A letter report issued by the General Accounting Office with an abstract that begins "The Mutual Mortgage Insurance Fund has maintained an economic value of at least two percent of the Fund's insurance-in-force, as required by law. GAO's and the Department of Housing and Urban Development's (HUD) analysis show that the Fund had an economic value of $15.8 billion (3.20 percent) and $16.6 billion (3.66 percent), respectively. Given the economic value of the Fund and the state of the economy at the end of fiscal year 1999, a two-percent capital ratio appears sufficient to withstand moderately severe economic downturns that could lead to worse-than-expected loan performance. However, under more severe economic conditions, the economic value of two percent of insurance-in-force would not be adequate. Because of the uncertainty and professional judgment associated with this type of economic analysis, GAO cautions against relying on one estimate or even a group of estimates to determine the adequacy of the Fund's reserves over the longer term. HUD could exercise several options under current legislative authority to reduce the capital ratio for the Fund. It is difficult, however, to reliably measure the impact of policy changes on the Fund's capital ratio and Federal Housing …

A letter report issued by the General Accounting Office with an abstract that begins "Under Title III of the Older Americans Act, the Administration on Aging (AoA) distributes grants to states on the basis of their proportional share of the total elderly population in the United States. These grants are then disbursed to more than 600 area agencies nationwide, and are used to fund group and in-home meals, as well as support services, including transportation and housekeeping. The grants are further subdivided by these agencies to more than 4,000 local service providers. AoA requires that states obligate these funds by September 30 of the fiscal year in which they are awarded. Also, states must spend this money within two years after the fiscal year in which it is awarded. During this time AoA does not limit or monitor the amount of unspent funds that states may carry over to the succeeding fiscal year. GAO examined whether states were using Title III carryover funds to expand their meal service programs for the elderly beyond a level sustainable by their annual allotments alone. GAO found that the buildup and use of Title III carryover funds to support elderly nutrition services does not …

A letter report issued by the General Accounting Office with an abstract that begins "The Department of Defense (DOD) budgets billions of dollars each year to purchase and repair the spare parts needed to maintain its weapons systems and support equipment. The quality of the spare parts can greatly determine if the Department's investment of funds is effective, efficient, and economical. This report examines the Navy's Product Quality Deficiency Reporting Program and the extent to which the program has gathered the data needed for the analysis, correction, and prevention of deficiencies in spare parts. GAO found that data on parts defects identified at the time of installation were underreported. Data on parts that failed after some operation but before their expected design life were not collected as part of this program. In the quality reports GAO reviewed, some key information was omitted on the cause of the parts' failures and some reports did not identify who was responsible for the defects. To a large extent, the program's ineffectiveness can be attributed to lack of management, limited training and incentives to report deficiencies, and competing priorities for the staff resources needed to carry out the program."

A letter report issued by the General Accounting Office with an abstract that begins "The Department of Energy (DOE) created the Laboratory Directed Research and Development (LDRD) program in fiscal year 1992. This program formalized a long-standing policy of giving its multi-program national laboratories discretion to conduct self-initiated, independent research and development (R&D). Since then, DOE's multi-program national laboratories have spent more than $2 billion on LDRD projects. DOE's three largest multi-program national laboratories account for nearly three-quarters of laboratory-wide LDRD spending. All LDRD projects GAO reviewed at the five laboratories met DOE's guidelines for selection. In addition, each of the five laboratories created the internal controls necessary to reasonably ensure compliance with DOE's guidelines. Each laboratory issues annual LDRD reports that contain performance indicators, such as the numbers of patents obtained, publications, copyrights, awards, and relevance of the research to DOE's missions. The reports present performance information in various formats, making it difficult to focus on the most relevant performance information."

A letter report issued by the General Accounting Office with an abstract that begins "This report reviews the Nuclear Regulatory Commission's (NRC) fiscal year 2000 performance report and fiscal year 2002 performance plan required by the Government Performance and Results Act of 1993 to assess its progress in achieving selected key outcomes that are important mission areas for the agency. NRC reports mixed progress in achieving the three outcomes GAO reviewed. To measure performance for the three outcomes, NRC established the same four goals: one relates to safety and three relate to such nonsafety issues as public confidence, regulatory burden, and organizational enhancements. Although NRC's strategies for the safety-related performance goal outcomes seem clear and reasonable, GAO could not assess NRC's performance for the three nonsafety performance goals because NRC only recently developed and reported strategies for them in its fiscal year 2002 performance plan. Because NRC has had little experience in applying the strategies and measures for the three nonsafety goals, it may need to revise them after it completes various planned evaluations during the next three years."

