bureau of Ocean Energy Management, Regulation and Enforcement. However, the Coast Guard faces complex and technical challenges in assessing risks. For example, the Coast Guard does not have data on the ability of an OCS facility to withstand an attack. The Coast Guard generally recognizes these challenges and has actions underway to study or address them. Further, GAO determined that as of May 2011, the Coast Guard had not assessed security risks for 12 of the 50 security-regulated OCS facilities that are to be subjected to such assessments. Coast Guard officials later determined that they needed to add these OCS facilities to MSRAM for assessment and have completed the required assessments. However, while the list of security-regulated facilities may change each year based on factors such as production volume, the Coast Guard's current policies and procedures do not call for Coast Guard officials to provide an annual updated list of regulated OCS facilities to MSRAM analysts. Given the continuing threat to such offshore facilities, revising its procedures could help ensure that the Coast Guard carries out its risk assessment requirements for security-regulated OCS facilities. What GAO Recommends GAO is recommending that the Coast Guard revise policies and procedures to ensure its analysts receive the annual updated list of regulated offshore energy facilities to ensure risk assessments are conducted on those facilities. The Coast Guard concurred with this recommendation.
gao_GAO-05-817	gao_GAO-05-817_0	For example, the requirements for acquisition program baselines and independent cost estimates, generally applicable by statute to major defense acquisition programs and implemented by the DOD regulations, will not be applied until a BMDS element or component is transferred to a military service concurrent with Milestone C. Milestone C, the point at which a decision is made to begin initial production, is the point at which the service is to assume management and funding responsibility for an element or component of the BMDS. These officials told us that when the Under Secretary established transfer criteria in 2002, DOD did not fully understand the complexity of the BMDS and how it could affect transfer decisions. MDA Contemplates a Revised Acquisition Model There is currently uncertainty as to when and under what conditions DOD will transfer management and funding responsibility for elements and major components from MDA to the military services. Management responsibility for some elements and components might never be transferred to a military service because these assets are not integrated on service platforms or do not perform core service missions. MDA officials suggested that these components could be operated by either contractors or military personnel, and MDA might fund their operation and sustainment. Additionally, DOD has not yet determined the full cost of procuring, operating, and sustaining the BMDS from 2006 through 2011, and it has not included all known costs in its budget. Until DOD decides which organization will fund these costs, the services will likely continue to provide only the funding that they are directed to make available, and some needs, which neither MDA nor the services have planned for, will probably go unfunded. Additionally, if the funds budgeted for some purposes, such as logistical support for the BMDS, turn out to be insufficient, DOD will either have to take funds from other programs or spend less on missile defense. DOD reports that it will spend $68.5 billion between fiscal years 2005 and 2011 to develop, acquire, and support missile defense capabilities, including an initial capability emplaced in 2004-2005 that can be used in the event of an emergency. MDA Is Using RDT&E Funds to Acquire BMDS Components In fiscal year 2005, MDA budgeted $1.5 billion of its research and development funds to acquire interceptors and radars and to upgrade various BMDS elements or components. It expects to continue to acquire and upgrade BMDS assets through 2011. Conclusions The military services are uncertain as to which missile defense assets may eventually be transferred to them and under what conditions those transfers may occur. This uncertainty makes it difficult for the services to plan the activities that are necessary to apply the requirements of DOD acquisition system regulations and to consider how to best realign their budgets to support the missile defense mission. DOD also needs to clarify whether MDA or the services will be responsible for sustaining missile defense capabilities that have not been transferred to the services. On the other hand, the military services will not want to fund the operation and sustainment of a missile defense capability if its cost cannot be accurately estimated. While the team established by MDA to develop transition plans includes working-level representatives from MDA, the military services, and the combatant commands, it will be difficult to reach full agreement as to who should pay sustainment costs for these assets because the representatives do not have the authority to make binding financial decisions for their organizations. Recommendations We recommend that the Under Secretary of Defense for Acquisition, Technology and Logistics revise the criteria for deciding when management and funding responsibility for missile defense assets should be transferred from MDA to a military service so that those criteria are clear and complete.	Why GAO Did This Study In 2002, the Department of Defense (DOD) implemented a new acquisition model to develop a Ballistic Missile Defense System (BMDS) that included all major missile defense acquisitions, some of which were being developed by the military services. The model called for the management and funding responsibility for production, operation, and sustainment of a capability to be transferred to a military service when a BMDS element or major component is technically mature and plans for production are well developed. The Missile Defense Agency (MDA) was given responsibility for developing the BMDS and recommending the transfer of management and funding responsibilities to the services. In 2004, MDA emplaced an initial missile defense capability, but DOD did not transfer management and funding responsibility for that capability. Because a formal transfer did not occur, GAO was asked to (1) identify DOD's criteria for deciding when a missile defense capability should be transferred to a service and (2) determine how DOD is managing the costs of fielding a BMDS capability. What GAO Found There is currently uncertainty as to which assets may eventually be transferred to each military service and under what conditions those transfers should occur. This uncertainty makes it difficult for the services to plan to address the requirements of DOD acquisition regulations and realign their budgets to support the missile defense mission. According to MDA and other DOD officials, when transfer criteria were established in 2002, the Department did not fully understand the complexity of the BMDS and how it could affect transfer decisions. For example, it has been difficult to determine whether MDA or a military service will be responsible for managing and funding some assets, such as stand-alone missile defense radars, because these assets are not integrated on service platforms or do not perform core service missions. MDA officials suggested that these components could be operated by either contractors or military personnel and MDA might fund their operation and sustainment. A team that includes representatives from the military services, the combatant commands, MDA, and other DOD offices was established early this year to address transfer issues. However, because MDA and the services have been unable to reach agreement on the transfer of some missile defense assets, a unit under the Joint Chiefs of Staff was tasked in July 2005 with recommending revisions to the existing transfer criteria. MDA budgeted $1.5 billion of its fiscal year 2005 research and development funds to acquire interceptors and radars and upgrade various BMDS components. It expects to continue to acquire and upgrade BMDS assets through 2011 and beyond. However, MDA and the services disagree as to who should pay for operating and sustaining the initial defensive capability after fiscal year 2005. Additionally, although DOD has budgeted $68.5 billion to develop, procure, operate, and sustain a missile defense capability between 2005 and 2011, it has not completely determined whether additional operation and sustainment funds will be needed, and it has not included all known operation and sustainment costs in its budget. Until DOD decides who will fund these costs, the services will likely continue to provide only the funding that they have been directed to provide. As a result, some needs--for which neither MDA nor the services have planned--will go unfunded. Additionally, if the funds budgeted for some purposes, such as logistical support for the BMDS, turn out to be insufficient, DOD will either have to take funds from other programs or spend less on missile defense.
gao_GAO-06-760T	gao_GAO-06-760T_0	For reappointment only, VA’s policy requires that information on a physician’s performance, such as a physician’s surgical complication rate, be used when deciding whether to renew a physician’s clinical privileges. VA Has Taken Steps to Improve Employment Screening Requirements, but Gaps Remain VA has taken steps to improve employment screening of its health care practitioners by partially implementing each of the four recommendations made in our March 2004 report; however, gaps still remain in VA’s health care practitioner screening requirements. To address our recommendation that VA facility officials contact state licensing boards and national certifying organizations to verify all licenses and certificates held by all VA health care practitioners, VA expanded its verification requirement to include licenses and certificates for all prospective hires but did not extend this requirement to include all practitioners currently employed by VA. For those currently employed, such as nurses and pharmacists, VA only required facility officials to physically inspect one license of a practitioner’s choosing. VA Facilities Did Not Comply with Employment Screening Requirements for Practitioners For the seven VA facilities we visited to determine compliance with employment screening requirements for practitioners, we found poor compliance with four of the five requirements we selected for review. Physician Files at Facilities Demonstrated Compliance with Almost All Selected Credentialing and Privileging Requirements; Not All Facilities Submitted Paid Malpractice Claim Information in a Timely Manner We found that the physician files at the facilities we visited demonstrated compliance with four VA credentialing and four privileging requirements we reviewed. Officials at six medical facilities told us that they used performance information to support the granting of clinical privileges requested by their physicians, but collected all or most of this information through facility quality assurance programs. When VA medical facilities do not submit all relevant claim information to the Office of Medical-Legal Affairs, determinations on substandard care are not available to facility officials when they make privileging decisions. VA Has Not Established Internal Controls to Help Ensure the Accuracy of Facilities’ Privileging Information VA has not required its medical facilities to establish internal controls to help ensure that privileging information managed by medical staff specialists is accurate. One facility we visited did not identify 106 physicians whose privileging processes had not been completed by facility officials for at least 2 years because of inaccurate information provided by the facility’s medical staff specialist. As a result, these physicians were practicing at the facility without current clinical privileges. Our reports include the following four recommendations that VA should implement to help ensure patient safety: expand the human resource management oversight program to include a review of VA facilities’ compliance with employment screening requirements for all types of practitioners, provide guidance to medical facilities on how to collect individual physician performance information in accordance with VA’s credentialing and privileging requirements to use in medical facilities’ privileging processes, enforce the requirement that medical facilities submit information on paid VA medical malpractice claims to VA’s Office of Medical-Legal Affairs within 60 days after being notified that the claim is paid, and instruct medical facilities to establish internal controls to ensure the accuracy of their physician privileging information. Appendix I: March 2004 Report Recommendations and VA Screening, Credentialing, and Privileging Requirements In our March 2004 report, VA Health Care: Improved Screening of Practitioners Would Reduce Risk to Veterans, we made four recommendations to address the gaps we identified in VA’s employment screening requirements and the noncompliance we found at the four medical facilities we visited. We selected two other requirements because VA implemented these since March 2004 to improve its employment screening of practitioners. Verify that all state medical licenses held by physicians are valid.	Why GAO Did This Study In its March 2004 report, "VA Health Care: Improved Screening of Practitioners Would Reduce Risk to Veterans," GAO-04-566 , GAO made recommendations to improve VA's employment screening of practitioners. GAO was asked to testify today on steps VA has taken to improve its employment screening requirements and VA's physician credentialing and privileging processes because of their importance to patient safety. This testimony is based on two GAO reports released today that determined the extent to which (1) VA has taken steps to improve employment screening for practitioners by implementing GAO's 2004 recommendations, (2) VA facilities are in compliance with selected credentialing and privileging requirements for physicians, and (3) VA has internal controls to help ensure the accuracy of privileging information. What GAO Found In its report released today, "VA Health Care: Steps Taken to Improve Practitioner Screening, but Facility Compliance with Screening Requirements Is Poor," GAO-06-544 , GAO found that VA has taken steps to improve employment screening for practitioners, such as physicians, nurses, and pharmacists, by partially implementing each of four recommendations GAO made in March 2004. However, gaps still remain in VA's requirements. For example, for the recommendation that VA check all state licenses and national certificates held by all practitioners, such as nurses and pharmacists, VA implemented the recommendation for practitioners it intends to hire, but has not expanded this screening requirement to include those currently employed by VA. In addition, VA's implementation of another recommendation--to conduct oversight to help facilities comply with employment screening requirements--did not include all screening requirements, as recommended by GAO. In another report released today, "VA Health Care: Selected Credentialing Requirements at Seven Medical Facilities Met, but an Aspect of Privileging Process Needs Improvement," GAO-06-648 , GAO found at seven VA facilities it visited compliance with almost all selected credentialing and privileging requirements for physicians. Credentialing is verifying that a physician's credentials are valid. Privileging is determining which health care services--clinical privileges--a physician is allowed to provide. Clinical privileges must be renewed at least every 2 years. One privileging requirement--to use information on a physician's performance in making privileging decisions--was problematic because officials used performance information when renewing clinical privileges, but collected all or most of this information through their facility's quality assurance program. This is prohibited under VA policy. Further, three of the seven facilities did not submit medical malpractice claim information to VA's Office of Medical-Legal Affairs within 60 days after being notified that a claim was paid, as required by VA. This office uses such information to determine whether VA practitioners have delivered substandard care and provides these determinations to facility officials. When VA medical facilities do not submit all relevant information in a timely manner, facility officials make privileging decisions without the advantage of such determinations. VA has not required its facilities to establish internal controls to help ensure that physician privileging information managed by medical staff specialists--employees who are responsible for obtaining and verifying information used in credentialing and privileging--is accurate. One facility GAO visited did not identify 106 physicians whose privileging processes had not been completed by facility officials for at least 2 years because of inaccurate information provided by the facility's medical staff specialist. As a result, these physicians were practicing at the facility without current clinical privileges.
gao_GAO-06-409T	gao_GAO-06-409T_0	Background Federal agencies, including DOD, can choose among numerous contract types to acquire products and services. Further, we estimate that most of the contracts and most of the dollars in our study population are related to the acquisition of weapon systems. A System in Need of Reform DOD’s use of award and incentive fees is symptomatic of an acquisition system in need of fundamental reform. Award fees have generally not been effective at helping DOD achieve its desired acquisition outcomes, in large part, because award-fee criteria are not linked to desired acquisition outcomes, such as meeting cost and schedule goals and delivering desired capabilities. As a result of all these factors, DOD programs frequently paid most of the available award fee for what they described as improved contractor performance, regardless of whether acquisition outcomes fell short of, met, or exceeded DOD’s expectations. A Case for Change: Motivating Excellent Contractor Performance and Promoting Accountability While DOD stated that award fee motivating excellent contractor performance by only paying award fees for above satisfactory performance arrangements should be structured to encourage the contractor to earn the preponderance of fee by providing excellent performance, it maintains that paying a portion of the fee for satisfactory performance is appropriate to ensure that contractors receive an adequate fee on contracts. DOD programs routinely engage in award-fee practices that are inconsistent with the intent of award fees, reduce the effectiveness of these fees as motivators of performance, compromise the integrity of the fee process, and waste billions in taxpayer money. Two practices, in particular, paying significant amounts of fee for “acceptable, average, expected, good, or satisfactory” performance and providing contractors multiple opportunities to earn fees that were not earned when first made available, undermine the effectiveness of fees as a motivational tool and marginalize their use in holding contractors accountable for acquisition outcomes. The inconsistent application of DOD’s existing policies on award fees and weapon system development reinforce the need for increased transparency and accountability in DOD’s management of award fees. Very little effort has gone into determining whether DOD’s current use of monetary incentives is effective. However, DOD has not compiled information, conducted evaluations, shared lessons learned, or used performance measures to judge how well award and incentive fees are improving or can improve contractor performance and acquisition outcomes. DOD uses these fees in an attempt to mitigate the risks that it creates through a flawed approach to major weapon system development. As a result, DOD has to date not been willing to hold its programs or its contractors accountable for achieving its specified acquisition outcomes. Implementing our recommendations on award and incentive fees will not fix the broader problems DOD faces with its management of major weapons or service acquisitions. However, by implementing our recommendations, DOD can improve incentives, increase transparency, and enhance accountability for the fees it pays. Working in concert, these steps can help DOD set the right conditions for more successful acquisition outcomes and make more efficient use of its resources in what is sure to be a more fiscally constrained environment as the nation approaches the retirement of the “baby boom” generation. Finally, we encourage the department to fully implement our remaining recommendations including developing a mechanism to capture award- and incentive-fee data and developing performance measures to evaluate the effectiveness of these fees.	Why GAO Did This Study With DOD spending over $200 billion annually to acquire products and services that include everything from spare parts to the development of major weapon systems, our numerous, large, and mounting fiscal challenges demand that DOD maximize its return on investment and provide the warfighter with needed capabilities at the best value for the taxpayer. In an effort to encourage defense contractors to perform in an innovative, efficient, and effective way, DOD gives its contractors the opportunity to collectively earn billions of dollars through monetary incentives known as award and incentive fees. Using these incentives properly--in concert with good acquisition practices--is a key to minimizing waste, maximizing value, and getting our military personnel what they need, when and where they need it. Congress asked GAO to testify on DOD's use of award and incentive fees and the role they play in the acquisition system. This statement highlights the risks of conducting business as usual and identifies the actions DOD needs to take to use these fees more effectively. DOD concurred or partially concurred with the seven recommendations GAO made in a previously issued report on award and incentive fees. GAO looks forward to seeing DOD turn these promised steps into actual policy and practice. What GAO Found DOD's use of award and incentive fees is an issue at the nexus of two areas that GAO has designated "high risk" for DOD--contract management and weapon system acquisition. Contract management has been a long-standing business management challenge for DOD because it often cannot assure that it is using sound business practices to acquire the goods and services the warfighter needs. For weapon system acquisitions, the persistent and long-standing nature of acquisition problems has perhaps made a range of key decision makers complacent about cost growth, schedule delays, quantity reductions, and performance shortfalls. DOD's strategies for incentivizing its contractors, especially for weapon system development programs, reflect the challenges in these areas. DOD programs routinely engage in award-fee practices that do not hold contractors accountable for achieving desired outcomes and undermine efforts to motivate contractor performance, such as evaluating contractors on award-fee criteria that are not directly related to key acquisition outcomes (e.g., meeting cost and schedule goals and delivering desired capabilities to the warfighter); paying contractors a significant portion of the available fee for what award-fee plans describe as "acceptable, average, expected, good, or satisfactory" performance; and giving contractors at least a second opportunity to earn initially unearned or deferred fees. As a result, DOD has paid out an estimated $8 billion in award fees on contracts in GAO's study population, regardless of whether acquisition outcomes fell short of, met, or exceeded DOD's expectations. Despite paying billions of dollars, DOD has not compiled data or developed performance measures to evaluate the validity of its belief that award and incentive fees improve contractor performance and acquisition outcomes. These issues, along with those GAO has identified in DOD's acquisition and business management processes, present a compelling case for change. By implementing the recommendations GAO has made on award and incentive fees, DOD can improve incentives, increase transparency, and enhance accountability for the fees it pays. At the same time, by working more broadly to improve its acquisition practices, DOD can set the right conditions for getting better acquisition outcomes and making more efficient use of its resources in what is sure to be a more fiscally constrained environment.
gao_GAO-06-47	gao_GAO-06-47_0	Eventually, though, consumers need to dispose of these units in some manner. Available EPA data indicate that less than 4 million monitors and 8 million televisions are disposed of annually in U.S. landfills—only a fraction of the amount estimated to become obsolete annually, according to EPA. Hence, the gap between the enormous quantity of used electronics that are obsolete (or becoming obsolete), and the quantity either in landfills or sent to recycling centers, suggests that most are still in storage—such as attics, basements, and garages, and that their ultimate fate is still uncertain—or have been exported for recycling and reuse overseas. By disposing of these products in landfills or incinerators, valuable resources are lost for future use. Cost and Regulatory Factors Deter Recycling and Reuse of Used Electronics The costs associated with recycling and reuse, along with limited regulatory requirements or incentives, discourage environmentally preferable management of used electronics. Generally, consumers have to pay fees and take their used electronics to locations that are often inconvenient to have them recycled or refurbished for reuse. Federal Regulatory Framework Governing Used Electronics Provides Little Incentive for Recycling or Reuse The lack of economic incentives promoting recycling and reuse of electronics is compounded by the absence of federal provisions that either encourage recycling, or preclude their disposal in landfills. Specifically, current federal laws and regulations (1) allow hazardous used electronics in municipal landfills, (2) do not provide for a financing system to support recycling, and (3) do not preclude electronic products generated in the United States from being exported and subsequently threatening human health and the environment overseas. According to an official with the California Department of Toxic Substance Control, the revenues generated from the fee are intended to deal with a key concern—used electronics in storage, or “legacy waste.” The officials explained that while California’s recycling industry had sufficient capacity to recycle large volumes of used electronics, consumers and businesses had little incentive to take products out of their basements or warehouses to have them recycled. Further, this patchwork may be placing a substantial burden on manufacturers, retailers, and recyclers. Accordingly, one survey respondent told us that the export of such products should be regulated more closely than the export of specific commodities, such as copper, because they still contain toxic substances likely to be handled improperly in countries without regulations to protect human health and the environment. Since 2000, EPA has spent about $2 million on voluntary pilot programs, projects, and grants related to recycling used electronics. Of note, the Bonneville Power Administration (BPA) recently documented cost savings associated with its FEC participation. The problem is particularly serious in the case of nonworking whole products, such as CRT televisions and computer monitors, which are often handled in a manner that causes adverse environmental and human health effects in receiving countries. These factors have prevented much recycling from occurring to date and, if not addressed, will continue to stymie recycling and reuse efforts. EPA has implemented several promising voluntary programs to encourage recycling and reuse of used electronics, but without the authority to require recycling of these products or to require other federal agencies to participate, the success of these programs is and will continue to be limited. Using the success of the Energy Star program as a precedent, the federal government has the opportunity to lead by example by building on existing EPA programs to (1) enhance the domestic recycling infrastructure for used electronics by ensuring a steady and substantial supply of used electronics; (2) stimulate markets for environmentally preferable electronic products by purchasing energy efficient, easily recyclable products with high recycled content and less toxic substances; and (3) save energy by extending the lifespan of used electronics. However, participating agencies and facilities are not required to meet these goals. Does this discourage recycling? (Select one.) a. ARF collected at retail level and managed by the federal government (covering collection, transportation, and recycling)....... b. ARF collected at retail level and managed by a third-party organization (covering collection, transportation, and recycling)....... c. ARF/EPR hybrid: ARF for historic waste with a transition to EPR after “X” years ........ d. ARF for collection/transportation of used electronics, and EPR for recycling/processing ...................................... e. EPR with market share divisions for orphan waste .................................................. f. EPR with retroactive liability for historic waste .............................................................. g. End of life fees............................................... h. Local tax base funding for collection/transportation, and EPR for recycling/processing ...................................... transportation, and EPR for recycling............ j. Deposit/refund ............................................... k. Other – Specify: .................................. EPA’s management of used electronics The Environmental Protection Agency’s Office of Solid Waste (OSW) developed shared responsibility pilots, for example, under the “Plug-In to eCycling” campaign to help demonstrate the kinds of voluntary partnerships that can significantly increase recycling of used electronics in the United States.	Why GAO Did This Study Advances in technology have led to rapidly increasing sales of new electronic devices. With this increase comes the dilemma of managing these products at the end of their useful lives. Some research suggests that the disposal of used electronics could cause a number of environmental problems. Research also suggests that such problems are often exacerbated by the export of used electronics to countries without protective environmental regulations. Given that millions of used electronics become obsolete each year with only a fraction of them being recycled, GAO was asked to (1) summarize information on the volumes of, and problems associated with, used electronics; (2) examine the factors affecting their recycling and reuse; and (3) examine federal efforts to encourage recycling and reuse of these products. What GAO Found Available estimates suggest that over 100 million computers, monitors, and televisions become obsolete each year, and this number is growing. If improperly managed, these used electronics can harm the environment and human health. Available data suggest that most used electronics are probably stored in garages, attics, or warehouses, with the potential to be recycled, reused, or disposed of in landfills, either in the United States or overseas. If disposed of in landfills, valuable resources, such as copper, gold, and aluminum, are lost for future use. Additionally, some research shows that toxic substances with known adverse health effects, such as lead, have the potential to leach from discarded electronics in landfills. Although one study suggests that this leaching does not occur in modern U.S. landfills, it appears that many used electronics are exported to countries without modern landfills or with regulations less protective of human health and the environment. Economic factors inhibit the recycling and reuse of used electronics. Consumers generally have to pay fees and drop off their used electronics at often inconvenient locations to have them recycled or refurbished for reuse. Recyclers and refurbishers charge these fees because their costs exceed the revenue they receive from selling recycled commodities or refurbishing units. In addition to these economic factors, federal regulatory requirements provide little incentive for environmentally preferable management of used electronics. First, the governing statute, the Resource Conservation and Recovery Act, allows individuals and households to dispose of hazardous waste, including many used electronics, in landfills. Second, federal regulations do not provide a financing system to overcome the economic factors deterring recycling and reuse. Third, federal regulations do not prevent the exportation of used electronics to countries where disassembly takes place at far lower cost, but where disassembly practices may threaten human health and the environment. In the absence of federal actions to address these concerns, an emerging patchwork of state requirements to encourage recycling and reuse may place a substantial burden on manufacturers, retailers, and recyclers, who incur additional costs and face an uncertain regulatory landscape as a result. In response to these challenges, EPA has spent about $2 million on several promising programs to encourage recycling and reuse of used electronics. Participation in one program--the Federal Electronics Challenge--has already led the Bonneville Power Administration to substantial cost savings through the procurement of environmentally friendly and energy efficient electronic products. To date, however, federal participation in this and other EPA electronics recycling programs has been minimal because--unlike other successful federal procurement programs (such as EPA's and the Department of Energy's Energy Star program)--participation is not required.
gao_GGD-00-69	gao_GGD-00-69_0	This transfer took place on December 10, 1998. As shown in table 1, as of September 30, 1999, 430 (or approximately 43 percent) of the approved 1,007 participant positions had been filled. According to federal and state officials, two of the factors that contributed to this slow start were that (1) COPS dedicated insufficient staff to implement the program, which resulted in delays in providing program guidance and backlogs in processing program applications and reimbursements and (2) the Police Corps statute did not provide funding for states’ administrative or recruiting costs, which slowed program growth in some states and led several states to decline to participate in the program. The Police Corps statute states, “There is established in the Department of Justice, under the general authority of the Attorney General, an Office of the Police Corps and Law Enforcement Education,” and the statute lays out the responsibilities of the Office. Statutory Language Led COPS to Operate the Police Corps as a Direct Reimbursement Program, Which Made Determining Program Status Difficult Under COPS, the Police Corps program was operated as a direct reimbursement program. According to DOJ’s Associate Attorney General, COPS based its decision to operate the Police Corps program as a direct reimbursement on the language in the provisions of the statute itself. Under direct reimbursement, funds were not considered obligated when state plans were approved. Instead, COPS considered funds obligated only when an individual check had been sent to a participating college or university, in-service Police Corps officer, approved training provider, or police department. OJP Has Obligated Police Corps Funds More Quickly and Is Making Funds Available for Administration and Recruiting Upon assuming responsibility for the Police Corps program in December 1998, OJP increased the Police Corps staff from five to seven positions with the intention of allowing faster processing of applications and response to participants’ questions. As of September 30, 1999, OJP had obligated $51.3 million of these available funds, which left $31.1 million still unobligated. As a part of its interagency agreements with state lead agencies, OJP has begun to make formula-based payments to state lead agencies that can be used to help defray their administrative and recruiting costs. OJP is doing this under the authority of 42 U.S.C. 3788(b), which allows it to enter into interagency agreements with states on a reimbursable basis. 3788(b) did not apply to the COPS office, this method of making reimbursements was not available to COPS. Conclusions Under COPS, implementation of the Police Corps program got off to a slower than expected start, and the majority of participant slots remained unfilled. 7. 8. 9. 10. 13. 14.	Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Department of Justice's (DOJ) implementation of the Police Corps program under the Community Oriented Policing Services (COPS) office and, more recently, the Office of Justice Programs. What GAO Found GAO noted that: (1) the Police Corps program got off to a slower than expected start resulting in the majority of participant slots remaining unfilled; (2) as of September 30, 1999, 433 of the 1,007 participant positions funded for fiscal years 1996 through 1998 had been filled; (3) according to federal and state officials, two of the factors that contributed to this slow start were as follows: (a) COPS dedicated insufficient staff to the Police Corps program, which led to delays in providing program guidance, processing program applications and payments, and answering participants' questions about the program; and (b) the Police Corps statute did not provide funding to pay states' costs for program administration or for recruitment and selection of program participants; (4) COPS operation of the Police Corps as a direct reimbursement program made determining program status difficult, as it slowed the rate at which funds were obligated; (5) according to a DOJ official, COPS based its decision to operate the Police Corps program as a direct reimbursement program on the language of the statute; (6) under direct reimbursement, funds were not considered obligated when state plans were approved; (7) instead, COPS considered funds obligated only when an individual check had been sent to a college or university, in-service Police Corps officer, approved law enforcement training provider, or participating police department; (8) on December 10, 1998, responsibility for the Police Corps program was transferred from COPS to OJP; (9) OJP devoted seven full-time staff positions to process program applications and payments and respond to participant queries faster; (10) under the authority granted OJP under 42 U.S.C. 3788(b), which allowed OJP to enter into interagency agreements with states on a reimbursable basis, OJP opted, through the use of such agreements, to make a formula payment that can be used to help defray states' recruiting and administrative costs; (11) this authority was not available to COPS; (12) while these interagency agreements only recently went into effect, they should make money more readily available to states trying to implement their Police Corps programs; (13) as of September 30, 1999, OJP had obligated $51.3 million of the $82.4 million available to the program; and (14) it is too early to determine the effects of the transfer of the Police Corps program from COPS to OJP on the factors contributing to the slow start.
gao_NSIAD-98-32	gao_NSIAD-98-32_0	Background Sanitary and phytosanitary measures encompass many complex technical and scientific issues. Private sector and government officials are concerned that such measures may be used inappropriately to restrict the growth of U.S. agricultural exports. While the government does not know the full scope of the problem, available data indicate that foreign SPS measures affect a broad range of U.S. processed product, meat, poultry, fruit, vegetable, and grain exports. The second reason that USTR and USDA have had difficulty defining the size of the problem that foreign SPS measures present is because they do not know, of the measures they have identified, how many may be inconsistent with WTO provisions regarding SPS measures. SPS measures can result in a variety of costs to the agricultural industry and to the government. The approach is based on a complex structure of multiple trade and regulatory entities, but no one entity leads overall federal efforts. Some Roles and Responsibilities Not Clearly Defined Absent overall leadership of federal efforts, some federal entities’ specific roles in addressing individual measures as well as their overall responsibility for addressing trade issues have not been clearly defined. We found that responsible federal entities have had different views about which SPS measures should be addressed and in what order. In response, we revised the first recommendation to emphasize the need for these agencies to work together to develop coordinated goals, objectives, and performance measurements for addressing SPS measures. Trade Agreement Is in Force, but Impact of Provisions Varies The World Trade Organization (WTO) Agreement on the Application of Sanitary and Phytosanitary Measures (SPS agreement) represents the first time that comprehensive multilateral rules were enacted specifically to cover the use of sanitary and phytosanitary (SPS) measures in agricultural trade. Objectives, Scope, and Methodology The objectives of our work were to provide Congress with information and analysis on (1) the extent to which foreign SPS measures may unfairly restrict U.S. agricultural exports and (2) the federal structure and approach for addressing such measures. To describe and analyze the federal structure and approach for addressing foreign SPS measures, we reviewed studies of the U.S. trade structure for agricultural products and the U.S. regulatory structure for food safety and animal and plant health to determine which entities were responsible for this issue; reviewed responsible entities’ relevant statutory authorities, mission statements, organizational charts, budgets, and staff levels, particularly related to addressing foreign SPS measures; interviewed relevant officials in USDA’s Office of the Secretary; at eight USDA agencies; USTR; FDA; EPA; and State to discuss their Department’s or agency’s role in addressing foreign SPS measures, activities their Department or agency has undertaken to address specific foreign measures, their working relationships with other responsible entities, the extent to which responsible entities have coordinated their efforts, and how key decisions were made in individual cases; attended or reviewed documentation of USDA interagency meetings held to coordinate and share information about the status of efforts to address foreign SPS measures; reviewed structural and procedural limitations of the current approach as well as possible changes that could address certain problems with high-level USDA officials and agency staff, including the Special Assistant for International Trade to the Secretary of Agriculture and the FAS Administrator; reviewed nonpublic agency documents that identified specific problems and suggested possible solutions, including a report by the USDA Office of Inspector General that examined USDA’s response to NAFTA implementation; reviewed documentation of several USDA agencies’ computer data bases that are used to track and manage SPS-related activities; attended APAC and ATAC meetings where concerns about the U.S. government approach to address SPS measures were discussed with USDA and USTR officials; interviewed and obtained documentation from representatives of agricultural trade associations that have requested U.S. government assistance to address SPS measures to assess their experiences, what problems they encountered, and how satisfied they were with U.S. government efforts; and reviewed agricultural trade association documents that identified specific problems in the current structure and approach and suggested possible solutions.	Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the: (1) extent to which foreign sanitary and phytosanitary (SPS) measures may unfairly restrict U.S. agricultural exports; and (2) federal structure and approach for addressing such measures. What GAO Found GAO noted that: (1) despite growing concerns that certain foreign sanitary or phytosanitary measures may be inconsistent with World Trade Organization (WTO) provisions and may unfairly impede the flow of agricultural trade, the U.S. government is not well positioned to address this issue; (2) agricultural trade associations and key government officials have identified such measures as an increasingly important issue in agricultural trade; (3) however, the U.S. Trade Representative (USTR) and the Department of Agriculture (USDA) have had difficulty defining the nature and scope of the problem that foreign sanitary and phytosanitary measures present for U.S. exports, partly because of the complex nature of the issue but for other reasons as well; (4) the available data indicate that foreign sanitary and phytosanitary measures affect the exports of a broad range of commodities, result in a variety of trade effects, and may create additional costs for the U.S. industry and government; (5) the U.S. government approach for addressing foreign sanitary and phytosanitary measures has been evolving in the 2 years since WTO provisions on sanitary and phytosanitary measures took effect; (6) however, the current approach exhibits certain weaknesses; (7) the federal structure for addressing foreign sanitary and phytosanitary measures is complex; (8) at least 12 federal trade, regulatory, and research entities have some responsibility for addressing such measures, but no one entity is directing and coordinating overall federal efforts; (9) some entities' roles and responsibilities for addressing such measures are not clearly defined, and these entities have had difficulty coordinating their activities; (10) federal entities lack comprehensive data on which sanitary and phytosanitary measures are being addressed or what progress has been made to address them; (11) they have not developed a process to jointly evaluate measures and determine which ones the government should address, and in what order; (12) once the government decides to challenge a measure, multiple entities with conflicting viewpoints have made it difficult to develop a unified approach to address measures and decide which cases should be referred to WTO for dispute resolution; and (13) coordinated goals, objectives, and performance measures related to federal efforts to address SPS measures do not yet exist.
