Correspondence issued by the General Accounting Office with an abstract that begins "GAO reviewed the Bureau of Prisons to determine whether it had made overpayments to contractors. During fiscal year 2001, the Bureau of Prisons had 24 open construction contracts that totaled about $1.9 billion. In addition to general disbursement controls, GAO found internal controls specific to construction contracts in which both the project representative and the contracting officer must approve each monthly progress payment invoice. GAO sampled 27 payments on five construction contracts to determine if construction contract payment controls were properly designed, in place, and operating to prevent or detect overpayments. GAO found that the internal controls were in place and operating and construction contract payment amounts were correct, or, if errors occurred, they were detected and corrected promptly as a normal part of the payment system. A few minor clerical errors were subsequently detected and corrected by the Bureau of Prisons through its own routine control procedures before GAO made its review. GAO concludes that the risk of undetected construction contractor overpayments at the Bureau of Prisons appears to be small."

Correspondence issued by the General Accounting Office with an abstract that begins "For several years, GAO has reviewed the Department of Defense's (DOD) efforts to strategically plan for the nation's defense needs and prepare related budgets. In particular, GAO evaluated DOD's methodology for conducting the 1993 Bottom-Up Review and the 1997 Quadrennial Defense Review (QDR), and its preparation of several Future Years Defense Programs (FYDP). As DOD began a new effort to review its strategic priorities, GAO shared some observations on the importance of (1) using realistic assumptions and integrated analyses to reach force structure and modernization decisions, (2) preparing FYDPs that clearly link strategy and resources, and (3) ensuring DOD's review efforts carefully scrutinize opportunities to reduce support infrastructure and improve business processes."

Testimony issued by the General Accounting Office with an abstract that begins "DOE spends more money on contracts than any other civilian federal agency because it relies primarily on contractors to operate its sites and carry out its diverse missions. These missions include maintaining the nuclear weapons stockpile, cleaning up radioactive and hazardous waste, and supporting basic energy and science research activities. For fiscal year 2001, DOE spent about 90 percent of its total annual budget, or about $18.2 billion, on contracts. Of that amount, DOE spent about $16.2 billion on contracts to manage or operate 28 major DOE sites. For over a decade, GAO, DOE's Office of Inspector General, and others have identified problems with DOE's contracting practices and the performance of its contractors. Projects were late or never finished; project costs escalated by millions and sometimes billions of dollars; and environmental conditions at the sites did not significantly improve. At the same time, contractors were earning a substantial portion of the profit (fee) available under the contract. Because of these problems, since 1990 we have designated DOE contract management as a high-risk area vulnerable to fraud, waste, abuse, and mismanagement. To address these and other problems, DOE began …

Testimony issued by the General Accounting Office with an abstract that begins "Financial management problems at the Department of Defense (DOD) are complex, long-standing, and deeply rooted throughout its business operations. DOD's financial management deficiencies represent the single largest obstacle to achieving an unqualified opinion on the U.S. government's consolidated financial statements. So far, none of the military services or major DOD components have passed the test of an independent financial audit because of pervasive weaknesses in financial management systems, operations, and controls. These problems go back decades, and earlier attempts at reform have been unsuccessful. DOD continues to rely on a far-flung, complex network of finance, logistics, personnel, acquisition, and other management information systems for financial data to support day-to-day management and decision-making. This network has evolved into an overly complex and error-prone operation with (1) little standardization across DOD components; (2) multiple systems performing the same tasks; (3) the same data stored in multiple systems; (4) manual data entry into multiple systems; and (5) a large number of data translations and interfaces, which combine to exacerbate problems with data integrity. Many of the elements that are crucial to financial management reform and business process transformation--particularly those that rely …

Testimony issued by the General Accounting Office with an abstract that begins "The Highway Trust Fund "guarantees" specific annual funding levels for most highway programs on the basis of projected receipts to the fund. It also makes annual adjustments to these funding levels on the basis of actual receipts and revised projections of trust fund revenue. These adjustments are called the Revenue Aligned Budget Authority (RABA). GAO concludes that the fiscal year 2003 RABA calculation appears reasonable. Although the RABA adjustment is clearly severe, it reflects the many ways in which an economic downturn affects the calculation. In late January 2002, the administration announced that the fiscal year 2003 RABA adjustment would be a negative $4.965 billion. Within a few days of the announcement, the administration reported that an error had been made and the correct amount was a negative $4.369 billion--a $600 million difference. Treasury is taking steps to improve its internal controls in order to prevent this type of error from reoccurring. The use of ethanol blended fuel instead of gasoline reduces Highway Trust Fund revenue because it is partially exempt from the standard excise tax on gasoline and 2.5 cents of the tax received on each gallon …

Correspondence issued by the General Accounting Office with an abstract that begins "The Army National Guard's funding requests for fiscal years 2000 and 2001 were overstated by $42.9 million and $31.6 million, respectively, because of inaccurate military strength and participation rates used to develop projected and actual military force levels. To correct these overstatements, the Guard is placing more emphasis on an existing personnel database reporting system that identifies the personnel assigned to a unit but who have not been paid for inactive duty training for three months or more. The Guard also improved the method it uses to calculate inactive duty training participation rates, now basing the rate on the number of people who have actually been paid for training, rather than on expected program costs."

