A letter report issued by the General Accounting Office with an abstract that begins "This report discusses the Office of National Drug Control Policy's (ONDCP) advertising contract for Phase III of the National Youth Anti-Drug Media Campaign. The contractor for the advertising portion of the Phase III anti-drug media campaign did not properly charge the government for some of the labor costs incurred under the contract. Ogilvy & Mather's submission of time sheets claiming hours that some employees said they did not work on the anti-drug media campaign was clearly improper. Moreover, Ogilvy should not have been awarded a cost accounting standards (CAS)-covered cost-reimbursement government contract until the company had an adequate cost accounting system to support this type of contract. The government poorly managed aspects of the award and administration of the contract. The Department of Health and Human Services (HHS) should not have awarded this cost-reimbursement contract without determining whether the contractor had an adequate cost accounting system that met CAS standards. In addition, HHS should have reviewed the appropriateness of the large amount of money that the contracting officer's technical representative (COTR) recommended be disallowed from the contractor's invoices or arranged for an audit of the contract. …

Testimony issued by the General Accounting Office with an abstract that begins "This testimony discusses the Office of National Drug Control Policy's (ONDCP) advertising contract for Phase III of the National Youth Anti-Drug Media Campaign. GAO found that the contractor, Ogilvy & Mather, improperly charged the government for some of its labor costs incurred under this contract. Ogivley & Mather submitted time sheets claiming hours that some employees said they did not work on the anti-drug media campaign. In addition, the company made little progress toward restructuring its accounting system to meet government requirements until nearly two years after the contract was awarded. The government poorly managed aspects of the award and administration of the contract. The Department of Health and Human Services (HHS) should not have awarded this cost-reimbursement contract without determining whether the contractor had an adequate cost accounting system. In addition, HHS should have reviewed the appropriateness of the large amount of money that the technical representative recommended be disallowed from the contractor's invoices, or arranged for an audit of the contract. The technical representative appropriately brought allegations of improper billing to the attention of ONDCP management, but ONDCP management did not take prompt action to investigate …

A letter report issued by the General Accounting Office with an abstract that begins "To disguise illegally obtained funds, money launderers have traditionally targeted banks, which accept cash and arrange domestic and international fund transfers. However, criminals seeking to hide illicit funds may also be targeting the U.S. securities markets. Although few documented cases exist of broker-dealer or mutual fund accounts being used to launder money, law enforcement agencies are concerned that criminals may increasingly try to use the securities industry for that purpose. Most broker-dealers or firms that process customer payments for mutual funds are subject to U.S. anti-money laundering requirements. However, unlike banks, most of these firms are not required to report suspicious activities. The Treasury Department is now developing a rule requiring broker-dealers to report suspicious activities. Treasury expects that the rule will be issued for public comment by the end of this year. Various intergovernmental groups, such as the Financial Action Task Force, have been working on recommendations that call for member nations to take various steps to combat money laundering through their financial institutions, including requiring securities firms to report suspicious activities. Although many members countries report that they have issued all or many of …

Correspondence issued by the General Accounting Office with an abstract that begins "GAO assisted the Department of Transportation determine whether the net excise tax revenue distributed to the Airport and Airway Trust Fund (AATF) for fiscal year 2000 was supported by the underlying records. GAO agreed to (1) perform detailed tests of transactions that represent the underlying basis of amounts distributed to AATF, (2) review the Internal Revenue Service's (IRS) quarterly AATF certifications, (3) review the Department of the Treasury Financial Management Service adjustments to AATF for FY 2000, (4) review the Office of Tax Analysis process for estimating amounts to be distributed to AATF for the fourth quarter of FY 2000, (5) compare net excise tax distributions to AATF during FY 2000 and amounts reported in the financial statements prepared by the Bureau of the Public Debt for AATF and the Federal Aviation Administration's consolidated financial statements, and (6) review key reconciliations of IRS records to Treasury records."