gao_GAO-15-816	gao_GAO-15-816_0	Legislative Requirements for the Imaging AUC Program PAMA stipulated that, as of January 2017, providers ordering imaging services (including primary care and specialty care providers) generally will be required to consult AUC through a qualified CDSM. The results of the AUC consultation generally must be documented on the claim submitted by providers furnishing imaging services (typically radiologists) in order to be paid by Medicare. Roll out imaging AUC program by January 1, 2017. Imaging services ordered by an outlier provider will be subject to prior authorization from CMS. CMS’s Initial Implementation Plan Focuses on the Process for Specifying Applicable AUC and Establishing Priority Clinical Areas for Future Prior Authorization In its July 2015 notice of proposed rulemaking, CMS outlined its initial plan and timeframes for implementing the imaging AUC program. Specifying Applicable AUC To respond to the PAMA requirement of specifying applicable AUC, CMS is proposing to qualify provider-led entities such that all AUC developed, endorsed, or modified by these entities may be eligible for use in the imaging program. The agency does not intend to evaluate and select AUC itself because of the volume of those potentially available, according to CMS officials. CMS has proposed that individual AUC must link a specific clinical condition, one or more imaging services, and an assessment of the appropriateness of the service(s). To respond to PAMA’s requirement for AUC development, the agency proposed that, to become qualified, provider-led entities must demonstrate that their process for developing, endorsing, or modifying AUC includes certain elements such as a rigorous evidentiary review process whereby key decision points within each criteria are graded according to the strength of evidence using a formal, published, and widely recognized methodology; a multidisciplinary team with autonomous governance to lead the AUC a publicly transparent process for identifying and disclosing potential public postings of their AUC and their AUC development process on the entity’s website; and a transparent process for the timely and continual updating of each AUC. Prior Authorization Policy To respond to PAMA’s requirement that prior authorization be applied to ordering providers with low adherence to appropriate ordering, CMS plans to establish priority clinical areas and limit its identification of outlier ordering providers to these areas. According to agency officials, given the variety of clinical scenarios for which imaging services may be ordered, the aim of establishing priority clinical areas is to narrow the potential scope of prior authorization. They also stated that low back pain, nontrauma headache, and acute chest pain are examples of potential priority clinical areas. To do so, CMS must determine which CDSMs are suitable for use in the program. The agency’s July 2015 notice of proposed rulemaking did not contain specifics on this implementation component. Provider-Led Entities Have Developed AUC Related to a Number of Services Deemed of Questionable or Low Value Medical specialty societies and health care researchers have undertaken efforts to identify services that are of questionable or low value under certain circumstances and therefore have the potential to be used inappropriately. Based on our examination of the AHRQ National Guideline Clearinghouse, we found that provider-led entities—as defined in CMS’s notice of proposed rulemaking—have developed AUC associated with a number of these services. These questionable- and low-value services with associated AUC are potential candidate services if the AUC program were to expand beyond imaging services. In addition, researchers at Harvard Medical School compiled a list of 26 low-value Medicare-covered services, of which we reviewed 19 nonimaging services. The 19 nonimaging services fell into 5 categories: cardiovascular testing and procedures, cancer screening, diagnostic and preventive testing, preoperative testing, and other surgery. Our analysis of AHRQ’s National Guideline Clearinghouse indicated that provider-led entities have developed AUC for more than half of the 36 questionable- or low-value services included in our review. For the remaining 13 services, we did not find any associated Among the 17 radiation therapy and clinical pathology questionable-value services identified by the respective medical specialty societies, 12 services had an associated AUC developed by a provider-led entity. Agency Comments and Our Evaluation The Department of Health and Human Services reviewed a draft of this report and provided technical comments, which we incorporated where appropriate.	Why GAO Did This Study PAMA required the establishment of a Medicare AUC program for advanced diagnostic imaging services. The Act also included a provision for GAO to report on the extent to which AUC could be used for other Medicare services, such as radiation therapy and clinical diagnostic laboratory services. In this report, GAO describes (1) CMS's plans for implementing the imaging AUC program and (2) examples of questionable- or low-value nonimaging services where provider-led entities have developed AUC, among other objectives. GAO reviewed CMS's July 2015 Federal Register notice of proposed rulemaking outlining its initial plans for implementing components of the imaging AUC program and also interviewed CMS and AHRQ officials. To identify services for potential AUC program expansion, GAO focused on 36 nonimaging services deemed to be of questionable or low value as identified by the American Society for Radiation Oncology, the American Society for Clinical Pathology, and a 2014 study by researchers at Harvard Medical School. GAO also examined AHRQ's National Guideline Clearinghouse to determine whether AUC developed by provider-led entities were associated with those 36 services. GAO did not evaluate the extent to which the associated AUC are suitable for program implementation. Also, the resulting set of services is illustrative and not a comprehensive list of candidates for potential AUC program expansion. HHS provided technical comments on a draft of this report, which were incorporated where appropriate. What GAO Found The Centers for Medicare & Medicaid Services (CMS)—an agency within the Department of Health and Human Services (HHS)—has proposed initial plans and timeframes for implementing the Medicare appropriate use criteria (AUC) program for advanced diagnostic imaging services, such as computed tomography, magnetic resonance imaging, and positron emission tomography. AUC are a type of clinical practice guideline intended to provide guidance on whether it is appropriate to perform a specific service for a given patient. Under the Protecting Access to Medicare Act of 2014 (PAMA), a health care provider ordering advanced diagnostic imaging services generally must consult AUC as a condition of Medicare payment for providers who furnish imaging services. Consulting AUC involves entering patient clinical data into an electronic decision tool to obtain information on the appropriateness of the service. The agency's July 2015 notice of proposed rulemaking focused largely on the process for specifying applicable AUC to be used in the program and a policy for identifying providers who must obtain authorization from CMS before ordering imaging services due to their low adherence to appropriate ordering. CMS has proposed to qualify provider-led entities—such as national professional medical specialty societies—such that all AUC developed, endorsed, or modified by these entities would be eligible for use in the imaging program. To become a qualified source of AUC, provider-led entities must adhere to CMS standards for AUC development. The agency does not plan to evaluate and select imaging AUC itself because of the volume of those potentially available, according to CMS officials. CMS plans to establish priority clinical areas, and providers with low adherence to appropriate ordering—as determined by the AUC—in those areas will be subject to prior authorization. The agency intends to establish a number of priority clinical areas—potentially including low back pain, nontrauma headache, or acute chest pain—through rulemaking beginning in 2016. CMS officials stated that, given the variety of clinical scenarios for which imaging services may be ordered, the aim of establishing priority clinical areas is to narrow the potential scope of prior authorization. Medicare services with associated AUC developed by provider-led entities represent potential candidates for AUC program expansion. Medical specialty societies and health care researchers—including the American Society for Radiation Oncology, the American Society for Clinical Pathology, and researchers at Harvard Medical School—have compiled lists of services considered to be of questionable or low value in certain clinical circumstances. GAO reviewed 36 of these services and found that provider-led entities have developed associated AUC for more than half of them, according to a database of clinical practice guidelines maintained by Agency for Health Research Quality (AHRQ). Specifically, GAO found associated AUC across several service categories, including radiation therapy, clinical pathology, cardiovascular testing and procedures, cancer screenings, diagnostic and preventive testing, and preoperative testing.
gao_GAO-05-669	gao_GAO-05-669_0	It is a large and complex development effort to provide a networked family of weapons and other systems for the future force. Establishing reliable, robust communications and networking capabilities is essential to FCS. The WIN-T program is developing communications equipment that supports an expanded area of battlefield operations and interfaces with JTRS radios to connect warfighters and command centers, including joint, allied, and coalition forces, providing commanders with access to on-the- move communications—that is, continuously updated, real-time multimedia information from dispersed locations throughout the theater. However, the Army restructured the FCS program in July 2004 to address development risks. JTRS Cluster 1 Began System Development without Requisite Knowledge, Resulting in Cost and Schedule Problems The JTRS Cluster 1 program began system development and demonstration in 2002 with an aggressive schedule, immature technologies, and a lack of clearly defined and stable requirements. In addition, because of increased concern about the contractor’s ability to develop the radios, the Army notified the contractor that it was considering contract termination. The National Security Agency has recently determined that the current design is not sufficient to meet security requirements to operate in an open networked environment. Size, Weight, and Power Requirements for Key Platform Users Have Presented a Significant Challenge for Cluster 1 A key technical challenge in developing the Cluster 1 radio is meeting the size, weight, and power requirements for ground vehicles and helicopters. Thus far, the program has not been able to develop radios that meet size, weight, and power requirements, and the current projected transmission range is only 3 kilometers—well short of the 10-kilometer range required for the Wideband Networking Waveform. Adding to the program’s uncertainty is the impact of pending requirements on program cost and schedule. Several programmatic changes and a contract award bid protest have contributed to disruptions in the progress of the Cluster 5 program. The Army has concluded that the schedule for the small form radios is not synchronized with the FCS schedule and has asked the contractor for a plan to accelerate deliveries. None of the critical technologies will be fully mature at the time production begins in March 2006. Because there are significant interdependencies among critical technologies, any delay in maturing an individual technology further increases overall program risk. The tightly compressed schedule also assumes nearly flawless execution and may not allow sufficient time for correcting problems. WIN-T’s ability to significantly improve upon current communications capabilities relies on demonstrating integrated network operations and the ability to work on the move. According to program officials, SOSCOE development does not require “cutting edge” software technology. The high risk is derived from the fact that SOSCOE may not reach the necessary technical maturity level required to meet program milestones. FCS Program Requirements Are Still Evolving Higher-level FCS specifications are still evolving nearly 2 years after the program started development. As currently structured, the JTRS, WIN-T, and SOSCOE programs are at risk of not delivering intended capabilities when needed, particularly for the first spiral of FCS. They continue to struggle to meet an ambitious set of user requirements, steep technical challenges, and stringent timeframes. Recommendations for Executive Action Since (1) an enhanced Army communications network is critical for a successful transformation to FCS and (2) JTRS, including the advanced wideband waveforms, WIN-T, and SOSCOE are the key pillars of the communications network, the timing of the first FCS spiral should be based on when the pacing capabilities to be provided by JTRS and WIN-T will be demonstrated. To determine the development risks associated with the System of Systems Common Operating Environment (SOSCOE), we obtained briefings on fielding plans, analyzed documents describing SOSCOE software availability and maturity, and interviewed project officials from the Project Manager for FCS Network Systems Integration, Fort Monmouth, New Jersey.	Why GAO Did This Study The Army has embarked on a major transformation of its force. Central to this transformation is the Future Combat Systems (FCS), a $108 billion effort to provide warfighters with the vehicles, weapons, and communications needed to identify and respond to threats with speed, precision, and lethality. Establishing reliable, robust communications and networking capabilities is key to FCS's success. Each of the systems integral to the FCS communications network--the Joint Tactical Radio System (JTRS), the Warfighter Information Network-Tactical (WIN-T), and the System of Systems Common Operating Environment (SOSCOE)--rely on significant advances in current technologies and must be fully integrated to realize FCS. Given the complexity and costs of this undertaking, GAO was asked to review each of these key development efforts to identify any risks that may jeopardize the successful fielding of FCS. What GAO Found Each of the programs for developing FCS's communications network is struggling to meet ambitious sets of user requirements and steep technical challenges within highly compressed schedules. As currently structured, the programs are at risk of not delivering intended capabilities for the first spiral of FCS, slated to start in fiscal year 2008. The JTRS Cluster 1 program--a program to develop radios for ground vehicles and helicopters--began development with an aggressive schedule, immature technologies, and a lack of clearly defined and stable requirements. As currently designed, the radio will only have a transmission range of only 3 kilometers--well short of the required 10 kilometers--and will not meet security requirements for operating in an open networked environment. The program's struggle to mature and integrate key technologies has contributed to significant cost and schedule growth. A recent review of the program concluded that the current program structure is not executable, and in April 2005, DOD directed the Army to stop work and notify the contractor that it was considering terminating the contract. Meeting requirements for JTRS Cluster 5 radios--miniaturized radios, including those that soldiers carry--is even more technically challenging given their smaller size, weight, and power needs. The smallest of these radios weighs only about 1 pound, compared with 84 pounds for Cluster 1 radios. Several programmatic changes and a contract award bid protest have further slowed program progress. The Army is considering options for restructuring the program to meet the needs of FCS and address the technical issues encountered in the Cluster 1 program. The Army does not expect to fully mature the technologies for WIN-T--communications equipment that supports an expanded area of battlefield operations and interfaces with JTRS radios--when production begins in March 2006. Moreover, the compressed schedule assumes nearly flawless execution and does not allow sufficient time for correcting problems. Significant interdependencies among the critical technologies further increase overall program risk. The program was directed to deliver networking and communications capabilities sooner to meet near-term warfighting needs and synchronize with the restructured FCS program. A plan for how to develop and field WIN-T capabilities sooner to address FCS needs remains undetermined. According to Army network system integration officials, SOSCOE--the operating software to integrate the communications network--may not reach the necessary technical maturity level required to meet program milestones. In addition, top-level FCS requirements are still evolving and have not been translated into more detailed specifications necessary for writing SOSCOE software.
gao_GAO-15-433T	gao_GAO-15-433T_0	First, according to FMCSA, SMS was designed to use all safety-related violations of FMCSA regulations recorded during roadside inspections. However, we found that the relationship between the violation of most of these regulations and crash risk is unclear, potentially limiting the effectiveness of SMS in identifying carriers that are likely to crash. Our analysis found that most of the safety regulations used in SMS were violated too infrequently over a 2-year period to reliably assess whether they were accurate predictors of an individual carrier’s likelihood to crash. Second, most carriers lack sufficient safety performance data, such as information from inspections, to ensure that FMCSA can reliably compare them with other carriers. Violation rates calculated for carriers with more inspections or vehicles will have more precision and confidence than those with only a few inspections or vehicles. At the same time, FMCSA has also stated that SMS provides stakeholders with valuable safety information, which can “empower motor carriers and other stakeholders…to make safety-based business decisions.” As a result, some stakeholders we spoke to, such as industry and law enforcement groups, have said that there is a lot of confusion in the industry about what the SMS scores mean and that the public, unlike law enforcement, may not understand the limitations of the system. Based on the concerns listed above, in our 2014 report we recommended that FMCSA revise the SMS methodology to better account for limitations in available information when drawing comparisons of safety performance across carriers. FMCSA did not concur with our recommendation to revise the SMS methodology because, according to FMCSA officials, SMS in its current state sufficiently prioritizes carriers for intervention purposes. However, FMCSA agreed with our recommendation on the determination of a carrier’s fitness to operate, but has not yet taken any actions. As mentioned earlier, chameleon carriers are motor carriers disguising their former identity to evade enforcement actions. FMCSA has established a vetting program to review each new application for operating authority submitted by passenger carriers (intercity and charter or tour bus operators) and household goods carriers (hired by consumers to move personal property). We found that using data analysis to target new applicants would allow FMCSA to expand its examinations of newly registered carriers to include new applicants of all types using few or no additional staff resources. Our analysis of FMCSA data found that 1,136 new motor carrier applicants in 2010 had chameleon attributes, of which 1,082 were freight carriers.Even with the large number of new applicant carriers and constraints on its resources, we concluded in 2012 that FMCSA could target the carriers that present the highest risk of becoming chameleon carriers by using a data-driven, risk-based approach. As a result of these findings, we recommended that FMCSA use a data- driven, risk-based approach to target carriers at high risk for becoming chameleon carriers. With over 500,000 active motor carriers, it is essential to examine ways to better target FMCSA’s resources to motor carriers presenting the greatest risk. To effectively do this, FMCSA must use a number of strategies to identify and intervene with high risk carriers. We continue to believe that a data-driven, risk-based approach for identifying high risk carriers holds promise. FMCSA’s preliminary steps to implement a risk-based screening methodology have the potential to identify more high risk chameleon carriers. However, without efforts to revise its SMS methodology, FMCSA will not be able to effectively target its intervention resources toward the highest risk carriers and will be challenged to meet its mission of reducing the overall crashes, injuries, and fatalities involving large trucks and buses.	Why GAO Did This Study FMCSA's primary mission of reducing crashes, injuries, and fatalities involving large trucks and buses is critical to the safety of our nation's highways. However, with more than 500,000 active motor carriers operating on U.S. roadways, FMCSA must screen, identify, and target its resources toward those carriers presenting the greatest risk for crashing in the future. FMCSA has recently taken some steps in this direction by, among other actions: Establishing its oversight program—the CSA program—based on a data-driven approach for identifying motor carriers at risk of presenting a safety hazard or causing a crash, and Establishing a vetting program designed to detect potential “chameleon” carriers—those carriers that have deliberately disguised their identity to evade enforcement actions issued against them. This testimony provides information on both of these programs, based on two recent GAO reports on the oversight challenges FMCSA faces in identifying high risk motor carriers for intervention ( GAO-14-114 ), and chameleon carriers ( GAO-12-364 ), respectively. What GAO Found The Federal Motor Carrier Safety Administration (FMCSA) has taken steps toward better oversight of motor carriers by establishing the Compliance, Safety, Accountability (CSA) and chameleon carrier vetting programs; however, FMCSA could improve its oversight to better target high risk carriers. The CSA program oversees carriers' safety performance through roadside inspections and crash investigations, and issues violations when instances of noncompliance with safety regulations are found. CSA provides FMCSA, state safety authorities, and the industry with valuable information regarding carriers' performance on the road. A key component of CSA—the Safety Measurement System (SMS)—uses carrier performance data collected from inspections and investigations to calculate safety scores for carriers and identify those at high risk of causing a crash. The program then uses these scores to target high risk carriers for enforcement actions, such as warning letters, additional investigations, or fines. However, GAO's 2014 report identified two major challenges that limit the precision of the SMS scores and confidence that these scores are effectively comparing safety performance across carriers. First, SMS uses violations of safety-related regulations to calculate a score, but GAO found that most of these regulations were violated too infrequently to determine whether they were accurate predictors of crash risk. Second, most carriers lacked sufficient data from inspections and violations to ensure that a carrier's SMS score could be reliably compared with scores for other carriers. GAO concluded that these challenges raise questions about whether FMCSA is able to identify and target the carriers at highest risk for crashing in the future. To address these challenges, GAO recommended, among other things, that FMCSA revise the SMS methodology to better account for limitations in available information when drawing comparisons of safety performance across carriers. FMCSA did not concur with GAO's recommendation to revise the SMS methodology because it believed that SMS sufficiently prioritized carriers for intervention. Therefore, FMCSA has not taken any actions. GAO continues to believe that a data-driven, risk-based approach holds promise, and efforts to improve FMCSA's oversight could allow it to more effectively target its resources toward the highest risk carriers, and better meet its mission of reducing the overall crashes, injuries, and fatalities involving motor carriers. GAO's 2012 report found that FMCSA examined only passenger and household goods carriers as part of its chameleon carrier vetting program for new applicants. GAO found that by modifying FMCSA's vetting program, FMCSA could expand its examinations of newly registered carriers to include all types of carriers, including freight carriers, using few additional staff resources. GAO recommended that FMCSA develop, implement, and evaluate the effectiveness of a data-driven, risk-based vetting methodology to target carriers with chameleon attributes. FMCSA concurred with GAO's recommendation and has taken actions to address these recommendations.
gao_GAO-02-413	gao_GAO-02-413_0	Lastly, WIA youth activities are coordinated through newly created state and local workforce investment boards. We found that nearly all of the youth councils were active by the start of program year 2000—the first WIA program year—and a majority of councils included the WIA-required members. Nationwide, 65 percent of local boards reported difficulty in getting youth members and 54 percent found it difficult to get parents of eligible youth to participate on the council. Most local boards reported that contracted service providers generally served youth directly at the providers’ facilities rather than at the one-stop centers in their local areas. Moreover, secondary and postsecondary schools were contracted to provide youth services, typically delivering services at the schools, or partnered with the one-stop centers to deliver youth services. In these communities, some school personnel were reluctant to incorporate workforce development activities into classroom learning because they did not want to broaden their role in youth development beyond education. Schools Were Used as Youth Service Providers and Worked with One-Stop Centers In all the sites we visited, youth councils developed various strategies to link with the education community including contracting with schools as service providers and partnering schools with the one-stop centers to deliver youth services. According to state and local officials, ambiguous definitions and lags in data availability complicated the measurement and reporting of some WIA youth performance indicators and resulted in inconsistencies in reporting and comparing outcomes within and across states. Recommendations for Executive Action To improve the availability of information on WIA youth programmatic, administrative, and other implementation issues and to enhance implementation of state and local workforce investment systems, we recommend that the Secretary of Labor issue guidance and provide assistance to state and local boards and youth councils by developing and disseminating strategies to effectively recruit and engage parents, youth, and business community representatives on the youth council; to increase the number of responses to competitive requests for proposals by encouraging youth-serving organizations new to WIA to participate in the youth program and promoting new ways of collaboration among new and existing service providers; to obtain and verify applicant eligibility information by sharing client information among agencies or using existing electronic databases (for example, DOL should consider exploring methods to extend eligibility automatically for WIA based on an applicant’s participation in other programs);to recruit and retain out-of-school youth to the WIA youth program and all youth into the one-stops; and to facilitate linkages between the board and youth council and their required youth-serving partners. Workforce Investment Act: New Requirements Create Need for More Guidance.	Why GAO Did This Study The Workforce Investment Act of 1998 substantially changed the way youth workforce development services are configured and delivered. The act requires states and localities to create a more comprehensive workforce system for development needs. The act promotes partnerships among diverse programs and community representatives through participation on newly created state and local workforce investment boards and youth councils. What GAO Found GAO found that most youth councils nationwide included the required members and nearly all councils were active by July 2000. Local boards competitively chose youth service providers and developed strategies for one-stop centers. Most boards reported that services were provided through contracted service providers rather than one-stop centers. However, local boards had difficulty getting parents and youth to participate on youth councils. Some local areas found it difficult to identify and select youth service providers because of low response to requests for proposals. Getting youth to visit the typically adult-focused one-stop centers was also difficult. Youth councils linked with the education community by including representatives of local school districts and existing school-board career programs in their membership or as youth service providers. Moreover, secondary and postsecondary schools contracted to deliver mentoring and occupational skills training. Some educators, however, were hesitant to broaden their role in youth development beyond traditional academics and saw few financial incentives to partner with the youth council. GAO found three legislative requirements that impeded service delivery. First, eligibility documentation requirements may have excluded eligible at-risk youth from services. Second, difficulties in recruiting and retaining enough out-of-school youth to meet the 30 percent requirement that local funds be spent on these youth. Third, ambiguous definitions and lags in data availability resulted in inconsistent reporting and when comparing outcomes within and across states.
gao_GAO-11-413T	gao_GAO-11-413T_0	TSA Reports that It Met the Screening Mandate as It Applies to Domestic Cargo, but Previously Identified Data Limitations and Other Challenges Persist TSA took several actions to address the 9/11 Commission Act mandate to screen 100 percent of air cargo as it applies to domestic cargo transported on passenger aircraft by August 2010. As of August 2010, TSA reported that it met the 9/11 Commission Act mandate to screen 100 percent of air cargo as it applies to domestic cargo, although in June 2010 we reported that TSA lacked a mechanism to verify the accuracy of the data used to make this determination. To help meet the mandate, TSA took several actions, among them: TSA created a voluntary program to facilitate screening throughout the air cargo supply chain. TSA is taking steps to test technologies for screening air cargo. TSA expanded its explosives detection canine program. Among the challenges and recommendations previously identified in our June 2010 report are the following. Given that the agency uses these data to report to Congress its compliance with the screening mandate as it applies to domestic cargo, we continue to believe that verifying the accuracy of the screening data is important so that TSA will be better positioned to provide reasonable assurance that screening is being conducted at reported levels. TSA concurred and stated that as part of the staffing study, the agency is working to develop a model to identify the number of required transportation security inspectors and that this effort would be completed in the fall of 2010. TSA Has Taken Steps to Enhance the Security of Inbound Air Cargo, but Previously Identified Screening Data Limitations and Other Challenges Persist TSA has taken a number of steps to enhance the security of inbound air cargo, as discussed below. TSA moved its deadline for meeting the 100 percent screening mandate as it applies to inbound air cargo. According to TSA officials, the agency determined it was feasible to require air carriers to meet a December 2011 screening deadline as a result of trends in carrier reported screening data and discussions with air cargo industry leaders regarding progress made by industry to secure inbound cargo on passenger aircraft. TSA implemented additional security measures following the October 2010 Yemen air cargo bomb attempt. Even with these steps to improve the security of inbound air cargo, as we previously reported in June 2010, TSA faces challenges that could hinder its ability to meet the 9/11 Commission Act screening mandate as it applies to inbound cargo. TSA lacks a mechanism to verify data on screening conducted on inbound air cargo. As we reported in June 2010, questions exist about the reliability of TSA’s reported screening data for inbound cargo because TSA does not have a mechanism to verify the accuracy of the data reported by industry. In June 2010, we reported that TSA’s screening percentages were estimated based on screening requirements of certain countries and were not based on actual data collected from air carriers or other entities, such as foreign governments. As of March 2011, TSA officials stated that current screening percentages are based on actual data reported by air carriers, but stated that it is difficult to verify the accuracy of the screening data reported by air carriers. No technology is currently approved or qualified by TSA to screen cargo once it is loaded onto a unit-load device. As we noted earlier for domestic air cargo, TSA has not approved any equipment to screen cargo transported on unit-load device (ULD) pallets or containers—both of which are common means of transporting air cargo on wide-body passenger aircraft—on both domestic and inbound aircraft. As a result, questions remain about air carriers’ ability to effectively and efficiently screen air cargo bound for the United States. We will be examining these issues as part of our ongoing review of TSA’s efforts to secure inbound air cargo for the House Committee on Homeland Security and Senate Committee on Homeland Security and Governmental Affairs. We plan to issue the final results later this year.	Why GAO Did This Study The Department of Homeland Security's (DHS) Transportation Security Administration (TSA) is the federal agency with primary responsibility for securing the air cargo system. The Implementing Recommendations of the 9/11 Commission Act of 2007 mandated DHS to establish a system to screen 100 percent of cargo flown on passenger aircraft by August 2010. GAO reviewed TSA's progress in meeting the act's screening mandate, and any related challenges it faces for both domestic (cargo transported within and from the United States) and inbound cargo (cargo bound for the United States). This statement is based on prior reports and testimonies issued from April 2007 through December 2010 addressing the security of the air cargo transportation system and selected updates made in February and March 2011. For the updates, GAO obtained information on TSA's air cargo security programs and interviewed TSA officials. What GAO Found As of August 2010, TSA reported that it met the mandate to screen 100 percent of air cargo as it applies to domestic cargo, but as GAO reported in June 2010, TSA lacked a mechanism to verify the accuracy of the data used to make this determination. TSA took several actions in meeting this mandate for domestic cargo, including creating a voluntary program to facilitate screening throughout the air cargo supply chain; taking steps to test technologies for screening air cargo; and expanding its explosives detection canine program, among other things. However, in June 2010 GAO reported that TSA did not have a mechanism to verify screening data and recommended that TSA establish such a mechanism. TSA partially concurred with this recommendation and stated that verifying such data would be challenging. As GAO reported in June 2010, data verification is important to provide reasonable assurance that screening is being conducted at reported levels. As GAO further reported in June 2010, there is no technology approved or qualified by TSA to screen cargo once it is loaded onto a pallet or container--both of which are common means of transporting domestic air cargo on passenger aircraft. As a result, questions remain about air carriers' ability to effectively screen air cargo on such aircraft. TSA has also taken a number of steps to enhance the security of inbound air cargo, but also faces challenges that could hinder its ability to meet the screening mandate. TSA moved its deadline for meeting the 100 percent screening mandate as it applies to inbound air cargo to the end of 2011, up 2 years from when the TSA administrator previously reported the agency would meet this mandate. According to TSA officials, the agency determined it was feasible to accelerate the deadline as a result of trends in air carrier reported screening data and discussions with air cargo industry leaders regarding progress made by industry to secure cargo on passenger aircraft. TSA also took steps to enhance the security of inbound cargo following the October 2010 Yemen air cargo bomb attempt--such as requiring additional screening of high-risk cargo prior to transport on an all-cargo aircraft. However, TSA continues to face challenges GAO identified in June 2010 that could impact TSA's ability to meet this screening mandate as it applies to inbound air cargo. For example, GAO reported that TSA's screening percentages were estimates and were not based on actual data collected from air carriers or other entities, such as foreign governments, and recommended that TSA establish a mechanism to verify the accuracy of these data. TSA partially agreed, and required air carriers to report inbound cargo screening data effective May 2010. However, TSA officials stated while current screening percentages are based on actual data reported by air carriers, verifying the accuracy of the screening data is difficult. It is important for TSA to have complete and accurate data to verify that the agency can meet the screening mandate. GAO will continue to monitor these issues as part of its ongoing review of TSA's efforts to secure inbound air cargo, the final results to be issued later this year. What GAO Recommends GAO has made recommendations in prior work to strengthen air cargo screening. Although not fully concurring with all recommendations, TSA has taken or has a number of actions underway to address them. Continued attention is needed to ensure some recommendations are addressed, such as establishing a mechanism to verify screening data. TSA provided technical comments on the information in this statement, which GAO incorporated as appropriate.
gao_GAO-12-631	gao_GAO-12-631_0	Transportation Infrastructure Projects The seven MCC compacts completed in 2010 and 2011 each included a transportation infrastructure project that—except in the case of Armenia— received 50 percent or more of the compact’s total funding (see fig.1). 2.) Average annual daily traffic: A measure of the volume and type of traffic using a road. Beneficiary Assessment MCC defines beneficiaries as people who realize income gains or expenditure savings as a result of its investment. MCC Data Show that Some Key Performance Targets Were Met, but Data Quality Problems Call into Question Reported Results MCC reduced the scope of early road and port projects and reports mixed success in meeting key performance targets. In addition, MCC did not consistently account for third-party funding. Five of six compacts met their reduced targets for kilometers completed. We identified problems with the measurement of road roughness for some of the six compacts with road projects, including the use of inconsistent application of methodologies and calculation errors. Therefore, MCC reports that it did not meet the compact’s final kilometers-completed target, even though data suggest that the kilometers MCC funded were complete at the end of the compact The government of Cape Verde secured funding from the government of Portugal to rehabilitate 22.9 kilometers of secondary roads that MCC removed from the scope of its compact. However, MCC reported all 57.2 kilometers as a part of its final results, even though it did not fund all of the work. MCC Reduced the Cape Verde Port Project Scope and Did Not Meet Many Targets for the Benin Port Project For the Cape Verde compact, MCC reduced the scope of the port project, deferred the measurement of key indicators, and therefore did not conduct any data quality reviews of those indicators. We identified problems with MCC’s measurement of the volume-of- merchandise indicators, and MCA-Benin’s data quality reviews identified additional problems with all three key indicators. MCC subsequently revised its beneficiary estimates for ongoing compacts, but the implementation of the new approach was not always consistent and suffered from varying degrees of quality control problems. MCC’s Updated Beneficiary Analysis Guidelines Do Not Include a Formal Quality Review Process In our previous work, we found that MCC did not have a consistent methodology for estimating the number of beneficiaries across compacts. Third, the beneficiary figures in MCC’s public documents are sometimes inaccurate. Conclusions MCC recognizes the importance of a disciplined, transparent, and accountable approach to tracking compact results to make well-informed decisions about U.S. investments. Because MCC’s new approach to estimating beneficiary numbers does not include a formal quality review process, the beneficiary estimates contain incorrect numbers and formulas and inconsistent calculations. To improve the reliability of results measurement, MCC should improve guidance for common indicators by requiring that they are included in data quality reviews, measured uniformly across compacts, and reported in a standardized manner—including when third-party funding is used to complete the original scope of a project; improve guidance for baseline measurements by requiring MCAs to document the date, source, and methodology for establishing the baseline; and enforce current monitoring and evaluation policy requiring MCAs to conduct data quality reviews and to provide written comments in response to identified issues, discussing how recommendations will be implemented or explaining why changes may not be made. Agency Comments and Our Evaluation In written comments on a draft of this report, MCC stated that it agrees with our four recommendations and outlined steps it will take or has taken to address them. This report examines the extent to which MCC has, for transportation infrastructure projects in compacts ending in 2010 and 2011, (1) achieved expected performance targets and (2) used a consistent methodology in estimating numbers of beneficiaries. To assess the extent to which MCC has achieved its performance targets for transportation infrastructure projects in compacts ending in 2010 and 2011, we reviewed MCC guidance and policy documents and analyzed compacts, monitoring and evaluation plans, and indicator tracking tables for the compacts with Honduras, Cape Verde, Nicaragua, Georgia, Vanuatu, Armenia, and Benin. Appendix II: Compact Timeframes The Millennium Challenge Corporation (MCC) completed seven compacts in 2010 and 2011—Honduras, Cape Verde, Nicaragua, Georgia, Benin, Vanuatu, and Armenia (see fig. 3).	Why GAO Did This Study To help developing countries reduce poverty and stimulate economic growth, MCC has approved 26 bilateral compact agreements totaling about $9.3 billion. In the seven compacts that ended in 2010 and 2011--Honduras, Cape Verde, Nicaragua, Vanuatu, Georgia, Armenia, and Benin--transportation infrastructure projects generally received about 50 percent of the compact's total funding. To measure the results of its compacts, MCC sets targets for various performance indicators--such as number of kilometers paved or volume of merchandise passing through a port--and estimates the number of beneficiaries. This report, responding to a congressional mandate, examines the extent to which MCC has, for transportation infrastructure projects, (1) achieved expected performance targets and (2) consistently estimated numbers of beneficiaries. GAO analyzed MCC documents, interviewed MCC officials, and drew on fieldwork completed for related work in four of the seven countries. What GAO Found The Millennium Challenge Corporation (MCC)--a U.S. government corporation-- recognizes the importance of a disciplined, transparent, and accountable approach to tracking compact results. However, it reduced the scopes of its early transportation infrastructure projects and reports mixed success in meeting key performance targets. In addition, problems with data quality call into question the reliability of those reported results. GAO found the following for the seven compacts ending in 2010 and 2011, each with a road project or a port project. Road Projects: (1) MCC reduced kilometers to be paved under six compacts--Honduras, Cape Verde, Nicaragua, Vanuatu, Georgia, and Armenia--by a combined 63 percent (from about 1,800 to 600 km) because of increased construction costs and political problems in partner governments. MCC reported meeting reduced targets for five compacts. However, for three compacts, MCC did not consistently account for kilometers completed with funding from third parties. (2) MCC reported meeting revised targets for road roughness--a measure of pavement quality--for five of the compacts. However, reported data have quality issues, including the inconsistent application of measurement methodologies and calculation errors that resulted in overstated results. (3) MCC reported meeting targets for annual average daily traffic--a measure of the volume of traffic using the road--for three of the compacts. However, weaknesses in traffic baseline estimates may have affected the establishment of targets and therefore MCC's ability to measure results. Port Projects: (1) In Cape Verde, MCC funding ($53.7 million) was insufficient to construct all planned port elements. As a result, MCC reduced the project's scope and deferred measuring the results of key indicators. (2) In Benin, MCC completed most of the envisioned scope of the port project. MCC's data show that the compact met the original target for one of three key performance indicators, volume of merchandise. (The other two indicators relate to the measurement of shipping costs.) However, GAO found that MCC's estimation of this indicator's baseline may lead to overstated results. In addition, data quality reviews identified problems with the data used, which MCA-Benin did not formally address. In 2009, MCC improved its methodology for estimating beneficiaries--people who realize income gains or expenditure savings as a result of its investment--by standardizing its approach. MCC subsequently revised its beneficiary numbers for all compacts. However, the new approach did not include a formal quality review process. As a result, implementation of the new approach suffered from varying degrees of quality problems. For example, (1) MCC did not implement its beneficiary estimation methodology consistently across early transportation infrastructure projects; (2) beneficiary calculations contained incorrect formulas and numbers, and differed from supporting documents; and (3) beneficiary figures in MCC's public documents were sometimes inaccurate. What GAO Recommends MCC should strengthen existing policies and practices regarding measuring and evaluating results data and formalize a quality review process to improve its beneficiary calculations. MCC agreed with all of our recommendations and outlined some steps the agency will take or has already taken to address them.
