Correspondence issued by the Government Accountability Office with an abstract that begins "The Department of Defense (DOD) spends billions of dollars to purchase, manage, store, track, and deliver spare parts and other supplies needed to keep military equipment ready and operating. Given the need to support ongoing U.S. military operations, DOD reported that it currently manages more than 4 million secondary inventory items valued at more than $91 billion as of September 2009. However, DOD reported that $10.3 billion (11 percent) of its secondary inventory has been designated as excess and categorized for potential reuse or disposal. According to DOD, another $15.2 billion (17 percent) of its secondary inventory exceeds the approved acquisition objective and is being retained because it was determined to be more economical to retain than to dispose of it or it might be needed in the future. Since 1990, we have identified DOD supply chain management as a high-risk area due in part to ineffective and inefficient inventory management practices and procedures, weaknesses in accurately forecasting demand for spare parts, and challenges in achieving widespread implementation of key technologies aimed at improving asset visibility. These factors have contributed to the accumulation of billions of dollars in …

Correspondence issued by the Government Accountability Office with an abstract that begins "This letter formally transmits the documents used for an oral briefing we gave to Congress on January 12-13, 2011, in response to the Dodd-Frank Wall Street Reform and Consumer Protection Act. GAO was directed to study the role and importance of the Governmental Accounting Standards Board (GASB) in the municipal securities markets as well as the manner and level at which GASB has been funded. GASB establishes standards of accounting and financial reporting for U.S. state and local governments. Established in 1984 as an operating component of the Financial Accounting Foundation (the Foundation), GASB is recognized by the American Institute of Certified Public Accountants as the body that sets generally accepted accounting principles (GAAP) for state and local governments. In conducting this study, GAO was to consult with the principal organizations representing state governors, legislators, local elected officials, and state and local finance officers. Specifically, in accordance with the mandate and discussions with Congress, our objectives were to address the following key questions: (1) What are key stakeholder views on the role and relevance of GASB in the municipal securities markets? and ( 2) What is the manner …

Correspondence issued by the Government Accountability Office with an abstract that begins "Congress asked us to estimate the effect on Ryan White Comprehensive AIDS Resources Emergency Act of 1990 (CARE Act) funding to urban areas if a certain stop-loss provision was enacted. The CARE Act, administered by the Department of Health and Human Services' (HHS) Health Resources and Services Administration (HRSA), was enacted to address the needs of jurisdictions, health care providers, and people with human immunodeficiency virus/acquired immunodeficiency syndrome (HIV/AIDS). In October 2009, the Ryan White HIV/AIDS Treatment Extension Act of 2009 (RWTEA) reauthorized CARE Act programs for fiscal years 2010 through 2013. The stop-loss provision that you asked us to address was contained in a draft consolidated appropriations bill for fiscal year 2011."

Other written product issued by the Government Accountability Office with an abstract that begins "This report presents the highlights of GAO's fiscal year 2010 Performance and Accountability Report. The Government Accountability Office, the audit, evaluation, and investigative arm of the Congress, exists to support the Congress in meeting its constitutional responsibilities and to help improve the performance and ensure the accountability of the federal government for the benefit of the American people. GAO examines the use of public funds; evaluates federal programs and policies; and provides analyses, recommendations, and other assistance to help the Congress make informed oversight, policy, and funding decisions. To fulfill its mission, GAO organizes and manages its resources to support four broad strategic goals. These include helping to address challenges to the well-being and financial security of the American people, responding to changing security threats and global interdependence, and transforming the federal government to address national challenges. Strategic goal 4 is an internal goal focused on enhancing GAO's value through improving its efficiency, effectiveness, and quality, and institutional stewardship and resource management. GAO maintains a workforce of highly trained professionals across a breadth of academic and scientific disciplines. About three-quarters of the approximately 3,200 employees are …