A letter report issued by the General Accounting Office with an abstract that begins "This report, part of GAO's performance and accountability series, discusses the major management challenges and program risks facing the Environmental Protection Agency (EPA). These challenges include (1) improving environmental performance information management, (2) developing a comprehensive human capital approach, and (3) strengthening working relationships with the states."

A letter report issued by the General Accounting Office with an abstract that begins "The consensus of the Food and Drug Administration (FDA), the World Health Organization, and other major health agencies is that the research to date does not show radiofrequency energy emitted from mobile phones has harmful health effects, but there is not yet enough information to conclude that they pose no risk. Although most of the epidemiological and laboratory studies done on this issue have found no adverse health effects, the findings of some studies have raised questions about cancer and other health problems that require further study. The Cellular Telecommunication & Internet Association (CTIA) and FDA will jointly conduct research on mobile phone health affects. Although the initiative is funded solely by CTIA, FDA's active role in setting the research agenda and providing scientific oversight should help alleviate concerns about the objectivity of the report. The media has widely reported on the debate over whether mobile phones can cause health problems. Thus, the federal government's role in providing the public with clear information on this issue is particularly important. FDA has a consumer information update on mobile phone health issues but has not revised that data …

A letter report issued by the General Accounting Office with an abstract that begins "The Treasury Department, on behalf of the Customs Service, requested Office of Personnel Management (OPM) approval for Schedule A appointment authority for 10 positions for oversight policy and direction of sensitive law enforcement activities. Treasury's request stated that "due to the sensitive nature of the operations, these positions require a unique blend of special characteristics, skills and abilities that cannot be announced to the general public, and for which it is not practical to examine." According to OPM officials, no detailed criteria are applied when OPM considers such requests. OPM approved the request primarily because Treasury argued that the positions were sensitive in nature, involved law enforcement activities, and were impracticable to advertise and examine for. In using the Schedule A authority between September 1998 and January 2001, Customs made nine appointments to various positions. GAO found that circumstances surrounding five of the nine appointments can give the appearance of inconsistency in the application of the Schedule A appointment authority or possible favoritism toward former political employees. OPM reviews agencies' use of appointment authorities, including Schedule A and other excepted appointments, every four to five years. …

A letter report issued by the General Accounting Office with an abstract that begins "To take a more complete and accurate count of the nation's population in the 2000 Census, the Bureau of the Census partnered with other federal agencies, as well as with state, local, and tribal governments; religious, community, and social service organizations; and private businesses. According to the Bureau, about 140,000 organizations participated in the partnership program by assisting in such critical activities as reviewing and updating the Bureau's address list, encouraging people--especially hard-to-count populations--to participate in the census, and recruiting temporary census employees. GAO found that the Bureau spent about $142.9 million on its partnership program, or about two percent of the estimated $6.5 billion the Bureau allocated for the census and an average of about $1.19 for each of the 120 million households that the Bureau estimates are in the nation. The Bureau staffed the partnership program with 594 full-time positions, of which 560 were allocated to the field, while the remaining slots were located in the Bureau's headquarters. Decisions on which organizations to partner with and what events to attend were governed by unwritten guidelines and criteria and were driven by the Bureau's desire …

A letter report issued by the General Accounting Office with an abstract that begins "GAO contracted with KPMG Peat Marwick LLP to audit the financial statements of the Senate Restaurants Revolving Fund for fiscal years 2000 and 1999. KPMG found that the statements were fairly presented in conformity with U.S. generally accepted accounting principles. Management fairly stated that internal controls safely guarded assets against loss from unauthorized acquisition, use, or disposition; ensured material compliance with laws and regulations; and ensured that there were no material misstatements in the financial statements. KPMG found no reportable noncompliance with selected provisions of the laws and regulations it tested."