gao_GAO-12-740T	gao_GAO-12-740T_0	Background One unconventional energy resource that has received renewed attention in recent years in the United States is oil shale. The federal government is in a unique position to influence the development of oil shale because nearly three-quarters of the oil shale within the Green River Formation lies beneath federal lands managed by the Department of the Interior’s (Interior) Bureau of Land Management (BLM). The Department of Energy (DOE), advances energy technologies, including oil shale technology, through its various offices, national laboratories, and arrangements with universities. Opportunities Presented by Future Oil Shale Development Our October 2010 report found that oil shale development presents significant opportunities for the United States. Increasing domestic oil production. Being able to tap the vast amounts of oil locked within U.S. oil shale formations could go a long way toward satisfying the nation’s future oil demands. At the midpoint of this estimate, almost half of the 3 trillion barrels of oil would be recoverable. This is an amount about equal to the entire world’s proven oil reserves. Development of oil shale resources could also yield important socioeconomic benefits, including the creation of jobs, increases in wealth, and increases in tax and royalty payments to federal and state governments for oil produced on their lands. Uncertainty about viable technologies. Environmental impacts on water, air, and wildlife. Construction and mining activities during the development of oil shale resources can temporarily degrade air quality in local areas. There can also be long-term regional increases in air pollutants from oil shale processing and the generation of additional electricity to power oil shale development operations. Oil shale operations are likely to clear large surface areas of topsoil and vegetation, and as a result, some wildlife habitat will be lost. In addition, the withdrawal of large quantities of surface water for oil shale operations could negatively impact aquatic life downstream of the oil shale development. Socioeconomic impacts. Oil shale development can bring a sizeable influx of workers, who along with their families, put additional stress on local infrastructure such as roads, housing, municipal water systems, and schools. As noted in our 2010 report, development from expansion of extractive industries, such as oil shale or oil and gas, has typically followed a “boom and bust” cycle, making planning for growth difficult for local governments. Furthermore, development of a future oil shale industry would have the potential to replace traditional rural uses by the industrial development of the landscape, and tourism that relies on natural resources, such as hunting, fishing, and wildlife viewing, could be negatively impacted. Federal Agencies Can Proactively Take Actions to Prepare For Oil Shale Development Our 2010 report noted that current federal research efforts on the impacts of oil shale development do not provide sufficient data for future monitoring and that there is a greater need for collaboration among key stakeholders to address water resources and research issues related to oil shale development. However, our October 2010 report noted that Interior and DOE officials generally have not shared information on oil shale research and that there is a need for federal agencies to improve their efforts to collaborate and develop more comprehensive baseline information on the current condition of groundwater and surface water in these areas. We recommended that the Secretary direct BLM and USGS to establish comprehensive baseline conditions for groundwater and surface water quality, including their chemistry, and quantity in the Piceance and Uintah Basins to aid in the future monitoring of impacts from oil shale development in the Green River Formation; model regional groundwater movement and the interaction between groundwater and surface water, in light of aquifer properties and the age of groundwater, so as to help in understanding the transport of possible contaminants derived from the development of oil shale; and coordinate with DOE and state agencies with regulatory authority over water resources in implementing these recommendations, and to provide a mechanism for water-related research collaboration and sharing of results.	Why GAO Did This Study Fossil fuels are important to both the global and U.S. economies, and unconventional oil and gas resourcesresources that cannot be produced, transported, or refined using traditional techniquesare expected to play a larger role in helping the United States meet future energy needs. With rising energy prices one such resource that has received renewed domestic attention in recent years is oil shale. Oil shale is a sedimentary rock that contains solid organic material that can be converted into an oil-like product when heated. About 72 percent of this oil shale is located within the Green River Formation in Colorado, Utah, and Wyoming and lies beneath federal lands managed by the Department of the Interiors Bureau of Land Management, making the federal government a key player in its potential development. In addition, the Department of Energy (DOE), advances energy technology, including for oil shale, through its various offices, national laboratories, and arrangements with universities. GAOs testimony is based on its October 2010 report on the impacts of oil shale development (GAO-11-35). This testimony summarizes the opportunities and challenges of oil shale development identified in that report and the status of prior GAO recommendations that Interior take actions to better prepare for the possible future impacts of oil shale development. What GAO Found In its October 2010 report, GAO noted that oil shale development presents the following opportunities for the United States: Increasing domestic oil production. Tapping the vast amounts of oil locked within U.S. oil shale formations could go a long way toward satisfying the nations future oil demands. Oil shale deposits in the Green River Formation are estimated to contain up to 3 trillion barrels of oil, half of which may be recoverable, which is about equal to the entire worlds proven oil reserves. Socioeconomic benefits. Development of oil shale resources could lead to the creation of jobs, increases in wealth, and increases in tax and royalty payments to federal and state governments for oil produced on their lands. The extent of these benefits, however, is unknown at this time because the ultimate size of the industry is uncertain. In addition to these opportunities and the uncertainty of not yet having an economical and environmentally viable commercial scale technology, the following challenges should also be considered: Impacts on water, air, and wildlife. Developing oil shale and providing power for oil shale operations and other activities will require large amounts of water and could have significant impacts on the quality and quantity of surface and groundwater resources. In addition, construction and mining activities during development can temporarily degrade air quality in local areas. There can also be long-term regional increases in air pollutants from oil shale processing and the generation of additional electricity to power oil shale development operations. Oil shale operations will also require the clearing of large surface areas of topsoil and vegetation which can affect wildlife habitat, and the withdrawal of large quantities of surface water which could also negatively impact aquatic life. Socioeconomic impacts. Oil shale development can bring an influx of workers, who along with their families can put additional stress on local infrastructure such as roads, housing, municipal water systems, and schools. Development from expansion of extractive industries, such as oil shale or oil and gas, has typically followed a boom and bust cycle, making planning for growth difficult for local governments. Moreover, traditional rural uses would be displaced by industrial uses and areas that rely on tourism and natural resources would be negatively impacted. GAOs 2010 report found that federal research efforts on the impacts of oil shale development did not provide sufficient data for future monitoring and that there was a greater need for collaboration among key federal stakeholders to address water resources and research issues. Specifically, Interior and DOE officials generally have not shared information on their oil shale research efforts, and there was a need for the federal agencies to improve their collaboration and develop more comprehensive baseline information related to water resources in the region. GAO made three recommendations to Interior, which the department generally concurred with and has already begun to take actions to address.
gao_NSIAD-95-137	gao_NSIAD-95-137_0	DOD Overstated Its Inventory Shortage We analyzed DOD’s secondary inventory records and found that on September 30, 1991, DOD’s secondary inventory shortage was $16.4 billion, not the $26 billion DOD cited. Also, DOD’s figure included $2.4 billion of standard price surcharges that increased acquisition costs by adding charges for transportation and inventory losses. Decreased Requirements Reduced the Shortage Between September 1991 and September 1993, the inventory shortage decreased by about $8.3 billion (51 percent), from $16.4 billion to about $8.1 billion. Officials at these locations attributed the reduced shortage to removing Desert Storm requirements, downsizing the military forces, eliminating DLA war reserve requirements, and decreasing requirements due to reduced levels of operations. Our work showed that because of continuing demand, shortages recur. The inventory manager for the vane said that the shortages were a normal function of the supply system and resulted in inventory purchases. Reorder Point Shortages Did Not Always Result in Purchases Inventory managers did not make purchases to satisfy reorder point shortages of $559 million for 3,240 items because (1) requirements for the items were not valid, had changed, or were uncertain; (2) purchases were not necessary for a variety of nonrequirement reasons such as items being returned to the supply system or the availability of substitute items; and (3) responsibility for the items was transferred to other organizations or the items were no longer in the supply system. DOD’s current inventory reporting categories, however, do not focus on the amount of inventory that is needed to be on hand. In its 1993 materiel management regulation, DOD defined its inventory requisitioning objective—equivalent to an item’s reorder point plus economic order quantity requirements—as the “maximum quantity of materiel to be maintained on-hand or on-order to sustain current operations and core war reserves.” Based on our analysis of inventory reported in DOD’s September 1993 Supply System Inventory Report and other inventory reports, we estimate that $28.8 billion of DOD’s $58.8 billion wholesale inventory was needed to satisfy reorder point and economic order quantity requirements.	Why GAO Did This Study GAO reviewed inventory shortages in the Department of Defense's (DOD) secondary, nonweapon inventory, focusing on: (1) the size of the shortages; (2) inventory managers' actions in response to the shortages; (3) whether funding problems caused managers not to buy needed items; and (4) the need for revising DOD inventory reporting. What GAO Found GAO found that: (1) the September 1991 DOD secondary inventory shortage was $16.4 billion instead of the $26 billion DOD reported because DOD included some Navy nonsecondary inventory items and standard price surcharges for transportation and inventory losses that increased DOD acquisition costs; (2) between September 1991 and September 1993, the shortage decreased to $8.1 billion due to the removal of Desert Storm requirements, military downsizing, elimination of some war reserve requirements, and reduced levels of operations; (3) reorder point shortages were a normal part of the supply system because of continuing demand, but these shortages were rarely due to a lack of funding; (4) inventory managers decided not to order almost one-half of $1.1 billion in reorder point shortages because of invalid requirements, the availability of substitute items, the transfer to other units of certain items, and items being removed from the inventory; (5) in general, these procurement decisions were valid and probably saved millions of dollars, since the items probably would not have been used; and (6) DOD inventory reporting is not based on the amount of inventory needed to be on hand, but rather on reorder points and economic order quantity which can result in excessive inventory.
gao_GAO-06-1021	gao_GAO-06-1021_0	State regulators oversee independent lenders and mortgage brokers and do so by generally requiring business licenses that mandate meeting net worth, funding, and liquidity thresholds. Once considered a financial management tool for wealthier borrowers, lenders have marketed AMPs as affordability products that enable borrowers to purchase homes they might not be able to afford using conventional fixed- rate mortgages. AMP Share of Mortgage Originations Grew Threefold from 2003 to 2005, with Higher Concentrations in the Coastal Markets As home prices increased nationally and lenders offered alternatives to conventional mortgages, AMP originations tripled in recent years, growing from less than 10 percent of residential mortgage originations in 2003 to about 30 percent in 2005. AMP lending has been concentrated in the higher-priced regional markets on the East and West Coasts, where homes are least affordable. Additionally, independent mortgage brokers have been an important source of originations for AMP lenders. However, federal regulatory officials and industry participants agree that it is too soon to tell whether risks to borrowers will result in significant delinquencies and foreclosures for borrowers and corresponding losses for banks that hold AMPs in their portfolios. AMPs Create Potential for Borrowers to Face Payment Shock, Particularly as Interest Rates Rise AMPs such as interest-only and payment-options ARMs are initially more affordable than conventional fixed-rate mortgages because during the first few years of the mortgage they allow a borrower to defer repayment of principal and, in the case of payment-option ARMs, part of the interest as well. Specifically, borrowers with interest-only ARMs can make monthly payments of just interest for the fixed introductory period. Most AMPs Originations Are Too Recent to Generate Sufficient Performance Data to Predict Delinquencies and Losses to Banks, but Regulators Said Most Banks Appeared to Be Managing Credit Risk AMP underwriting practices may have increased the risk of payment shock and default for some borrowers, resulting in increased credit risk for lenders, including banks. Regulators and Others Are Concerned That Borrowers May Not Be Well-informed About the Risks of AMPs The information that borrowers receive about their loans through advertisements and disclosures may not fully or effectively inform them about the risk of AMPs. Federal and state banking regulatory officials expressed concern that advertising practices by some lenders and brokers emphasized the affordability of these products without adequately describing their risks. Because most AMPs have not recast to fully amortizing payments, many borrowers are still making lower monthly payments that do not cover repayment of deferred principal. 4). For instance, the draft guidance states that lenders should provide clear and balanced information on both the benefits and risks of AMPs to consumers, including payment shock and negative amortization. Draft Interagency Guidance on AMP Lending Recommends Tightening Underwriting Standards, Developing Risk Management Policies, and Improving Consumer Information Draft interagency guidance, which federal banking regulators released in December 2005, responds to their concern that banks may face heightened risks as a result of AMP lending and that borrowers may not fully understand the terms and risks of these products. Other financial institutions said that the recommendations regarding borrower qualification and general underwriting practices were too prescriptive and would have the effect of reducing mortgage choice for consumers. Officials from most states have not created their own mortgage disclosures. In recent years, federally and state-regulated lenders and brokers widely marketed AMPs by touting their low initial payments and flexible payment options, which helped borrowers to purchase homes for which they might not have been able to qualify with a conventional fixed-rate mortgage, particularly in some high-priced markets. Although the draft interagency guidance by federal banking regulators addressed some of the concerns with consumer disclosures, the draft guidance focuses on promotional materials, not the written disclosures required by Regulation Z at loan application and closing. FDIC, FTC, NCUA, OCC, and OTS did not provide written comments. To obtain information on the federal regulatory response to the risks of AMPs for lenders and borrowers, we reviewed the draft interagency guidance on AMP lending issued in December 2005 by federal banking regulators and interviewed regulatory officials about what actions they could use to enforce guidance principles upon final release of the draft.	Why GAO Did This Study Alternative mortgage products (AMPs) can make homes more affordable by allowing borrowers to defer repayment of principal or part of the interest for the first few years of the mortgage. Recent growth in AMP lending has heightened the importance of borrowers' understanding and lenders' management of AMP risks. This report discusses the (1) recent trends in the AMP market, (2) potential AMP risks for borrowers and lenders, (3) extent to which mortgage disclosures discuss AMP risks, and (4) federal and selected state regulatory response to AMP risks. To address these objectives, GAO used regulatory and industry data to analyze changes in AMP monthly payments; reviewed available studies; and interviewed relevant federal and state regulators and mortgage industry groups, and consumer groups. What GAO Found From 2003 through 2005, AMP originations, comprising mostly interest-only and payment-option adjustable-rate mortgages, grew from less than 10 percent of residential mortgage originations to about 30 percent. They were highly concentrated on the East and West Coasts, especially in California. Federally and state-regulated banks and independent mortgage lenders and brokers market AMPs, which have been used for years as a financial management tool by wealthy and financially sophisticated borrowers. In recent years, however, AMPs have been marketed as an "affordability" product to allow borrowers to purchase homes they otherwise might not be able to afford with a conventional fixed-rate mortgage. Because AMP borrowers can defer repayment of principal, and sometimes part of the interest, for several years, they may eventually face payment increases large enough to be described as "payment shock." Mortgage statistics show that lenders offered AMPs to less creditworthy and less wealthy borrowers than in the past. Some of these recent borrowers may have more difficulty refinancing or selling their homes to avoid higher monthly payments, particularly if interest rates have risen or if the equity in their homes fell because they were making only minimum monthly payments or home values did not increase. As a result, delinquencies and defaults could rise. Officials from the federal banking regulators stated that most banks appeared to be managing their credit risk by diversifying their portfolios or through loan sales or securitizations. However, because the monthly payments for most AMPs originated between 2003 and 2005 have not reset to cover both interest and principal, it is too soon to tell to what extent payment shocks would result in increased delinquencies or foreclosures for borrowers and in losses for banks and other lenders. Regulators and others are concerned that borrowers may not be well-informed about the risks of AMPs, due to their complexity and because promotional materials by some lenders and brokers do not provide balanced information on AMPs benefits and risks. Although lenders and certain brokers are required to provide borrowers with written disclosures at loan application and closing, federal standards on these disclosures do not currently require specific information on AMPs that could better help borrowers understand key terms and risks. In December 2005, federal banking regulators issued draft interagency guidance on AMP lending that discussed prudent underwriting, portfolio and risk management, and consumer disclosure practices. Some lenders commented that the recommendations were too prescriptive and could limit consumer choices of mortgages. Consumer advocates expressed concerns about the enforceability of these recommendations because they are presented in guidance and not in regulation. State regulators GAO contacted generally relied on existing regulatory structure of licensing and examining independent mortgage lenders and brokers to oversee AMP lending.
gao_GAO-08-1174T	gao_GAO-08-1174T_0	Provide Insight into Pressing National Issues The next Congress and new administration will confront a set of pressing issues that will demand urgent attention and continuing oversight to ensure the nation’s security and well-being. A few examples follow: Oversight of financial institutions and markets: As events over the past few weeks have underscored, oversight over the U.S. housing and financial markets will certainly be among the priority matters commanding the attention of the new administration and the 111th Congress. Our transition work will highlight the major implementation issues that need to be addressed to ensure the development of comprehensive integrated strategies, accountability over resources provided, and ongoing assessments of progress, regardless of what policies are pursued in the future. While facing pressing issues, the next Congress and new administration also inherit the federal government’s serious long-term fiscal challenge— driven on the spending side by rising health care costs and changing demographics. Ultimately, however, the new administration and Congress will need to develop a strategy to address the federal government’s long-term unsustainable fiscal path. Our transition work will highlight challenges the new Congress and next administration face in devising integrated solutions to such multi-dimensional problems. Disaster response: Hurricane Katrina demonstrated the critical importance of the capability to implement an effective and coordinated response to catastrophes that leverages needed resources from across the nation, including all levels of government as well as nongovernmental entities. Strengthen the capacity to manage contractors and recognize related risks and challenges: Enhancing acquisition and contracting capability will be a critical challenge for many agencies in the next administration in part because many agencies (for example, DOD, DHS, the Department of Energy, and the Centers for Disease Control and Prevention) are increasingly reliant on contractors to carry out their basic operations. It also has provided the impetus for the creation of several statutory management reforms. The support of this Subcommittee and others in Congress has been especially important to the success of this program. In summary, our goal will continue to be to provide congressional and executive branch policy makers with a comprehensive snapshot of how things are working across government and to emphasize the need to update some federal activities to better align them with 21st century realities and bring about government transformation. In keeping with our role, we will be providing Congress and the executive branch with clear facts and constructive options and suggestions that our elected officials can use to make policy choices in this pivotal transition year. The nation’s new and returning leaders will be able to use such information to help address both the nation’s urgent issues and long-term challenges so that our nation stays strong and secure now and for the next generation.	Why GAO Did This Study The upcoming 2009 transition will be a unique and critical period for the U.S. government. It marks the first wartime presidential transition in 40 years. It will also be the first administration change for the relatively new Department of Homeland Security operating in the post 9/11 environment. The next administration will fill thousands of positions across government; there will be a number of new faces in Congress as well. Making these transitions as seamlessly as possible is pivotal to effectively and efficiently help accomplish the federal government's many essential missions. While the Government Accountability Office (GAO), as a legislative branch agency, has extensive experience helping each new Congress, the Presidential Transition Act points to GAO as a resource to incoming administrations as well. The Act specifically identifies GAO as a source of briefings and other materials to help presidential appointees make the leap from campaigning to governing by informing them of the major management issues, risks, and challenges they will face. GAO has traditionally played an important role as a resource for new Congresses and administrations, providing insight into the issues where GAO has done work. This testimony provides an overview of GAO's objectives for assisting the 111th Congress and the next administration in their all-important transition efforts. What GAO Found GAO will highlight issues that the new President, his appointees, and the Congress will confront from day one. These include immediate challenges ranging from national and homeland security to oversight of financial institutions and markets to a range of public health and safety issues. GAO will synthesize the hundreds of reports and testimonies it issues every year so that new policy makers can quickly zero in on critical issues during the first days of the new administration and Congress. GAO's analysis, incorporating its institutional memory across numerous administrations, will be ready by the time the election results are in and transition teams begin to move out. GAO will provide congressional and executive branch policy makers with a comprehensive snapshot of how things are working across government and emphasize the need to update some federal activities to better align them with 21st century realities and bring about government transformation. In keeping with its mission, GAO will be providing Congress and the executive branch with clear facts and constructive options and suggestions that elected officials can use to make policy choices in this pivotal transition year. GAO believes the nation's new and returning leaders will be able to use such information to help meet both the nation's urgent issues and long-term challenges so that our nation stays strong and secure now and for the next generation. GAO's transition work also will highlight the need to modernize the machinery of government through better application of information technology, financial management, human capital, and contracting practices. GAO also will underscore the need to develop strategies for addressing the government's serious long-term fiscal sustainability challenges, driven on the spending side primarily by escalating health care costsand changing demographics.
gao_GAO-09-185	gao_GAO-09-185_0	In processing and paying claims, RHHIs are responsible for minimizing improper payments. Six States Identified as Experiencing Highest Medicare Home Health Spending or Utilization Growth from 2002 through 2006 Medicare home health spending or utilization growth from 2002 through 2006 was highest in California, Florida, Nevada, Oklahoma, Texas, and Utah. These states ranked among the top three in at least one of four spending and utilization indicators. Two states—Florida and Texas— ranked in the top three on three or more indicators. All three states had at least double the national growth rate of 44 percent, and Texas’s increase in spending was more than three times the national growth rate. Upcoding and Other Fraudulent and Abusive Practices Contributed to Home Health Spending and Utilization Upcoding, or overstating the severity of a beneficiary’s condition, and other fraudulent and abusive practices were problems in some areas and contributed to Medicare home health spending and utilization. In addition, stakeholders identified these practices as common types of home health fraud and abuse, although some stakeholders acknowledged that they were difficult to prove. One PSC interviewed 670 Houston beneficiaries who had the most severe clinical rating and who were patients of HHAs identified by the PSC as having aberrant billing patterns. The PSC concluded that only 9 percent of claims for the 670 beneficiaries were properly coded. In addition, court cases and OIG actions illustrate how other fraudulent and abusive practices such as kickbacks, payments by HHAs to beneficiaries for use of their Medicare identification numbers, and billing for services not rendered contributed to Medicare home health spending and utilization. Inadequate Screening, Monitoring, Investigation, and Enforcement Procedures Leave Home Health Benefit Vulnerable to Improper Payments Inadequate administration of the Medicare home health benefit leaves the benefit vulnerable to improper payments. Although CMS policy charges RHHIs with the responsibility of screening applications from prospective Medicare HHAs, CMS does not require RHHIs to verify the criminal history of persons named on the application. In the preamble to the rule establishing the revalidation requirement, CMS noted that revalidation will “ensure that Medicare beneficiaries are receiving services furnished only by legitimate providers and suppliers, and strengthen ability to protect the Medicare Trust Funds.” Gaps in Monitoring Claims Make It Easy for Improper Payments to Occur CMS generally does not include physicians, who are in a position to detect certain types of improper billing, in CMS efforts to detect improper payments. CMS does not routinely provide physicians authorizing home health care with information that would allow the physicians to detect billing for unauthorized services. Current CMS regulations provide for the removal of providers or HHA officials from the program for abuse of billing privileges in limited circumstances. CMS recently issued regulations authorizing the revocation of Medicare billing privileges of providers engaging in one narrowly defined type of improper billing—billing for services that could not have been rendered. While this is a step in the right direction, CMS has yet to address the removal of HHAs or HHA officials engaging in other types of improper or abusive billing. Appendix I: Medicare Home Health Spending and Utilization Growth in the United States, 2002 through 2006 For our analysis of 2002 and 2006 Medicare home health claims data for the 50 states and Washington, D.C., we used the following four spending and utilization indicators: percentage growth in Medicare home health spending from 2002 through 2006 (table 2), percentage growth in the percentage of Medicare beneficiaries who used home health services from 2002 through 2006 (table 3), percentage growth in the number of home health agencies (HHA) that billed Medicare from 2002 through 2006 (table 4), and percentage of outlier cases in 2006 (table 5).	Why GAO Did This Study Medicare spending on home health totaled $12.9 billion in 2006, up 44 percent from 2002. Concerns have been raised that improper payments from practices indicating fraud and abuse may have contributed to Medicare home health spending and utilization. The Centers for Medicare & Medicaid Services (CMS), the agency that administers Medicare, is responsible for minimizing improper payments made on behalf of Medicare beneficiaries. GAO was asked to examine the growth in Medicare home health spending and utilization and the benefit's vulnerability to improper payments. GAO focused on states with the highest growth in Medicare home health spending or utilization; fraudulent and abusive practices contributing to recent spending and utilization; and administrative issues that make it vulnerable to improper payments. GAO analyzed Medicare claims data; reviewed Medicare laws and regulations and CMS documents; and interviewed stakeholders and contractors that administer and protect the home health benefit. What GAO Found California, Florida, Nevada, Oklahoma, Texas, and Utah were identified as experiencing the highest growth in Medicare home health spending or utilization from 2002 through 2006. These states ranked among the three highest in one or more of four spending and utilization indicators. Florida and Texas were among the top three on three or more indicators. Texas, Florida, and Nevada--the states with the highest percentage growth in Medicare home health spending from 2002 through 2006--had more than double the national spending growth rate of 44 percent during this period. Upcoding--overstating the severity of a beneficiary's condition--by home health agencies (HHA) and other fraudulent and abusive practices contributed to Medicare home health spending and utilization. For example, a CMS contractor found that only 9 percent of claims were properly coded for 670 Houston beneficiaries who had the most severe clinical rating and who were served by potentially fraudulent HHAs. Court cases and Department of Health and Human Services Office of Inspector General actions illustrated that kickbacks and billing for services not rendered also contributed to Medicare spending and utilization. Stakeholders identified these practices as common types of home health fraud and abuse. Inadequate administration of the Medicare home health benefit leaves the benefit vulnerable to improper payments. Although CMS policy charges its contractors, known as Regional Home Health Intermediaries (RHHI), with the responsibility of screening applications from prospective Medicare HHAs, CMS does not require RHHIs to verify the criminal history of persons named on the application. CMS does not generally include physicians, who are in a position to detect certain types of improper billing, in the agency's efforts to detect improper payments. For instance, CMS does not provide physicians responsible for authorizing home health care with information that would enable them to determine whether an HHA was billing for unauthorized care. Current CMS regulations provide for the removal of HHAs or HHA officials from Medicare for one type of abusive billing--billing for services that could not have been rendered. However, the agency has yet to address the removal of HHAs or HHA officials engaging in other types of abusive or improper billing.
gao_GAO-02-743	gao_GAO-02-743_0	ATF officials identified three investigations since 1997 of Internet vendors for cigarette smuggling in violation of the CCTA and violating the Jenkins Act. States’ Efforts Produced Limited Results Starting in 1997, seven of the nine states had made some effort to promote Jenkins Act compliance by Internet cigarette vendors. These efforts involved contacting Internet vendors and U.S. Attorneys’ Offices. I), we identified 147 Web site addresses for Internet cigarette vendors based in the United States and reviewed each Web site linked to these addresses. Majority of Web sites Indicate that Vendors do Not Comply with the Jenkins Act None of the 147 Web sites we reviewed stated that the vendor complies with the Jenkins Act and reports cigarette sales to state tobacco tax administrators. Conversely, as shown in table 2, information posted on 114 (78 percent) of the Web sites indicated the vendors’ noncompliance with the act through a variety of statements posted on the sites. Matters for Congressional Consideration To improve the federal government’s efforts in enforcing the Jenkins Act and promoting compliance with the act by Internet cigarette vendors, which may lead to increased state tax revenues from cigarette sales, the Congress should consider providing ATF with primary jurisdiction to investigate violations of the Jenkins Act (15 U.S.C. Appendix I: Scope and Methodology To determine actions taken by the Department of Justice (DOJ) and the Bureau of Alcohol, Tobacco and Firearms (ATF) to enforce the Jenkins Act with regard to Internet cigarette sales and factors that may have affected the level and extent of such actions, we provided written questions to DOJ and ATF headquarters requesting the needed information.	Why GAO Did This Study State and federal officials are concerned that as Internet cigarette sales continue to grow and as states' cigarette taxes increase, so will the amount of lost state tax revenue due to noncompliance with the Jenkins Act. The act requires any person who sells and ships cigarettes across a state line to a buyer, other than a licensed distributor, to report the sale to the buyer's state tobacco tax administrator. The Department of Justice (DOJ) is responsible for enforcing the Jenkins Act, and the Federal Bureau of Investigation (FBI) is the primary investigative authority. What GAO Found However, GAO found that DOJ and FBI headquarters officials did not identify any actions taken to enforce the Jenkins Act with respect to Internet cigarette sales. Since 1997, the Bureau of Alcohol, Tobacco, and Firearms (ATF) has begun three investigations of Internet cigarette vendors for cigarette smuggling that included the investigation of potential Jenkins Act violations. Overall, seven of nine selected states have made some effort to promote Jenkins Act compliance by Internet cigarette vendors by contacting Internet vendors and U.S. Attorneys' Offices, but they produced few results. GAO's Internet search efforts identified 147 website addresses for Internet cigarette vendors based in the United States. None of the websites posted information indicating the vendors' compliance with the Jenkins Act. Conversely, information posted on 78 percent of the websites indicated the vendors do not comply with the act.
gao_GAO-16-129	gao_GAO-16-129_0	1). OSDBU has established in its strategic plan that its longer-term goals for the verification program are to transform the verification process to make it more veteran-friendly and to expand the program’s capacity to serve more veterans. VA Improved Processing Times, Quality Controls, and Communication with Veterans In our May 2010 and January 2013 reports, we found that VA faced challenges in establishing a program to verify firms on a timely and consistent basis. VA Improved Processing Times Based on CVE’s administrative data, application processing times have decreased by more than 50 percent since October 2012—from an average of approximately 85 days—to 42 days in fiscal year 2015 (see fig. 2). Our review of randomly selected application files corroborated that CVE generally met its processing goals, but the verification process can take longer from a veteran’s perspective. CVE also has implemented an internal audit process and a continuous improvement process. These allegations were made by a veteran-owned small business advocate. All the counselors and representatives of veterans’ service organizations with whom we spoke noted that VA has improved its verification process, but most had suggestions for continued improvement. Officials said that they have been working with OSDBU to redesign the website to make documents, such as verification assistance briefs and the tool to identify required documents, easier to locate. Moreover, the officials noted that they encourage veterans to obtain free assistance with their applications from VA certified verification counselors. OSDBU developed a strategic plan for 2014–2018 that included longer- term goals for the program, such as making the verification process more veteran-friendly. Restructuring the Verification Process In August 2015, VA began to test (VA officials refer to it as a pilot) a restructured verification process that gives veterans a case manager who serves as a point of contact throughout the process and allows veterans to communicate directly with the individual processing their application. CVE officials stated that they plan to fully transition to a new process by September 2016. Specifically, CVE has had four different directors since 2011, including two acting directors in 2015. VA Continues to Face Delays in Replacing the Program’s Outdated Case- Management System We reported in January 2013 that VA moved from using a paper-based verification application to an electronic application when it implemented a new case-management system in 2011, consistent with our prior recommendation. We recommended that VA integrate its efforts to modify or replace the program’s data system with a broader strategic planning effort to ensure that the system addressed the program’s short- and long-term needs. VA’s Office of Information Technology hired a contractor in September 2013 to develop the new system, but VA cancelled the contract in October 2014 due to poor contractor performance. We recommended that VA develop and implement such a plan. But, VA’s operating plan is not comprehensive and does not include an integrated schedule with specific actions and milestone dates for achieving program changes or discuss how the efforts described in the previous sections might be coordinated. But these efforts began and have continued in the absence of a detailed operational plan to guide and integrate them with VA’s strategic objectives. Moreover, having a detailed plan to accomplish multiple ongoing efforts is critical given the repeated delays in VA’s efforts to acquire a new case-management system and the lack of continuity in CVE leadership. Without a policy to review and update the operating plan to reflect current conditions and priorities, VA would continue to be at risk for delays in implementing its initiatives and achieving its long-term goals. Recommendations for Executive Action To improve the management and oversight of VA’s SDVOSB and VOSB verification program, we recommend that the Secretary of Veterans Affairs direct OSDBU to complete its fiscal year 2016 operating plan and include an integrated schedule that addresses key implementation goals and the actions and milestone dates for achieving them, such as the coordination of the redesign of the verification process and the design, acquisition, and deployment of a new case-management system; and establish a process to review and update the operating plan for the verification program on a timely basis to address new VA initiatives, other changing conditions, and long-term goals. VA also provided timeframes for completing its planned actions. Appendix I: Scope and Methodology This report assesses progress by the Department of Veterans Affairs (VA) in (1) establishing a timely and consistent verification program and improving communication with veterans, and (2) the steps VA has taken to identify and address program challenges and longer-term goals. To assess VA’s progress in addressing communication challenges with veterans, we reviewed VA’s work instructions for processes that involve communicating with veterans. We interviewed VA officials to determine what procedures they have in place to communicate with applicants and verified businesses and obtain feedback from these entities on VA’s verification process and communication efforts.	Why GAO Did This Study In fiscal year 2014, the VA made contract awards totaling $4.0 billion to veteran-owned small businesses, including $3.6 billion to service-disabled veteran-owned small businesses. VA must verify the ownership, control, and status of firms seeking such preferences. GAO found in January 2013 ( GAO-13-95 ) that VA faced challenges verifying firms on a timely and consistent basis, communicating with veterans, enhancing information technology systems, and developing and implementing long-term strategic plans. GAO assessed (1) VA's progress in establishing a timely and consistent verification program and improving communication with veterans, and (2) the steps VA has taken to identify and address program challenges and longer-term goals. GAO reviewed VA's verification procedures and strategic plan, reviewed a generalizable random sample of 96 verification applications, and interviewed VA officials and representatives from two veterans' organizations selected from prior work and four verification assistance counselors selected to obtain geographic representation. What GAO Found Since GAO's 2013 report, the Department of Veterans Affairs (VA) took significant steps to improve how it verifies and communicates with veteran-owned small businesses, consistent with several of GAO's previous recommendations. VA reported that due to process improvements, it reduced average application processing times by more than 50 percent—from 85 days in 2012 to 41 in 2015. VA reported that it generally met its regulatory goals for application processing, and GAO's review of randomly selected application files generally corroborated this statement. VA refined the program's quality controls and implemented an internal audit process. Veterans' organizations and verification counselors with whom GAO spoke noted improvements in VA's communications and interactions with veterans, although three of the four verification counselors with whom GAO spoke suggested the program's website could be clearer and all four said the agency's letters to veterans could be clearer. In response, VA officials said they have been redesigning the website to make documents easier to locate. Officials also said the regulatory language in the letters was necessary and they encourage veterans to obtain free assistance with their applications from VA-certified counselors. VA has been undertaking multiple efforts to address continuing verification program challenges (such as an outdated case-management system) and long-term goals (making processes more veteran-friendly). However, the agency has not had a comprehensive operational plan for managing these efforts to completion. GAO previously recommended that VA's Office of Small and Disadvantaged Business Utilization (OSDBU), which oversees the verification program, establish a strategic plan for the program and integrate efforts to replace an outdated case-management system with agency strategic planning. VA developed a strategic plan for 2014–2018 that included longer-term goals for the program, such as making the verification process more veteran-friendly. In August 2015, VA began piloting a restructured process that allows veterans to communicate directly with the individual processing their application. VA plans to fully transition to the new process by September 2016. VA recently hired a new director for the program, which has had four directors since 2011, including two acting directors in 2015. VA also has continued its efforts to replace the outdated case-management system for the program, but has faced delays due to contractor performance and funding issues. As a result, VA officials do not anticipate the replacement system will be in place until early 2017. While VA has developed a high-level operating plan for OSDBU, the plan does not integrate schedules or specify actions and milestone dates for achieving the multiple changes under way or discuss how to integrate the efforts. VA officials told GAO they were working on developing a detailed operating plan but were waiting to evaluate preliminary results of the verification pilot. GAO's work on organizational transformations states that organizations should set implementation goals and develop timelines to show progress. A detailed plan to guide multiple ongoing efforts is critical given repeated delays in VA's efforts to acquire a new case-management system and the lack of continuity in the program's leadership. Once such an operating plan is developed, it also will be important to update it on a timely basis. Otherwise, VA would continue to be at risk for delays in implementing its initiatives and achieving its long-term goals. What GAO Recommends GAO recommends that VA: (1) complete its fiscal year 2016 operating plan and include an integrated schedule addressing key actions for the verification program and milestone dates for achieving them, and (2) establish a process to review and update the operating plan to address changing conditions. VA agreed with these recommendations.