Correspondence issued by the General Accounting Office with an abstract that begins "GAO performed procedures to determine whether the net federal unemployment tax revenue distributed to the Unemployment Trust Fund for fiscal year 2000 is supported by the underlying records. The procedures GAO agreed to perform include (1) detailed tests of transactions that represent the underlying basis of amounts distributed to the UTF and (2) a review of key reconciliations of the Internal Revenue Service records to those of the Department of the Treasury."

Correspondence issued by the General Accounting Office with an abstract that begins "GAO assisted the Department of Transportation determine whether the net excise tax revenue distributed to the Highway Trust Fund (HTF) for the fiscal year 2000 was supported by the underlying records. GAO agreed to (1) perform detailed tests of transactions that represent the underlying basis of amounts distributed to HTF, (2) review the Internal Revenue Service's (IRS) quarterly HTF certifications, (3) review the Financial Management Service adjustments to HTF for FY 2000, (4) review the Office of Tax Analysis process for estimating amounts to be distributed to HTF for the fourth quarter of FY 2000, (5) compare net excise tax distributions to the HTF during FY 2000 and amounts reported in the financial statements prepared by the Bureau of Public Debt for HTF and HTF's financial statements, and (6) review key reconciliations of IRS records to Treasury records."

Correspondence issued by the General Accounting Office with an abstract that begins "To assist the Committee on International Relations evaluate the extent to which five House Interparliamentary Groups' schedules of receipts, disbursements, and fund balance for 2000 and 1999 appropriately reflected the cash receipts and disbursements and fund balance for those years, GAO reviewed documentation supporting each group's recorded receipt and disbursement transactions and related fund balances for evidence that the transactions were properly authorized and recorded. The schedules, prepared by the treasurer of each group, present for 2000 and 1999 the opening fund balance, total receipts, and disbursements by category, and ending fund balance, on a cash basis, for each of the five groups. GAO also recalculated and compared the recalculated amounts to the reported amounts in each group's 2000 and 1999 schedule."

A letter report issued by the General Accounting Office with an abstract that begins "The military's ability to carry out its mission depends on its having adequate supplies of spare parts on hand for maintenance and repairs. Shortages are a key indicator that the billions of dollars being spent on these parts are not being used effectively, efficiently, and economically. Despite additional funding from Congress, the Army still has concerns about spare parts shortages. Spare parts shortages for the Apache, Blackhawk, and Chinook helicopters have harmed operations and lowered morale among maintenance personnel. Cannibalization of parts from one aircraft to another is an inefficient practice that results in double work for the maintenance personnel, masks parts shortages, and lowers morale. Parts were unavailable for various reasons, including higher-than-expected demand for parts, delays in obtaining parts from contractors, and problems with overhaul and maintenance. Another factor contributing to the shortage was the Army's inability to obtain parts for these aging aircraft from the original manufacturers, which sometimes had gone out of business. The Army and the Defense Logistics Agency have efforts planned or underway to improve the availability of aviation spare parts. Once these initiatives are further along, GAO will review …

A letter report issued by the General Accounting Office with an abstract that begins "Since the 1920s, the Army's Ceremonial Rifle Program has lent obsolete or condemned rifles to veterans' organizations for funerals and other ceremonies. The M-1 is the only rifle currently authorized for this purpose. The National Defense Authorization Act for Fiscal Year 2000 authorized the Secretary of the Army to conditionally loan or donate M-1 rifles and required that GAO review and report on the Secretary's exercise of authority under the amended law. The Army issued an interim change to its regulation governing the Ceremonial Rifle Program that partially addresses the Secretary's authority under the law. This interim change addresses (1) the number of rifles that may be provided and (2) the security, safety, and accountability over provided rifles. From the time the law was amended in October 1999 through March 2001, the Army reported providing 232 organizations with 2,054 rifles and had 937 open requests for 8,395 rifles. The Army estimates that it has provided more than 300,000 rifles under the Ceremonial Rifle Program since the program's inception."