Correspondence issued by the Government Accountability Office with an abstract that begins "The Department of Defense (DOD) spends billions of dollars each year to maintain key business operations intended to support the warfighter, including systems and processes related to the management of contracts, finances, the supply chain, support infrastructure, and weapon systems acquisition. We have designated a number of these areas as high risk because of their vulnerability to fraud, waste, abuse, and mismanagement and because of opportunities to achieve greater efficiencies and free up resources for higher-priority needs. In 2005, we identified DOD's approach to business transformation as a high-risk area because (1) DOD had not established clear and specific management responsibility, accountability and control over business transformation-related activities and applicable resources; and (2) DOD lacked a clear strategic and integrated plan for business transformation with specific goals, measures and accountability mechanisms to monitor progress. Because of the complexity and magnitude of the challenges facing DOD in improving business operations, we have reported the need for a chief management officer (CMO) with significant authority and experience to focus the necessary attention and sustain progress. Both DOD and Congress have taken actions to address DOD's management of business transformation efforts. …

Correspondence issued by the Government Accountability Office with an abstract that begins "According to Department of Defense (DOD) officials, the Air Force Electronic Warfare Evaluation Simulator (the Simulator), located at Air Force Plant in Fort Worth, Texas, is an important asset for helping to protect U.S. and allied pilots and aircraft against the missile threats posed by adversaries. Most missiles use one of two electronic warfare technologies in order to pursue aircraft in flight and deliver an explosive warhead with the intent to inflict maximum damage. Small shoulder-launched missiles generally use infrared seekers that search for heat sources on an aircraft, while more sophisticated air-to-air and larger surface-to-air missiles can use radio waves and infrared seekers to determine an aircraft's location in flight. DOD continually develops and tests countermeasures to protect U.S. and allied aircraft from both types of missile threats. The Air Force Electronic Warfare Evaluation Simulator at Plant 4 is one of only two Air Force facilities of its kind that test countermeasures against heat-seeking missiles, and it is the only Air Force facility that currently houses the equipment necessary to test countermeasures against more sophisticated radio frequency surface-to-air missiles. The Simulator uses an array of computer hardware …

Correspondence issued by the Government Accountability Office with an abstract that begins "In recent years, we and other federal fiscal experts--including the Congressional Budget Office (CBO) and the Medicare Trustees--have noted the rise in Medicare spending and expressed concern that the program is unsustainable in its present form. Concerns about the rising cost of health care are particularly pressing in light of evidence that suggests that greater spending does not necessarily translate to better health outcomes or higher-quality care. Medicare's fee-for-service (FFS) payment system may contribute to spending growth because it rewards volume of services regardless of the appropriateness, cost, and quality of those services. Under FFS, a payment is made for each unit of service based on the expected costs of delivering that service. For example, Medicare makes multiple separate payments for the services associated with a complex medical procedure performed in a hospital. It pays the hospital for the initial admission and any related readmissions; each physician involved in the patient's care, such as the surgeon and the anesthesiologist; and the skilled nursing facility for any related care immediately after hospitalization. Payments made in isolation in this way may give providers little incentive to coordinate the provision of …

Correspondence issued by the Government Accountability Office with an abstract that begins "As Congress requested, we conducted a review of challenges associated with enhancing safety on major rail transit systems. During the course of that review, we assessed the quality of data that the Federal Transit Administration (FTA) collects and maintains in its State Safety Oversight (SSO) Rail Accident Database. FTA, an agency within the Department of Transportation (DOT), collects these safety data, including data on types of accidents and causes, from SSO agencies and the rail transit agencies they oversee. FTA used the SSO Rail Accident Database to produce the agency's 2009 Rail Safety Statistics Report, which analyzed data from 2003 through 2008. Although we originally intended to report on safety trends using the SSO Rail Accident Database in the rail transit report, we determined that these data were not sufficiently reliable for such a purpose. As a result, in this review we further assess the SSO Rail Accident Database and FTA's processes for collecting and compiling the data. We determined that there are numerous inaccuracies in FTA's SSO Rail Accident Database and, consequently, the 2009 Rail Safety Statistics Report. FTA implemented changes to the data collection process over …