gao_GAO-08-805	gao_GAO-08-805_0	Five are applications development projects, of which four are health care applications currently in development and one is a financial application in the planning stage. The remaining two projects are to enhance current VistA systems, prepare them for transition to HealtheVet, and develop new applications. However, since 2003, the time frames for completing the projects and the HealtheVet system as a whole have been extended from 2012 to 2018. Of the eight projects in progress, one is currently operational though not yet completed. The Health Data Repository (HDR) database, which became operational in 2006, currently contains standardized health data in three areas: vital signs, allergies, and outpatient pharmacy. This work is expected to be ongoing until the completion of the HealtheVet initiative. From the inception of the initiative in 2001 through fiscal year 2007, VA reported spending almost $600 million for the development of these eight projects. VA Has Developed an Overall Strategy for HealtheVet, but It Lacks a Project Management Plan Under VA’s current strategy for HealtheVet, developed in August 2006, the department is taking an incremental approach to the remainder of the initiative, based on six phases (referred to as “blocks”) that are to be completed in 2018. III) with 67 applications, 3 databases, and 10 common services. Further, although the department has established interim dates for completing projects that are under way, as of mid-June 2008, the department had not developed a detailed schedule or approach for completing the HealtheVet initiative, including the remaining 62 software applications, other than to state that it intends to complete all six blocks of the initiative by 2018. Such a plan also includes an integrated schedule that considers all dependencies and includes subtasks so that deadlines are realistic, and it incorporates reviews to allow oversight and approval by high-level managers. A key component of planning is determining the resources necessary to accomplish the myriad tasks needed throughout the life cycle of the initiative. In April 2008, VA provided an $11 billion cost estimate to complete HealtheVet; however, it has not yet independently validated these estimates. We stress in our Cost Assessment Guide that having a validated cost estimate is essential to improve the accuracy of cost, schedule, and performance management. Without an integrated plan that includes independently validated cost estimates, VA increases the risk that HealtheVet could incur schedule slippages and cost increases and not achieve what it intends to achieve. For the HealtheVet initiative, various levels and types of oversight are currently provided by the business owner (the Veterans Health Administration), the developers (the Office of Enterprise Development within the department’s CIO organization), and departmental IT governance boards. However, the business unit has not yet finalized a governance plan or implemented a complete governance structure, several key leadership positions within the developers’ organization are either vacant or filled with acting personnel, and the IT governance boards have not yet scheduled critical reviews of HealtheVet projects. Until all elements of governance and oversight are in place, the risk is increased that the HealtheVet initiative may experience cost overruns and continued schedule slippages and may not achieve what it intends to achieve. Appendix I: Objectives, Scope, and Methodology As requested, the objectives of our review were to determine (1) the status of the HealtheVet initiative, (2) VA’s overall plan for completing the initiative, and (3) how VA is providing oversight to ensure the success of the initiative.	Why GAO Did This Study The Department of Veterans Affairs (VA), through its Veterans Health Administration (VHA), provides health care for more than 5 million veterans each year. In 2001, VHA began an initiative, HealtheVet, to modernize its current medical information system. GAO's objectives were to determine the status of the modernization, VA's overall plan for completing it, and how VA is providing oversight to ensure the success of the initiative. To conduct this review, GAO analyzed project documentation and interviewed officials responsible for the development and implementation of the new system. What GAO Found As of June 2008, the HealtheVet initiative has these eight major software development projects under way. One project is to further develop the Health Data Repository, a database of standardized health data. This database, which is currently operational, is not yet complete; additional types of health data remain to be standardized and added to the repository. Four application projects are currently in development. One application project is in the planning stage. Two projects are being pursued to enhance current systems, prepare them for transition to HealtheVet, and develop new applications. From 2001 through fiscal year 2007, VA reported spending almost $600 million for these eight projects. The time frame for completing the projects and the HealtheVet system as a whole was 2012, but the projected completion date has now been delayed until 2018. The department has a high-level strategy for HealtheVet, in which the remainder of the initiative is to be completed incrementally in phases (referred to as "blocks"), but it does not have a comprehensive project management plan to guide the remaining work. This work is considerable: the department plans to replace the 104 applications in its current medical information system with 67 modernized applications (of which 5 are currently in development, as described), 3 databases, and 10 common services (general software functions, such as messaging and security, on which application software can call as needed). In view of this scope, the importance is increased of developing a comprehensive project management plan that includes, among other things, an integrated schedule that considers all dependencies and defines subtasks to ensure that deadlines are realistic. Another important component of such planning is determining the resources necessary to accomplish tasks throughout the life cycle of the initiative. In April 2008, VA provided an $11 billion cost estimate for completion of HealtheVet; however, it has not yet independently validated this estimate. Having a validated cost estimate is essential to improve the accuracy of cost, schedule, and performance management. Without an integrated plan that includes independently validated cost estimates, VA increases the risk that HealtheVet could incur cost increases and continued schedule slippages and not achieve its intended outcomes. Various levels and types of oversight are currently being provided for the HealtheVet initiative by business owners, developers, and departmental information technology governance boards. However, the business owners have not yet implemented a complete governance structure, several key leadership positions within the developers' organization are either vacant or filled with acting personnel, and the governance boards have not yet scheduled critical reviews of HealtheVet projects. Until all elements of governance and oversight are in place, the risk to the success of the HealtheVet initiative is increased.
gao_GAO-11-378	gao_GAO-11-378_0	Under its business model, DOE reimburses contractors for the allowable costs of employee compensation, including benefits such as pension and other postretirement benefits. Within Its Current Business Model, DOE Has Limited Influence over Contractor Pension and Other Postretirement Benefit Costs Under its current business model, DOE has limited influence over contractor pension and other postretirement benefit costs. Specifically, contractors sponsor the plans and therefore control the types of benefits offered employees and the investment strategies for allocating pension plan assets; they also determine the amounts paid into plans. In addition, external factors beyond both DOE’s and the contractors’ control, such as economic conditions and changes in statutory requirements, have significant effects on benefit costs incurred by contractors and, in turn, affect the amount of allowable costs that DOE reimburses contractors. Despite these constraints, however, DOE can exercise some limited influence over contractor pension and other postretirement benefit costs through its oversight efforts, reimbursement policy, and contract requirements. As a result, DOE ultimately bears the investment risk incurred by the contractor sponsoring the plan. In addition, changes in the interest rate can significantly affect contractor pension contributions. Changes in economic conditions can also affect other postretirement benefit costs. While DOE will ultimately have to reimburse the cost of contractor pension benefits that have already been accrued, it can use these means to exert some influence over future benefit costs. DOE Has Taken Steps to Enhance Its Management of Contractor Pension Costs but Has Not Comprehensively Reviewed Other Postretirement Benefits or Issued Complete Guidance Since the economic downturn deepened in 2008, DOE has taken steps to enhance its management of contractor benefit costs—particularly for contractor pensions—but gaps remain in its approach. As a result, DOE may be delayed in improving its oversight of those benefits, and potentially not provide important information to Congress that could inform annual funding decisions. Moreover, DOE has not added information to its budget request on its contractors’ nonpension postretirement benefit costs. DOE Has Largely Continued Its Existing Contract Requirements and Reimbursement Policy but Lacks Clarifying Guidance to Ensure a Consistent Approach to Contractor Benefit Costs DOE has, for the most part, continued to insert the same contract requirements since 2005 and use the same reimbursement policy from 1996, but it lacks complete guidance on how program offices should evaluate contractor requests to contribute more than the minimum required to their pension plans, and it also lacks a comprehensive timeline for modifying contractor benefit packages with values that exceed DOE standards. Without standard guidance for its program offices, DOE is unable to ensure that its offices are deciding on contractor requests on the basis of consistent criteria reflecting departmentwide goals for managing contractor pension costs. In addition, DOE’s existing process is incomplete for correcting contractor benefit packages that exceed its reimbursement standard. As a result, only one contractor with benefit packages exceeding DOE’s standard for the most recent evaluation period is expected to bring its benefits in line with DOE’s requirements. As a result, contractors whose scores exceed DOE’s standard may remain above that level for an undefined period and continue to accrue liabilities and be reimbursed for the cost of benefits that may not meet DOE’s standard. Nevertheless, DOE has yet to comprehensively review its approach to managing other postretirement benefit costs as it has for contractor pensions, although the cost of these benefits is growing and could put pressure on the department’s budget in coming years. Clarify existing guidance on correcting contractor benefit packages that exceed DOE’s standard by: establishing a defined timeline by when contractors must submit corrective action plans to their DOE contracting officer if the value of their benefit package is determined to exceed DOE’s standard, as well as a timeline for when DOE contracting officers must reach a decision on such plans; developing criteria for contracting officers to use when deciding whether to waive a required corrective action plan; and requiring review of these contracting officer decisions by the responsible headquarters office to help ensure consistent application of the criteria across the department. DOE agreed with three of our recommendations but disagreed with the recommendation that the Secretary of Energy issue guidance to program offices that defines criteria to be considered when evaluating contractor requests to contribute more than the minimum to their pension plans.	Why GAO Did This Study The Department of Energy (DOE) relies on contractors to conduct its mission activities. DOE reimburses these contractors for allowable costs, including the costs of providing pension and other postretirement benefits, such as retiree health care plans. Since the economic downturn, DOE has had to devote significantly more funding toward reimbursing these benefit costs, in part because of a decline in interest rates and asset values that has increased contractor pension contributions. In a challenging budgetary environment, further growth in these costs could put pressure on DOE's mission work. GAO was asked to report on (1) the level of control DOE has over contractor pension and other postretirement benefit costs under its current business model and (2) the changes DOE has adopted since the national economic downturn to manage those costs and the extent to which those changes have enhanced its approach. To do so, GAO reviewed relevant laws, regulations, and DOE guidance; analyzed agency financial data; and interviewed officials. What GAO Found Under its current business model, DOE has limited influence over contractor pension and other postretirement benefit costs. For example, contractors sponsor benefit plans and, as a result, control the types of benefits offered to their employees and the strategies for investing pension plan assets. DOE nevertheless ultimately bears the investment risk incurred by the contractors. Moreover, external factors beyond both DOE's and the contractors' control, such as economic conditions and changes in statutory requirements, can significantly affect benefit costs. For example, the investment performance of plan assets can affect pension contributions, while changes in health care law can affect postretirement benefit payments. Even with these constraints, however, DOE can exercise some influence over contractor pension and other postretirement benefit costs through its oversight efforts, reimbursement policy for contractor benefit costs, and contract requirements. Still, the department will ultimately have to reimburse the cost of contractor pension benefits that have already been accrued. Since the economic downturn deepened in 2008, DOE has taken steps to enhance its management of contractor benefit costs--particularly for contractor pensions--but has not comprehensively reviewed its approach to managing its contractors' other postretirement benefit costs, such as retiree health care coverage. In addition, DOE has not added agencywide information on the costs of its contractors' other postretirement benefits to its annual budget request. As a result, DOE may be delayed in identifying options that might better address the growth of its reimbursement costs and may not provide important information to Congress that could inform annual funding decisions. Moreover, while DOE has, for the most part, continued to use the same reimbursement policy and contract requirements from before the economic downturn, it lacks complete guidance on how program offices should evaluate contractor requests to contribute more than DOE's minimum requirement to their pension plans. DOE is therefore unable to ensure that its offices decide on contractor requests on the basis of consistent criteria reflecting departmentwide goals for managing contractor pension costs. In addition, DOE's existing process for having contractors align their benefit packages with DOE's reimbursement standard is incomplete. Specifically, DOE lacks a comprehensive timetable for when contractors must modify benefit packages whose values exceed DOE's standard. As a result, only 1 of the 16 contractors with benefit packages exceeding DOE's standard for the most recent evaluation period is expected to bring its benefits in line with that standard. Further, DOE guidance allows contracting officers to waive the requirement for contractors to correct benefit packages exceeding DOE's reimbursement standard, but does not detail the criteria contracting officers should follow in making that decision or require a review by DOE headquarters. As a result, some contractors may continue for an undefined period to accrue liabilities and be reimbursed by DOE for benefit packages exceeding the department's reimbursement standard. What GAO Recommends GAO recommends, among other things, that DOE comprehensively review how it manages contractor postretirement benefit costs and define criteria for evaluating contractor requests to contribute more than the minimum to their pension plans. DOE agreed with three of GAO's recommendations but disagreed with the need to define such criteria.
gao_GAO-03-839T	gao_GAO-03-839T_0	The state of deterioration is alarming because of the magnitude of the repair backlog— current estimates show that tens of billions of dollars will be needed to restore these assets and make them fully functional. We have also reported extensively on the security problems and challenges at individual real property-holding agencies. These factors include competing stakeholder interests in real property decisions; various legal and budget-related disincentives to businesslike outcomes; the need for improved capital planning; and the lack of a strategic, governmentwide focus on federal real property issues. Resolving the long-standing problems will require high-level attention and effective leadership by Congress and the administration and a governmentwide, strategic focus on real property issues. Also, it is important that key stakeholders develop an effective system to measure results. Real property problems related to unneeded property and the need for realignment; deteriorating conditions, unreliable data, costly space, and security concerns have multibillion-dollar cost implications, and can seriously jeopardize mission accomplishment. Because of the breadth and complexity of the issues involved, the long-standing nature of the problems, and the intense debate about potential solutions that will likely ensue, current structures and processes may not be adequate to address the problems. Such a strategy, based on input from agencies, the private sector, and other interested groups, could comprehensively address these long-standing problems with specific proposals on how best to realign the federal infrastructure and dispose of unneeded property, taking into account mission requirements, changes in technology, security needs, costs, and how the government conducts business in the 21st century; address the significant repair and restoration needs of the federal ensure that reliable governmentwide and agency-specific real property data—both financial and program related—are available for informed decisionmaking; resolve the problem of heavy reliance on costly leasing; and consider the impact that the threat of terrorism will have on real property needs and challenges, including how to balance public access with safety. Congress and the administration could work together to develop and enact reform legislation to give real property-holding agencies the tools they need to achieve better outcomes, foster a more businesslike real property environment, and provide for greater accountability for real property stewardship.	Why GAO Did This Study Long-standing problems with excess and underutilized real property, deteriorating facilities, unreliable real property data, and costly space challenges are shared by several agencies. These factors have multibillion-dollar cost implications and can seriously jeopardize agencies' missions. Federal agencies face many challenges securing real property due to the threat of terrorism. This testimony discusses long-standing, complex problems in the federal real property area and what actions are needed to address them. What GAO Found Over 30 agencies control hundreds of thousands of real property assets worldwide, including facilities and land, which are worth hundreds of billions of dollars. Unfortunately, much of this vast, valuable portfolio reflects an infrastructure based on the business model and technological environment of the 1950s. Many of the assets are no longer effectively aligned with, or responsive to, agencies' changing missions and are therefore no longer needed. Further, many assets are in an alarming state of deterioration; agencies have estimated restoration and repair needs to be in the tens of billions of dollars. Compounding these problems are the lack of reliable government-wide data for strategic asset management, a heavy reliance on costly leasing instead of ownership to meet new needs, and the cost and challenge of protecting these assets against potential terrorism. Resolving these problems will require high-level attention and effective leadership by both Congress and the administration. Also, because of then breadth and complexity of the issues, the long-standing nature of the problems, and the intense debate that will likely ensue, current structures and processes may not be adequate to address the problems. Thus, as we have reported, there is a need for a comprehensive, integrated transformation strategy for real property that will focus on some of the underlying causes that contribute to these problems, such as competing stakeholder interests in real property decisions; various legal and budget related disincentives to businesslike outcomes; inadequate capital planning and the lack of governmentwide focus on real property issues. It is equally important that Congress and the administration work together to develop and enact needed reform legislation to give real property-holding agencies the tools they need to achieve better outcomes. This would also foster a more businesslike real property environment and provide for greater accountability for real property stewardship.
gao_GAO-01-487T	gao_GAO-01-487T_0	Payroll Tax Financing of Social Security and Medicare Benefits Payroll taxes are the main source of financing for Social Security— which includes OASI and DI—and for the HI program in Medicare— also referred to as Medicare part A. Once individuals have worked a sufficient time to qualify, they become eligible for benefits under the program. HI tax is 2.9 percent, divided evenly between the employee and the employer. How Are Benefits Determined? Neither eligibility for benefits nor the amount of benefits is based on the amount of taxes paid by an individual, and neither IRS nor the Social Security Administration (SSA) directly credits to the individual the annual and cumulative FICA taxes paid by or on behalf of each individual. The cash flows for these programs will create pressure on the federal budget long before these so-called trust fund exhaustion dates. Most EITC recipients earn credits that exceed their income tax liabilities. Efforts to Reduce EITC Noncompliance Concerned about the level of EITC noncompliance, Congress and IRS have taken various steps to reduce it. With that authority, IRS has been able to (1) automatically disallow any EITC claim associated with an invalid SSN and (2) make appropriate adjustments to any refund that the taxpayer might be claiming. In implementing its plan, IRS has taken several actions, with some significant results. - - - - - I appreciate this opportunity to appear today to provide a basic description of the payroll taxes funding Social Security and Medicare hospital insurance and to discuss what is known about EITC noncompliance. Earned Income Credit: IRS’ Tax Year 1994 Compliance Study and Recent Efforts to Reduce Noncompliance (GAO/GGD-98-150, July 28, 1998).	Why GAO Did This Study This testimony discusses (1) how payroll taxes fund Social Security and the Medicare Hospital Insurance (HI) programs and (2) noncompliance associated with the Earned Income Tax Credit (EITC) and efforts to deal with that noncompliance. What GAO Found Payroll taxes fund the Social Security Program and the Medicare HI program. These taxes are paid in equal portions by employees and their employers. Employees and their families become eligible to collect these benefits once workers have been employed for a sufficient period of time. Although Social Security benefits are calculated using a formula that considers lifetime earnings, HI benefits are based on the health of the covered individual and are paid directly to the health care provider. Demographic trends indicate that these programs will impose an increasing burden on the federal budget and the overall economy. Regarding EITC, significant compliance problems can expose the Internal Revenue Service (IRS) to billions of dollars in overpayments. EITC noncompliance is identified as taxpayer errors and intent to defraud. IRS and Congress have taken several steps to reduce noncompliance, including the passage of laws that enabled IRS to disallow EITC claims with invalid social security numbers and the implementation of a five-year EITC compliance initiative.
gao_GAO-10-626	gao_GAO-10-626_0	The United States does not have a comprehensive national approach for the reuse and recycling of used electronics, and previous efforts to establish a national approach have been unsuccessful. Despite steps to strengthen enforcement of the CRT rule, issues related to CRT exports and to exports of other used electronics remain. EPA’s Partnership Programs Have Had a Positive but Limited Effect EPA has worked with electronics manufacturers, retailers, recyclers, state governments, environmental groups, and other stakeholders to promote partnership programs that address the environmentally sound management of used electronics. However, EPA has not systematically analyzed the agency’s partnership programs, such as the Federal Electronics Challenge, to determine whether the impact of each program could be augmented. Stakeholders’ Views on the State-by-State Approach to Managing Used Electronics Vary Widely To varying degrees, the entities regulated under the state electronics recycling laws—electronics manufacturers, retailers, and recyclers— consider the increasing number of laws to be a compliance burden. In contrast, in the five states we visited, state and local solid waste management officials expressed varying levels of satisfaction with individual state recycling programs, which they attributed more to the design and implementation of the programs, rather than to any burden caused by the state-by-state approach. Options for Promoting the Environmentally Sound Management of Used Electronics Involve Basic Policy Considerations Options to further promote the environmentally sound management of used electronics involve a number of basic policy considerations and encompass many variations. Moreover, EPA does not have a plan for coordinating its efforts with state electronics recycling programs or for articulating how EPA’s partnership programs, taken together, can best assist stakeholders to achieve the environmentally sound management of used electronics. Key Implications of a Continuation of the State-by- State Approach Among the key implications of a continuation of the state-by-state approach are a greater flexibility for states and a continuation of a patchwork of state recycling efforts, including some states with no electronics recycling requirements. A state-by-state approach also allows for innovations among states in enacting electronics recycling legislation. A primary issue of concern to many stakeholders is the degree to which the federal government would (1) establish minimum standards, allowing states to adopt stricter standards (thereby providing states with flexibility but also potentially increasing the compliance burden from the standpoint of regulated entities), or (2) establish fixed standards. Further Federal Regulation of Exports Is a Potential Component of Either Approach to Managing Used Electronics In doing our work, we found that a potential component of either approach that we discuss for managing used electronics is a greater federal regulatory role over exports to (1) facilitate coordination with other countries to reduce the possibility of unsafe recycling or dumping and (2) address the limitations on the authority of states to regulate exports. Second, we recommended that the agency submit to Congress a legislative package for ratification of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, a multilateral environmental agreement that aims to protect against the adverse effects resulting from transboundary movements of hazardous waste. EPA officials told us that the agency had developed a legislative proposal on more than one occasion under previous administrations but did not finalize any proposal with other federal agencies. In addition, we recommend that the Administrator of EPA work with other federal agencies, including the State Department and the Council on Environmental Quality, to finalize a legislative proposal that would be needed for ratification of the Basel Convention, with the aim of submitting a package for congressional consideration. Appendix I: Scope and Methodology To examine the Environmental Protection Agency’s (EPA) efforts to facilitate the environmentally sound management of used electronics, we reviewed solid and hazardous waste laws and regulations—including the Resource Conservation and Recovery Act and EPA’s rule on the management of cathode-ray tubes (CRT)—and their applicability to used electronics.	Why GAO Did This Study Low recycling rates for used televisions, computers, and other electronics result in the loss of valuable resources, and electronic waste exports risk harming human health and the environment in countries that lack safe recycling and disposal capacity. The Environmental Protection Agency (EPA) regulates the management of used electronics that qualify as hazardous waste and promotes voluntary efforts among electronics manufacturers, recyclers, and other stakeholders. However, in the absence of a comprehensive national approach, a growing number of states have enacted electronics recycling laws, raising concerns about a patchwork of state requirements. In this context, GAO examined (1) EPA's efforts to facilitate environmentally sound used electronics management, (2) the views of various stakeholders on the state-by-state approach, and (3) considerations to further promote environmentally sound management. GAO reviewed EPA documents, interviewed EPA officials, and interviewed stakeholders in five states with electronics recycling legislation. What GAO Found EPA's efforts to facilitate the environmentally sound management of used electronics consist largely of (1) enforcing its rule for the recycling and exporting of cathode-ray tubes (CRT), which contain significant quantities of lead, and (2) an array of partnership programs that encourage voluntary efforts among manufacturers and other stakeholders. EPA has improved enforcement of export provisions of its CRT rule, but issues related to exports remain. In particular, EPA does not specifically regulate the export of many other electronic devices, such as cell phones, which typically are not within the regulatory definition of hazardous waste despite containing some toxic substances. In addition, the impact of EPA's partnership programs is limited or uncertain, and EPA has not systematically analyzed the programs to determine how their impact could be augmented. The views of stakeholders on the state-by-state approach to managing used electronics have been shaped by the increasing number of states with electronics recycling legislation. To varying degrees, the entities typically regulated under the state laws--electronics manufacturers, retailers, and recyclers--consider the increasing number of state laws to be a compliance burden. In contrast, in the five states GAO visited, state and local solid waste management officials expressed overall support for states taking a lead role in the absence of a national approach. The officials attributed their varying levels of satisfaction more to the design and implementation of individual state recycling programs, rather than to the state-by-state approach. Options to further promote the environmentally sound management of used electronics involve a number of policy considerations and encompass many variations, which generally range from a continued reliance on state recycling programs to the establishment of federal standards via legislation. The first approach provides the greatest degree of flexibility to states, but does not address stakeholder concerns that the state-by-state approach is a compliance burden or will leave some states without electronics recycling programs. Moreover, EPA does not have a plan for coordinating its efforts with state recycling programs or articulating how EPA's partnership programs can best assist stakeholders to achieve the environmentally sound management of used electronics. Under the second approach, a primary policy issue is the degree to which federal standards would allow for stricter state standards, thereby providing states with flexibility but also potentially worsening the compliance burden from the standpoint of regulated entities. As a component of any approach, a greater federal regulatory role over exports could address limitations on the authority of states to regulate exports. GAO previously recommended that EPA submit to Congress a legislative proposal for ratification of the Basel Convention, a multilateral environmental agreement that aims to protect against the adverse effects resulting from transboundary movements of hazardous waste. EPA officials told GAO that the agency had developed a legislative proposal under previous administrations but had not finalized a proposal with other federal agencies. What GAO Recommends GAO recommends that the Administrator, EPA, (1) examine how EPA's partnership programs could be improved to contribute more effectively to used electronics management and (2) work with other federal agencies to finalize a legislative proposal on ratification of the Basel Convention for congressional consideration. EPA agreed with the recommendations.
gao_GAO-07-1030	gao_GAO-07-1030_0	The Marine Corps has taken several steps to establish its special operations command, such as activating the Command’s headquarters, establishing Marine Corps special operations forces units, and deploying these units to conduct special operations missions; however, DOD did not use critical practices of effective strategic planning when developing the initial force structure plans for the Command. As a result of limitations in the strategic planning process, the Marine Corps special operations command has identified several force structure challenges that will likely affect the Command’s ability to perform its full range of responsibilities, and is working to revise its force structure to address these challenges. Such analyses are critical to the Marine Corps’ efforts to develop a strategic human capital approach for the management of personnel in its special operations forces units. Without the benefit of these analyses, the Marine Corps has developed an interim policy to assign some personnel to special operations forces units for extended tour lengths to account for the additional training and skills needed by these personnel. However, this interim policy is inconsistent with the Marine Corps special operations command’s goal for the permanent assignment of some personnel within the special operations community. While Some Personnel Requirements Have Been Identified, Marine Corps Special Operations Command Has Not Fully Identified the Critical Skills and Competencies Required of Its Personnel While the Marine Corps special operations command has identified some critical skills and competencies that are needed to perform special operations missions, it has not fully identified these requirements because it has not yet conducted a comprehensive analysis to determine all the critical skills and additional training required of personnel in its units. Marine Corps Has Developed an Interim Policy to Manage Personnel in Its Special Operations Command, but It Lacks Consensus on a Strategic Human Capital Approach To address the personnel needs of the Marine Corps special operations command, Headquarters, Marine Corps, has established an interim policy that provides for extended assignments of some personnel in special operations forces units; however, the absence of a comprehensive analysis of the critical skills and training required of personnel in special operations forces units has contributed to a lack of consensus within the Marine Corps on a strategic human capital approach to manage these personnel. Until the Marine Corps special operations command completes a comprehensive analysis to identify and document the critical skills and additional training needed by its future workforce to perform the Command’s full range of assigned special operations missions, the Marine Corps will not have a sound basis for developing or evaluating alternative strategic human capital approaches for the management of personnel assigned to its special operations forces units. USSOCOM Does Not Have a Sound Basis for Determining Whether Marine Corps Special Operations Forces Training Programs Prepare Units for Missions USSOCOM does not have a sound basis for determining whether Marine Corps special operations forces training programs are preparing units for their missions because it has not established common training standards for many special operations skills and it has not formally evaluated whether these programs will prepare units to be fully interoperable with DOD’s other special operations forces. The Marine Corps special operations command has provided training for its forces that is based on training that was provided to conventional units that were assigned some special operations missions prior to the activation of the Command, and by selectively incorporating the training that USSOCOM’s other service components provide to their forces. Furthermore, USSOCOM has not formally validated whether the training used to prepare Marine Corps forces meets special operations standards and prepares forces to be fully interoperable with the department’s other special operations forces. Appendix I: Scope and Methodology To assess the extent to which the Marine Corps special operations command (Command) has identified the force structure needed to perform its mission, we identified and reviewed Department of Defense (DOD) reports related to the department’s efforts to increase the size of special operations forces by integrating Marine Corps forces into the U.S. Special Operations Command (USSOCOM).	Why GAO Did This Study The Department of Defense (DOD) has relied on special operations forces to conduct military operations in Afghanistan and Iraq and to perform other tasks such as training foreign military forces. To meet the demand for these forces, DOD established a Marine Corps service component under the U.S. Special Operations Command (USSOCOM) to integrate Marine Corps forces. Under the authority of the Comptroller General, GAO assessed the extent to which (1) the Marine Corps special operations command has identified its force structure requirements, (2) the Marine Corps has developed a strategic human capital approach to manage personnel in its special operations command, and (3) USSOCOM has determined whether Marine Corps training programs are preparing its forces for assigned missions. GAO performed its work with the Marine Corps and USSOCOM and analyzed DOD plans for this new command. What GAO Found While the Marine Corps has made progress in establishing its special operations command (Command), the Command has not yet fully identified the force structure needed to perform its assigned missions. DOD developed initial force structure plans to establish the Command; however, it did not use critical practices of strategic planning, such as the alignment of activities and resources and the involvement of stakeholders in decision-making processes when developing these plans. As a result of limitations in the strategic planning process, the Command has identified several force structure challenges that will likely affect the Command's ability to perform its full range of responsibilities, and is working to revise its force structure. Although preliminary steps have been taken, the Marine Corps has not developed a strategic human capital approach to manage the critical skills and competencies required of personnel in its special operations command. While the Command has identified some skills needed to perform special operations missions, it has not conducted a comprehensive analysis to determine all of the critical skills and incremental training required of personnel in its special operations forces units. These analyses are critical to the Marine Corps' efforts to develop a strategic human capital approach for the management of personnel in its special operations forces units. Without the benefit of these analyses, the Marine Corps has developed an interim policy to assign some personnel to special operations forces units for extended tour lengths to account for the additional training and skills; however, the policy is inconsistent with the Command's goal for the permanent assignment of some personnel within the special operations community. Until the Command completes an analysis to identify and document the critical skills and competencies needed by its future workforce to perform its full range of special operations missions, the Marine Corps will not have a sound basis for developing or evaluating alternative strategic human capital approaches for managing personnel assigned to its special operations forces units. USSOCOM does not have a sound basis for determining whether the Command's training programs are preparing units for their missions because it has not established common training standards for many special operations skills and it has not formally evaluated whether these programs prepare units to be fully interoperable with other special operations forces. The Command is providing training to its forces that is based on training programs for conventional units that were assigned some special operations missions prior to the Command's activation and incorporates the training that USSOCOM's other service components provide to their forces. However, USSOCOM has not validated that the training for Marine Corps forces prepares them to be fully interoperable with DOD's other special operations forces. Without an evaluation, USSOCOM cannot demonstrate the needed assurances that Marine Corps forces are fully interoperable with its other forces, which may jeopardize the success of future joint missions.
gao_GAO-05-348	gao_GAO-05-348_0	Financial Conditions Similar for Deployed and Non-Deployed Servicemembers, but Pay Administration and Communication Problems Exist for Deployed Members DOD-wide survey data suggest that the financial conditions of deployed and non-deployed personnel are similar, but problems were found with the administration of a special pay to deployed personnel, as well as the ability of deployed servicemembers to communicate with creditors. Servicemembers who were deployed for at least 30 days reported similar levels of financial health or problems as those who had not deployed when they responded to a 2003 DOD-wide survey. In total, almost 6,000 servicemembers received more than the prescribed $250 monthly allowance, with 11 servicemembers (1.5 percent) receiving a $3,000 catch-up, lump sum payment—the equivalent of 12 months of family separation pay. Despite this subsequent change, Air Force servicemembers in our June 2004 focus group noted that they had not received the family separation allowance during their deployments. However, an earlier draft of the instruction included these requirements. The DOD officials told us that the services did not want the additional reporting requirements. Without a policy requiring common evaluation DOD-wide and reporting relationships among DOD and the services, DOD will continue to have limited oversight to make improvements in the PFM programs and limited ability to achieve a standardized evaluation system. In addition, Congress will not have the visibility or oversight it needs to address issues related to DOD’s financial management training and assistance to servicemembers. Some Junior Enlisted Servicemembers Are Not Receiving Required PFM Training Some junior enlisted servicemembers are not receiving the required PFM training. While each of the services implements PFM training differently, all of the services have policies requiring that PFM training must be provided to junior enlisted servicemembers. Despite having these policies, some servicemembers have not received the required training, but the extent to which the training is not received is unknown because servicewide totals are not always collected. Table 3 shows how each service monitors PFM training. As shown in the table, the Army was the only service that collected installation-level PFM data and could provide a rough servicewide estimate of PFM training completed by junior enlisted servicemembers. Top-level DOD officials have stated repeatedly that financial issues have a direct effect on servicemembers’ mission readiness and that the lack of basic consumer skills and training in finances sets the stage for financial difficulties. Therefore, units whose servicemembers do not receive required PFM training risk jeopardizing their ability to meet mission requirements. Conclusions Although DOD-wide data show that the financial conditions for deployed and non-deployed servicemembers and their families are similar, some deployed servicemembers experience delays in obtaining their monthly family separation allowance. While DOD states in its Social Compact that a standardized evaluation system to measure the effectiveness of the PFM programs is a desired goal, the department does not have an oversight framework that includes the performance measures and reporting requirements needed to fully measure results from its programs. During these site visits to installations in the United States and Germany, special emphasis was given to ascertaining the financial conditions of junior enlisted servicemembers because DOD and service officials have reported that this subgroup is more likely to encounter financial problems. To address the extent to which there is a financial impact of deployment on active duty servicemembers and their families, we reviewed and analyzed laws, policies, and directives governing military pay, such as the Servicemembers Civil Relief Act and DOD’s Financial Management Regulation 7000.14R, Volume 7A, as well as documents related to the tax treatment of military pay, including the Internal Revenue Service Armed Forces’ Tax Guide: For Use in Preparing 2003 Returns. To assess the adequacy of DOD’s oversight framework for evaluating military programs that assist both deployed and non-deployed servicemembers in managing their personal finances, we reviewed DOD’s, the services’, and selected installations’ PFM program policies, along with DOD’s strategic and tactical plans for implementing the PFM programs. 2.a. Military Pay: Army Reserve Soldiers Mobilized to Active Duty Experienced Significant Pay Problems.	Why GAO Did This Study Congress and the Department of Defense (DOD) are concerned about the financial conditions of servicemembers and their families, particularly in light of recent deployments to Iraq and Afghanistan. Serious financial issues can negatively affect unit readiness. According to DOD, servicemembers with severe financial problems risk losing security clearances, incurring administrative or criminal penalties or, in some cases, face discharge. Despite increases in compensation and DOD programs on personal financial management (PFM), studies show that servicemembers, particularly junior enlisted personnel, continue to report financial difficulties. GAO assessed (1) the extent deployment impacts the financial condition of active duty servicemembers and their families, (2) whether DOD has an oversight framework for evaluating military programs designed to assist deployed and non-deployed servicemembers in managing their finances, and (3) the extent junior enlisted servicemembers receive required PFM training. What GAO Found The financial conditions of deployed and non-deployed servicemembers and their families are similar, but deployed servicemembers and their families may face additional financial problems related to pay. In both a 2003 DOD-wide survey and non-generalizable focus groups that GAO conducted on 13 military installations in the United States and Germany, servicemembers who were deployed reported similar financial conditions as those who were not deployed. Some of GAO's focus group participants also noted that they--like Army Reservists in GAO's 2004 report, Military Pay: Army Reserve Soldiers Mobilized to Active Duty Experienced Significant Pay Problems--had not received their $250 family separation allowance each month during their deployment. Pay record data showed that almost 6,000 deployed servicemembers had received more than the prescribed $250 in January 2005, and 11 of them received a $3,000 catch-up, lump sum payment--the equivalent of 12 months of the allowance. This pay problem was due, in part, to service procedures being confusing and not always followed. Families who do not receive this allowance each month may experience financial strain caused by additional expenses such as extra childcare. DOD lacks an oversight framework--with results-oriented performance measures and reporting requirements--for evaluating the effectiveness of PFM programs across the services. DOD's 2002 human capital strategic plan stated that a standardized evaluation system for PFM programs is a desired goal; however, DOD does not currently have such a system. In 2003, GAO reported that DOD had included evaluative reporting measures in a draft of its PFM instruction to the services. However, the final PFM instruction issued by DOD in 2004 did not address outcome measures or contain a requirement that the services report program results to DOD because the services objected to these additional reporting requirements. Without a policy requiring evaluation and a reporting relationship between DOD and the services, DOD and Congress do not have the visibility or oversight needed to address issues related to the PFM programs. Some junior enlisted servicemembers are not receiving PFM training that is required in service regulations. While each of the services implements PFM training differently, all of the services have policies requiring that PFM training be provided to junior enlisted servicemembers. Moreover, the extent to which the PFM training is not received is unknown because most of the services do not track the completion of PFM training at the service level. Only the Army collected installation-level data and could provide a service-wide estimate of PFM training completed by junior enlisted servicemembers. Senior Army officers said PFM training had not been a priority given the need to prepare for current operations. Top-level DOD officials have repeatedly stated that financial issues directly affect servicemembers' mission readiness and should be addressed. Therefore, units whose servicemembers do not receive required PFM training risk jeopardizing their ability to meet mission requirements.