A letter report issued by the General Accounting Office with an abstract that begins "The Internal Revenue Service (IRS) began the Customer Account Data Engine (CADE) project to modernize the agency's outdated and inefficient data management system. This report determines (1) the reported status of CADE and IRS' plans for completing the project, (2) whether IRS is managing the relationship between CADE and the agency's enterprise architecture and current systems environment, (3) whether IRS is managing CADE in accordance with its Enterprise Life Cycle (ELC), and (4) whether IRS is ensuring that CADE will satisfy agency business needs. GAO found that IRS was over budget and behind schedule in meeting CADE's next project milestone, which is the completion of the preliminary design. IRS was not effectively managing the relationship between CADE and the enterprise architecture or its current systems environment. IRS had not fully employed several critical management controls that are intended to ensure that CADE is aligned with ELC. IRS had completed or was in the process of completing steps to ensure that CADE will satisfy agency business needs."

A letter report issued by the General Accounting Office with an abstract that begins "The Environmental Protection Agency (EPA) provides millions of dollars to grantees to conduct research, demonstrate pollution control techniques, and perform other activities. Oversight of this large pool of grantees has proven to be difficult. EPA's post-award grant management policy provides few guarantees that unallowable costs for nonprofit grantees will be identified. Identifying such costs is important for effective oversight of EPA's nonprofit grantees. EPA's on-site grantee visits could provide agency officials with a valuable opportunity to test for unallowable costs while they are testing the adequacy of the grantees' financial and administrative systems. Although more time may be required to test for unallowable costs and additional training may be required for regional personnel, the tests would provide greater assurance that grant funds are spent in accordance with Office of Management and Budget (OMB) requirements. The single audit is an important tool for ensuring that federal funds are properly spent. EPA has taken several steps to identify grantees that need a single audit, but it is difficult to identify them definitively because information on total federal expenditures by each grantee is unavailable. As a result, EPA is …

A letter report issued by the General Accounting Office with an abstract that begins "The Department of Defense (DOD) has not developed a proposal to improve the accuracy of the reporting of contract service costs. Without accurate and reliable information, Congress cannot effectively use the information reported for DOD in the President's budget as it drafts and passes laws that affect spending. Last year, DOD agreed to develop a proposal to resolve this problem. GAO was told recently that DOD's momentum to develop a written proposal had subsided."

A letter report issued by the General Accounting Office with an abstract that begins "This report, part of GAO's performance and accountability series, discusses the major management challenges and program risks facing the Agency for International Development (AID). GAO identified weaknesses in AID's management of its human capital. AID has, however, made efforts to improve this area, including hiring additional foreign service employees, establishing a recruitment program, and improving employee training. AID needs to sustain its focus on these areas if it is to succeed in reforming its personnel system. GAO also found weaknesses in financial management, information technology management, and data collection."

A letter report issued by the General Accounting Office with an abstract that begins "The attorneys general of 46 states signed a settlement agreement in 1998 with the nation's largest tobacco companies. The agreement requires the tobacco companies to make annual payments to the states in perpetuity as reimbursement for past tobacco-related costs. Florida, Minnesota, Mississippi, and Texas reached earlier individual settlements with the tobacco companies. States are free to use the money for any purpose. This report examines (1) the amount of payments received by the states and the states' decision-making processes on the allocation of payments in fiscal years 2000 and 2001 and (2) the types of programs that states funded with their payments in those two fiscal years. As of April 2001, GAO found that 45 of the 46 states received nearly $13.5 billion of the $206 billion estimated to be paid by the tobacco companies during the first 25 years of the agreement. Many states established dedicated funds to receive at least part of the payments. Other states passed legislation to ensure that payments are used to supplement existing state funds, enacted laws governing the future use of the payments, established voter approved initiatives to decide …

A letter report issued by the General Accounting Office with an abstract that begins "A sound public infrastructure plays a vital role in encouraging a more productive and competitive national economy and meeting public demands for safety, health, and improved quality of life. The federal government has spent an average of $149 billion (in constant 1998 dollars) annually since the late 1980s on the nation's infrastructure. Little is known, however, about the comparability and reasonableness of individual agencies' estimates for infrastructure needs. This report discusses infrastructure investment or "needs" estimates compiled by seven agencies--the U.S. Army Corps of Engineers, the Environmental Protection Agency (EPA), the Federal Aviation Administration (FAA), the Federal Highway Administration (FHWA), the Federal Transit Administration (FTA), the General Services Administration (GSA), and the Appalachian Regional Commission (ARC). GAO focuses on the following infrastructure areas: water resources (inland and deep draft navigation, flood control, and shore protection), hydropower, water supply, wastewater treatment, airports, highways, mass transit, and public buildings. GAO found that the agencies' estimates for infrastructure investments ranged from GSA's calculation of $4.58 billion (in current dollars) over one to five years to repair public buildings to FHWA's estimate of $83.4 billion (in constant 1997 dollars) per …