Testimony issued by the Government Accountability Office with an abstract that begins "Agencies across the government are increasingly reliant on contractors to execute their missions. With hundreds of billions of taxpayer dollars at stake, the government needs strong controls to provide reasonable assurance that these contract funds are not being lost to improper payments (fraud and errors), waste, and mismanagement. Effective contract oversight, which includes effective internal controls throughout the contracting process, is essential to protecting government and taxpayer interests. Standards for Internal Control in the Federal Government provides the overall framework for internal control, which includes the control environment, risk assessment, control activities, information and communication, and monitoring. Contract auditing is a control mechanism intended to provide those responsible for government procurement with financial information and advice relating to contractual matters and the effectiveness, efficiency, and economy of contractors' operations. Today's testimony describes the (1) contracting cycle and related internal controls, (2) Defense Contract Audit Agency (DCAA) and its role in performing contract audits for the Department of Defense (DOD) and other federal agencies, and (3) risks associated with ineffective contract controls and auditing. GAO's testimony is based on prior reports and testimonies, as listed at the end of …

Other written product issued by the Government Accountability Office with an abstract that begins "This report presents the Government Accountability Office's (GAO) Performance Plan for Fiscal Year 2012. In the spirit of the Government Performance and Results Act, this annual plan informs the Congress and the American people about what we expect to accomplish on their behalf in the coming fiscal year. It sets forth our plan to make progress toward achieving our strategic goals for serving the Congress and the American people. This framework not only shows the relationship between our strategic goals and strategic objectives, but also show major themes that could potentially affect our work."

Testimony issued by the Government Accountability Office with an abstract that begins "This testimony discusses the status of the Airport and Airway Trust Fund (Trust Fund). Established in 1970, the Trust Fund helps finance the Federal Aviation Administration's (FAA) investments in the airport and airway system, such as construction and safety improvements at airports and technological upgrades to the air traffic control system, as well as FAA operations, such as providing air traffic control and conducting safety inspections. FAA, the Trust Fund, and the excise taxes that support the Trust Fund (which are discussed later in this statement) must all be periodically reauthorized. The most recent reauthorization expired at the end of fiscal year 2007. Proposed reauthorization legislation was considered but not enacted in the 110th and 111th Congresses, although several short-term measures were passed to extend the authorization of aviation programs, funding, and Trust Fund revenue collections. The latest of these extensions--the Airport and Airway Extension Act of 2010, Part IV--was enacted on December 22, 2010, extending FAA programs, expenditure authority, and aviation trust fund revenue collections through March 31, 2011. The financial health of the Trust Fund is important to ensure sustainable funding for a safe and efficient …

Correspondence issued by the Government Accountability Office with an abstract that begins "While most of Medicare's 46 million beneficiaries are covered by the traditional fee-for-service (FFS) program, about one in four beneficiaries receives benefits through private health plans under the Medicare Advantage (MA) program. Under the FFS program, Medicare pays health care providers for each covered service they furnish. While Medicare sets the price it pays, the volume of services--and, as a consequence, total spending--remains largely uncontrolled. In contrast, MA plans have more control over both the price they pay to providers and the quantity of services they deliver. As of September 2010, more than 11 million beneficiaries were enrolled in approximately 3,900 MA plans sponsored by 181 parent MA organizations (MAO). MAOs generally offer beneficiaries one or more plans to choose from--with different coverage, premiums, and cost sharing features--in the areas they serve. Also, MA plans may provide additional benefits not offered under FFS Medicare, such as reduced cost sharing or vision and dental coverage. Medicare pays plans a fixed amount per enrolled beneficiary monthly. In 2010, Medicare payments to MA plans totaled an estimated $115 billion. In June of each year, MA plans submit bids to the Centers …