Testimony issued by the General Accounting Office with an abstract that begins "Through the Mutual Mortgage Insurance Fund, the Federal Housing Administration operates a single-family insurance program that helps millions of Americans buy homes. Last year, the Fund's economic value appeared to have reached its highest level in the last 20 years--prompting proposals to spend some of the Fund's current resources or reduce net cash flows into the Fund. This testimony discusses (1) the financial health of the Fund under different economic scenarios and (2) the impact of proposals to reduce the size of the Fund. Under several scenarios it tested, GAO found that the Fund would be able to withstand moderately severe economic downturns. However, in three other scenarios GAO tested, the Fund would not be able to maintain its actuarial soundness. Because of the professional judgment and uncertainty involved in these analyses, GAO urges caution in using these estimates to conclude that the Fund would withstand any particular economic scenario under all circumstances. Congress and the Secretary of Housing and Urban Development have taken and could take several steps to influence the economic value of the Fund. However, those actions will affect the federal budget, and, if not …

Testimony issued by the General Accounting Office with an abstract that begins "In fiscal years 1996 to 2000, the National Aeronautics and Space Administration (NASA) was one of the few agencies that received an unqualified opinion on its financial statements and was in substantial compliance with the Federal Financial Management Improvement Act (FFMIA). This suggested that NASA could generate reliable information for annual external financial reporting and could provide accurate, reliable information for day-to-day decision-making. In contrast with the unqualified or "clean" audit opinions of its previous auditor, Arthur Andersen, NASA's new independent auditor, PricewaterhouseCoopers, disclaimed an opinion on the agency's fiscal year 2001 financial statements because of significant internal control weaknesses. PricewaterhouseCoopers also concluded that NASA's financial management systems do not substantially comply with the requirements of FFMIA. Modernizing NASA's financial management system is essential to providing accurate, useful information for external financial reporting as well as internal management decision-making. NASA is working on an integrated financial management system that it expects to have fully operational in fiscal year 2006 at an estimated cost of $475 million. This is NASA's third attempt to implement a new financial management system. The first two efforts were abandoned after 12 years and …

Testimony issued by the General Accounting Office with an abstract that begins "The 1998 terrorist bombings of the U.S. embassies in Kenya and Tanzania, which killed more than 220 people and injured 4,000, highlighted the compelling need for safe and secure overseas facilities. In November 1999, an independent advisory group, the Overseas Presence Advisory Panel, said that thousands of Americans representing our nation abroad faced an unacceptable level of risk from terrorist attacks and other threats. The panel called for accelerating the process of addressing security risks to provide overseas staff with the safest working environment, consistent with the nation's resources and the demands of their missions. Moreover, the panel concluded that many U.S. overseas facilities were insecure, decrepit, deteriorating, overcrowded, and "shockingly shabby," and it recommended major capital improvements to redress these problems. GAO was asked to (1) assess the current conditions of overseas diplomatic facilities, including security, maintenance, office space, and information technology; and (2) provide some preliminary observations regarding State's efforts to improve facility conditions by replacing existing buildings with new, secure embassy compounds."

Testimony issued by the General Accounting Office with an abstract that begins "This testimony discusses how states are using the March 2002 Reed Act distribution, which was part of the Job Creation and Worker Assistance Act of 2002. This broad stimulus package included an additional 13 weeks of federally-funded extended unemployment insurance (UI) benefits for all states and a distribution to states of $8 billion of the unemployment tax revenue it holds in reserve, referred to as a Reed Act distribution. Under the act, these funds may be used to pay UI benefits, and/or to enhance UI benefits, such as increasing weekly benefit payments, extending the period of time benefits are paid, or otherwise expanding eligibility to groups that currently do not qualify for benefits. States may also appropriate these funds for the administrative costs of UI, including activities related to program integrity, and employment services (ES) programs, including one-stop service centers. This testimony focuses on: (1) the proportion of Reed Act dollars that states have spent; (2) the proportion of total Reed Act dollars that remains in state UI trust funds and the effect this has had on employer UI taxes; and (3) the proportion of Reed Act dollars …

A statement of record issued by the Government Accountability Office with an abstract that begins "FAA’s pilot training requirements for certification of commercial pilots are not aligned with airline operations or emphasize skills that airlines consider important for greater aviation safety."