A letter report issued by the General Accounting Office with an abstract that begins "In recent years, GAO has testified that personnel shortages, assignment priorities, and frequent peacekeeping deployments were undermining the combat readiness of the Army's five later-deploying divisions. In 2001, GAO reported on the Army Chief of Staff's manning initiative of October 1999, which seeks to ensure that all active Army units are assigned the numbers, grades, and skills needed to carry out wartime missions. Since then, terrorists have attacked the World Trade Center and the Pentagon, and the Bush administration has formulated a new military strategy. These developments may change how, when, and where these divisions will be used--as seen in the deployment of soldiers from the 40th Infantry Division in Operation Enduring Freedom. As of June 2001 the five divisions reported they were ready and able to perform all or most of their combat missions. Enlisted personnel levels were at or near 100 percent of their authorization compared with 93 percent in March 1998. However, staffing imbalances persist for some combat support skills. Each division met its training requirements for combat missions. The amount of equipment on hand and the serviceability of that equipment indicated that …

A letter report issued by the General Accounting Office with an abstract that begins "Instructor shortages are affecting the quality and quantity of Army truck driver training. Fort Leonard Wood, which trains about 90 percent of truck drivers, is especially affected by the instructor shortage. The result is that student drivers are not fully trained in all aspects of the instruction program when they graduate. If formal schools had enough instructors, they would presumably be able to teach the entire instruction program. The student imbalance between the schools at Fort Leonard Wood and Fort Bliss creates an ineffective use of resources. If the annual student load were more equally distributed between the two schools, student graduates from Fort Leonard Wood might receive more complete training. The formal schools are not adhering to the instruction program, which calls for some training with trucks carrying cargo. Furthermore, no training is provided on how to pull equipment. Similarly, students are not being trained to drive under different weather and surface conditions. Because annual check rides and sustainment are not always being performed, unsafe driving habits may go undetected. Although performing and recording check rides and sustainment may be time-consuming, these procedures can save …

A letter report issued by the General Accounting Office with an abstract that begins "Children diagnosed with attention deficit disorders are often treated with stimulant medications, such as Ritalin or Adderall. These drugs are controlled substances under federal law because of their high potential for abuse. Many of these stimulant drugs must be taken several times a day to be effective, so children need medication during the school day. Concern has arisen that the increasing use of these medications in school might provide additional opportunities for drug abuse. No data exists on the extent to which attention disorder drugs have been diverted or abused at school, or the extent to which state laws or regulations guide local school officials in safely administering these drugs. Middle and high school principals reported little diversion or abuse of attention disorder drugs. For the first seven to nine months of school year 2000-2001, about eight percent of principals in public middle and high schools reported that attention disorder drugs had been diverted or abused at their school. Most of the principals reported that school officials administer attention disorder medications, with about two percent of the school's students on average being administered attention disorder drugs …

A letter report issued by the General Accounting Office with an abstract that begins "The transition to quieter aircraft required by the Airport Noise and Capacity Act of 1990 was expected to benefit communities, airports, and airlines. In turn, the transition was expected to reduce community opposition to airport operations and expansion and to reduce the demand for funds provided for noise abatement through federal grants and user charges. The results expected from the transition to quieter aircraft were partially realized. The transition occurred as planned and considerably reduced the population exposed to noise levels incompatible with residential living. Nevertheless, noise concerns remain a barrier to airport expansion, and the demand for federally authorized support for noise abatement efforts has continued. GAO identified two key issues for review by the aviation community. First, even though fewer people are exposed to aircraft noise, according to a survey in 1999-2000, more than half of the noise complaints came from people living in areas exposed to noise levels that FAA considers compatible with residential living. Second, if people are allowed to move to areas close to an airport, they may later find themselves exposed to noise levels that FAA considers incompatible with residential …