Testimony issued by the Government Accountability Office with an abstract that begins "This testimony discusses the E-Verify program, which provides employers a tool for verifying an employee's authorization to work in the United States. The opportunity for employment is one of the most powerful magnets attracting immigrants to the United States. According to the Pew Hispanic Center, in early 2009 approximately 11 million unauthorized immigrants were living in the country, and an estimated 7.8 million of them, or about 70 percent, were in the labor force. Congress, the administration, and some states have taken various actions to better ensure that those who work here have appropriate work authorization and to safeguard jobs for authorized employees. Nonetheless, opportunities remain for unscrupulous employers to hire unauthorized workers and for unauthorized workers to fraudulently obtain employment by using borrowed or stolen documents. Immigration experts have noted that deterring illegal immigration requires, among other things, a more reliable employment eligibility verification process and a more robust worksite enforcement capacity. E-Verify is a free, largely voluntary, Internet-based system operated by the Verification Division of the Department of Homeland Security's U.S. Citizenship and Immigration Services (USCIS) and the Social Security Administration (SSA). The goals of E-Verify …

Testimony issued by the Government Accountability Office with an abstract that begins "The federal real property portfolio, comprising over 900,000 buildings and structures and worth hundreds of billions of dollars, presents management challenges. In January 2003, GAO designated the management of federal real property as a high-risk area in part due to the presence of unneeded property. The Office of Management and Budget (OMB) is responsible for reviewing agencies' progress on federal real property management. The General Services Administration (GSA), often referred to as the federal government's landlord, controls more square feet of buildings than any other civilian federal agency. GSA funds real property acquisition, operation, maintenance, and disposal through the rent it collects from tenant agencies that is deposited into the Federal Buildings Fund (FBF). This testimony discusses (1) the scope and costs of the excess real property held by GSA and other federal agencies; and (2) the challenges GSA and other federal agencies face in disposing of excess and underutilized real property. GAO analyzed GSA data from a centralized real property database, reviewed GSA real property plans and previous GAO reports, and interviewed GSA and OMB officials."

Correspondence issued by the Government Accountability Office with an abstract that begins "Prescription drug spending in 2009 totaled approximately $250 billion, of which $78 billion--or about 31 percent--was spent by the federal government. Prescription drug spending by the federal government, patients, and third-party payers, including employers, is driven by many factors, including the prices paid for drugs. In 2007 we reported on trends in retail prices--known as usual and customary (U&C) prices--for prescription drugs. We found that the average U&C price for the commonly used brand-name prescription drugs we reviewed increased about 6 percent per year from January 2000 through January 2007. Some media reports have suggested that prescription drug prices may have increased more during the debate leading up to passage of the Patient Protection and Affordable Care Act (PPACA) in March 2010 compared to other recent years. We were requested to examine recent trends in drug prices for brand-name and generic pharmaceuticals. In this report, we (1) examine U&C price trends for commonly used prescription drugs from 2006 through the first quarter of 2010, the latest available data at the time of our analysis, and compare these trends to those of other medical consumer goods and services, and …

Testimony issued by the Government Accountability Office with an abstract that begins "Access to broadband service--a highspeed connection to the Internet--is seen as vital to economic, social, and educational development, yet many areas of the country lack access to, or their residents do not use, broadband. To expand broadband deployment and adoption, the American Recovery and Reinvestment Act of 2009 (Recovery Act) provided $7.2 billion to the Department of Commerce's National Telecommunications and Information Administration (NTIA) and the Department of Agriculture's Rural Utilities Service (RUS) for grants or loans to a variety of program applicants. The Recovery Act required the agencies to award all funds by September 30, 2010. This testimony addresses (1) NTIA's and RUS's efforts to award Recovery Act broadband funds and (2) the remaining risks that NTIA and RUS face in providing oversight for funded projects. To conduct this work, GAO reviewed and summarized information from prior GAO work. GAO also reviewed NTIA and RUS reports on the status of the agencies' programs and gathered information from the agencies on steps taken to respond to prior GAO recommendations. In past work, GAO recommended that the agencies take several actions, such as developing contingency plans to ensure sufficient …