Testimony issued by the Government Accountability Office with an abstract that begins "As Hurricane Katrina so forcefully demonstrated, the nation's critical infrastructures--both physical and cyber--have been vulnerable to a wide variety of threats. Because about 85 percent of the nation's critical infrastructure is owned by the private sector, it is vital that the public and private sectors work together to protect these assets. The Department of Homeland Security (DHS) is responsible for coordinating a national protection strategy including formation of government and private sector councils as a collaborating tool. The councils, among other things, are to identify their most critical assets, assess the risks they face, and identify protective measures, in sector-specific plans that comply with DHS's National Infrastructure Protection Plan (NIPP). This testimony is based primarily on GAO's October 2006 sector council report and a body of work on cyber critical infrastructure protection. Specifically, it addresses (1) the extent to which these councils have been established, (2) key facilitating factors and challenges affecting the formation of the council, (3) key facilitating factors and challenges encountered in developing sector plans, and (4) the status of DHS's efforts to fulfill key cybersecurity responsibilities. GAO has made previous recommendations, particularly in the …

Testimony issued by the Government Accountability Office with an abstract that begins "In response to GAO reports over the past few years on management weaknesses in major projects (i.e., those costing $750 million or more), the Department of Energy (DOE) has undertaken a number of reforms since March 2009, including those overseen by the Office of Environmental Management (EM) and the National Nuclear Security Administration (NNSA). For example, DOE has updated program and project management policies and guidance in an effort to improve the reliability of project cost estimates, better assess project risks, and better ensure project reviews that are timely and useful, and that identify problems early. In addition to actions taken to improve project management, in its 2012 work, GAO has noted DOE's progress in managing the cost and schedule of nonmajor projects--those costing less than $750 million. DOE's actions to improve project management are promising, but their impact on meeting cost and schedule targets is not yet clear. Because all ongoing major projects have been in construction for several years, neither EM nor NNSA has a major project that can demonstrate the impact of DOE's recent reforms."

Testimony issued by the Government Accountability Office with an abstract that begins "In summary, we found the following:"

Testimony issued by the Government Accountability Office with an abstract that begins "Ten states concentrated in the western, midwestern, and southeastern United States--all areas where the housing market had experienced strong growth in the prior decade--experienced 10 or more commercial bank or thrift (bank) failures between 2008 and 2011. The failures of the smaller banks (those with less than $1 billion in assets) in these states were largely driven by credit losses on commercial real estate (CRE) loans. The failed banks also had often pursued aggressive growth strategies using nontraditional, riskier funding sources and exhibited weak underwriting and credit administration practices. Fair value accounting also has been cited as a potential contributor to bank failures, but between 2007 and 2011 fair value accounting losses in general did not appear to be a major contributor, as over two-thirds of small failed banks' assets were not subject to fair value accounting. During the course of our work, some state banking associations said that the magnitude of the credit losses were exacerbated by federal bank examiners' classification of collateral-dependent loans and evaluation of appraisals used by banks to support impairment analysis of these loans. Federal banking regulators noted that regulatory guidance on CRE …

Testimony issued by the Government Accountability Office with an abstract that begins "GAO is required by law to annually audit the consolidated financial statements of the U.S. government. The Congress and the President need to have timely, reliable, and useful financial and performance information. Sound decisions on the current results and future direction of vital federal government programs and policies are made more difficult without such information. Until the problems discussed in GAO's audit report on the U.S. government's consolidated financial statements are adequately addressed, they will continue to (1) hamper the federal government's ability to reliably report a significant portion of its assets, liabilities, costs, and other related information; (2) affect the federal government's ability to reliably measure the full cost as well as the financial and nonfinancial performance of certain programs and activities; (3) impair the federal government's ability to adequately safeguard significant assets and properly record various transactions; and (4) hinder the federal government from having reliable financial information to operate in an economical, efficient, and effective manner."

Testimony issued by the Government Accountability Office with an abstract that begins "This testimony summarizes GAO's work on the Department of Homeland Security's (DHS) efforts to implement the U.S. Visitor and Immigrant Status Indicator Technology (US-VISIT) program at air, sea, and land ports of entry (POE). US-VISIT is designed to collect, maintain, and share data on selected foreign nationals entering and exiting the United States at air, sea, and land POEs. These data, including biometric identifiers like digital fingerprints, are to be used to screen persons against watch lists, verify identities, and record arrival and departure. This testimony addresses DHS's efforts to (1) implement US-VISIT entry capability, (2) implement US-VISIT exit capability, and (3) resolve longstanding management challenges that could impair DHS's ability to effectively implement the US-VISIT program. GAO analyzed DHS and US-VISIT documents, interviewed program officials, and visited 21 land POEs with varied traffic levels on both borders."