Testimony issued by the General Accounting Office with an abstract that begins "The major network carriers dominate traffic at most of their large hubs and extensive evidence exists that fares in markets where competition is absent are consistently above competitive levels. GAO believes that the oversight scheme contemplated when the industry was deregulated--with antitrust enforcement by the Department of Justice (DOJ) and oversight of unfair trade practices by the Department of Transportation (DOT)--has not been entirely successful in preserving and ensuring competition. Although the current legislative scheme grants explicit authority for DOT to regulate unfair competitive practices, the legislation does give DOT substantial leeway on the scope of its action. Thus, with the range of competitive challenges confronting the industry and directly affecting consumers, especially in the face of unprecedented industry consolidation, GAO believes there is merit in the overall intent of the proposed Aviation Competition Restoration Act to direct DOT to actively monitor the state of competition in the industry and to institute remedial actions as appropriate."

A letter report issued by the General Accounting Office with an abstract that begins "The increasing numbers of regional jets (RJ) in operation have provided U.S. air carriers with opportunities to serve new and existing markets. With predominantly 50-seat aircraft, the carriers have initiated service to many large and medium-large communities but have provided less service to smaller communities. Service to small communities--to which the airlines now mostly operate turboprop aircraft--continues to be an important concern, because of the uncertainty about whether those markets may generate enough passenger traffic and revenue to be financially viable to sustain RJ operations. Eventually, smaller RJs may let carriers serve those smaller communities economically. Other questions also emerge about the impact of how the carriers will use their RJs. For example, the airlines could restrict capacity in a market by reducing service with larger mainline jets but increasing the number of RJ flights in a way that may inhibit entry by new competitors, allowing the airlines to charge fares higher than might exist in a more competitive market. Additionally, the growth in RJs has clearly contributed to an increasing problem with congestion, particularly in some locations like New York's LaGuardia Airport. But how the …

A letter report issued by the General Accounting Office with an abstract that begins "Passengers on the same commercial airline flight may pay very different fares. This situation has led to dissatisfaction among some passengers who believe that airline ticketing practices are unfair. To reduce their cost of flying, some passengers have tried to use "hidden-city" and "back-to-back" ticketing. Hidden-city ticketing occurs when a passenger books a flight to one city but purposely deplanes at an intermediate city. Though never intending to make the last leg of the flight, the passenger buys the ticket because it is cheaper than a ticket to the intermediate city. Back-to-back ticketing occurs when a passenger buys two round-trip tickets that include a Saturday night stay but either uses only half the ticket coupons or uses all the coupons out of sequence. This practice results in a lower price than would be possible by purchasing round-trip tickets that did not include a Saturday night stay. Most airlines expressly forbid the use of hidden-city and back-to-back ticketing. This report reviews (1) the factors that airlines consider when setting fares; (2) the factors that create hidden-city ticketing and the pricing practices that foster back-to-back ticketing practices; (3) …

A chapter report issued by the General Accounting Office with an abstract that begins "The Federal Aviation Administration (FAA) issues regulations to strengthen aviation safety and security and to promote the efficient use of airspace. FAA's rulemaking is a complicated process intended to ensure that all aspects of any regulatory change are fully analyzed before any change goes into effect. During the last 40 years, many reports have documented problems in FAA's rulemaking efforts that have delayed the formulation and finalization of its rules. This report reviews FAA's rulemaking process. GAO reviewed 76 significant rules and found that FAA's rulemaking process varied widely. These rules constituted the majority of FAA's workload of significant rules from fiscal year 1995 through fiscal year 2000. GAO found that FAA had begun about 60 percent of the rulemaking projects by Congress and about a third of the rulemaking projects recommended by the National Transportation Safety Board within six months. For one-fourth of the mandates and one-third of the recommendations however, at least five years passed before FAA began the process. Once the rule was formally initiated, FAA took a median time of two and a half years to proceed from formal initiation of the …