Correspondence issued by the Government Accountability Office with an abstract that begins "This report responds to questions that Congress raised about Air Force engine maintenance and repair work currently performed at Kelly Aviation Center (KAC) and the potential transfer of that work to another location. In 1999, Oklahoma City Air Logistics Center (OC-ALC) awarded a contract to KAC to perform work, including depot-level maintenance, repair, and overhaul on TF39 engines, which are typically used for C-5 Galaxy aircraft; T56 engines, which are typically used for C-130 aircraft; and fuel accessories on these engines. The Air Force estimates the total expenditure under the contract for this work to be $3.7 billion from February 16, 1999, through December 1, 2010. The contract is not to exceed 15 years (the contract had an initial 7-year ordering period that could be extended to 15 years or reduced to 5 years based on performance), and will expire not later than February 15, 2014. The Air Force will need to determine how to conduct the engine maintenance work after the term of the contract ends. Congress requested that we review the potential transfer of the engine maintenance and repair workload from KAC. Our objectives were to …

Correspondence issued by the Government Accountability Office with an abstract that begins "Al Qaeda, the Taliban, and other extremists have used safe havens along Pakistan's Western Frontier (border) region to attack Pakistani, Afghan, U.S., and coalition troops; plan and train for attacks against U.S. interests and the U.S. homeland; destabilize Pakistan, a nuclear-armed U.S. ally; and spread radical Islamic ideologies that threaten U.S. interests. A key U.S. national security objective is to disrupt, dismantle, and defeat al Qaeda and its violent extremist affiliates in Pakistan and to deny them a safe haven. Since 2002, the United States has provided over $18 billion in assistance and reimbursement to Pakistan including (1) reimbursements to the Pakistani government for costs incurred in direct support of U.S. counterterrorism operations; (2) security assistance such as grants to Pakistan for the acquisition of military equipment; and (3) development, economic, and humanitarian assistance. Since 2006, this assistance has included $1.5 billion to improve the counterterrorism and counterinsurgency capabilities of Pakistani security forces operating along the country's border with Afghanistan, including $400 million for the Pakistan Counterinsurgency Fund (PCF) and $700 million for the Pakistan Counterinsurgency Capabilities Fund (PCCF). The President has requested an additional $1.2 billion for …

Testimony issued by the Government Accountability Office with an abstract that begins "The Department of Homeland Security (DHS) reports that the nearly 2,000-mile U.S. border with Mexico is vulnerable to cross-border illegal activity. The Office of Border Patrol (Border Patrol), within DHS's U.S. Customs and Border Protection (CBP), is responsible for securing the border between U.S. ports of entry and has divided responsibility for southwest border miles among nine Border Patrol sectors. CBP reported spending about $3 billion on Border Patrol's southwest border efforts in fiscal year 2010, apprehending over 445,000 illegal entries. This testimony provides preliminary observations on (1) the extent to which DHS reported progress in achieving operational control--Border Patrol was able to detect, respond, and interdict cross-border illegal activity--of the southwest border; (2) the extent to which operational control reflects Border Patrol's ability to respond to illegal activity at the border or after entry into the United States; and (3) how DHS reports the transition to new border security measures will change oversight and resource requirements for securing the southwest border. This testimony is based on GAO's ongoing work for the House Committee on Homeland Security. GAO analyzed DHS border security documents and data supporting border security …

Testimony issued by the Government Accountability Office with an abstract that begins "Many federal programs and initiatives involve shared responsibilities--and benefits--for the federal, state, local and tribal governments, and the private sector. Federal statutes and rules often require nonfederal parties to expend their resources in support of certain national goals. The Unfunded Mandates Reform Act of 1995 (UMRA) was enacted to address some of the concerns about federal statutes and regulations that require nonfederal parties to expend resources to achieve these goals without being provided funding to cover the costs. UMRA generates information about how these potential federal mandates could affect other levels of government and the private sector as Congress and agency decision makers consider proposed legislation and regulations. Congress has asked GAO to evaluate the effectiveness of UMRA procedures and requirements several times since it was enacted. Based on that body of work, this testimony focuses on Title II of UMRA regarding federal mandates in rules and (1) describes the exceptions and exclusions in the act when identifying a federal mandate and (2) summarizes GAO findings on UMRA's implementation over the years and views of knowledgeable parties on potential improvements. GAO is not making recommendations in this testimony."