A letter report issued by the General Accounting Office with an abstract that begins "The Department of Veterans Affairs (VA) spent about $1.9 billion--or about 10 percent of its health care budget--to provide nursing home care to veterans in fiscal year 2000. VA will likely see increasing demand for nursing home care during the next decade. The number of veterans age 85 and older is expected to triple--from 422,000 veterans in 2000 to nearly 1.3 million in 2010. Among the very old, the prevalence of chronic health conditions and disabilities increases markedly. In addition, VA is required to provide long-term care to some veterans, which may further increase veterans' demand for nursing home care. Almost 73 percent of VA's nursing home care in fiscal year 2000 went to VA's 134 nursing homes; the rest went to state-owned and operated veterans' nursing homes (15 percent) or to community nursing homes under local or national contract to VA (12 percent). VA generally requires its medical center staff to conduct annual inspections of state veterans' homes and community nursing homes; it also requires monthly staff visits to veterans in community nursing homes. However, VA plans to change its oversight of community nursing homes, …

A letter report issued by the General Accounting Office with an abstract that begins "The Farm Credit Administration (FCA) regulates the farm credit system. Administrative expenses, which accounted for about 97 percent of FCA's total operating expenses of $34.5 million in fiscal year 2000, are funded primarily by assessments on the institutions that make up the system, including the Federal Agricultural Mortgage Corporation (Farmer Mac). This report (1) analyses trends in administrative expenses for fiscal years 1996 through 2000 and (2) compares ways that FCA and other federal financial regulators calculate the assessments they need to fund their operations. GAO found that although FCA's administrative expenditures varied each year between 1996 and 2000, they remained below 1996 levels and stayed within congressionally imposed annual spending limits for each year during 1997 through 2000. Between 1996 and 2000, the agency experienced a decline in administrative spending of around $2 million, or 5.8 percent. Personnel costs were the largest single expense, consistently accounting for more than 80 percent of administrative spending; thus, a 15 percent staff reduction also provided the greatest overall savings. Unlike many government agencies whose operations are funded by taxpayers' money, the federal financial regulators are self-funded agencies that …

A letter report issued by the General Accounting Office with an abstract that begins "The Centers for Disease Control and Prevention (CDC) and the National Institutes of Health (NIH) have conducted an increasingly broad range of research and educational activities related to Lyme disease. CDC has instituted a system for the surveillance of Lyme disease, helped to standardize diagnostic testing, conducted and funded basic research on Lyme disease and on its prevention, and developed patient and practitioner educational materials. CDC has initiated most activities recommended by external reviewers and congressional appropriations committees regarding changes to its programs. NIH has conducted and funded basic research on Lyme disease and on its etiology, diagnosis, treatment, and prevention. In addition, NIH research is addressing two topics of particular interest to patient advocates--chronic Lyme disease and the occurrence of other tick-borne infections in Lyme disease patients. NIH has also responded to most expert recommendations and congressional recommendations. During the last 10 years, allocations for Lyme disease have increased slightly at CDC, and obligations for Lyme disease have increased significantly at NIH. CDC allocations for Lyme disease research and education have increased seven percent, from $6.9 million to $7.4 million in inflation-adjusted dollars from fiscal …

A letter report issued by the General Accounting Office with an abstract that begins "The Andean region continues to cultivate, produce, and export almost all of the world's cocaine as well as an increasing amount of heroin, according to the State Department. Colombia is the source of 90 percent of the cocaine entering the United States and about two-thirds of the heroin found on the East Coast. Although coca cultivation estimates have fallen by about two-thirds in Bolivia and Peru since 1996, increases in coca cultivation in Colombia have offset much of these successes. Under State's Bureau for International Narcotics and Law Enforcement Affairs, the Office of Aviation, through a contract with DynCorp Aerospace Technology, supports foreign governments' efforts to locate and eradicate illicit drug crops in the Andean region. In recent years, DynCorp has maintained and operated aircraft to locate and eradicate drug crops in Colombia, trained pilots and mechanics for the Colombian Army Aviation Brigade, and provided logistical and training support for the aerial eradication programs of the Colombian National Police and manual eradication programs in Bolivia and Peru. The Office of Aviation met both State's overall contracting oversight requirements and more specific oversight and evaluation requirements in …