gao_GAO-02-685T	gao_GAO-02-685T_0	VERA allocates nearly 90 percent of VA’s medical care appropriation. VERA’s Design Is a Reasonable Approach to Resource Allocation VERA’s design is a reasonable approach to resource allocation and has helped promote more comparable resource allocations for comparable workloads in VA. Consistent with the literature and expert views on resource allocation, VERA allocates resources primarily on the basis of network patient workload, attempts to adjust network resources for factors beyond the control of network management, and provides protection to patients against network budget shortfalls. As a result of VERA’s approach, resources have shifted among regions to better reflect workload. In fiscal year 2001, VERA shifted approximately $921 million among networks compared to what the allocations would have been if networks received the same proportion of funding they received in fiscal year 1996, the year before VERA was implemented. To correct these weaknesses we made several recommendations which if implemented would better align approximately $200 million in resources with workloads in VA’s health care networks. VA Could Better Align Resources With Workload and Network Cost Differences To improve its network workload calculation, VERA should account for all veteran workload served—including Priority 7 veterans, who have higher incomes and no service-connected disability. To improve its adjustment for cost differences beyond networks’ control, we also recommended that VERA use more case-mix categories to adequately adjust for differences in patients’ health care needs across networks. 3). Our analysis shows that doing so would better allocate about $200 million annually. The amount of resources provided to networks through the supplemental funding process for the National Reserve Fund has continued to increase, yet VA has not been able to determine the relative contribution of factors such as imperfections in VERA, network inefficiency, or lack of managerial flexibility to close or consolidate programs or facilities to the need for supplemental resources.	Why GAO Did This Study The Veterans Equitable Resource Allocation (VERA) system allocated $17.8 billion of its $20.3 billion health care budget to 22 regional health care networks in fiscal year 2001. Before Vera resources were allocated to facilities on the basis of their historical expenditures. By aligning resources with workloads VERA shifted about$921 million among VA's networks in fiscal year 2001. VERA's design is reasonable for equitably allocating resources, but improvements could better allocate comparable resources for comparable workloads. VERA's allocations are based primarily on network workload, with adjustments made for factors beyond the control of network management. These include the health care needs of veterans and some local cost differences. VERA's design also protects patients from the effects of network budget shortfalls. What GAO Found However, GAO found that $200 million annually that could be reallocated to better align network resources with workloads. First, VERA's measurement of network workload is not accurate enough to determine each network's allocation because VERA excludes most veterans with higher incomes who do not have service-connected disabilities--about one-fifth of VA's workload. Second, VERA does not accurately adjust for cost differences among networks for differences in patients' health care needs or case mix across networks. GAO also found that the Veterans Administration has not analyzed whether the networks' need for supplemental resources--provided through the National Reserve Fund--is the result of potential problems in VERA, network inefficiency, or other factors. Without such information, VA can neither ensure the appropriateness of supplemental funding nor take corrective action.
gao_RCED-96-108	gao_RCED-96-108_0	Major Differences Between Federal and State Timber Programs Federal and state timber programs differ in their legislative and regulatory guidance, in the types of timberlands managed, and in their sources of funding. State lands generally have second-growth forests, whereas federal timberlands contain a mixture of second-growth and old-growth forests with portions set aside for wilderness and roadless areas. The Forest Service’s regulations require that these lands be managed to produce the greatest “net public benefit.” Subsequent legislation required the Forest Service to develop detailed management plans for the national forests; regulate timber harvests to ensure the protection of other resources; and allow the public to participate in the development, review, and revision of the forest plans. Funding of Federal and State Timber Programs Differs The timber programs on Washington’s and Oregon’s timberlands are funded by a legislatively specified percentage of gross timber sale receipts—generally from 25 to 36 percent. The federal agencies’ individual timber sales are based on a timber sale schedule—covering 5 years for BLM and 10 years for the Forest Service—developed from the agencies’ long-term land management plans. The States’ Timber Sales Have Fewer Legal Challenges Than Federal Sales Regardless of the level of the public’s participation in the long- and short-term planning processes, both federal and state timber sales can be subject to legal challenges. While the states’ planning processes are fairly straightforward, the federal agencies’ processes are more lengthy and expensive. Modifying these differences, however, would require changes in how the federal programs are currently structured—a complex and intricate task, involving stakeholders with varying views on how to best balance the goals of multiple resource uses.	Why GAO Did This Study Pursuant to a congressional request, GAO compared the timber sale programs of the Bureau of Land Management and Forest Service with those of Washington and Oregon, focusing on: (1) the major differences between the programs; and (2) how these differences affect agency and state planning processes. What GAO Found GAO found that: (1) the states' timber sale programs are tailored to generate timber production revenues for funding of schools and counties; (2) federal legislation requires agencies to manage their lands for the public benefit, regulate timber harvests and protect other resources, and develop detailed management plans; (3) the states adjust the amount of timber they sell to take advantage of market prices; (4) the agencies sell a steady amount of timber regardless of market forces; (5) the states' timberlands are generally available for timber production, contain only second-growth forests, and have road systems; (6) national forests are not exclusively available for timber production, contain old-growth and second-growth forests, and have road networks and exclusive wilderness areas; (7) the states' timber sales are funded by a legislatively specified percentage of gross timber sale receipts; (8) federal timber sale programs are funded by annual appropriations; (9) the states' long- and short-term planning processes are relatively short and involve generally fewer people than the federal agencies'; (10) federal agencies must develop various alternative plans, satisfy conflicting interests, incorporate the public's input, redevelop or review their plans on a regular basis, and face legal obstacles; and (11) modifying the agencies' timber sales programs to resemble the states' programs would require significant program structural changes and consideration of how to best balance the goals of multiple resource uses.
gao_GAO-09-741	gao_GAO-09-741_0	In 2007, the bill was introduced to strengthen consumer protections and included provisions that would have created a safe harbor for loans that met certain requirements. H.R. The bill would have reformed mortgage lending by, among other things, setting minimum standards for residential mortgage loans (see fig. The two standards included: Reasonable ability to repay. Most Recent Nonprime Mortgages Would Not Have Been Safe Harbor Loans and Certain Variables Associated with the Safe Harbor Requirements and Other Factors Influenced Defaults We estimate that almost three-quarters of securitized nonprime mortgages originated from 2000 through 2007 would not have been safe harbor loans. Our statistical analysis of loan data shows that certain variables associated with the safe harbor requirements—documentation of borrower income and assets, in particular—were associated with the probability of a loan default. The significance of particular safe harbor requirements varied by origination year. More specifically, the estimated percentages of nonprime loans without full documentation ranged from a low of 27 percent in 2000 to a high of almost 60 percent in 2007. Consistent with this view, H.R. For example, less than full documentation was associated with a 5.5 percentage point increase in the estimated probability of default for short-term hybrid ARMs used for home purchases, all other things being equal (see table 4). In examining the influence of safe harbor variables on the probability of default within 24 months, we controlled for other variables not associated with the safe harbor requirements, such as house price appreciation, borrower credit score, and the LTV ratio. Relevant Research and Stakeholder Perspectives Do Not Provide a Consensus View on the Bill’s Potential Impact While some research indicates that anti-predatory lending laws can reduce originations of problematic loans without overly restricting credit, research on state and local anti-predatory lending laws and the views of mortgage industry stakeholders do not provide a consensus view on the potential effects of the bill. Mortgage industry and consumer group representatives we interviewed disagreed on the bill’s potential effect on credit availability and consumer protections. Our review of eight such studies found evidence that anti-predatory lending laws can have the intended effect of reducing loans with problematic features without substantially affecting credit availability, but also that it is difficult to generalize these findings to all anti-predatory lending laws or to the potential effect of the bill. Additionally, this study found that the strength of a law’s enforcement provisions (e.g., the extent of potential liability for assignees) was not associated with changes in the estimated likelihood of subprime originations. Safe Harbor Requirements Mortgage industry representatives we interviewed generally viewed the bill’s safe harbor requirements as overly restrictive and said that these requirements would reduce mortgage options and increase the cost of credit for certain borrowers. For example, some consumer group representatives said that the bill’s assignee liability provisions should not allow for any exemptions from liability, such as allowing assignees to cure a loan (i.e., modify or refinance the loan so that it meets the bill’s minimum lending standards) to avoid liability. Appendix I: Objectives, Scope, and Methodology Our objectives were to (1) assess the proportion of recent nonprime loans that would likely have met and not met the Mortgage Reform and Anti- Predatory Lending Act of 2007’s (bill) safe harbor requirements, and how variables associated with those requirements affect loan performance; and (2) discuss relevant research and the views of mortgage industry stakeholders concerning the potential impact of key provisions of the bill on the mortgage market. The scope of our analysis was limited to the nonprime mortgages.	Why GAO Did This Study H.R. 3915 (2007), a bill introduced, but not enacted by the 110th Congress, was intended to reform mortgage lending practices to prevent a recurrence of problems in the mortgage market, particularly in the nonprime market segment. The bill would have set minimum standards for all mortgages (e.g., reasonable ability to repay) and created a "safe harbor" for loans that met certain requirements. Securitizers of safe harbor loans would be exempt from liability provisions, while securitizers of non-safe harbor loans would be subject to limited liability for loans that violated the bill's minimum standards. In response to a congressional request, this report discusses (1) the proportions of recent nonprime loans that likely would have met and not met the bill's safe harbor requirements and factors influencing the performance of these loans, and (2) relevant research and the views of mortgage industry stakeholders concerning the potential impact of key provisions of the bill on the availability of mortgage credit. To do this work, GAO analyzed a proprietary database of securitized nonprime loans, reviewed studies of state and local anti-predatory lending laws, and met with financial regulatory agencies and key mortgage industry stakeholders. What GAO Found GAO estimates that almost 75 percent of securitized nonprime mortgages originated from 2000 through 2007 would not have met H.R. 3915's safe harbor requirements, which include, among other things, full documentation of borrower income and assets, and a prohibition on mortgages for which the loan principal can increase over time. The extent to which mortgages met specific safe harbor requirements varied by origination year. For example, the percentage of nonprime mortgages with less than full documentation rose from 27 percent in 2000 to almost 60 percent in 2007. Consistent with the consumer protection purpose of the bill, GAO found that certain variables associated with the safe harbor requirements influenced the probability of a loan entering default (i.e., 90 or more days delinquent or in foreclosure) within 24 months of origination. For example, on the basis of statistical analysis, GAO estimates that, all other things being equal, less than full documentation was associated with a 5 percentage point increase in the likelihood of default for the most common type of nonprime mortgage product. GAO also found that other variables--such as house price appreciation, borrowers' credit scores, and the ratio of the loan amount to the house value--were associated with default rates. Research on state and local anti-predatory lending laws and the perspectives of mortgage industry stakeholders do not provide a consensus view on the bill's potential effects on the availability of mortgage credit. Some research indicates that anti-predatory lending laws can have the intended result of reducing loans with problematic features without substantially affecting credit availability. However, it is difficult to generalize these findings to all anti-predatory lending laws or the potential effect of the bill, in part, because of differences in the design and coverage of these laws. Mortgage industry and consumer group representatives with whom GAO spoke disagreed on the bill's potential effect on credit availability and consumer protection. For example, mortgage industry officials generally said that the bill's safe harbor, securitizer liability, and other provisions would limit mortgage options and increase the cost of credit for nonprime borrowers. In contrast, consumer groups generally stated that these provisions needed to be strengthened to protect consumers from predatory loan products.
gao_GAO-15-356	gao_GAO-15-356_0	Premium subsidy rates vary by the level of insurance coverage, the type of units covered by the policy, and the geographic diversity of crops insured. About 1 Percent Would Have Been Affected if Subsidies Were Reduced for the Highest Income Crop Insurance Participants About 1 percent of crop insurance participants that also applied for farm and conservation programs with income limits would have been affected if subsidies had been reduced for the highest income participants from 2009 through 2013, based on our analysis of RMA and FSA data. Highest Income Crop Insurance Participants Insured More Farmland and Had More Premium Subsidies Provided on Their Behalf Than Other Participants The highest income participants insured more farmland and had more premium subsidies provided on their behalf than other participants from 2009 through 2013. Reducing Crop Insurance Subsidies for the Highest Income Participants Would Have Minimal Effect on the Program and Save Millions of Dollars If crop insurance subsidies had been reduced for participants with the highest incomes from 2009 through 2013, the crop insurance program, including its actuarial soundness, would not likely be affected, according to our analysis of FSA and RMA data. The Crop Insurance Program Would Likely Remain Actuarially Sound if Subsidies Were Reduced for the Highest Income Participants RMA is directed by law to adopt rates and coverages that will improve the actuarial soundness of the crop insurance program. In addition, one of RMA’s goals is to continue to expand We determined that if Congress enacted statutory provisions to reduce premium subsidies for the highest income participants, it would most likely not affect the actuarial soundness or viability of the program because, based on our analysis of FSA and RMA data, the highest income participants (1) do not represent a lower risk to the program than participants in the remaining pool, (2) would be unlikely to leave the program, and (3) represent only about 1 percent of all participants and premiums in the program. In addition, since their premiums generally correspond to their likelihood of collecting claims payments, their decisions to stay in or leave the program would not affect its actuarial soundness at the national level. Reducing Subsidies for the Highest Income Participants Would Have Saved Millions from 2009 through 2013 If crop insurance premium subsidies had been reduced by 15 percentage points for the highest income participants that applied to farm and conservation programs with income limits each year from 2009 through 2013, the federal government would have saved more than $70 million over the 5-year period, according to our analysis of FSA and RMA data. USDA Could Use Existing Procedures to Reduce Crop Insurance Subsidies for the Highest Income Participants USDA could use existing procedures without adding requirements for a majority of crop insurance participants if a statutory provision were enacted directing USDA to reduce premium subsidies for the highest income participants. FSA, in cooperation with the IRS, has existing procedures to verify participants’ compliance with income limits applicable to farm and conservation programs. About two-thirds of crop insurance participants, on average, also participated in farm and conservation programs that have income limits. For example, RMA and FSA would need to reconcile their data on entities because members of entities—which are subject to income limits—may be reported differently for crop insurance and farm and conservation programs, according to RMA officials. RMA, FSA, and NRCS are also developing procedures to administer the conservation compliance requirements in the 2014 farm bill that may help administer premium subsidy reductions for the highest income crop insurance participants. Conclusions The federal crop insurance program plays a critical role in helping participants manage the risk that is inherent in farming. Matter for Congressional Consideration To reduce the cost of the crop insurance program and achieve budgetary savings for deficit reduction or other purposes, Congress should consider reducing premium subsidies for the highest income participants. In its written comments, reproduced in appendix VI, USDA said it had no comment on the draft report. Appendix I: Objectives, Scope, and Methodology Our objectives were to determine, if premium subsidies were reduced for participants with the highest incomes, (1) the percentage and characteristics of participants that would be affected; (2) the impact, if any, on the crop insurance program; and (3) how the U.S. Department of Agriculture (USDA) could implement a reduction in premium subsidies for the highest income participants. There are trade-offs in choosing the number of years of data to examine. We reviewed industry and academic publications and testimonies to identify challenges that may be posed by administering a provision that would reduce premium subsidies for the highest income participants.	Why GAO Did This Study The federally subsidized crop insurance program helps about 1 million participants manage the risk inherent in farming. In recent years, the government's costs for the crop insurance program have increased substantially, and these costs have come under scrutiny as the nation's budgetary pressures have been increasing. Unlike farm and conservation programs, the crop insurance program provides the same level of subsidies to participants regardless of their income. GAO was asked to examine the potential effects of reducing premium subsidies for the highest income crop insurance participants. This report examines: (1) the percentage and characteristics of participants that would be affected; (2) the impact, if any, on the crop insurance program; and (3) how USDA could implement a reduction in premium subsidies for the highest income participants. GAO analyzed RMA crop insurance data and FSA data on compliance with income limits from 2009 through 2013 (most recent year of available data), analyzed RMA data to examine the impact on the program and calculate potential savings, reviewed agency guidance and industry and academic publications, and interviewed USDA officials and stakeholders. What GAO Found About 1 percent of crop insurance participants would have been affected if premium subsidies had been reduced for the highest income participants from 2009 through 2013, based on GAO's analysis of data from the U.S. Department of Agriculture's (USDA) Risk Management Agency (RMA) and Farm Service Agency (FSA). The highest income participants were those with incomes that exceeded limits in place for farm and conservation programs. In terms of characteristics, the highest income participants insured more farmland and had more premium subsidies provided on their behalf than other participants from 2009 through 2013. However, all crop insurance participants generally insured major crops, such as corn, soybeans, and wheat, while the highest income participants were more likely to insure specialty crops such as fruits, vegetables, and nursery crops. The highest income participants also made similar choices as other participants in terms of the type of crop insurance and the levels of coverage they chose. Reducing crop insurance subsidies for the highest income participants would have a minimal effect on the program and save millions of dollars. RMA is directed by law to adopt rates and coverages that will improve the actuarial soundness of the crop insurance program. Actuarial soundness under the program means that premiums are adequate to cover expected claims and a reasonable reserve. Based on GAO's analysis of agency data, participants' premiums generally corresponded to their likelihood of collecting claims payments, regardless of their income level. Also, the highest income participants account for only about 1 percent of the premiums in the program. As a result, their decisions to stay in or leave the program would likely not affect the crop insurance program's actuarial soundness at the national level. If premium subsidies had been reduced by 15 percentage points for the highest income participants from 2009 through 2013, the federal government would have saved more than $70 million over the 5-year period, according to GAO's analysis of agency data. The current income limit, enacted in 2014 for farm and conservation programs, would likely affect fewer crop insurance participants than did the previous limit. Consequently, the savings would be smaller. USDA could use existing procedures to implement a reduction in subsidies for the highest income participants. FSA has procedures to verify participants' compliance with income limits applicable to some farm and conservation programs. About two-thirds of crop insurance participants, on average, participated in programs that had income limits from 2009 through 2013 and would not need to provide additional information. Opportunities exist for RMA to access FSA's eligibility data system and work with insurance companies to apply the reduction in premium subsidies for the highest income participants. According to RMA officials, administering a provision that would reduce premium subsidies for the highest income participants would pose some challenges. For example, RMA and FSA would need to reconcile certain data on participants that are subject to the income limit. However, USDA is developing procedures to administer conservation compliance requirements in the Agricultural Act of 2014 that could help administer a premium subsidy reduction for the highest income crop insurance participants. What GAO Recommends To reduce the cost of the crop insurance program and achieve budgetary savings for deficit reduction or other purposes, Congress should consider reducing premium subsidies for the highest income participants. In written comments, USDA stated that it had no comments on the draft report.
gao_GAO-08-168	gao_GAO-08-168_0	Compliance with a Selected Provision of Law Our tests for compliance in fiscal year 2007 with the statutory debt limit disclosed no instances of noncompliance that would be reportable under U.S. generally accepted government auditing standards or applicable OMB audit guidance. In order to fulfill these responsibilities, we examined, on a test basis, evidence supporting the amounts and disclosures in the Schedules of Federal Debt; assessed the accounting principles used and any significant estimates evaluated the overall presentation of the Schedules of Federal Debt; obtained an understanding of the entity and its operations, including its internal control relevant to the Schedule of Federal Debt as of September 30, 2007, related to financial reporting and compliance with laws and regulations (including execution of transactions in accordance with budget authority); tested relevant internal controls over financial reporting and compliance, and evaluated the design and operating effectiveness of internal control relevant to the Schedule of Federal Debt as of September 30, 2007; considered the process for evaluating and reporting on internal control and financial management systems under the Federal Managers’ Financial Integrity Act; and tested compliance in fiscal year 2007 with the statutory debt limit (31 U.S.C. The comments are reprinted in appendix I. Overview, Schedules, and Notes Federal debt managed by the Bureau of the Public Debt (BPD) comprises debt held by the public and debt held by certain federal government accounts, the latter of which is referred to as intragovernmental debt holdings. As of September 30, 2007 and 2006, outstanding gross federal debt managed by the bureau totaled $8,993 and $8,493 billion, respectively. The increase in gross federal debt of $500 billion during fiscal year 2007 was due to an increase in gross intragovernmental debt holdings of $294 billion and an increase in gross debt held by the public of $206 billion. The increases in debt held by the public are due primarily to total federal spending exceeding total federal revenues. However, this interest represents a claim on future budgetary resources and hence an obligation on future taxpayers. (in billions) Debt held by the public reflects how much of the nation’s wealth has been absorbed by the federal government to finance prior federal spending in excess of total federal revenues. Intragovernmental debt holdings represent balances of Treasury securities held by over 230 individual federal government accounts with either the authority or the requirement to invest excess receipts in special U.S. Treasury securities that are guaranteed for principal and interest by the full faith and credit of the U.S. Government. Projections determined that the United States would hit the statutory debt limit on October 1, 2007, and consequently, the full senate passed this measure to raise the debt limit by $850 billion on September 27, 2007. On September 29, 2007, Public Law 110-91 was enacted, which raised the statutory debt ceiling to $9,815 billion. As a result, total federal debt increased almost five fold between 1982 and 1997. By law, trust funds have the authority or are required to invest surpluses in federal securities. Notes to the Schedules of Federal Debt Notes to the Schedules of Federal Debt Managed by the Bureau of the Public Debt For the Fiscal Years Ended September 30, 2007 and 2006 (Dollars in Millions) Note 1. Intragovernmental Debt Holdings primarily consist of GAS securities.	Why GAO Did This Study GAO is required to audit the consolidated financial statements of the U.S. government. Due to the significance of the federal debt held by the public to the governmentwide financial statements, GAO has also been auditing the Bureau of the Public Debt's (BPD) Schedules of Federal Debt annually. The audit of these schedules is done to determine whether, in all material respects, (1) the schedules are reliable and (2) BPD management maintained effective internal control relevant to the Schedule of Federal Debt. Further, GAO tests compliance with a significant selected provision of law related to the Schedule of Federal Debt. Federal debt managed by BPD consists of Treasury securities held by the public and by certain federal government accounts, referred to as intragovernmental debt holdings. The level of debt held by the public reflects how much of the nation's wealth has been absorbed by the federal government to finance prior federal spending in excess of federal revenues. Intragovernmental debt holdings represent balances of Treasury securities held by federal government accounts, primarily federal trust funds such as Social Security, that typically have an obligation to invest their excess annual receipts over disbursements in federal securities. What GAO Found In GAO's opinion, BPD's Schedules of Federal Debt for fiscal years 2007 and 2006 were fairly presented in all material respects and BPD maintained effective internal control relevant to the Schedule of Federal Debt as of September 30, 2007. GAO also found no instances of noncompliance in fiscal year 2007 with the statutory debt limit. As of September 30, 2007 and 2006, federal debt managed by BPD totaled about $8,993 billion and $8,493 billion, respectively. Total federal debt increased over each of the last 4 fiscal years. Total federal spending has exceeded total federal revenues which have resulted in increases in debt held by the public. Further, certain trust funds (e.g., Social Security) continue to run cash surpluses, resulting in increased intragovernmental debt holdings since the federal government spends these surpluses on other operating costs and replaces them with federal debt instruments. These debt holdings are backed by the full faith and credit of the U.S. government and represent a priority call on future budgetary resources. As a result, total gross federal debt has increased about 33 percent between the end of fiscal years 2003 and 2007. On September 29, 2007, legislation was enacted to raise the statutory debt limit by $850 billion to $9,815 billion. This was the third occurrence since the end of fiscal year 2003 that the statutory debt limit had to be raised to avoid breaching the statutory debt limit. During that time, the debt limit has increased by over $2.4 trillion, or about 33 percent, from $7,384 billion on September 30, 2003, to the current limit of $9,815 billion.
gao_GAO-10-907	gao_GAO-10-907_0	1.) The Air Ambulance Industry Has Seen Growth and Structural Change, but Perspectives Differ on Implications for Availability, Efficient Use, Safety, and Services Provided From 1999 through 2008, the number of patients transported by helicopter air ambulances increased from just over 200,000 to over 270,000, or about 35 percent, and the number of air ambulance helicopters increased from 360 to 677, or by about 88 percent. Since 1999, the structure of the air ambulance industry has also changed. Stakeholders concerned with the growth in the industry, noted that the increase in the number of helicopters has been focused in areas that already have multiple air ambulance services while rural areas remain underserved. Literature Indicates That Questions about the Medical Necessity of Some Air Ambulance Transports Have Existed for Decades Stakeholders concerned with industry growth believe that uncontrolled growth of air ambulances in a region leads to medically unnecessary use— that is, when an air ambulance is dispatched for a patient whose injury or illness is not severe enough for the patient to need air transport. They maintain that providers’ high fixed costs create economic pressure to fly, and the concentration of many air ambulances in a geographic area further exacerbates this pressure. However, some instances perceived as call jumping may stem from a lack of communication among first responders. Perspectives Differ on the Impact of Cost-Related Business Decisions on the Services Provided in Air Ambulances Stakeholders concerned with the growth of the industry assert that economic pressures have led some air ambulance providers to cut costs by using smaller, less expensive helicopters and less experienced medical crews. Stakeholders have expressed concern that the open-ended nature of this statement allows any medical regulation to be challenged as an economic regulation and thus be preempted under the ADA. Several federal legislative proposals seek to clarify the states’ role in regulating medical issues and to allow the states to institute certain types of economic regulation for air ambulances, including certificate of need requirements, by carving out an exception to the ADA’s preemption of state regulation of prices, routes, and services. Since 1986, DOT has issued only eight opinion letters in response to inquiries on the limits of federal and state authority over air ambulances. As stated in the report, the objectives of our work were to examine how the air ambulance industry had changed over the last decade and the implications of these changes, as well as to examine the relationship between the federal and state oversight and regulation of the industry. Comments provided by ACCT, AMOA, and NASEMSO were generally reflective of their views regarding the implications of the changes in the air ambulance industry and the role of states in regulating the industry. To determine how the U.S. air ambulance industry changed from 1999 through 2008, we obtained and analyzed available data that provided information on the growth and evolution of the industry, including shifts in business models, and the types of air ambulance aircraft that are used to provide services. To determine the relationship between federal and state oversight and regulation of the air ambulance industry, we reviewed federal aviation laws, and the Airline Deregulation Act (ADA) of 1978, and challenges to state authority to regulate in matters that are federally preempted under these acts. We also reviewed Department of Transportation (DOT) General Counsel letters and state attorneys general opinion letters to state officials or attorneys. Mileski, S.E. Knowlton, and S.A. Bowers. 2 no. “Physician Presence on a Helicopter Emergency Medical Service: Necessary Or Desirable?” Aviation, Space, and Environmental Medicine vol.	Why GAO Did This Study Changes in the air ambulance industry's size and structure have led to differences of opinion about the implications for air ambulance use, safety, and services. Some industry stakeholders believe that greater state regulation would be good for consumers. While states can regulate the medical aspects of air ambulances, the Airline Deregulation Act (ADA) preempts states from economic regulation--i.e., regulating rates, routes, and services--of air ambulances. Other stakeholders view the industry changes as having been beneficial to consumers and see no need for a regulatory change. Asked to review the U.S. air ambulance industry, GAO examined (1) changes in the industry in the last decade and the implications of these changes on the availability of air ambulances and patient services and (2) the relationship between federal and state oversight and regulation of the industry. GAO analyzed available data about the industry; synthesized empirically based literature on the industry; visited four air ambulance providers with differing views on the industry changes; and interviewed federal and industry officials. What GAO Found From 1999 through 2008, the number of patients transported by helicopter air ambulance increased from just over 200,000 to over 270,000, or by about 35 percent, and the number of dedicated air ambulance helicopters increased from 360 to 677, or by about 88 percent. During the same period, the structure of the industry changed from a preponderance of providers affiliated with a specific hospital to a fairly even split between hospital-based and independent providers, often located outside hospitals, in suburban or rural communities. Perspectives on the implications of these changes vary. Supporters of the existing regulatory framework say that the growth in the number of helicopters provides, among other things, flexibility to perform aircraft maintenance on some helicopters while keeping others available to respond as needed. Proponents of a change in the regulatory framework maintain that the growth in helicopters has led to medically unnecessary flights. These stakeholders assert that high fixed costs create economic pressure to fly in unsafe weather and use less costly small helicopters that limit some patient services. GAO found few data that support either perspective. Court cases and advisory opinions from the Department of Transportation (DOT) have helped to clarify the relationship between federal and state oversight and regulation of the air ambulance industry, but DOT has acknowledged a continuing lack of clarity in some areas. Generally, the federal government has authority and oversight concerning the economic and safety aspects of the industry; states--which are preempted from regulating matters related to prices, routes, and services--have authority over the medical aspects. However, when both economic and medical or safety and medical issues are involved, questions about jurisdiction may arise. To resolve such questions, states have sought DOT's opinion and, in response, DOT has issued eight opinion letters since 1986. Some state officials have expressed concerns, particularly in relation to a DOT opinion letter on Hawaii laws, that the open-ended nature of the opinion could allow any medical regulation to be challenged as an economic regulation and thus be preempted under the ADA. States can continue to seek DOT's opinion on a case-by-case basis, as further questions surface. Additionally, states can also contract directly with air ambulance providers, which would allow states to control specific services as the customer. What GAO Recommends GAO is not making recommendations in this report. GAO incorporated comments on a draft this report from the appropriate federal agencies and key industry and emergency medical services stakeholders.
gao_GAO-16-805	gao_GAO-16-805_0	Figure 1 shows the DRC’s provinces and adjoining countries. 2). The act required that SEC promulgate disclosure and reporting regulations regarding the use of conflict minerals from the DRC and adjoining countries (or “Covered Countries”) by April 2011. A higher estimated percentage of companies in 2015, compared to 2014, disclosed that they knew or had reason to believe they knew the source of the conflict minerals in their products as a result of performing an RCOI, which indicates that they have more information about their supply chains. Companies Reported Performing Due Diligence, but the Majority Were Still Unable to Confirm the Origin of Their Products’ Conflict Minerals or Whether They Benefited Armed Groups Although a higher percentage of companies reported that they were able to make a determination about the country of origin based on their RCOI than in 2014, after conducting due diligence, the majority were unable to confirm the origin of the conflict minerals in their products or whether the minerals financed or benefited armed groups in the Covered Countries. An estimated 80 percent of all companies that performed an RCOI in 2015—which is almost all companies that filed a Form SD with SEC— reported that they exercised due diligence. Based on our analysis, an estimated 79 percent of the companies should have filed a conflict minerals report as an exhibit to the Form SD (similar to an estimated 71 percent in 2014); almost all—an estimated 97 percent—of those companies did so. Uncertainty about Source and Chain of Custody of Conflict Minerals at Processing Facilities May Pose Challenges to Companies’ Due Diligence Efforts, but Industry and Others’ Efforts May Reduce Risks SEC-filing companies face challenges in their due diligence efforts related to uncertainty about the source and chain of custody of conflict minerals processed by processing facilities because (1) these facilities generally rely on documentary evidence from upstream stakeholders that may be susceptible to fraud, and (2) the complexity of processing operations also introduces fraud risk and may increase the cost associated with disclosure efforts. The act requires that Commerce annually report a listing of all known conflict mineral processing facilities worldwide, among other things. Commerce Has Not Developed Plans to Assess or Advise Audits of Conflict Minerals Filings As of July 2016, Commerce had not submitted to Congress a report that includes an assessment of the accuracy of IPSAs and other due diligence efforts described by the Dodd-Frank Act conflict minerals provisions as well as recommendations for improving the accuracy of the IPSAs, as required by the Dodd-Frank Act—nor had it developed a plan for doing so. These officials added that they would conduct a review based on the 19 IPSAs filed in 2016. Until Commerce fulfills these requirements, SEC-filing companies may face additional challenges. Recommendation for Executive Action To improve the effectiveness of the SEC’s conflict minerals disclosure rule, the Secretary of Commerce should take the following action: Submit to the appropriate congressional committees a plan outlining steps that Commerce will take, with associated time frames, to assess the accuracy of the independent private sector audits (IPSA) and other due diligence processes described under section 13(p) of the Securities Exchange Act of 1934; develop recommendations for the process used to carry out such audits, including ways to improve the accuracy of the audits and establish standards of best practices for such audits; and acquire the necessary knowledge, skills, and abilities to carry out these responsibilities. Appendix II: Objectives, Scope, and Methodology To examine the second annual company disclosures filed with the Securities and Exchange Commission (SEC) in 2015 in response to the SEC conflict minerals disclosure rule, we downloaded the Specialized Disclosure reports (Form SD) and Conflict Minerals Reports (CMR) from SEC’s publically available Electronic Data Gathering, Analysis, and Retrieval (EDGAR) database on September 15, 2015. To examine actions that Commerce has taken regarding its conflict minerals-related requirements under the Dodd-Frank Act, we interviewed Commerce officials and reviewed relevant documentation and reports. In response to a mandate in the Dodd-Frank Act that GAO submit an annual report that assesses the rate of sexual violence in war-torn areas of the Democratic Republic of the Congo (DRC) and adjoining countries, we identified and assessed any additional published information available on sexual violence in eastern DRC, as well as three adjoining countries that border eastern DRC—Rwanda, Uganda, and Burundi—since our August 2015 report on sexual violence in these areas.	Why GAO Did This Study Armed groups in eastern DRC continue to profit from the exploitation of minerals, according to the United Nations. Congress included a provision in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act that, among other things, required SEC to promulgate regulations regarding the use of conflict minerals from the DRC and adjoining countries. The act also required Commerce to develop a list of worldwide processing facilities and to assess IPSAs filed in conjunction with SEC disclosures, and included provisions for GAO to assess the SEC regulations' effectiveness in promoting peace and security and report on the rate of sexual violence in the DRC and adjoining countries. This report examines (1) company disclosures filed in 2015 in response to the SEC conflict minerals regulations, (2) challenges to companies' due diligence efforts related to the processing facilities in conflict minerals supply chains and efforts to mitigate those challenges, and (3) Commerce's actions regarding its conflict minerals-related requirements under the Dodd-Frank Act. The report also provides information on sexual violence in the DRC and three adjoining countries. GAO analyzed a generalizable random sample of SEC filings and interviewed relevant officials. What GAO Found As a result of country-of-origin inquiries, an estimated 19 percent more companies that filed a specialized disclosure form (Form SD) with the Securities and Exchange Commission (SEC) reported that they knew or had reason to believe they knew the source of the conflict minerals in their products in 2015 than in 2014, based on a generalizable sample of filings GAO reviewed. However, after an estimated 79 percent of the companies that filed a Form SD performed due diligence, an estimated 67 percent of them reported they were unable to confirm the source of the conflict minerals in their products, and about 97 percent of them reported that they could not determine whether the conflict minerals financed or benefited armed groups in the Democratic Republic of the Congo (DRC) and adjoining countries. Facilities that process conflict minerals pose challenges to the disclosure efforts of companies filing a Form SD because (1) these facilities generally rely on documentary evidence about the origin of conflict minerals, which may be susceptible to fraud; and (2) multiple levels of processing operations introduce fraud risk and may increase the cost associated with disclosures. Industry and other stakeholders have developed or are pursuing efforts to mitigate these risks, such as chemical “fingerprinting” to verify documentary evidence. As of July 2016, the Department of Commerce (Commerce) had not submitted a report that was required in January 2013, assessing the accuracy of the Independent Private Sector Audits (IPSA) filed by some companies that filed a Form SD, nor had it developed a plan to do so . Ten companies filed the audits between 2014 and 2015 as part of their Conflict Minerals Reports, none of which Commerce has assessed. Commerce officials said they established a team in March 2016, but they noted that they did not have the knowledge, skills, or expertise to conduct IPSA reviews or to establish best practices. As a result, Congress lacks information on the accuracy of the IPSAs and other due diligence processes used by filing companies. What GAO Recommends GAO recommends that Commerce establish a plan outlining steps and time frames for assessing the accuracy of due diligence processes such as IPSAs, and developing the necessary expertise to fulfill these requirements. Commerce concurred with GAO's recommendation.