Correspondence issued by the Government Accountability Office with an abstract that begins "From fiscal years 2001 through 2010, the Department of Defense's (DOD) spending for health care increased from about $19 billion to nearly $49 billion, representing approximately 6 percent of DOD's total spending in fiscal year 2001 and approximately 9 percent in fiscal year 2010. This health care spending primarily funds TRICARE--DOD's program that provides health care to active duty personnel and other beneficiaries, including retired servicemembers. According to DOD, the increase in its health care spending can be attributed to factors such as growth in the number of TRICARE beneficiaries. From fiscal years 2001 through 2010, the number of TRICARE beneficiaries increased by nearly 15 percent, from 8.3 million to 9.5 million beneficiaries. To help reduce DOD's health care costs, Congress passed section 707 of the John Warner National Defense Authorization Act for Fiscal Year 2007 (section 707), which went into effect January 1, 2008. Section 707 prohibits employers with 20 or more employees from offering financial or other incentives to their employees who are eligible for TRICARE to not enroll in the employer-sponsored health insurance plan or to terminate such coverage. Historically, some employers offered financial or …

Testimony issued by the Government Accountability Office with an abstract that begins "This testimony discusses possible strategies for improving the rate of federal employment of individuals with disabilities. This testimony is based on our October 2010 report that discussed barriers to the employment of people with disabilities in the federal workforce and leading practices that could be used to overcome these barriers. To identify these barriers and leading practices, we solicited the views of a wide range of knowledgeable individuals through a survey and forum held at GAO on July 20, 2010. Participants in the forum concluded (1) Top leadership commitment is key to implementing and sustaining improvements in the employment of individuals with disabilities. (2) Accountability is critical to success. (3) Regularly surveying the workforce on disability issues provides agencies with important information on potential barriers. (4) Better coordination within and across agencies could improve employment outcomes for employees with disabilities. (5) Training for staff at all levels can disseminate leading practices throughout the agency. (6) Career development opportunities inclusive of people with disabilities can facilitate advancement and increase retention. (7) A flexible work environment can increase and enhance employment opportunities for individuals with disabilities. (8) Centralizing funding within …

Correspondence issued by the Government Accountability Office with an abstract that begins "Pakistan is a key U.S. ally in the effort to combat terrorism and violent extremism. Taliban, al Qaeda, and other terrorists have used parts of Pakistan to plan and launch attacks on Afghan, U.S., and NATO security forces in Afghanistan, as well as on Pakistani citizens and security forces in Pakistan. Enhancing the effectiveness of civilian assistance to Pakistan is one of the U.S. government's top foreign policy and national security priorities. Foreign assistance is vital to help the government of Pakistan overcome the political, economic, and security challenges that threaten Pakistan's long-term stability. Since 2002, the United States has provided over $18 billion in foreign assistance and reimbursements to Pakistan, about two-thirds of which has been security-related. In October 2009, Congress passed the Enhanced Partnership with Pakistan Act of 2009, which authorizes up to $1.5 billion a year for development, economic, and democratic assistance (henceforth referred to as "civilian assistance") to Pakistan for fiscal years 2010 through 2014. In the act, Congress declares that the United States requires a balanced, integrated, countrywide strategy to support Pakistan's efforts that does not disproportionately focus on security-related assistance. The act …

Testimony issued by the Government Accountability Office with an abstract that begins "The federal government is the world's largest and most complex entity, with about $3.5 trillion in outlays in fiscal year 2010 funding a broad array of programs and operations. GAO maintains a program to focus attention on government operations that it identifies as high risk due to their greater vulnerabilities to fraud, waste, abuse, and mismanagement or the need for transformation to address economy, efficiency, or effectiveness challenges. This testimony summarizes GAO's 2011 High-Risk Update, which describes the status of high-risk areas listed in 2009 and identifies any new high-risk area needing attention by Congress and the executive branch. Solutions to high-risk problems offer the potential to save billions of dollars, improve service to the public, and strengthen the performance and accountability of the U.S. government."