A letter report issued by the General Accounting Office with an abstract that begins "Australia, Japan, New Zealand, the United Kingdom, and the United States have been the major providers of bilateral development assistance to the Pacific Island nations since 1987. The Asian Development Bank and the European Union have been the major multilateral donors. The donors' main development objectives, according to the planning documents, have been to alleviate poverty and to set the Pacific Island nations on the path to economic self-sufficiency. To achieve these objectives, these donors focus their assistance in key areas, such as education, policy reform, and infrastructure. The United States could draw several lessons from the donors' experiences for providing assistance as well as the strategies and approaches the donors have adopted. These lessons could provide valuable insights for the United States as it negotiates additional economic assistance to the Federal States of Micronesia and the Republic of the Marshall Islands. On the basis of the donors' experiences, GAO observed that (1) assistance strategies may involve trade-offs in expectations of aid effectiveness if other objectives for providing assistance take priority over development objectives; (2) assistance strategies may involve trade-offs between effectiveness and accountability, on the …

A letter report issued by the General Accounting Office with an abstract that begins "The reauthorization of the Temporary Assistance for Needy Families (TANF) block grant represents an opportunity to re-examine the fiscal balance between the federal government and the states in providing services to needy families. Since the enactment of federal welfare reform, there has been much discussion of the fiscal implications of these sweeping changes in national welfare policy. A particularly contentious issue has been the extent to which states have replaced, rather than supplemented, their own spending with federal TANF dollars, thereby freeing up state funds for other budget priorities. This report reviews (1) the degree to which states have used the flexibility afforded in the federal TANF grant to supplant, rather than supplement, state spending for low-income families; (2) the changes that have occurred in the states' use of different funding sources (including their TANF funds) on programs that help the poor; (3) the effects of state funding choices on the amounts of TANF funds the states have left unspent at the U.S. Treasury; and (4) the measures states are taking to save a portion of the TANF grant or set aside their funds for a …

A letter report issued by the General Accounting Office with an abstract that begins "This report reviews trade adjustment assistance and other assistance programs, such as the North American Free Trade Agreement Transitional Adjustment Assistance (NAFTA-TAA) program, to determine if they have helped distressed communities deal with the adverse impacts of trade. GAO conducted case studies in six such trade-impacted communities, all of which experienced major trade-related plant closures and layoffs in the mid- to late-1990s. Two communities lost a large percentage of local jobs in sudden plant closures and experienced economic crises. The other communities experienced rolling layoffs or a series of smaller plant closures that dislocated as many or more workers but did so gradually. Experiences in the communities GAO visited indicate that Temporary Adjustment Assistance (TAA) and NAFTA-TAA assistance to dislocated workers, although substantial, could be implemented more effectively. Program administrators and training providers in each community said that the programs have structural problems that impede effective service delivery. One factor that influenced the implementation of training benefits in many communities is that a significant percentage of dislocated workers needed to earn a high school equivalency degree or take remedial courses before they could even start a …

A letter report issued by the General Accounting Office with an abstract that begins "This report discusses GAO's review of the Department of the Treasury's Office of Enforcement. The office was created to provide oversight, policy guidance, and support to Treasury's enforcement bureaus. GAO found that no comprehensive source provided guidance to either the office staff or to the bureaus on the circumstances under which bureaus are required to interact with the office. In addition, established documentation did not exist for 12 of the 29 circumstances under which the bureaus are required to interact with the office, and when it did exist, the documentation was generally broad in nature and did not provide explicit information on one-half of the expected interaction. About one-half of the bureau officials that GAO interviewed said that they were not aware of written requirements for their bureaus' interactions with the office or that they knew when to interact through such factors as their professional responsibility, experience, judgment, or common sense. An agency's internal control needs to be clearly documented and that documentation should be readily available for examination. Without a clearly defined and documented set of policies and procedures covering operational and communications activities, the …