gao_T-GGD-96-84	gao_T-GGD-96-84_0	U.S. and European Approaches to Combating Money Laundering Through Financial Institutions Until recently, U.S. banking regulators’ anti-money-laundering efforts relied heavily on regulations requiring financial institutions to routinely report currency transactions that exceed $10,000, primarily through filing currency transaction reports (CTR) with the IRS. U.S. Review of Some Overseas Bank Branches Faces Obstacles According to U.S. banking regulators, bank privacy and data protection laws in some countries serve to prevent U.S. regulators from examining U.S. bank branches located within their borders. While European law enforcement officials acknowledged the important role U.S. law enforcement agencies play in criminal investigations involving money laundering, some commented about the difficulties of dealing with multiple agencies. This overlap makes it difficult, in some money-laundering inquiries, to determine which U.S. agency they should coordinate with. International Arrangements to Combat Overseas Money Laundering The United States works with other countries through multilateral and bilateral treaties and arrangements to establish global anti-money-laundering policies, enhance cooperation, and facilitate the exchange of information on money-laundering investigations.	Why GAO Did This Study GAO discussed U.S. efforts to combat money laundering abroad. What GAO Found GAO noted that: (1) U.S. bank regulators rely on financial institutions' reporting currency transactions that exceed $10,000, involve known or suspected money laundering, or are inconsistent with the account holder's stated business; (2) European countries focus their anti-laundering efforts less on routine currency transaction reports and more on reports of suspicious activities; (3) host countries' anti-laundering and bank privacy and protection laws, to which overseas branches of U.S. banks must adhere, sometimes hinder U.S. bank regulators' reviews of overseas branches, and examinations of overseas banks tend to be more narrowly scoped; (4) while European law enforcement officials acknowledged the important role of several U.S. law enforcement agencies in anti-laundering activities, they also indicated that it was difficult to determine which U.S. agency they should coordinate efforts with; and (5) the United States works with other countries through multilateral and bilateral treaties and arrangements to establish global anti-laundering policies, enhance cooperation, and facilitate the exchange of information on money-laundering investigations.
gao_GAO-02-692	gao_GAO-02-692_0	In response to growing public concerns and recognition that further assessment of the system was needed, the Navy decided to initiate an environmental impact statement process. Because there is some potential for incidental harm to marine mammals, the Navy must obtain a Letter of Authorization from the National Marine Fisheries Service before SURTASS/LFA can be used. The decision on the authorization is expected later in 2002. As a result, a system such as SURTASS/LFA can provide the means to detect enemy submarines before they can get within the effective weapons range of U.S. ships. Demonstration of Capabilities Results of SURTASS/LFA testing to date show that the system will increase the Navy’s capability to detect modern submarines at long range in deep, open ocean areas. The Navy planned for the evaluation to primarily focus on demonstrating the system’s capabilities in the open ocean. Other Antisubmarine Warfare Technologies Complement but Are Not Substitutes for SURTASS/LFA Since the beginning of the program, the Navy has considered a number of existing and potential alternatives to SURTASS/LFA, and each time it found that the system provides long-range detection capabilities other systems could not provide.	What GAO Found For decades, the Navy has been striving to improve its ability to detect potential enemy submarines before they can get within effective weapons range of U.S. forces. In 1985, the Navy established the Surveillance Towed Array Sensor System (SURTASS) Low Frequency Active (LFA) sonar program to develop a long-range capability for detecting a new generation of quieter Soviet nuclear and diesel submarines operating principally in the open ocean. However, as the Navy conducted testing of the system in the mid-1990s, some public interest groups and scientists raised concerns that SURTASS/LFA may cause harm to marine mammals. The Navy discontinued operational testing of the system and initiated an environmental impact statement process. The Navy will not begin testing or operating the system until it receives a Letter of Authorization from the National Marine Fisheries Service. A decision on the authorization is expected later in 2002. SURTASS/LFA will increase the Navy's capability to detect submarines in the open ocean, where the system was originally intended to operate. The Navy has considered a number of existing alternatives to SURTASS/LFA and found that the system provides long-range detection capabilities not available with other systems.
gao_GAO-02-679T	gao_GAO-02-679T_0	When federal welfare reform was enacted in 1996, states implemented a variety of initiatives intended to help families move from welfare to the workforce. Welfare reform provided states additional flexibility in helping cash assistance recipients to both find work and achieve family independence. Transitional Medicaid Assistance Can Provide Continued Insurance Coverage Because of limitations in the availability of private insurance—especially for low-paid, part-time workers and those in certain industry sectors that often characterize jobs available to individuals moving from cash assistance to work—transitional Medicaid assistance is an important option for health insurance coverage. However, even with such successful enrollment efforts, many families did not receive the full transitional Medicaid assistance benefits because they failed to periodically report their income as required. The Medicaid statute requires that beneficiaries report their income three times during the 12 months of transitional Medicaid assistance: once in the first 6-month period and twice in the second 6-month period. Precedent for a full year of coverage in Medicaid has been provided in other aspects of the Medicaid program. A similar approach could facilitate uninterrupted health insurance coverage for families that are moving from cash assistance to the workforce.	What GAO Found Welfare reform significantly changed federal policy for low-income families with children and established a five-year lifetime limit on cash assistance. Welfare reform also extended transitional Medicaid assistance through 2001. States have implemented various initiatives to help families move from cash assistance to the workforce, including some enhancements to transitional Medicaid. These initiatives likely helped to cut cash assistance caseloads by more than half from 1996 through mid-2001. Low-wage or part-time jobs--which are common for newly working individuals--often do not come with affordable health insurance, thus making transitional Medicaid coverage an important option. The implementation of transitional Medicaid assistance varied across the 21 states that GAO reviewed. State practices enhanced beneficiaries' ability to retain Medicaid coverage. However, many families did not receive their full transitional Medicaid assistance benefits because they failed to report their income three times during the 12-month period of coverage. Amending the Medicaid statute to provide states with greater flexibility to ease income-reporting requirements, as has been done for other aspects of the Medicaid program, could facilitate uninterrupted health insurance coverage for families moving from cash assistance to the workforce.
gao_GAO-10-197	gao_GAO-10-197_0	For example, a state should propose a CMP or a DPNA with the minimum notice period. States Considered Factors Other Than Rank When Selecting SFFs, Which Were More Likely to Be Chain Affiliated and For-Profit Than Other Nursing Homes When selecting SFFs from the candidate list, state officials considered factors other than rank, such as their own knowledge of each candidate’s circumstances. Such discretion is key not only because of states’ familiarity with each candidate’s circumstances but also because the list has limitations. For example, SFFs were more likely than other homes to be chain affiliated and for-profit and to have more beds and more total residents. While the first-ranked candidate (the worst performing home) was selected about 17 percent of the time from January 2006 through February 2009, about 57 percent of SFFs selected during that period were among the five worst-ranked candidates. As noted in our August 2009 report, the candidate list identifies poorly performing nursing homes in each state but does not necessarily identify the most poorly performing nursing homes in the nation. Comparing the characteristics of 133 homes in the SFF Program as of February 2009 to those of other homes, we found that they differed in terms of type of organization and participation in Medicare and Medicaid, the number of beds and residents, nurse staffing levels, and ratings on CMS’s Five-Star System. State and Regional Office Adherence to SFF Program Guidance Was Uneven, but Most SFFs Improved Their Performance While in the Program We found that some states did not consistently follow CMS’s basic SFF Program requirements, such as surveying SFFs twice a year. We also found that CMS’s enforcement guidance is vague and results in inconsistent interpretations. Most SFFs did eventually graduate, not all met CMS’s graduation criteria, and some remained in the program well beyond CMS’s 18-month time frame for improvement. While states improved their compliance with this requirement in fiscal year 2008—8 states did not conduct two surveys for SFFs, compared to 26 states in the previous fiscal year—some SFFs were still not receiving increased scrutiny through additional standard surveys, a fundamental component of the program. Active SFFs. For example, CMS began identifying SFFs on its Nursing Home Compare Web site each month. Other Quality Improvement Strategies to Assist SFFs Have Merit, and Some Could Inform CMS Efforts While the core of the SFF Program is more frequent surveys and stringent enforcement, CMS and others have adopted a variety of other quality improvement strategies to help address care problems identified at SFFs and other nursing homes; both the HHS OIG and state strategies hold potential lessons that could help inform CMS’s efforts. In general, regional offices have used SIAs as an alternative to terminating homes that had been in the program for 18 months. For example, QIOs are required to conduct an on-site assessment of each home to identify the underlyin causes of poor quality of care, prepare a root-cause analysis based on those findings, and develop an action plan to address the home’s problems. Some States Have Also Adopted Nursing Home Quality Improvement Strategies That Are Relevant to CMS’s Efforts to Address SFF Quality Problems Officials from the majority of the 14 states we interviewed detailed strategies they use to promote quality improvement in nursing homes, including poorly performing homes. For example, one SFF received no civil money penalties even though it was cited for consecutive deficiencies that could have resulted in fines ranging from $300 to $825 per day of noncompliance, while a home with a similar compliance history received CMPs that increased from $300 to $600 per day of noncompliance, suggesting that CMS’s monitoring of enforcement is insufficient. We selected a nongeneralizable sample of 14 states to interview based on a combination of factors, including: (1) the number of SFFs allocated to the state, (2) the inclusion of at least one state from each CMS region, (3) states that had many homes with high SFF scores, (4) the number of SFFs that either graduated from the program or were terminated from Medicare and Medicaid for failing to improve their performance, (5) the use of Systems Improvement Agreements, and (6) the existence of state ranking methodologies. To determine the factors that states considered in selecting SFFs from January 2006 through February 2009, we determined the rank of each home on the candidate list that was generated before, but closest to, the date of that home’s selection for the program.	Why GAO Did This Study CMS established the Special Focus Facility (SFF) Program in 1998 to help address poor nursing home performance. States select a subset of homes as SFFs from a list of the 15 poorest performing homes in each state, but the program is limited to 136 homes nationwide because of resource constraints. CMS guidance directs states to survey SFFs twice as frequently as other homes and to propose more robust enforcement, including termination, for SFFs that fail to improve within about 18 months. GAO was asked to (1) determine the factors states consider in selecting SFFs and how SFFs differed from other nursing homes, (2) evaluate CMS regional office and state adherence to program guidance and the program's impact on homes' performance, and (3) identify other strategies that have been used to improve poorly performing homes. In general, GAO's analysis used CMS data from 2005 through 2009 on SFFs and other homes as well as interviews with officials in 14 states selected based on the number of SFFs in each state and other factors. What GAO Found When selecting SFFs from the candidate list, state officials considered factors other than rank on that list, such as their own knowledge of each candidate's circumstances. For example, state officials might not select a nursing home as an SFF if the home had a new owner they perceived as committed to addressing the home's quality problems. GAO found that states selected SFFs from among the five worst-ranked candidates about 57 percent of the time from January 2006 through February 2009. State discretion in selecting SFFs is key not only because of states' familiarity with each candidate's circumstances but because the list has limitations. Some officials from the 14 states that GAO interviewed noted that candidate lists included current SFFs, resulting in an insufficient number of homes from which to select new SFFs. The characteristics of SFFs differed from those of other nursing homes in terms of organization type and the number of beds and residents. For example, SFFs were more likely than other homes to be chain affiliated and for-profit and to have more beds and more total residents. GAO found that some states did not consistently follow CMS's basic SFF Program requirements. When CMS began monitoring SFF survey frequency in fiscal year 2008, 8 states did not conduct twice as many surveys for SFFs as required--a significant improvement compared to 26 states in the previous fiscal year. GAO also found that CMS's enforcement guidance is vague and results in inconsistent interpretations. For example, one SFF was assessed no civil money penalties (CMP) even though it was cited for consecutive deficiencies that could have resulted in fines of up to $825 per day of noncompliance while a home with a similar compliance history was assessed CMPs that increased from $300 to $600 per day of noncompliance. Most SFFs did eventually graduate, but not all met CMS's graduation criteria, and some SFFs remained in the program well beyond CMS's expected 18-month time frame for improvement. For example, 17 percent of active SFFs as of February 2009 had been in the program for 25 months or longer--some since 2005. However, most graduates showed significant improvement while in the program but some failed to sustain that improved performance after graduation. CMS and states have used a variety of additional strategies to help address care problems identified at SFFs and other nursing homes. For example, a few CMS regional offices have negotiated agreements requiring SFFs to take specific actions, such as hiring quality improvement consultants. In addition, each year one SFF per state can volunteer to work with an organization under contract with CMS to deal more directly with the root causes of poor quality. Some states have adopted their own quality improvement strategies that offer assistance to both poorly performing and other homes, including on-site technical assistance from nurse consultants or monthly training opportunities for nursing home staff on the most frequently cited care problems. Further, one state charges homes for the cost of additional surveys that it conducts under a program that resembles the SFF Program.
gao_GAO-09-344	gao_GAO-09-344_0	The Army Test and Evaluation Command must also provide an operational test report. Operational test and evaluation is conducted to estimate a system’s operational effectiveness and operational suitability. DOD Research and Development Efforts Have Yielded Few Products to Address Non-Lethal Weapon Needs The Joint Non-Lethal Weapons Program has conducted more than 50 research and development efforts and spent at least $386 million since 1997, but it has not developed any new weapons, and the military services have fielded 4 items stemming from these efforts that only partially fill some capability gaps identified since 1998. Among the contributing factors, we found that DOD did not prioritize departmentwide non-lethal capability gaps until 2007 and still does not have efforts under way to fully address these gaps, that DOD did not give consistent consideration to logistics and supportability in its NLW development process; and that DOD exercises limited general oversight of the program. 3). This has resulted in gaps in the timeliness and utility of key program guidance as well as limited measurement of progress and performance. NLW Program Funding Lacks Centralized Visibility Further complicating DOD’s ability to oversee its NLW program is the fact that no single organization has visibility over all spending categories, and available budget information may not fully capture all spending associated with the development of non-lethal capabilities. DOD Has Not Fully Developed Policy and Doctrine for Use and Training in Non-Lethal Weapons Capabilities DOD has begun to incorporate ideas about non-lethal capabilities into policy, doctrine, and training, but gaps in key policy decisions limit the effectiveness of doctrine changes and subsequent training. DOD has not yet clearly defined the accepted level of risk for fatality, nor has it fully developed weapons employment policies for overseas warfighting or homeland applications or ensured that warfighters and domestic responders are fully trained in NLW use. DOD has also not fully clarified what constitutes acceptable risk short of fatality. Current DOD policy defines NLW as weapons that are explicitly designed and primarily employed so as to incapacitate, and are intended to have “relatively reversible” effects. Until these issues are resolved, doctrine and training for non- lethal weapons may be limited, and the warfighter or domestic responder may have fewer options other than resorting to lethal force. DOD testing for commercial-off-the-shelf items can be even more limited than for those urgently fielded because agency officials can use contractor test data instead of conducting their own tests. DOD has begun to develop elements of a risk assessment methodology, but the methodology will not be complete until human effects testing requirements are standardized in DOD policy. DOD has not yet established a risk assessment methodology for human effects testing that is capable of identifying the potential risks associated with the use of NLW. These problems have contributed to the program’s overall limited progress in fielding suitable NLW. To help DOD more fully incorporate non-lethal concepts and capabilities into its existing and new policy and doctrine for operations overseas and in the homeland, the Secretary of Defense should direct the Under Secretary of Defense for Policy to articulate a methodology and develop a time frame for determining acceptable risk with respect to lethality and permanent injury for operators, targets, and bystanders due to the use of specific types of NLW, and the Secretary of Defense should direct the Joint Staff, in consultation with the Under Secretary of Defense for Policy and the Services, to provide clearer weapons employment guidance that can be used to modify or augment existing rules of engagement or rules for the use of force for both warfighters and domestic responders on how non-lethal weapons should be used under certain conditions, and incorporate this guidance into training curricula.	Why GAO Did This Study Nonlethal weapons (NLW) provide an alternative when lethal force is undesirable. The Department of Defense (DOD) defines NLW as those that are explicitly designed and primarily employed to incapacitate personnel or materiel, while minimizing fatalities, permanent injury to personnel, and undesired damage to property and the environment. DOD created the Joint Non-Lethal Weapons Program in 1996 to have centralized responsibility for the development of NLW and coordinate requirements among the services. GAO was asked to review the status of NLW programs within DOD and the military services by identifying the extent to which (1) DOD and the Joint Non-Lethal Weapons Program have developed and fielded NLW since the program's inception; (2) DOD has established and implemented policy, doctrine, and training for NLW; and (3) DOD has conducted testing and evaluation prior to fielding NLW. GAO reviewed and analyzed DOD and service plans, guidance, and doctrine and interviewed officials associated with NLW development. What GAO Found The joint non-lethal weapons program has conducted more than 50 research and development efforts and spent at least $386 million since 1997, but it has not developed any new weapons and the military services have fielded 4 items stemming from these efforts that only partially fill some capability gaps identified since 1998. Three major factors contribute to the program's limited progress in fully addressing capability gaps. First, DOD did not prioritize departmentwide non-lethal capability gaps until 2007 and still does not fully address these gaps. Second, DOD has not consistently incorporated logistics and supportability considerations early in the development process. As a result, DOD may miss opportunities to allocate resources more effectively. Third, DOD has exercised limited general oversight of the NLW program which has resulted in gaps in key program guidance as well as limited measurement of progress and performance. For example, DOD's road map of ongoing and projected NLW capabilities and efforts could be used to discharge oversight responsibilities, but the road map lacks guidance about how to allocate resources and evaluate performance. Further, DOD has no single organization with visibility over all spending, and available budget information may not fully capture all spending associated with the development of non-lethal capabilities. DOD has begun to incorporate ideas about non-lethal capabilities into policy, doctrine, and training but has not yet clearly articulated what constitutes acceptable risk for fatality, fully developed weapons employment policies for the use of force in overseas warfighting or homeland applications, or ensured that warfighters and domestic responders are fully trained in NLW use. Until these issues are resolved, doctrine and training for non-lethal weapons may be limited, and the warfighter or domestic responder may have fewer options other than resorting to lethal force. DOD lacks a clear methodology for estimating the human effects of non-lethal weapons and does not fully test and evaluate many non-lethal weapons because they have been fielded under urgent operational requirements that abbreviate normal DOD testing standards. Testing can be bypassed for commercial items because DOD officials can use contractor test data instead of conducting their own tests. Therefore, when NLW are fielded, commanders are uncertain about acceptable risk on targets and bystanders and cannot accurately predict their effects. DOD has begun to develop elements of a risk assessment methodology to address human effects testing; for example, it has drafted a Risk of Significant Injury scale, which broadly categorizes levels of health care capabilities required to reverse NLW effects. However, DOD has not completed a risk assessment methodology that would provide information to commanders so that they may then make a determination about its acceptability in their operating environment.
gao_GAO-11-731T	gao_GAO-11-731T_0	This waste is the result of both commercial and noncommercial activities. In addition to spent nuclear fuel generated from commercial purposes, DOE manages an inventory of about 13,000 metric tons of spent nuclear fuel and high-level nuclear waste at five DOE sites. DOE is also responsible for managing nuclear waste from a variety of other sources. The Status of the Yucca Mountain Repository Uncertainties exist about the direction of the nation’s policy for nuclear waste disposal. Under NWPA, as amended, Yucca Mountain is the only site that DOE is to investigate for suitability as a permanent nuclear waste repository. DOE investigated Yucca Mountain; in 2002 recommended the site to the President; and in 2008 submitted a license application to NRC. DOE did not cite technical or safety issues as the reason for its decision to withdraw the license application. In a May 2010 reply DOE filed before NRC’s Atomic Safety and Licensing Board, the department explained that the Secretary’s judgment is not that Yucca Mountain is unsafe or that there are flaws in the license application, but rather that Yucca Mountain is not a workable option and that alternatives will better serve the public interest. DOE stated that a key aspect of the problem was the continuing lack of public support for the repository among the people of the state of Nevada and that public acceptance is a key component of a workable solution to permanent disposal of nuclear waste. On June 29, 2010, the licensing board denied DOE’s motion, ruling that DOE was obligated under NWPA, as amended, to continue with the licensing effort. On June 30, 2010, the day after the Atomic Safety and Licensing Board denied DOE’s motion to withdraw its license application with prejudice, the NRC commissioners issued an order inviting parties— including the state of Nevada, local counties, and industry—to file briefs addressing whether the commissioners should review the board’s decision and, if so, whether they should uphold or reverse it. Amid uncertainties about the status of the repository license, DOE took steps to shut down the Yucca Mountain program and the Office of Civilian Radioactive Waste Management by September 30, 2010, when funding would have ended under the President’s budget proposal. As of May 26, 2011, the board has not ruled on the motion. DOE plans to wait for the Blue Ribbon Commission’s final recommendations, before deciding on a direction for future nuclear waste storage efforts. Each Storage Option Offers Benefits but Poses Challenges, Including High Costs The three primary nuclear waste storage and disposal options we have reported on—continued on-site storage, interim storage at a centralized facility, and permanent disposal in a geologic repository—offer benefits as well as challenges, including significant costs. Two of the options— which could be used in the interim before permanent disposal is available—provide the nation with additional time to seek approaches to nuclear waste management and disposal that might achieve broader acceptance than the Yucca Mountain permanent repository. Interim storage in general comes with benefits and challenges. Continued on-site storage. It would also result in costs to the federal government such as exposure to liabilities resulting from lawsuits against DOE, which committed to take custody of commercial nuclear waste in 1998, as required by NWPA, as amended. The federal government has paid $956 million through the Department of Treasury’s judgment fund, and DOE estimates future liability to be about $15.4 billion through 2020, plus $500 million every year after that. potential penalties of $75,000 per day, or about $27.4 million per year if DOE and the Navy fail to meet commitments to remove their spent nuclear fuel from DOE-sites in Idaho and Colorado by January 1, 2035. Interim storage at a centralized facility. Key challenges to a geologic repository are the cost and time required to site and build it and the need to gain public acceptance for the project. Principal Lessons Learned That Could Facilitate Future Nuclear Waste Storage or Disposal Efforts Our review of reports and interviews with DOE and NRC officials and representatives of various national associations, local and state governments, and community organizations, suggest two broad lessons for future waste storage or disposal efforts. Education has also helped foster public acceptance. A second broad lesson is that, in developing storage or disposal options, it is important to have consistent policy, funding, and leadership, since any such effort will take decades. Because the nation has not resolved how to manage spent nuclear fuel and high-level waste and because any future endeavor is likely to take decades and cost billions of dollars more, in our April 2011 report we raised matters Congress may wish to consider to improve the success of future nuclear waste disposal efforts. Specifically, Congress may wish to consider whether a more predictable funding mechanism and an independent organization, outside of DOE, may be more effective in developing a permanent solution to nuclear waste management.	Why GAO Did This Study The United States has generated over 75,000 metric tons of spent nuclear fuel and high-level nuclear waste--extremely hazardous substances--at 80 sites in 35 states and is expected to more than double that amount by 2055. The Nuclear Waste Policy Act of 1982 (NWPA) required the Department of Energy (DOE) to investigate a geologic repository for nuclear waste. In 1987, Congress amended NWPA to direct DOE to focus on a repository at Yucca Mountain, Nevada. In 2008, DOE submitted a license application for the repository but in March 2010 moved to withdraw it. However, the Nuclear Regulatory Commission (NRC) or the courts--as a result of federal lawsuits--might compel DOE to resume the licensing process. GAO has reported on options for interim storage of this waste and the effects a Yucca Mountain termination could have on both commercial waste and DOE-managed waste. This testimony is based on that prior work and discusses (1) the status of the Yucca Mountain repository and national policy for nuclear waste disposal, (2) options for storing nuclear waste and their benefits and challenges, and (3) principal lessons that can be learned from past nuclear waste management efforts. What GAO Found Uncertainties exist about the direction of the nation's policy for nuclear waste disposal. Under NWPA, DOE investigated Yucca Mountain as a site for a repository. In 2002, DOE recommended the site to the President and in 2008 submitted a license application to NRC. DOE is now seeking to withdraw the application from NRC's Atomic Safety and Licensing Board. DOE did not cite technical or safety issues but stated that Yucca Mountain is not a workable option because of a lack of public acceptance by the people of Nevada. On June 29, 2010, the board denied DOE's motion, ruling that NWPA requires DOE to continue the licensing effort. The NRC commissioners announced they might consider reviewing the board's decision, but as of May 26, 2011, no review had been announced. Separately, state and local governments and a private party filed suit in federal court against DOE and NRC in an effort to stop the repository termination. The court has not yet ruled. Amid this uncertainty, DOE took steps to shut down Yucca Mountain by September 30, 2010. DOE also established a Blue Ribbon Commission to evaluate alternatives for nuclear waste disposal, which plans to report by January 2012. Three primary waste storage options offer benefits but also face challenges, including high costs. Two options are for interim storage--continued on-site or centralized storage--which could allow time for research into new approaches that might have wider public acceptance than the Yucca Mountain permanent repository. Continued on-site storage would require less effort to implement since it is the current method of waste storage. However, this option could trigger significant financial liabilities as a result of industry lawsuits stemming from DOE's failure to accept the waste in 1998, as required under NWPA. The federal government has already paid $956 million, and future liabilities are estimated to be at least $15.4 billion through 2020. DOE and the Navy also might not meet certain commitments to remove their waste from two states, which could bring penalties and a suspension of the Navy's shipments of spent fuel, raising concerns about the Navy's ability to refuel its nuclear-powered warships. The second interim option, centralized interim storage, may face challenges because DOE states that it currently has no authority to implement this option. The third option, a geologic repository, is widely considered the only currently feasible option for permanently disposing of nuclear waste. DOE has faced challenges in identifying an acceptable site for permanent geologic disposal. Restarting the search would likely take decades and cost billions of dollars. Published reports and interviews--with federal, state, and local government officials and representatives of various organizations--suggest two broad lessons that can be learned from past nuclear waste management efforts. First, transparency, economic incentives, and education are important tools for gaining public acceptance. Second, it is important for any waste management strategy to have consistent policy, funding, and leadership, particularly since the process will take decades. An independent organization with a more predictable funding mechanism may be better suited than DOE to oversee nuclear waste management. What GAO Recommends GAO is making no new recommendations at this time and continues to believe that implementing the recommendations in its March (GAO-11-230) and April 2011 (GAO-11-229) reports could improve DOE's efforts to manage and store nuclear waste.
gao_NSIAD-96-3	gao_NSIAD-96-3_0	The process for determining spare and repair parts budget requests is based on data from the budget stratification reports, which show the dollar value of requirements and inventory available to meet the requirements. Overstated requirements and understated inventory levels were the major reasons items were erroneously reported in a deficit position. These problems could cause items to be erroneously reported as being in a deficit position. Because the Army is reimbursed for foreign military sale items, these items should have been excluded from the budget stratification process. The item was reported as having a deficit inventory position of $500,000. Army Is Aware of the Data Problems, but Is Waiting to Make Corrections The Army is aware of many of the processing, policy, and data problems affecting the accuracy of the requirements data. Furthermore, the Army has identified 32 change requests to correct problems with the requirements determination and supply management system. Nevertheless, not all of the requests have been approved for funding because the Department of Defense is developing a standard requirements system as part of its Corporate Information Management initiative and does not want to spend resources to upgrade existing systems. As a result, it has limited the changes that the services can make to their existing systems. Therefore, unless the data problems are corrected, they will be integrated into the standard system and the Army will still not have reliable data. Scope and Methodology We held discussions with responsible officials and reviewed Army regulations to determine the process used by the Army to identify its spare and repair parts needs for its budget development process.	Why GAO Did This Study GAO reviewed the: (1) accuracy of the databases used to determine Army spare and repair parts requirements and inventory levels for Defense Business Operations Fund budget requests; and (2) actions taken to correct data problems that could affect the reliability of these budget estimates. What GAO Found GAO found that: (1) the Army's 1994 budget report contained numerous inventory data inaccuracies which led to erroneous reports of deficit inventory positions for several items; (2) overstated requirements and understated inventory levels were the major cause of most of the false deficit position reports; (3) the actual deficit position value for 94 items was about ten-fold less than what was reported; (4) some items should have been excluded from the budget stratification process; (5) although the Army is aware of many requirements data problems and has identified several change requests to correct these problems, the Army has not been able to correct these problems because the Department of Defense (DOD) is developing a standard requirements determination system for all the services and has limited how much the services can spend to change their existing systems; (6) the new DOD standard system will not be implemented for 4 years and most of its existing data will be integrated into that system; and (7) the Army cannot ensure that its budget requests represent its actual funding needs for spare and repair parts, that the new system will receive accurate data when it is implemented, or that expensive usable items will not be discarded and reprocured.
gao_GAO-03-204	gao_GAO-03-204_0	DOT’s Evaluation Has Been Delayed and May Not Address Significant Aspects of the Job Access Program DOT has not reported to the Congress on the results of an evaluation of the Job Access Program, as TEA-21 required. DOT therefore is missing an important opportunity to provide information that could be useful as the Congress considers whether to reauthorize the program in 2003. Notwithstanding the information given to us by FTA program officials about the proposed contents for their report to the Congress, for the following reasons we continue to believe that contents of the final report are uncertain, including whether the report would evaluate the program against both program goals and selection criterion: First, FTA’s list of the performance indicators that FTA proposed for its report to the Congress did not specify how FTA would collect these additional performance data—an important consideration given the results of FTA’s earlier efforts to collect performance data from the Job Access grantees. Varied Services Delivered and Collaboration Improved, but Projects’ Sustainability and Use of Federal Funds Can Be Improved In awarding over $355 million in grants in 42 states through fiscal year 2002, the Job Access Program funded such services as extending existing bus routes to serve low-income populations and implementing services that provide information to clients about available transportation services and their use. Forty-one percent of the Job Access grantees used vans to serve low-income people. Another 47 percent of the grantees responded that they were uncertain about their ability to continue their services. The remaining 12 percent reported that they would continue their projects at the same or expanded levels after the end of their Job Access funding. Conclusions Because DOT has not evaluated the Job Access Program and reported the findings to the Congress as required by law, the department is missing an opportunity to provide important information on a timely basis to the Congress on the effectiveness of the program. FTA program officials have not provided us with a specific date for issuing the report because the draft must still be reviewed and approved by the Office of the Secretary of Transportation and the Office of Management and Budget before release to the Congress. In addition, the usefulness of the report is also in doubt: If the report contains information only on employment sites, then it would address only the first program goal of providing transportation services to low-income people while ignoring the other goal of promoting collaboration in the design, financing, and delivery of those services and the criterion of ensuring that Job Access projects are financially sustainable after the end of program funding. Include in the report to the Congress, an evaluative methodology that examines the Job Access Program’s effectiveness in meeting its goals of (1) establishing transportation-related services that help low-income individuals, including welfare recipients, reach jobs and employment support services, such as child care and training, and (2) increasing planning, financial, and service delivery collaboration among local transportation providers, human services agencies, and others in providing access to employment and employment support services. The Transportation Equity Act has mandated the GAO for the 21st Century (TEA-21) to periodically examine how the Department of Transportation’s Federal Transit Administration (FTA) is implementing the Access to Jobs Program (Job Access/Reverse Commute Program).	Why GAO Did This Study Pursuant to Transportation Equity Act for the 21st Century (TEA-21), GAO periodically reports on the implementation of the Job Access and Reverse Commute (Job Access) program. The program is designed to assist low-income people in accessing employment opportunities. This report examines the Department of Transportation's (DOT) efforts to evaluate the program and report the results to the Congress. GAO also examined (1) transportation and related services provided by the program; (2) whether the program fosters collaboration between Job Access grantees and others in the design, financing, and delivery of those services; and (3) whether Job Access services would be financially sustainable after the end of Job Access funding. What GAO Found Since 1999, DOT has awarded over $355 million for 352 Job Access grants in 42 states to help low-income people get to job opportunities and job support services, such as training and child care. Job Access grantees used various approaches to provide transportation for this purpose, such as expanding existing bus service, adding new areas to be served by an existing fixed transit route, or enhancing the frequency of the service. The program has met its goal of encouraging collaboration among transportation, human service, and other community-based agencies in Job Access service design, implementation, and financing. However, most of the program's services are not financially sustainable. For example, 12 percent of Job Access grantees indicated that they could continue their services after the end of program funding, while 41 percent reported they would likely terminate or decrease services, and 47 percent were uncertain about their ability to continue those services. DOT has not evaluated the Job Access program or reported to the Congress, as TEA-21 requires. The department therefore is missing an opportunity to provide timely information to the Congress that could assist it in deciding whether to reauthorize the program in 2003. GAO has several concerns about DOT's plans to evaluate the Job Access program. For its evaluation, DOT initially planned to use one performance measure--employment sites served. However, using a methodology that is based on this measure would yield limited information because it only partially addresses the program's goal of providing transportation to low-income people and does not address other program goals and criteria. Federal Transit Administration (FTA) program officials informed GAO that they also plan to use other performance measures, but they did not provide sufficient detail for GAO to comment on the quality of their evaluation. Moreover, the final report's date of issuance and its contents are uncertain because the report has yet to be reviewed and approved by the Office of the Secretary of Transportation, and the Office of Management and Budget. DOT officials did not provide GAO with an estimated date for submitting the report to the Congress.
