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."

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 "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 …

A letter report issued by the General Accounting Office with an abstract that begins "Both federal and state governments exercise regulatory authority in many of the same policy areas. In enacting new legislation in these shared areas, Congress must provide federal protections, guarantees, or benefits while preserving an appropriate balance between federal and state regulatory authority and responsibility. State efforts can be directed toward federal or nationally shared regulatory objectives through various arrangements, each of which reflects a way to define and issue regulations or standards and assign responsibility for their implementation or enforcement. Regulatory and standard-setting mechanisms for achieving nationwide coverage include (1) fixed federal standards that preempt all state regulatory action, (2) minimum federal standards that preempt less stringent state laws but permit states to establish more stringent standards, (3) the inclusion of federal regulatory provisions in grants or other forms of assistance, (4) cooperative programs in which voluntary national standards are formulated by federal and state officials working together, and (5) widespread state adoption of voluntary standards formulated by quasi-official entities. The first two of these mechanisms involve preemption; the other three represent alternative approaches. Each represents a different combination of federal and state regulatory authority. The …