Testimony issued by the Government Accountability Office with an abstract that begins ""

Testimony issued by the Government Accountability Office with an abstract that begins ""

Testimony issued by the Government Accountability Office with an abstract that begins "Under the Medicare program, the Department of Health and Human Services (HHS) and its contractors paid a reported $330 billion in Medicare benefits in calendar year 2005. Because GAO previously identified government contractors with billions of dollars in unpaid federal taxes, Congress requested that we expand our work in this area to all Medicare providers. This testimony addresses Medicare physicians, health professionals, and suppliers for services related to senior health care, who received about 20 percent of all Medicare payments. Because of limitations in HHS data, GAO was asked to determine if Medicare Part B physicians, health professionals, and suppliers have unpaid federal taxes, and if so, to (1) determine the magnitude of such debts; (2) identify examples of Medicare physicians and suppliers that have engaged in abusive, or potentially criminal activities; and (3) assess HHS efforts to prevent delinquent taxpayers from enrolling in Medicare and levy payments to pay delinquent federal taxes. To perform this work, GAO reviewed data from HHS and the Internal Revenue Service (IRS). In addition, GAO reviewed policies, procedures, and regulations related to Medicare. GAO also performed additional investigative activities. We plan to …

Testimony issued by the Government Accountability Office with an abstract that begins "The Social Security Administration (SSA) has made several changes to improve the process it uses for updating its medical criteria, but continues to face challenges ensuring timely updates. SSA’s medical criteria for adults are in the form of listings of medical conditions and impairments organized under 14 body systems, which SSA periodically updates. To help ensure timely, periodic updates of a body system’s listings, SSA is moving away from comprehensively revising a body system’s listings toward a more targeted approach, wherein SSA selects for revision those impairment listings most in need of change. To date, SSA has completed comprehensive revisions of listings for 8 of the 14 body systems and now is in the process of reviewing them to determine whether and which targeted revisions are appropriate. In 2010, the SSA Commissioner set a 5-year cycle time for updating listings for each body system, replacing the agency’s prior practice of setting expiration dates for listings that ranged from 3 to 8 years and then frequently extending them. To further increase the timeliness and accuracy of decisions, SSA has sought recommendations from the Institute of Medicine and has acted …

Correspondence issued by the Government Accountability Office with an abstract that begins "To encourage private-sector employers to sponsor new pension plans and U.S. workers to save for retirement, federal law authorizes a variety of tax incentives, such as the ability to defer taxes on contributions to qualified plans until the funds are distributed, up to certain limits. Since 2000, the dollar amount of these limits has increased over time. However, from 2009 through 2011, the number of new pension plans formed each year in the private sector remained relatively flat, and was below the levels reported previously for 2003 through 2007. Specifically, from 2009 through 2011, private-sector employers sponsored about 81,000 new pension plans, including 75,000 defined contribution (DC) plans and 6,000 defined benefit (DB) plans. DC plans with fewer than 100 participants accounted for about 90 percent of all new plan growth over this period. Moreover, the net change in the number of pension plans over this period was negative, with the number of terminated plans more than offsetting new plan formation by nearly 34,000 plans. Over the 3-year span from 2009 through 2011, private-sector employers terminated about 106,000 DC and 9,000 DB plans. Overall, there were about 52,000 …

Correspondence issued by the Government Accountability Office with an abstract that begins "State and USAID disbursed $27.2 million of INCLE, ESF, DA, and NADR funds and committed $11.1 million of FMF funds from the combined total of about $203 million allocated to support activities in CBSI partner countries from fiscal years 2010 through 2012. State and USAID used this funding for new and pre-existing programs that provide equipment, training, and other activities related to the CBSI strategic goals of substantially reducing illicit trafficking, advancing public safety and security, and promoting social justice in the Caribbean countries."

Testimony issued by the Government Accountability Office with an abstract that begins "Yellowstone National Park, in northwest Wyoming, is home to a herd of about 3,600 free-roaming bison. Some of these bison routinely attempt to migrate from the park in the winter. Livestock owners and public officials in states bordering the park have concerns about the bison leaving the park because many are infected with brucellosis--a contagious bacterial disease that some fear could be transmitted to cattle, thus potentially threatening the economic health of the states' livestock industry. Other interested groups believe that the bison should be allowed to roam freely both within and outside the park. In an effort to address these concerns, five federal and Montana state agencies agreed to an Interagency Bison Management Plan (IBMP) in December 2000 that includes three main steps to "maintain a wild, free-ranging population of bison and address the risk of brucellosis transmission to protect the economic interest and viability of the livestock industry in Montana." This testimony discusses GAO's preliminary observations on the progress that has been made in implementing the IBMP and the extent to which bison have access to lands and an easement acquired for $13 million in federal …