gao_GAO-12-703	gao_GAO-12-703_0	During fiscal year 2011, USOC provided quarterly reports that included descriptions of activities conducted by subgrantees, the number of veterans and servicemembers served in the activities, and anecdotal information on how participants benefited from activities. VA Grants and USOC Subgrants Were Awarded Primarily to Provide Adaptive Sports Opportunities, but Reporting on Expenditures Was Problematic VA Awarded the Majority of Program Funds to USOC, but VA’s Administrative and Personnel Expenditure Reporting Had Weaknesses In the first 2 years of the Paralympics program, VA granted most of its available funds for the program to USOC, but inconsistent with federal internal controls standards for reporting relevant and reliable information, we found weaknesses in VA’s administrative and personnel expenditure reporting. VA officials told us that the Office of National Veterans Sports Programs and Special Events did not have a full-time program director and was not fully operational until about midway through fiscal year 2011, and as a result, VA did not establish accounting codes for the Paralympics program until that time. The remainder was spent on athletes’ monthly assistance allowances as well as agency administrative and personnel costs. USOC reported that it plans to pay for administrative costs associated with the VA program through other funding sources. All subgrantees’ grant agreements required them to report how VA funds were used to cover program expenses. Inconsistent with federal internal control standards, we found that during the first program year, USOC did not have reporting requirements or electronic reporting systems in place for subgrantees to provide information on how VA funds were used separate from other sources. VA Relied on Self- Reported, Unverified Information to Oversee the Grant Program, but Is Taking Steps to Improve Oversight VA Lacked Information on How USOC and Subgrantees Used Funds VA lacked information on how USOC and subgrantees used funds due to its reliance on self-reported, unverified quarterly reports from USOC. Our review of a sample of USOC’s files on subgrantees showed that USOC officials were not holding subgrantees accountable for meeting the terms of their subgrant agreements—a grant management problem about which VA was not in the position to know about given its lack of oversight. However, in 12 of the 21 subgrant files we reviewed, we did not find evidence that the subgrantees conducted all agreed-upon activities. Counts of Activities and Participants Are Inconsistent, but VA Is Taking Steps to Improve Measurement of Program Benefits While VA requires USOC and its subgrantees to count the number of adaptive sports activities conducted and the number of participants served, these measurements are not always accurate. In its fiscal year 2011 annual report to VA, USOC stated that over 10,000 veterans and servicemembers participated in nearly 2,000 activities. While subgrantees and program participants reported program benefits, VA has not yet systematically measured how adaptive sports activities specifically benefitted the health and well-being of veterans and servicemembers. VA and USOC have, in turn, taken the initiative to hire a contractor to conduct a study on the effects of adaptive sports on rehabilitation and reintegration of veterans and servicemembers into the community, including five life domains (self-care, mobility skills, communication with family and friends, participation in society, and acceptance of disability) and the psychosocial outcomes, including self-esteem and quality of life. Direct subgrantees to only include VA Paralympics program funds in expenditure reports; and b. VA indicated that USOC also plans to provide training to subgrantees on how to appropriately report on grant funds during this quarter. Appendix I: Objectives, Scope and Methodology The objectives of this report were to (1) review how VA and its grantee and subgrantees used program funds to provide adaptive sports opportunities to veterans and servicemembers; (2) assess how VA is overseeing grantees’ and subgrantees’ use of funds; and (3) describe how veterans and servicemembers have benefited from VA Paralympics activities. We found issues with double-counting of activities and participants, as well as issues of counting non- veteran/servicemember activities and participants.	Why GAO Did This Study The Veterans Benefits Improvement Act of 2008 established VAs Paralympics Program to promote the lifelong health of disabled veterans and members of the Armed Forces through physical activity and sports. Additionally, the act authorized VA to provide a grant to USOCs Paralympics Division, and allowed USOC to enter into subgrant agreements to provide adaptive sports activities to veterans and service members. The act also mandated GAO to report on the VA Paralympics program. GAO is required to (1) review how VA and its grantee and subgrantees used program funds to provide adaptive sports opportunities to veterans and service members; (2) assess how VA is overseeing its grantees and subgrantees use of funds; and (3) describe how veterans and service members have benefited from VA Paralympics activities. To do this, GAO reviewed relevant federal laws, regulations, guidance, agency reports, and a non-probability sample of 21 of 76 subgrant files, consisting of data on about 56 percent of funds subgranted. GAO also conducted site visits to two states and interviewed veterans as well as agency and grantee officials. What GAO Found The Department of Veterans Affairs (VA) and the U.S. Olympic Committee (USOC) primarily awarded program funds through subgrants to 65 national and community organizations that support adaptive sports opportunities. However, their respective program expenditure reporting was not consistent with federal internal control standards, making it difficult to know fully how program funds were spent. VAs reporting of first-year program funding was problematic because it did not closely track costs until midway through the fiscal year. During the second fiscal year2011VA granted $7.5 million to USOC, which, in turn, awarded $4.4 million to subgrantees and spent the remainder primarily on operations and personnel. Subgrantees reported using funds for activities such as training and camps. GAO found, however, that USOC did not have sufficient reporting requirements in place for subgrantees to provide information on how VA funds were used separate from other sources of funding. VA relied upon self-reported, unverified information to oversee the grant program but is planning to make improvements. In fiscal year 2011, VA did not conduct any on-site or remote monitoring to verify how funds were used. Thus, VA lacked information on how well USOC and subgrantees managed grant funds, potentially exposing itself to paying for services not delivered. In 12 of 21 subgrant files selected, USOC was not holding subgrantees accountable for meeting the terms of their agreements. For example, one subgrantee agreed to conduct 10 activities, but the file indicated only 4 were conducted. VA reported that it has plans to improve to oversight, including conducting on-site monitoring of grantees and subgrantees use of funds and having USOC verify financial reports for at-risk subgrantees, such as those with large subgrants. While program benefits were reported by subgrantees and participants, up until this point VA has not systematically measured how adaptive sports activities benefit the health and well-being of veterans and service members. Subgrantees primarily report anecdotal information on program benefits, such as individual success stories. VA collects information on the number of activities and participants from USOC. In 2011, over 10,000 participants were served through nearly 2,000 activities. However, these metrics are flawed due to double counting and other measurement issues. VA officials also recognize that the metrics do not comprehensively measure program benefits. Thus, VA and USOC have hired a contractor to conduct a study on the effects of adaptive sports on rehabilitation and reintegration of veterans and service members into the community. What GAO Recommends GAO recommends that VA take additional actions to improve grantee and subgrantee reporting of expenditures, activities, and participants, as well as USOCs monitoring of subgrantees. In commenting upon a draft of this report, VA agreed with these recommendations and reported that it was taking steps to implement them.
gao_GAO-09-529	gao_GAO-09-529_0	2). In February 2008, OPM renamed the program RetireEZ and deployed a limited initial version of DBTS. In October 2008, after 5 months of attempting to address system quality issues, the agency terminated the contract. The agency only partially implemented two of eight capabilities that it identified to modernize retirement processing. Specifically, it had achieved partial implementation of an integrated database of retirement information that was intended to be accessible to OPM and agency retirement processing personnel. OPM has also partially implemented enhanced customer service capabilities. Further, OPM has not implemented a planned capability for active and retired federal employees to access online retirement information through self-service tools. Specifically, although agency documents describe program implementation activities, they do not include a definition of the program, its scope, lines of responsibility and authority, management processes, and schedule. Until the agency completes and uses a plan that includes all of the above elements to guide its efforts, it will not be properly positioned to obtain agreement with relevant stakeholders (e.g., Congress, OMB, federal agencies, and OPM senior executives) for its restructured retirement modernization initiative. Also, OPM has not established and validated a performance measurement baseline, which is essential for reliable EVM. Further, although OPM is revising its previously developed system requirements, it has not established processes and plans to guide this work. Nor has the agency addressed test activities, even though developing processes and planning test activities early in the life cycle are recognized best practices for effective testing. Furthermore, although OPM’s Executive Steering Committee and Investment Review Board have recently become more active regarding RetireEZ, these bodies did not exercise effective oversight in the past, which has allowed the aforementioned management weaknesses to persist. Notably, OPM has not established guidance regarding how these entities are to engage with the program when corrective actions are needed. Until OPM addresses these weaknesses, many of which we and others made recommendations to correct, the agency’s retirement modernization initiative remains at risk of failure. However, the agency does not yet have a requirements management plan. Institutionalizing effective planning and management is critical not only for the success of this initiative, but also for that of other modernization efforts within the agency. Recommendations for Executive Action To improve OPM’s effort toward planning and implementing its retirement modernization program by addressing management weaknesses, we recommend that the Director of the Office of Personnel Management provide immediate attention to ensure the following six actions are taken: Develop a complete plan for the restructured program that defines the scope, implementation strategy, lines of responsibility and authority, management processes, and schedule. To assess the status of OPM’s efforts toward planning and implementing the RetireEZ program, we reviewed and analyzed program documentation, including program management plans, briefing slides, and project status documentation, to identify planned retirement modernization capabilities and determine to what extent these capabilities have been implemented; evaluated the agency’s documentation about restructuring the program and analyzed the extent to which the documentation describes current and planned RetireEZ program activities; identified and evaluated the agency’s program goals and measures and compared them to relevant guidance to determine the extent to which the goals and measures are described in results-oriented terms; supplemented agency program documentation and our analyses by interviewing agency and contractor officials, including the OPM Director, Chief Information Officer, Chief Financial Officer, Director of Modernization, Associate Director for Human Resources Products and Services Division, and executives from Hewitt Associates and Northrop Grumman Corporation; and observed retirement operations and ongoing modernization activities at OPM and contractor facilities in Washington, D.C.; Boyers, Pennsylvania; and Herndon, Virginia. Specifically, to evaluate whether OPM effectively developed a reliable program cost estimate, we analyzed the agency’s program documentation and determined to what extent the agency had completed key activities described in our Cost Estimating and Assessment Guide; to assess OPM’s implementation of EVM, we reviewed program progress reporting documentation and compared the agency’s plans for restarting its EVM-based progress reporting against relevant guidance, including our Cost Estimating and Assessment Guide; regarding requirements management, we evaluated OPM’s processes for developing and managing retirement systems modernization requirements and compared the effectiveness of those processes against recognized guidance; to determine the effectiveness of the agency’s test planning for the retirement modernization, we reviewed program activities and test plans against best practices and evaluated the extent to which the agency has begun planning for these activities; and we reviewed and analyzed documentation from program oversight entities and evaluated the extent to which these entities took actions toward ensuring the RetireEZ program was being effectively overseen.	Why GAO Did This Study For the past two decades, the Office of Personnel Management (OPM) has been working to modernize the paper-intensive processes and antiquated systems used to support the retirement of federal employees. By moving to an automated system, OPM intends to improve the program's efficiency and effectiveness. In January 2008, GAO recommended that the agency address risks to successful system deployment. Nevertheless, OPM deployed a limited initial version of the modernized system in February 2008. After unsuccessful efforts to address system quality issues, OPM suspended system operation, terminated a major contract, and began restructuring the modernization effort, also referred to as RetireEZ. For this study, GAO was asked to (1) assess the status of OPM's efforts to plan and implement the RetireEZ program and (2) evaluate the effectiveness of the agency's management of the modernization initiative. To do this, GAO reviewed OPM program documentation and interviewed agency and contractor officials. What GAO Found OPM remains far from achieving the modernized capabilities it had planned. Specifically, the agency has partially implemented two of eight planned capabilities: (1) an integrated database of retirement information accessible to OPM and agency retirement processing personnel and (2) enhanced customer service capabilities that support customer needs and provide self-service tools. However, the remaining six capabilities have yet to be implemented because they depended on deliverables that were to be provided by a contract that is now terminated. Examples of these missing capabilities include: (1) automated submission of retirement information through interfaces with federal agencies and (2) Web-accessible self-service retirement information for active and retired federal employees. Further, OPM has not yet developed a complete plan that describes how the program is to proceed without the system that was to be provided under the terminated contract. Although agency documents describe program implementation activities, they do not include a definition of the program, its scope, lines of responsibility and authority, management processes, and a schedule. Also, modernization program documentation does not describe results-oriented performance goals and measures. Until the agency completes and uses a plan that includes all of the above elements to guide its efforts, it will not be properly positioned to move forward with its restructured retirement modernization initiative. Further, OPM has significant weaknesses in five key management areas that are vital for effective development and implementation of its modernization program: cost estimating, earned value management (a recognized means for measuring program progress), requirements management, testing, and oversight. For example, the agency has not developed a cost estimating plan or established a performance measurement baseline--prerequisites for effective cost estimating and earned value management. Further, although OPM is revising its previously developed system requirements, it has not established processes and plans to guide this work or addressed test activities even though developing processes and plans, as well as planning test activities early in the life cycle, are recognized best practices for effective requirements development and testing. Finally, although OPM's Executive Steering Committee and Investment Review Board have recently become more active regarding RetireEZ, these bodies did not exercise effective oversight in the past, which has allowed the aforementioned management weaknesses to persist and OPM has not established guidance regarding how these entities are to intervene when corrective actions are needed. Until OPM addresses these weaknesses, many of which GAO and others made recommendations to correct, the agency's retirement modernization initiative remains at risk of failure. Institutionalizing effective management is critical not only for the success of this initiative, but also for that of other modernization efforts within the agency.
gao_GAO-03-763	gao_GAO-03-763_0	Currently, mutual funds disclose information about their fees as percentages of their assets whereas most other financial services disclose their costs in dollar terms. Another alternative for disclosing mutual funds fees would involve funds specifically disclosing the actual dollar amount of fees paid by each investor. Trading and Other Costs Impact Mutual Fund Investor Returns, but Are Not Prominently Disclosed In addition to the expenses reflected in a mutual fund’s expense ratio—the fund’s total annual operating expenses as a percentage of fund assets— mutual funds incur trading costs that also affect investors’ returns. Changes in Mutual Fund Distribution Practices Have Increased Choices for Investors, but Have Raised Potential Concerns Concerns have been raised over changes in how mutual funds pay for the distribution of their shares to investors. Concerns also have been raised as to whether the disclosure of 12b-1 fees is sufficient and whether, another distribution practice— referred to as revenue sharing, in which investment advisers make payments to broker-dealers for selling and marketing their funds—could limit the number of mutual fund choices offered to investors. As a result, complete data are not available on the extent to which mutual fund advisers are making revenue sharing payments. Soft Dollar Arrangements Provide Benefits, but Could Also Have an Adverse Impact on Investors Soft dollar arrangements allow investment advisers of mutual funds and other clients to use part of the brokerage commissions paid to broker- dealers that execute trades on the fund's behalf to obtain research and brokerage services that can potentially benefit fund investors but could increase the costs borne by their funds. Conclusions Although mutual funds disclose considerable information about their costs to investors, some industry participants urge that additional disclosures are needed to further increase the awareness of investors of the fees they pay as part of investing in mutual funds and to encourage greater competition among mutual funds on the basis of these fees. However, additional disclosures could also improve investor awareness and the transparency of these fees. Providing existing investors with the specific dollar amounts of the fees paid on their shares and placing fee related disclosures in the quarterly account statements that investors receive would put mutual fund disclosures on comparable footing to many other financial services that already disclose specifically in dollars the cost of their services. Although the ways that funds use 12b-1 fees has changed over time, these fees appear to have provided investors with increased flexibility in choosing how to pay for the services of the individual financial professionals providing them with advice on fund purchases. Regulators acknowledged that the currently required disclosures might not provide needed transparency to investors at the time that mutual fund shares are being recommended for purchase. The SEC staff has recommended various changes that would increase the transparency of soft dollar practices by clarifying the acceptable uses of soft dollars and providing fund investors and directors with more information about how their fund’s adviser is using soft dollars. Recommendations To promote greater investor awareness and competition among mutual funds on the basis of their fees, we recommend that the Chairman, SEC increase the transparency of the fees and practices that relate to mutual funds by considering the benefits of additional disclosure relating to mutual fund fees, including requiring more information in mutual fund account statements about the fees investors pay; evaluating ways to provide more information that investors could use to evaluate possible conflicts of interest resulting from any revenue sharing payments their broker-dealers receive; and evaluating ways to provide more information that fund investors and directors could use to better evaluate the benefits and potential disadvantages of their fund adviser’s use of soft dollars, including considering and implementing the recommendations from its 1998 soft dollar examinations report.	Why GAO Did This Study The fees and other costs that investors pay as part of owning mutual fund shares can significantly affect their investment returns. As a result, questions have been raised as to whether the disclosures of mutual fund fees and other practices are sufficiently transparent. GAO reviewed (1) how mutual funds disclose their fees and related trading costs and options for improving these disclosures, (2) changes in how mutual funds pay for the sale of fund shares and how the changes in these practices are affecting investors, and (3) the benefits of and the concerns over mutual funds' use of soft dollars. What GAO Found Although mutual funds disclose considerable information about their costs to investors, the amount of fees and expenses that each investor specifically pays on their mutual fund shares are currently disclosed as percentages of fund assets, whereas most other financial services disclose the actual costs to the purchaser in dollar terms. SEC staff has proposed requiring funds to disclose additional information that could be used to compare fees across funds. However, other disclosures could also increase the transparency of these fees, such as by providing existing investors with the specific dollar amounts of the expenses paid or by placing fee-related disclosures in the quarterly account statements that investors receive. Although some of these additional disclosures could be costly and data on their benefits to investors was not generally available, less costly alternatives exist that could increase the transparency and investor awareness of mutual funds fees that make consideration of additional fee disclosures worthwhile. Changes in how mutual funds pay intermediaries to sell fund shares have benefited investors but have also raised concerns. Since 1980, mutual funds, under SEC Rule 12b-1 have been allowed to use fund assets to pay for certain marketing expenses. Since then, funds have developed ways to apply Rule 12b-1 fees to provide investors greater flexibility in choosing how to pay for the services of individual financial professionals that advise them on fund purchases. Another increasingly common marketing practice called revenue sharing involves fund investment advisers making additional payments to the broker-dealers that distribute their funds' shares. However, receiving these payments can limit fund choices offered to investors and conflict with the broker-dealer's obligation to recommend the most suitable funds. Regulators acknowledged that the current disclosure regulations might not always result in complete information about these payments being disclosed to investors. Under soft dollar arrangements, mutual fund investment advisers use part of the brokerage commissions they pay to broker-dealers for executing trades to obtain research and other services. Although industry participants said that soft dollars allow fund advisers access to a wider range of research than may otherwise be available and provide other benefits, these arrangements also can create incentives for investment advisers to trade excessively to obtain more soft dollar services, thereby increasing fund shareholders' costs. SEC staff has recommended various changes that would increase transparency by expanding advisers' disclosure of their use of soft dollars. By acting on the staff's recommendations SEC would provide fund investors and directors with needed information about how their funds' advisers are using soft dollars.
gao_GAO-12-512T	gao_GAO-12-512T_0	Background The 2010 Nuclear Security Summit highlighted the global threat posed by nuclear terrorism and the need for countries to work in a comprehensive and concerted fashion to ensure that nuclear materials are not stolen or diverted for weapons use. The 2010 Summit produced results. Governmentwide Strategy to Implement the President’s 4-Year Global Nuclear Material Security Initiative Lacked Important Details In December 2010, we reported on aspects of U.S. planning and strategies to secure all vulnerable nuclear materials worldwide within a 4- year period. NSC officials approved a U.S. governmentwide strategy entitled “Interagency Efforts to Improve the Security of Nuclear Weapons and Fissile Materials,” which, among other things, described the scope and objectives of the interagency effort and identified the main activities by agencies and programs in support of the President’s initiative. Despite individual agency efforts to implement the 4-year initiative, we found that the overarching interagency strategy coordinated by NSC lacked specific details concerning how the initiative would be implemented, including the identity of, and details regarding, vulnerable foreign nuclear material sites and facilities to be addressed, agencies and programs responsible for addressing each site, planned activities at each site, potential challenges and strategies for overcoming these challenges, anticipated timelines, and cost estimates. However, we found that, absent such an implementation plan, essential details associated with the 4-year initiative were unclear, including the initiative’s overall estimated costs, time frames, and scope of work. They described the value of the President’s proposal as a “forcing function” to (1) accelerate ongoing U.S. nuclear nonproliferation programs, (2) drive closer integration of nuclear nonproliferation programs across the federal government, and (3) mobilize greater international responsibility for and commitment to nuclear material security. We recommended that NSC lead and coordinate the development of a comprehensive plan for implementing this initiative. NSC did not comment on our recommendation. Agencies Have Limited Ability to Account for, Monitor, and Evaluate the Security of U.S. Nuclear Material Overseas Improving the U.S. government’s management of nuclear cooperation agreements could contribute to the administration achieving its goal of securing all vulnerable nuclear material worldwide in 4 years. Nuclear cooperation agreements do not contain specific access rights that enable U.S. agencies to monitor and evaluate the physical security of U.S. nuclear material overseas, and the United States relies on its partners to maintain adequate security. In our September 2011 report, we found that DOE has taken steps to improve security at a number of facilities overseas that hold U.S. nuclear material but faces constraints. For example, we suggested that Congress consider directing DOE and NRC to compile an inventory of U.S. weapon-usable nuclear materials overseas. As a separate matter, we also suggested that Congress consider amending the Atomic Energy Act if State, working with other U.S. agencies, does not include enhanced measures regarding physical protection access rights in future and renewed agreements, so that U.S. interagency physical protection teams may obtain access when necessary to verify that U.S. nuclear materials have adequate physical protection. We also identified potential fragmentation and overlapping functions among some programs. Furthermore, we found that no single federal agency has lead responsibility to direct federal efforts to prevent and detect nuclear smuggling overseas. We made two recommendations to NSC to streamline and eliminate the potential for fragmentation and overlap among U.S. government programs involved in preventing and detecting the smuggling of nuclear materials overseas. Based on the findings in this report, the Subcommittee subsequently asked us to review the security of hospitals and medical facilities in the United States that use radiological sources. NRC’s Security Requirements Do Not Prescribe Specific Measures for Protecting Radiological Sources at Hospitals and Medical Facilities NRC, which is responsible for regulating the security of radiological sources in U.S. hospitals and medical facilities, issued a security order in 2005 that directed licensees possessing radiological sources of concern to implement increased controls for access, detection and assessment, material shipments, physical barriers, information protection, and sensitive information. These approaches have created a mix of security controls and procedures that could leave some facilities’ radiological sources more vulnerable than others to possible tampering, sabotage, or outright theft. NNSA Has Secured Radiological Sources at U.S. According to NNSA officials, as of December 2011, the program spent an estimated $96 million to secure radiological sources at 302 U.S. hospitals and medical facilities. We found that some hospitals have declined the upgrades, including hospitals located in high-risk urban areas. We are continuing to conduct our audit and plan to visit some additional medical facilities in the United States.	Why GAO Did This Study In 2009, President Obama announced an international initiative to secure all vulnerable nuclear material worldwide within 4 years. Leaders of 47 nations endorsed this effort at the 2010 Nuclear Security Summit and will meet again in March 2012 to evaluate their work and set new goals for nuclear security. The United States has been a leader in promoting nuclear nonproliferation efforts worldwide. GAO has issued numerous reports on U.S. nonproliferation programs administered by several agencies, including the departments of Energy (DOE), State, and Defense (DOD); and the Nuclear Regulatory Commission (NRC). This testimony, which is based primarily on previously issued reports, discusses (1) the U.S. strategy to secure all vulnerable nuclear material within 4 years, (2) U.S. agencies ability to track and evaluate the security of U.S. nuclear materials transferred to foreign countries, (3) challenges coordinating federal nuclear nonproliferation efforts, and (4) preliminary observations regarding GAOs ongoing work on federal efforts to secure radiological sources in U.S. hospitals and medical facilities. To conduct its ongoing work, GAO visited 25 hospitals and medical facilities in 7 states and the District of Columbia. GAO is making no new recommendations, but continues to believe that implementation of the recommendations made in its recent reports complements and supports the administrations goal of securing vulnerable nuclear material in a timely fashion. What GAO Found The Presidents 4-year initiative is a worthwhile effort designed to accelerate U.S. and international efforts to secure nuclear material worldwide. However, as GAO reported in December 2010, the governmentwide strategy approved by the National Security Council (NSC) for the initiative lacked specific details regarding how the initiative will be implemented. As a result, key details associated with the initiative are unclear, including its overall estimated cost, time frame for completion of work, and scope of planned work. In its 2010 report, GAO recommended, among other things, that NSC lead the interagency development of a more detailed implementation plan for the Presidents 4-year initiative. NSC did not comment on GAOs recommendations. The United States also faces challenges accounting for and evaluating the security of U.S. nuclear material overseas. As GAO reported in September 2011, federal agencies are not able to fully account for U.S. nuclear material overseas that is subject to nuclear cooperation agreements. GAO also found that the agreements do not contain specific access rights that enable agencies to monitor and evaluate the physical security of U.S. nuclear material overseas. GAO found that the agencies responsible for reviewing foreign partners security are not doing so systematically. GAO suggested that Congress consider directing DOE and NRC to fully account for U.S. weapon-usable nuclear materials overseas and consider amending the Atomic Energy Act to require access rights allowing the United States to verify adequate protection of U.S. nuclear materials if future agreements cannot be negotiated to include such rights. GAO also reported in December 2011 on the challenges in coordinating U.S. governmentwide nonproliferation efforts. Specifically, GAO identified potential fragmentation and overlap among some U.S. programs that played a role in preventing and detecting the smuggling of nuclear materials overseas. GAO also found that no single federal agency had the lead responsibility to direct these efforts. GAO recommended, among other things, that NSC review U.S. programs working to prevent nuclear smuggling overseas to reduce fragmentation and potential overlap. NSC declined to comment on the recommendations. In addition to nuclear materials, the Summit plans to address the security of radiological sourcesmaterial that could be used to make a dirty bomb. Based on preliminary results from ongoing work on federal efforts to secure radiological sources in U.S. hospitals and medical facilities, GAO found that NRCs security controls for hospitals and medical facilities do not prescribe the specific steps that must be taken to protect their radiological sources. GAO also found that medical facilities have implemented the controls in various ways. This has created a mix of security measures at the locations GAO visited that could leave some facilities more vulnerable than others. DOEs National Nuclear Security Administration (NNSA) has established a voluntary program to upgrade the security of domestic facilities that have radiological sources. NNSA has made progress in securing domestic radiological sources, but some facilities have declined NNSAs assistance, including hospitals located in high-risk urban areas.
gao_GAO-17-749T	gao_GAO-17-749T_0	To become a covered entity and participate in the program, eligible entities must register with HRSA and be approved. 1). All drug manufacturers that supply outpatient drugs are eligible to participate in the 340B Program and must participate in order to have their drugs covered by Medicaid. A covered entity typically purchases and dispenses 340B drugs through pharmacies—either through an in-house pharmacy, or through the use of a contract pharmacy arrangement, in which the covered entity contracts with an outside pharmacy to dispense drugs on its behalf. Since that time, the number of unique contract pharmacies has increased significantly, from about 1,300 at the beginning of 2010 to around 18,700 in 2017 (see fig. 2); and, according to HRSA data, in 2017, there were more than 46,000 contract pharmacy arrangements. HRSA guidance indicates that covered entities are “expected” to conduct annual independent audits of contract pharmacies, leaving the exact method of ensuring compliance up to the covered entity. HRSA Has Implemented GAO’s Recommendation to Improve Its Oversight of the 340B Program by Conducting Audits In our September 2011 report, we found that HRSA’s oversight of the 340B Program was weak because it primarily relied on covered entities and manufacturers to police themselves and ensure their own compliance with program requirements. Beyond relying on participants’ self-policing, we also found that HRSA engaged in few activities to oversee the 340B Program and ensure its integrity, which agency officials said was primarily due to funding constraints. To address these oversight weaknesses, we recommended that the Secretary of HHS instruct the administrator of HRSA to conduct selective audits of covered entities to deter potential diversion. In response to that recommendation, in fiscal year (FY) 2012, HRSA implemented a systematic approach to conducting annual audits of covered entities that is outlined on its website. As a result of the audits already conducted, HRSA has identified instances of non-compliance with program requirements, including violations related to drug diversion and the potential for duplicate discounts. HRSA Implemented One of Three GAO Recommendations to Clarify Program Guidance In our 2011 report, we found that HRSA’s guidance on three key program requirements lacked the necessary level of specificity to provide clear direction, making it difficult for participants to self-police or monitor others’ compliance, and raising concerns that the guidance could be interpreted in ways that were inconsistent with its intent. First, we found that HRSA’s nondiscrimination guidance was not sufficiently specific in detailing practices manufacturers should follow to ensure that drugs were equitably distributed to covered entities and non- 340B providers when distribution was restricted. We recommended that HRSA further clarify its nondiscrimination guidance for cases in which distribution of drugs is restricted and require reviews of manufacturers’ plans to restrict distribution of drugs at 340B prices in such cases. In response, HRSA issued a program notice in May 2012 that clarified HRSA’s policy for manufacturers that intend to restrict distribution of a drug and provided additional detail on the type of information manufacturers should include in such restricted distribution plans. In addition, we found a lack of specificity in HRSA’s guidance on two other issues—the definition of an eligible patient and hospital eligibility for program participation. Given the lack of specificity in these areas, we recommended that HRSA (1) finalize new, more specific guidance on the definition of an eligible patient, and (2) issue guidance to further specify the criteria that hospitals not publicly owned or operated must meet to be eligible for the 340B program. After this ruling, the agency issued a proposed omnibus guidance in August 2015 to interpret statutory requirements for the 340B program in areas where it did not have explicit rulemaking authority, including further specificity on the definition of a patient of a covered entity and hospital eligibility for 340B program participation. GAO Has Ongoing Work Examining HRSA Oversight of 340B Contract Pharmacies Given the increase in the number of contract pharmacies in the 340B Program and concerns that contract pharmacy arrangements present an increased risk to the integrity of the program, we were asked to review contract pharmacy use under the 340B Program. For this review, we are planning to address the following four questions. To what extent do covered entities provide low-income, uninsured patients with discounts on drugs dispensed by contract pharmacies? How, if at all, do covered entities and HRSA ensure compliance with 340B program requirements at contract pharmacies?	Why GAO Did This Study According to HRSA, the purpose of the 340B Program, which was created in 1992, is to enable covered entities to stretch scarce federal resources to reach more eligible patients, and provide more comprehensive services. Covered entities can provide 340B drugs to patients regardless of income or insurance status and generate revenue by receiving reimbursement from patients insurance. The program does not specify how this revenue is to be used or whether discounts are to be passed on to patients. The number of participating covered entity sites—currently about 38,000—has almost doubled in the past 5 years and the number of contract pharmacies increased from about 1,300 in 2010 to around 18,700 in 2017. In recent years, questions have been raised regarding oversight of the 340B Program, particularly given the program's growth over time. In September 2011, GAO identified inadequacies in HRSA's oversight of the 340B program and made recommendations for improvement. This statement describes (1) HRSA actions in response to GAO recommendations to improve its program oversight, and (2) ongoing GAO work regarding the 340B program and HRSA oversight. For this statement, GAO obtained information and documentation from HRSA officials about any significant program updates and steps they have taken to implement the 2011 GAO recommendations. More detailed information on the objectives, scope, and methodology can be found in GAO's September 2011 report. What GAO Found The 340B Drug Pricing Program requires drug manufacturers to sell outpatient drugs at discounted prices to covered entities—eligible clinics, hospitals, and others—to have their drugs covered by Medicaid. Covered entities are only allowed to provide 340B drugs to certain eligible patients. Entities dispense 340B drugs through in-house pharmacies or contract pharmacies, which are outside pharmacies entities contract with to dispense drugs on their behalf. The number of contract pharmacies has increased significantly in recent years. In its September 2011 report, GAO found that the Health Resources and Services Administration's (HRSA) oversight of the 340B program was inadequate to ensure compliance with program rules, and GAO recommended actions that HRSA should take to improve program integrity, particularly given significant growth in the program in recent years. HRSA has taken steps to address two of GAO's four recommendations: HRSA initiated audits of covered entities . GAO found that HRSA's oversight of the 340B Program was weak because it primarily relied on covered entities and manufacturers to ensure their own compliance with program requirements and HRSA engaged in few oversight activities. GAO recommended that HRSA conduct audits of covered entities and in fiscal year 2012, HRSA implemented a systematic approach to conducting annual audits of covered entities. HRSA now conducts 200 audits a year, which have identified instances of non-compliance with program requirements, including the dispensing of drugs to ineligible patients. HRSA clarified guidance for manufacturers. GAO found a lack of specificity in guidance for manufacturers for handling cases in which distribution of drugs is restricted, such as when there is a shortage in drug supply. GAO recommended that HRSA refine its guidance. In May 2012, HRSA clarified its policy for when manufacturers restricted distribution of a drug and provided additional detail on the type of information manufacturers should include in their restricted distribution plans. HRSA has not clarified guidance on two issues. GAO also found that HRSA guidance on (1) the definition of an eligible patient and (2) hospital eligibility criteria for program participation lacked specificity and recommended that HRSA clarify its guidance. HRSA agreed that clearer guidance was necessary and, in 2015, released proposed guidance that addressed both issues. However, earlier this year, the agency withdrew that guidance in accordance with recent directives to freeze, withdraw, or postpone pending federal guidance. Given particular concerns that the significant escalation in the number of contract pharmacies poses a potential risk to the integrity of the 340B Program, GAO was asked to examine this issue and expects to issue a future report, in which it plans to address the extent to which covered entities use contract pharmacies; financial arrangements between covered entities and pharmacies; the provision of discounts on drugs dispensed by contract pharmacies to low-income, uninsured patients; and how covered entities and HRSA ensure compliance with 340B program requirements at contract pharmacies.
gao_GGD-00-42	gao_GGD-00-42_0	NAIC and State Insurance Regulators Have Accelerated Their Oversight of the Industry’s Year 2000 Readiness Since March 1999, NAIC has stepped up its Year 2000 efforts by (1) issuing expanded guidance to state regulators on how to examine companies’ preparedness and (2) encouraging state regulators to do on-site validation reviews of companies with the greatest potential public impact. Recognizing their industry’s high level of date sensitivity, the nation’s banking regulators have completed multiple rounds of on-site examinations for all financial institutions under their jurisdiction.Although 6 of the 17 states we reviewed indicated that their overall goal was to conduct 1 round of targeted examinations for all of their domiciled insurance companies, the remaining 11 states had established varying goals regarding which and how many companies would be subject to targeted Year 2000 examinations. For the most part, these goals attempted to cover the states’ nationally significant companies. Uncertainties about the status of the remaining 5 percent were largely unresolved at the time of our survey. NAIC and State Regulators Remain Confident About the Insurance Industry’s Readiness for Year 2000 In an October 1999 press release, NAIC’s Year 2000 task force reported that information obtained from its initiative focusing on nationally significant insurers indicates that the insurance industry is expected to experience little disruption when 2000 begins. Our survey indicated that state regulators had considerable confidence about the adequacy of the insurance industry’s preparation for the Year 2000 date change. The remaining 22 percent of the states’ domiciled insurance companies represented companies that were (1) not Year 2000 ready by September 30, but that were projected to be ready by December 31; (2) not subject to categorization due to the lack of adequate information to determine their readiness status; or (3) considered at risk of not being ready. The states indicated that as of September 30 they lacked sufficient information to determine the Year 2000 readiness of 4 percent of their domiciled insurance companies. In contrast, 72 to 80 percent of insurers in the property/casualty, life/health, and other insurer categories were considered Year 2000 ready. According to a task force official, health insurers represent one area that remains vulnerable because such insurers depend on hospitals and doctors’ offices becoming Year 2000 ready. Other Sources Are Generally Positive About Insurers’ Year 2000 Preparedness Efforts but Are Uncertain About Liability Exposure Impacts The industry observers we contacted generally maintained a favorable view of the insurance industry’s Year 2000 preparedness efforts, but they continued to express uncertainty over potential costs associated with Year 2000-related liability exposures. The rating companies we contacted in October indicated that it was still too early to tell how liability exposures might affect insurance companies. For this reason, the rating companies had not factored liability exposures into their ratings. Legal debates over insurance coverage for Year 2000-related mishaps, as well as for costs to avoid such mishaps, have yet to be fully resolved. We also found that, partly in response to this emphasis, some states have increased their efforts to conduct on-site examinations of their domiciled insurance companies’ Year 2000 preparations.	Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the readiness of the insurance industry to meet the year 2000 date change, focusing on: (1) an updated assessment, as of September 30, 1999, of state regulatory oversight of the insurance industry's year 2000 preparations; and (2) the status of the industry's year 2000 readiness. What GAO Found GAO noted that: (1) since GAO's last report, the National Association of Insurance Commissioners (NAIC) stepped up its efforts to assess the insurance industry's year 2000 readiness by: (a) issuing expanded guidance to state insurance regulators on how to examine companies' preparedness; and (b) encouraging state regulators to conduct on-site examinations of insurers with the greatest potential public impact; (2) some of the nation's state regulators increased their use of examinations aimed at verifying the year 2000 readiness of their insurers, particularly for their nationally significant life/health and property/casualty insurers; (3) six of the 17 states reviewed indicated that their goal was to conduct year 2000 readiness examinations for all of the insurance companies domiciled in their states; (4) the remaining 11 states had set varying goals regarding which companies were to be subject to year 2000 examinations, but most of these states attempted to cover their nationally significant insurers; (5) in October 1999, NAIC's Year 2000 Industry Preparedness Task Force reported the insurance industry expected to experience little disruption when 2000 begins; (6) state responses to a nationwide survey GAO conducted indicated considerable confidence in the insurance industry's preparation for the year 2000 date change; (7) uncertainties about the ability of the remaining 5 percent of the companies to be year 2000 ready were largely unresolved at time of survey; (8) regulators indicated they did not have adequate information to determine the readiness status for 4 percent of the companies and considered 1 percent to be at risk of not being ready by December; (9) states appeared to have a slightly lower level of confidence in the readiness of health maintenance organizations and managed care organizations than those in other insurance segments; (10) according to a task force official, health insurers represent one part of the industry that remains vulnerable because they depend on hospitals and doctors' offices becoming year 2000 ready; (11) industry observers continued to express uncertainty over potential costs associated with year 2000-related liability exposures; (12) legal debates had yet to be resolved over insurance coverage for year 2000-related mishaps as well as liability for costs that policyholders incur to avoid such mishaps; and (13) rating companies indicated that it was still too early to tell how liability exposures might affect insurance companies, and for this reason, the rating companies had not factored these exposures into their ratings.
gao_GAO-10-384	gao_GAO-10-384_0	No known or suspected hazard. However, the military services and the Corps also can consider other factors, such as military mission needs, land reuse plans, and stakeholder concerns, in determining which sites to clean up first. The Military Services and the Corps Do Not Track MMRP Staffing Levels, and the MMRP Receives a Small Share of DOD’s Environmental Restoration Funds According to a senior DOD official, DOD does not require the military services or the Corps to track the time they spend working on MMRP activities separately from the time they spend working on other environmental restoration program activities. As a result, we were unable to determine the staffing levels dedicated to the MMRP. It is the responsibility of the military services and the Corps to make decisions about how to prioritize that funding among their environmental programs, such as the IRP and MMRP. Between 2002 and 2008, the military services and the Corps directed most of their IRP and MMRP environmental restoration funds to their respective IRPs—a total of about $9.7 billion compared with the approximately $1.2 billion they directed to their respective MMRPs (see fig. Most Sites That DOD Has Reported as Response Complete Did Not Require Cleanup, and Cleanup Priorities Are Still Being Determined for the Majority of Sites DOD reported to Congress that it had achieved response complete at more than one-third of its munitions response sites by the end of fiscal year 2008. According to DOD, most of these sites did not require cleanup under the MMRP. However, for the majority of sites in the MMRP inventory, the military services and the Corps are still in the process of gathering information necessary to assess the sites’ relative risk levels in order to set cleanup priorities. The Air Force estimates that site cleanup will be complete in fiscal year 2010. Land reuse plans. DOD Has Not Established a Key Performance Goal for Its MMRP at FUDS, as Required by Law, and Has Not Determined and Reported on the Feasibility of Interim Goals DOD has not yet implemented the statutory requirement contained in the fiscal year 2007 National Defense Authorization Act to establish a key performance goal for reaching remedy in place or response complete at munitions response sites on FUDS, although DOD has established the required performance goals for active and BRAC 2005 sites. DOD Collects Limited Data on Factors That Can Affect MMRP Project Duration, and Incomplete Data Prevent an Assessment of the Accuracy of Its MMRP Cost Estimates DOD collects data on two of the many factors that can influence project duration at munitions response sites. Without DOD guidance on how to determine which sites to sequence first for cleanup, we are concerned that the military services and the Corps could use inconsistent processes for making these decisions. Implementing these requirements would provide DOD, Congress, and the public better information to track progress toward cleaning up munitions response sites. As a result, it is not possible to assess the accuracy of the cost estimates for activities conducted during these phases. Recommendations for Executive Action To improve consistency, transparency, and management of the MMRP, we recommend that the Secretary of Defense take the following three actions: develop guidance for the military services and the Corps that establishes a consistent approach for how factors other than relative risk should be considered in munitions response site sequencing decisions; establish and report to Congress (1) a goal for achieving remedy in place or response complete for FUDS, as required by law, and (2) such interim goals as DOD determines feasible for the remedy in place or response complete goals at munitions response sites on active and BRAC 2005 installations and FUDS; and establish a process to ensure the completeness of site-level obligated funds data in DOD’s Knowledge-Based Corporate Reporting System database. Appendix I: Objectives, Scope, and Methodology The National D we assess the (1) Military Mu and funding levels; (2) progress the Department of Defense (DOD) has made cleaning up munitions response sites; (3) extent to which DOD has established performance goals for the MMRP; and (4) extent to which DOD collects data on factors influencing project duration, as well as the accuracy of its cleanup cost estimates. In addition, we reviewed key laws, regulations, policies, and guidance from DOD, the military services (Army, Air Force, and Navy), and the U.S. Army Corps of Engineers (Corps). type of hazard.	Why GAO Did This Study The Department of Defense (DOD) established the military munitions response program (MMRP) in 2001 to clean up sites known to be or suspected of being contaminated with military munitions and related hazardous substances. Cleanup of sites on active and base realignment and closure installations is the responsibility of the military service--Air Force, Army, Navy, or Marine Corps--that currently controls the land, and the Army has delegated execution of cleanup of formerly used defense sites (FUDS) to the U.S. Army Corps of Engineers (Corps). GAO was mandated to assess the (1) MMRP staffing and funding levels; (2) progress DOD has made in cleaning up munitions response sites; (3) extent to which DOD has established MMRP performance goals; and (4) extent to which DOD collects data on factors influencing project duration, as well as the accuracy of its cleanup cost estimates. GAO analyzed MMRP data and DOD documents and interviewed officials from DOD, the military services, and the Corps. What GAO Found The military services and the Corps do not track the time that staff work on MMRP activities separately from the time they spend on another environmental restoration program--the Installation Restoration Program (IRP). Consequently, it is not possible to determine the staffing levels for the MMRP. In addition, obligated funds for the MMRP increased from $95 million in fiscal year 2002 to approximately $284 million in fiscal year 2008, and the military services and the Corps directed 11 percent of their total MMRP and IRP environmental restoration funds to the MMRP during the period--a total of about $1.2 billion to the MMRP compared with $9.7 billion to the IRP. DOD reported to Congress that it had completed its cleanup response for 1,318 of its 3,674 sites by the end of fiscal year 2008; however, for 1,234 of these sites, DOD's response was an investigation that determined cleanup was not necessary. The remaining 84 sites were cleaned up because of such factors as imminent danger to public safety and pressing military mission and land reuse needs. In addition, the military services and the Corps are still in the process of gathering information necessary to prioritize most sites in the MMRP inventory for cleanup. When this process is complete, the military services and the Corps will consider this information along with other factors, such as land reuse plans, to determine which sites to clean up first. However, DOD has not issued guidance on how factors other than risk should be considered when making decisions about which sites to sequence first for cleanup, and the Air Force, the Army, and the Corps have begun to independently develop their own approaches. Using varying approaches could lead to inconsistent sequencing decisions. DOD has not yet established a performance goal for implementing the cleanup remedy (referred to as "remedy in place") or achieving the cleanup objective (referred to as "response complete") at munitions response sites located on FUDS, as required by the fiscal year 2007 National Defense Authorization Act. The act also directs DOD to report on interim goals it determines feasible for achieving the performance goals, but DOD has not yet done so. Performance goals are important because they are used to track progress toward cleaning up munitions response sites. By establishing goals, DOD would have better information with which to measure MMRP progress. DOD gathers data on two of the factors--site size and type of hazard--that can influence project duration at military munitions response sites. As would be expected, these data indicate that the larger the munitions response site and the more complex the type of hazard, the longer it takes to clean up the site. In addition, because data on funds obligated to complete specific phases of the cleanup process are not included in DOD's database for many munitions response sites, it is not possible to assess the accuracy of the military services' and the Corps' cost estimates for the MMRP.
gao_GAO-08-31	gao_GAO-08-31_0	Further analysis of the FAADS data indicates that approximately 80 percent of federal grants and direct assistance consist of federal funds provided to state and local governments, which, in turn, disburse funds to the ultimate recipients. Consequently, only about 20 percent of awarded funds are provided directly from the federal government to the organization that ultimately spends the money. Grant and Direct Assistance Recipients Owe About $790 Million in Taxes While most federal grant and direct assistance recipients pay their federal taxes, we identified tens of thousands of grant and direct assistance recipients that collectively owed about $790 million in federal taxes as of September 2006. These tax debts were owed by entities who received federal payments directly from federal payment systems during fiscal years 2005 and 2006 and individuals who participated in HUD’s Section 8 tenant-based housing program as landlords during fiscal years 2005 and 2006. Specifically, we found 2,000 of about 32,000 recipients (about 6 percent) who received federal grant and direct assistance benefits directly from three of the largest federal payment systems had more than $270 million of unpaid federal taxes. Employers may be subject to civil and criminal penalties if they do not remit payroll taxes to the federal government. Examples of Selected Recipients of Grants and Direct Assistance Involved in Abusive and Criminal Activity Related to Federal Tax System For all 20 cases of grant and direct assistance recipients we investigated for examples of abusive and criminal activity related to the federal tax system based on the large amount of tax debt and number of delinquent tax periods, we found in all cases evidence that indicated the existence of such abusive and criminal activities. For the cases of payroll tax delinquencies we investigated, officials responsible for these organizations failed to fulfill their role as “trustees” of employees’ payroll tax withholdings and forward this money to IRS as required by federal tax laws. The following provide illustrative detailed information on several of these cases: Case 4: This landlord participating in the Section 8 tenant-based housing program was involved in a fraudulent real estate transaction in addition to owing over $3 million in delinquent income taxes. Federal Agencies Do Not Prevent Delinquent Taxpayers from Participating in Federal Grant or Direct Assistance Programs Neither federal law nor current governmentwide policies for administering federal grants or direct assistance prohibit applicants with unpaid federal taxes from receiving grants and direct assistance from the federal government. With regard to administering federal grants, federal law and current governmentwide policies, as reflected in OMB Circulars, do not prohibit individuals and organizations with unpaid taxes from receiving grants. Although current governmentwide policies do not require it, federal agencies, such as HHS and Department of Education, have policies against awarding grants to applicants that owe federal debts. We estimated these direct payments to final recipients represented about 20 percent of total federal grant and direct assistance payments. that the recipient individuals or entities, including key officials, own or receive. Tax Compliance: Thousands of Organizations Exempt from Federal Income Tax Owe Nearly $1 Billion in Payroll and Other Taxes. Internal Revenue Service: Procedural Changes Could Enhance Tax Collections.	Why GAO Did This Study Since February 2004, GAO has reported that weaknesses in the federal programs and controls that allowed thousands of federal contractors, tax exempt entities, and Medicare providers to receive government money while owing taxes. GAO was asked to determine if these problems exist for entities who receive federal grants or direct assistance and (1) describe the magnitude of taxes owed, (2) provide examples of grant recipients involved in abusive and potentially criminal activity, and (3) assess efforts to prevent delinquent taxpayers from participating in such programs. To perform this work, GAO analyzed data from the Internal Revenue Service (IRS), three of the largest grant and direct assistance payment systems, representing over $460 billion in payments in fiscal years 2005 and 2006, and the Housing and Urban Development (HUD) Section 8 tenant-based housing program. GAO investigated 20 cases to provide examples of grant recipients involved in abusive activity. What GAO Found While most recipients of payments federal grant and direct assistance programs pay their federal taxes, tens of thousands of recipients collectively owed $790 million in federal taxes as of September 30, 2006. This included over 2,000 individuals and organizations that received $124 billion of payments directly from the federal government and who owed more than $270 million of unpaid taxes (almost 6 percent of such recipients) and about 37,000 landlords participating in HUD's Section 8 tenant-based housing program who owed an estimated $520 million of unpaid taxes (almost 4 percent of such landlords). The $790 million estimate is likely substantially understated because GAO's analysis excluded the 80 percent of federal grants that are directly given to state and local governments which, in turn, disburse the grants to the ultimate recipients. GAO selected 20 grant and direct assistance recipients with high tax debt for a more in-depth investigation of the extent and nature of abuse and criminal activity. For all 20 cases GAO found abusive and potential criminal activity related to the federal tax system, including failure to remit individual income taxes and/or payroll taxes to IRS. Rather than fulfill their role as ''trustees'' of payroll tax money and forward it to IRS, these grant recipients diverted the money for other purposes. Willful failure to remit payroll taxes is a felony under U.S. law. Individuals associated with some of these recipients diverted the payroll tax money for their own benefit or to help fund their businesses. GAO referred these 20 cases to IRS for additional collection and investigation action, as appropriate. Federal law and current governmentwide policies do not prohibit individuals and organizations with unpaid taxes from receiving grants or direct assistance. Several federal agencies established policies against awarding grants to tax delinquent applicants; however, federal agencies do not verify applicants' certification that they do not owe taxes. Further, federal law generally prohibits the disclosure of taxpayer data to federal agencies. Eleven grant recipients that GAO investigated appeared to have made false statements by not disclosing their tax debt as required. Further, agencies that award grants are not required to inquire as to recipients' tax debt status prior to providing direct assistance payments.
gao_GAO-10-829T	gao_GAO-10-829T_0	Background The U.S. military has long used contractors to provide supplies and services to deployed U.S. forces. Contractors are an integral part of DOD’s operations, and DOD officials have stated that without a significant increase in the department’s civilian and military workforce, DOD is likely to continue to rely on contractors both in the United States and overseas in support of future deployments. DOD Has Taken Some Steps to Institutionalize Operational Contract Support, though Challenges Remain In response to congressional direction and GAO recommendations, DOD has taken some actions to institutionalize operational contract support, such as establishing a focal point to lead the department’s effort to improve contingency contractor management and oversight at deployed locations, issuing new guidance, and beginning to assess its reliance on contractors. However, DOD still faces challenges in eight areas related to operational contract support. (1) Developing guidance. DOD has yet to finalize joint policies required by Congress in the National Defense Authorization Acts for Fiscal Years 2007 and 2008. (2) Planning for contractors in ongoing operations. The department has not fully planned for the use of contractors in support of ongoing operations in Iraq and Afghanistan, although some efforts are underway at the individual unit level. (3) Planning for contractors in future operations. DOD needs to take additional actions to improve its planning for operational contract support in future operations. For example, while DOD has started to institutionalize operational contract support into combatant commands’ operation plans, it has not yet made significant progress. (4) Tracking contractor personnel. While DOD has developed a system to collect data on contractors deployed with U.S. forces, our reviews of this database have highlighted significant shortcomings in its implementation in Iraq and Afghanistan. (5) Providing oversight personnel. DOD continues to face challenges in providing an adequate number of personnel to oversee and manage contractors in contingency operations, such as Iraq and Afghanistan. (6) Training non-acquisition personnel. DOD faces challenges in ensuring that non-acquisition personnel, such as unit commanders, have been trained on how to work effectively with contractors in contingency operations. (7) Screening contractor personnel. DOD has yet to develop a departmentwide policy for screening the significant number of local and third-country national contractor personnel who support deployed U.S. forces. (8) Capturing lessons learned. DOD has not implemented previous GAO recommendations to develop a departmentwide lessons learned program to capture the department’s institutional knowledge regarding all forms of contractor support to deployed forces in order to facilitate a more effective working relationship between contractors and the military. Given the contractor-related challenges DOD continues to face, a cultural change is necessary to integrate operational contract support throughout the department. Without such a change, DOD is likely to continue to face these challenges in ongoing and future contingency operations. Some Departmentwide Steps Taken to Institutionalize Operational Contract Support In October 2006, the Deputy Under Secretary of Defense for Logistics and Materiel Readiness established the Office of the Assistant Deputy Under Secretary of Defense (Program Support) to act as a focal point for leading DOD’s efforts to improve contingency contractor management and oversight at deployed locations. Identifying and Planning for Operational Contract Support Requirements in Current Operations DOD guidance highlights the need to plan for operational contract support early in an operation’s planning process, in part because of the challenges associated with using contractors in contingencies. These challenges include overseeing and managing contractors in contingency operations. However, in previous reports and testimonies we have noted that DOD has not followed long-standing guidance on planning for operational contract support. Our work continues to show that DOD has not fully planned for the use of contractors in support of ongoing contingency operations in Iraq and Afghanistan, although some efforts are under way at the individual unit level. Data Collected by DOD’s System to Track Contractor Personnel in Iraq and Afghanistan Are Unreliable In January 2007, DOD designated the Synchronized Pre-deployment and Operational Tracker (SPOT) as its primary system for collecting data on contractor personnel deployed with U.S. forces, and it directed the use of a contract clause that requires contractor firms to enter personnel data for contracts performed in Iraq and Afghanistan into this system. Our work has found, however, that DOD frequently did not have a sufficient number of trained contracting and oversight personnel to effectively manage and oversee its contracts. While we recognize the efforts DOD has under way to develop long-term plans intended to address its personnel shortages, many of the problems we have identified in the past continue. In 2006, we first reported on the challenges that DOD faced in ensuring that contractor personnel had been thoroughly screened and vetted. We have previously recommended developing a departmentwide lessons learned program to capture the experiences of military units that have used logistics support contracts and establishing a focal point within the Office of the Under Secretary of Defense for Acquisition, Technology and Logistics, to lead and coordinate the implementation of the departmentwide lessons learned program to collect and distribute the department’s institutional knowledge regarding all forms of contractor support to deployed forces. Concluding Observations DOD has acknowledged that operational contract support plays an integral role in contingency operations and that successful execution of operational contract support requires significant planning and management. While some efforts have been made within the department and the individual services to improve the planning for and management of contractors, these efforts do not fully work toward integrating operational contract support throughout DOD. As we have discussed, many of the operational contract support challenges the department continues to face are long-standing and while the department has acknowledged many of these challenges, and taken some actions, it has not systematically addressed them.	Why GAO Did This Study This testimony discusses the challenges the Department of Defense (DOD) faces in institutionalizing operational contract support throughout the department. The institutionalization of operational contract support includes planning for the use of contractors, training of military personnel on the use of contractor support, accurately tracking contractor use, and establishing measures to ensure that contractors are accountable. For decades, DOD has relied on contractors to support contingency operations and has long considered them a part of the total force. For example, in its 2006 Quadrennial Defense Review the department reiterated that contractors were part of a total force that includes active and reserve military components, civilians and contractors. Additionally, in 2008 the Deputy Under Secretary of Defense for Logistics and Materiel Readiness testified that the structure of the U.S. military had been adapted to an environment in which contractors were an important part of the force. Further, an Army commission chaired by Dr. Jacques Gansler acknowledged that contractors were a significant part of the military's total force. While DOD joint guidance recognizes contractors as part of its total workforce, we have previously reported that DOD has not yet developed a strategy for determining the appropriate mix of contractor and government personnel. In addition, we recently testified that several long-standing challenges have hindered DOD's ability to manage and oversee contractors at deployed locations. For example, DOD has not followed long-standing planning guidance, ensured that there is an adequate number of contract oversight and management personnel, and comprehensively trained non-acquisition personnel, such as military commanders. Since 1992, we have designated DOD contract management as a high-risk area, in part due to concerns over the adequacy of the department's acquisition and contract oversight workforce. As we have previously testified, many of the long-standing problems we have identified regarding managing and overseeing contractor support to deployed forces stem from DOD's reluctance to plan for contractors as an integral part of the total force. We have also testified that DOD's long-standing problems in managing and overseeing contractors at deployed locations make it difficult for the department to ensure that it is getting the services it needs on time and at a fair and reasonable price. We have found numerous instances where poor oversight and management of contractors have led to negative monetary and operational outcomes. As a result, since the advent of our work on contractor support to deployed forces in 1997, we have made numerous recommendations to improve DOD's management of contractors in deployed locations. While DOD has taken some actions to address these challenges, it has not addressed all of them, as I will discuss in further detail. statement today will focus on the extent to which DOD has institutionalized operational contract support. This statement is based on recently published reports and testimonies that examined planning for operational contract support and the department's efforts to manage and oversee contractors in Iraq and Afghanistan as well as our ongoing work involving operational contract support related issues in Iraq and Afghanistan. What GAO Found In response to congressional direction and GAO recommendations, DOD has taken some actions to institutionalize operational contract support, such as establishing a focal point to lead the department's effort to improve contingency contractor management and oversight at deployed locations, issuing new guidance, and beginning to assess its reliance on contractors. However, DOD still faces challenges in eight areas related to operational contract support. 1) Developing guidance. DOD has yet to finalize joint policies required by Congress in the National Defense Authorization Acts for Fiscal Years 2007 and 2008. 2) Planning for contractors in ongoing operations. The department has not fully planned for the use of contractors in support of ongoing operations in Iraq and Afghanistan, although some efforts are underway at the individual unit level. 3) Planning for contractors in future operations. DOD needs to take additional actions to improve its planning for operational contract support in future operations. For example, while DOD has started to institutionalize operational contract support into combatant commands' operation plans, it has not yet made significant progress. 4) Tracking contractor personnel. While DOD has developed a system to collect data on contractors deployed with U.S. forces, our reviews of this database have highlighted significant shortcomings in its implementation in Iraq and Afghanistan. 5) Providing oversight personnel. DOD continues to face challenges in providing an adequate number of personnel to oversee and manage contractors in contingency operations, such as Iraq and Afghanistan. 6) Training non-acquisition personnel. DOD faces challenges in ensuring that non-acquisition personnel, such as unit commanders, have been trained on how to work effectively with contractors in contingency operations. 7) Screening contractor personnel. DOD has yet to develop a departmentwide policy for screening the significant number of local and third-country national contractor personnel who support deployed U.S. forces. 8) Capturing lessons learned. DOD has not implemented previous GAO recommendations to develop a departmentwide lessons learned program to capture the department's institutional knowledge regarding all forms of contractor support to deployed forces in order to facilitate a more effective working relationship between contractors and the military. Given the contractor-related challenges DOD continues to face, a cultural change is necessary to integrate operational contract support throughout the department. Without such a change, DOD is likely to continue to face these challenges in ongoing and future contingency operations. DOD has acknowledged that operational contract support plays an integral role in contingency operations and that successful execution of operational contract support requires significant planning and management. While some efforts have been made within the department and the individual services to improve the planning for and management of contractors, these efforts do not fully work toward integrating operational contract support throughout DOD. As we have discussed, many of the operational contract support challenges the department continues to face are long-standing and while the department has acknowledged many of these challenges, and taken some actions, it has not systematically addressed them.
gao_GAO-15-374	gao_GAO-15-374_0	UCLASS Program Has Been Delayed As Requirements Debate Continues Since our last review in September 2013, the system’s intended mission and required capabilities have come into question, delaying the Navy’s UCLASS schedule. In addition the Navy now expects to achieve early operational capability—a UCLASS system on at least one aircraft carrier—no earlier than fiscal year 2022, a delay of around 2 years. Congress, DOD, and the Navy continue to debate the primary role of the UCLASS system. The main options are a largely surveillance role with limited strike operating in less contested environments, or a largely strike role with limited surveillance operating in highly contested environments. Knowledge about Needed Resources Depends on Final UCLASS Requirements The resolution of the debate over UCLASS requirements could have significant design and cost implications, which will determine the resources the Navy needs and how much knowledge from the Navy’s previous assessments and estimates can still be applied. In September 2013, we concluded that the UCLASS program should demonstrate that it has an executable business case that reflects high levels of knowledge and a match between requirements and available resources before holding a Milestone B review, establishing an acquisition program baseline, and initiating system development. When the match occurs before system development begins, the weapon system is more likely to meet objectives. As such, the Navy would need to revisit its understanding of available resources in the areas of design knowledge, funding, and technologies as detailed below: Knowledge gained through preliminary design reviews may no longer be applicable: During the four preliminary design reviews that ended in May 2014, the Navy evaluated contractor designs against a set of performance specifications issued in July 2013. Despite this near term reduction, annual development funding levels are projected to reach nearly $850 million in fiscal year 2020, as shown in figure 2. Recommendation for Executive Action Once the JROC has validated UCLASS requirements, and in order to ensure that the Navy has a sound and executable business case and establishes an acquisition program baseline before awarding a development contract and committing significant resources, we recommend that the Secretary of Defense direct the Secretary of the Navy to provide a report to the congressional defense committees and the Secretary of Defense demonstrating that the Navy has the resources available and a strategy to deliver those required UCLASS capabilities. On behalf of DOD, the Navy partially agreed with our recommendation. If the Navy holds a Milestone B review before awarding the development contract for the UCLASS air system and receives the certifications required by statute and DOD policy at that point in time, as well as meeting the reporting requirements in the National Defense Authorization Act for Fiscal Year 2015, we agree that it will satisfy the basic intent of our recommendation, and thus no separate report would be required. However, the current UCLASS schedule does not include a Milestone B review prior to the air system development contract award.	Why GAO Did This Study The Navy expects to have invested at least $3 billion through fiscal year 2020 in the development of the UCLASS system, which includes air system, aircraft carrier, and control system and connectivity segments. It is expected to enhance the intelligence, surveillance, reconnaissance, targeting, and strike capabilities of the Navy's aircraft carrier fleet. In August 2013, the Navy awarded contracts worth $15 million each to four competing contractors to develop and deliver preliminary designs for the air system, which were assessed by the Navy in May 2014. The next anticipated steps for the program will be to solicit proposals and award the contract for air system development. The National Defense Authorization Act for Fiscal Year 2014 included a provision that GAO review the status of the UCLASS acquisition program annually. This report assesses (1) the current status of the program, and (2) the extent to which the Navy has the knowledge about resources it needs to develop the UCLASS system. GAO applied best practice standards, analyzed program documentation, and interviewed Department of Defense (DOD) and contractor officials. What GAO Found Since our last review in September 2013, the intended mission and required capabilities of the Navy's Unmanned Carrier-Launched Airborne Surveillance and Strike (UCLASS) system have come into question. Ongoing debate about whether the primary role of the UCLASS system should be mainly surveillance with limited strike or mainly strike with limited surveillance has delayed the program, as shown in the figure. Requirements emphasizing a strike role with limited surveillance could be more demanding and costly. a Early operational capability is currently not anticipated before fiscal year 2022 and could occur as late as fiscal year 2023. The knowledge the Navy has obtained about the resources needed to develop the UCLASS system may no longer be applicable depending on what requirements are finally chosen. GAO's prior best practices work has found that before initiating system development, a program should present an executable business case that demonstrates that it has a high level of knowledge and a match between requirements and available resources. If the final UCLASS requirements emphasize a strike role with limited surveillance, the Navy will likely need to revisit its understanding of available resources in the areas of design knowledge, funding, and technologies before awarding an air system development contract. What GAO Recommends GAO recommends that before committing significant resources the Navy should ensure that it has an executable business case for UCLASS development that matches available resources to required capabilities. On behalf of DOD, the Navy generally agreed with the recommendation.
gao_GAO-03-184	gao_GAO-03-184_0	Although the average annual use of clotting factor VIII for a person with hemophilia A is 78,000 units, individual use varies widely. Characteristics of Medicare Beneficiaries with Hemophilia According to CDC estimates, 6 percent of the hemophilia population, or about 1,100 individuals, are Medicare beneficiaries. Providers Obtain Clotting Factor Products for Substantially Less than Medicare’s Payment HTCs and homecare companies are able to purchase clotting factor at prices considerably lower than Medicare’s payment for clotting factor. Almost all HTCs that provide clotting factor participate in a federal program that allows them to obtain prices from manufacturers that are 35 to 48 percent below AWP. Homecare companies can obtain prices that range from 22 to 40 percent below AWP. Providers Incur Costs Associated with Delivering Clotting Factor to Medicare Beneficiaries That Are Not Separately Reimbursed Providers incur costs associated with delivering clotting factor that are not separately reimbursed by Medicare. Delivery costs are generated in inventory management, storage, shipping, and the provision of ancillary supplies necessary for the infusion of clotting factor. According to our analysis of data from four HTCs, the costs to HTCs for dispensing clotting factor and providing ancillary supplies directly to patients ranged from $0.03 to $0.08 per unit of clotting factor based on data from 2000 and 2001. Conclusions Medicare’s payment for clotting factor delivered on an outpatient basis is flawed in the same way that its payment is flawed for other outpatient prescription drugs. In tying its payment to AWP, Medicare has been paying substantially more than providers’ actual acquisition costs. We also analyzed data from 11 hemophilia treatment centers (HTC) and 2 homecare companies. These categories constituted over 90 percent of Medicare expenditures on clotting factor in 2001. We did not receive enough data from homecare companies to estimate their costs.	Why GAO Did This Study In 2001, Medicare's outpatient expenditures for blood clotting factor used to treat the estimated 1,100 beneficiaries with hemophilia totaled about $105 million, or more than 2 percent of total Medicare spending on outpatient drugs. Earlier work by GAO indicated that Medicare's payment for certain outpatient drugs is substantially higher than providers' acquisition costs. Concerns have been raised about Medicare's payment for blood clotting factor. GAO was asked to compare provider costs of purchasing clotting factor with Medicare's payment for it and to identify costs to providers associated with delivering clotting factor. What GAO Found Medicare's payment for clotting factor, like other outpatient drugs, is 95 percent of the average wholesale price (AWP), a price established for each drug by its manufacturer. Medicare's payment is substantially more than the actual acquisition costs of hemophilia treatment centers (HTC) and homecare companies, which provide a majority of Medicare beneficiaries with clotting factor. Most HTCs obtain prices from manufacturers that are 35 to 48 percent below AWP by participating in a federal program that guarantees them low prices. Homecare companies obtain prices that range from 22 to 40 percent below AWP. Providers incur additional costs associated with delivering clotting factor that are not separately reimbursed by Medicare. GAO estimates that these additional costs in 2000 and 2001 ranged from $0.03 to $0.08 per unit sold by HTCs. (Hemophilia patients use an average of 78,000 units of clotting factor annually.) GAO did not receive enough data from homecare companies to estimate their costs. Delivery costs are generated in inventory management, specialized refrigerated storage, shipping, and the provision of ancillary supplies such as needles, syringes, and tourniquets to patients.
gao_GAO-12-666T	gao_GAO-12-666T_0	Consequently, the security of these systems and networks is essential to protecting national and economic security, public health and safety, and the flow of commerce. Conversely, ineffective information security controls can result in significant risks, including loss or theft of resources, such as federal payments and collections; inappropriate access to and disclosure, modification, or destruction of sensitive information, such as national security information, personal taxpayer information, or proprietary business information; disruption of critical operations supporting critical infrastructure, national defense, or emergency services; undermining of agency missions due to embarrassing incidents that erode the public’s confidence in government; and use of computer resources for unauthorized purposes or to launch attacks on other computers systems. The Nation Faces an Evolving Array of Cyber-Based Threats Cyber-based threats are evolving and growing and arise from a wide array of sources. These threats can be unintentional or intentional. Unintentional threats can be caused by software upgrades or defective equipment that inadvertently disrupt systems. Intentional threats include both targeted and untargeted attacks from a variety of sources, including criminal groups, hackers, disgruntled employees, foreign nations engaged in espionage and information warfare, and terrorists. These threat sources vary in terms of the capabilities of the actors, their willingness to act, and their motives, which can include monetary gain or political advantage, among others. These sources of cyber threats make use of various techniques, or exploits, that may adversely affect computers, software, a network, an organization’s operation, an industry, or the Internet itself. The unique nature of cyber-based attacks can vastly enhance their reach and impact. For example, cyber attackers do not need to be physically close to their victims, technology allows attacks to easily cross state and national borders, attacks can be carried out at high speed and directed at a number of victims simultaneously, and cyber attackers can more easily remain anonymous. Systems Supporting Federal Operations and Critical Infrastructure Are Vulnerable to Cyber Attacks Significant weaknesses in information security controls continue to threaten the confidentiality, integrity, and availability of critical information and information systems used to support the operations, assets, and personnel of federal agencies. In addition, inspectors general at 22 of the major agencies identified information security or information system control as a major management challenge for their agency. Agency, inspectors general, and GAO assessments of information security controls during fiscal year 2011 revealed that most major federal agencies had weaknesses in most of the five major categories of information system controls: (1) access controls, which ensure that only authorized individuals can read, alter, or delete data; (2) configuration management controls, which provide assurance that only authorized software programs are implemented; (3) segregation of duties, which reduces the risk that one individual can independently perform inappropriate actions without detection; (4) continuity of operations planning, which helps avoid significant disruptions in computer-dependent operations; and (5) agencywide information security programs, which provide a framework for ensuring that risks are understood and that effective controls are selected and implemented. Over the past several years, we and agency inspectors general have made hundreds of recommendations to resolve similar previously identified significant control deficiencies. In addition, securing the control systems that monitor and control sensitive processes and physical functions supporting many of our nation’s critical infrastructures is a national priority, and we have identified vulnerabilities in these systems. Number of Cybersecurity Incidents Reported by Federal Agencies Continues to Rise, and Recent Incidents Illustrate Serious Risk Federal agencies have reported increasing numbers of security incidents that placed sensitive information at risk, with potentially serious impacts on federal operations, assets, and people. Over the past 6 years, the number of incidents reported by federal agencies to US-CERT has increased from 5,503 incidents in fiscal year 2006 to 42,887 incidents in fiscal year 2011, an increase of nearly 680 percent (see fig. Reported attacks and unintentional incidents involving federal, private, and critical infrastructure systems demonstrate that the impact of a serious attack could be significant. In summary, the cyber-threats facing the nation are evolving and growing, with a wide array of potential threat actors having access to increasingly sophisticated techniques for exploiting system vulnerabilities. The danger posed by these threats is heightened by the weaknesses that continue to exist in federal information systems and systems supporting critical infrastructures. GAO-11-24.	Why GAO Did This Study Nearly every aspect of American society increasingly depends upon information technology systems and networks. This includes increasing computer interconnectivity, particularly through the widespread use of the Internet as a medium of communication and commerce. While providing significant benefits, this increased interconnectivity can also create vulnerabilities to cyber-based threats. Pervasive and sustained cyber attacks against the United States could have a potentially devastating impact on federal and nonfederal systems, disrupting the operations of governments and businesses and the lives of private individuals. Accordingly, GAO has designated federal information security as a governmentwide high-risk area since 1997, and in 2003 expanded it to include protecting systems and assets vital to the nation (referred to as critical infrastructures). GAO is providing a statement that describes (1) cyber threats facing the nations systems, (2) vulnerabilities present in federal information systems and systems supporting critical infrastructure, and (3) reported cyber incidents and their impacts. In preparing this statement, GAO relied on previously published work in these areas and reviewed more recent GAO, agency, and inspectors general work, as well as reports on security incidents. What GAO Found The nation faces an evolving array of cyber-based threats arising from a variety of sources. These threats can be intentional or unintentional. Unintentional threats can be caused by software upgrades or defective equipment that inadvertently disrupt systems, and intentional threats can be both targeted and untargeted attacks from a variety of threat sources. Sources of threats include criminal groups, hackers, terrorists, organization insiders, and foreign nations engaged in crime, political activism, or espionage and information warfare. These threat sources vary in terms of the capabilities of the actors, their willingness to act, and their motives, which can include monetary gain or political advantage, among others. Moreover, potential threat actors have a variety of attack techniques at their disposal, which can adversely affect computers, software, a network, an organizations operation, an industry, or the Internet itself. The nature of cyber attacks can vastly enhance their reach and impact due to the fact that attackers do not need to be physically close to their victims and can more easily remain anonymous, among other things. The magnitude of the threat is compounded by the ever-increasing sophistication of cyber attack techniques, such as attacks that may combine multiple techniques. Using these techniques, threat actors may target individuals, businesses, critical infrastructures, or government organizations. The threat posed by cyber attacks is heightened by vulnerabilities in federal systems and systems supporting critical infrastructure. Specifically, significant weaknesses in information security controls continue to threaten the confidentiality, integrity, and availability of critical information and information systems supporting the operations, assets, and personnel of federal government agencies. For example, 18 of 24 major federal agencies have reported inadequate information security controls for financial reporting for fiscal year 2011, and inspectors general at 22 of these agencies identified information security as a major management challenge for their agency. Moreover, GAO, agency, and inspector general assessments of information security controls during fiscal year 2011 revealed that most major agencies had weaknesses in most major categories of information system controls. In addition, GAO has identified vulnerabilities in systems that monitor and control sensitive processes and physical functions supporting the nations critical infrastructures. These and similar weaknesses can be exploited by threat actors, with potentially severe effects. The number of cybersecurity incidents reported by federal agencies continues to rise, and recent incidents illustrate that these pose serious risk. Over the past 6 years, the number of incidents reported by federal agencies to the federal information security incident center has increased by nearly 680 percent. These incidents include unauthorized access to systems; improper use of computing resources; and the installation of malicious software, among others. Reported attacks and unintentional incidents involving federal, private, and infrastructure systems demonstrate that the impact of a serious attack could be significant, including loss of personal or sensitive information, disruption or destruction of critical infrastructure, and damage to national and economic security. What GAO Recommends GAO has previously made recommendations to resolve identified significant control deficiencies.

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