Testimony issued by the General Accounting Office with an abstract that begins "This testimony discusses the results of GAO's review of the Federal Aviation Administration's (FAA) rulemaking process and ways to improve its efficiency. GAO found that the time FAA took to formally initiate a rule in response to a congressional mandate or a National Transportation Safety Board recommendation varied widely. Between fiscal year 1995 and fiscal year 2000, FAA initiated most such rules within two years, but some rules were initiated many years later. During the entire six-year period GAO reviewed FAA's median time for the final rule phase--about 15 months--was comparable to that of four other federal regulatory agencies. Over a shorter, more recent period, FAA took longer to complete this phase. In 1998, FAA developed reforms to address problems the pace of rulemaking, including the timing of management's involvement, the administration of the process, and human capital management issues. However, the reforms have yet to shorten the rulemaking process because they have not been fully or effectively implemented. Shifting priorities, some brought about by external events and some by internal circumstances, have continued to delay the pace of rulemaking. In addition, difficult policy issues have sometimes remained …

A letter report issued by the General Accounting Office with an abstract that begins "The informal and formal networks used by the Federal Aviation Administration (FAA) and the military services to exchange critical aviation safety information have proven useful. However, because recent and expected retirements threaten to erode informal networks, additional formal channels of communication are needed to ensure that common safety risks are identified and addressed in a systematic and timely manner. This includes the exchange of information on how FAA and the military services have addressed particular aviation safety concerns. Existing gaps in the formal processes used by FAA and the military services to exchange information could allow for communication lapses and delays in getting critical safety information to the right parties in a timely manner, potentially resulting in the loss of lives and aircraft."

Testimony issued by the General Accounting Office with an abstract that begins "A safe and secure civil aviation system is a critical component of the nation's overall security, physical infrastructure, and economic foundation. Billions of dollars and myriad programs and policies have been devoted to achieving such a system. Although it is not fully known at this time what actually occurred or what all the weaknesses in the nation's aviation security apparatus are that contributed to the horrendous events on September 11, 2001, it is clear that serious weaknesses exist in our aviation security system and that their impact can be far more devastating than previously imagined. As reported last year, GAO's review of the Federal Aviation Administration's (FAA) oversight of air traffic control (ATC) computer systems showed that FAA had not followed some critical aspects of its own security requirements. Specifically, FAA had not ensured that ATC buildings and facilities were secure, that the systems themselves were protected, and that the contractors who access these systems had undergone background checks. Controls for limiting access to secure areas, including aircraft, have not always worked as intended. GAO's special agents used fictitious law enforcement badges and credentials to gain access to …

Testimony issued by the General Accounting Office with an abstract that begins "A safe and secure civil aviation system is critical to the nation's security, physical infrastructure, and economy. Billions of dollars and myriad programs and policies have been devoted to achieving such a system. Although it is not fully known at this time what actually occurred or what all the weaknesses in the nation's aviation security apparatus are that contributed to the horrendous events on September 11, 2001, it is clear that serious weaknesses exist in our aviation security system and that their impact can be far more devastating than previously imagined. As reported last year, GAO's review of the Federal Aviation Administration's (FAA) oversight of air traffic control (ATC) computer systems showed that FAA had not followed some critical aspects of its own security requirements. Specifically, FAA had not ensured that ATC buildings and facilities were secure, that the systems themselves were protected, and that the contractors who use these systems had undergone background checks. Controls for limiting access to secure areas, including aircraft, have not always worked as intended. GAO's special agents used fictitious law enforcement badges and credentials to gain access to secure areas, bypass security …

Testimony issued by the General Accounting Office with an abstract that begins "A safe and secure civil aviation system is critical to the nation's overall security, physical infrastructure, and economy. Billions of dollars and countless programs and policies have gone into developing such a system. Although many of the specific factors contributing to the terrible events of September 11 are still unclear, it is apparent that our aviation security system is plagued by serious weaknesses that can have devastating consequences. Last year, as part of an undercover investigation, GAO special agents used fake law enforcement badges and credentials to gain access to secure areas at two airports. They were also issued tickets and boarding passes, and could have carried weapons, explosives, or other dangerous items onto the aircraft. GAO tests of airport screeners also found major shortcomings in their ability to detect dangerous items hidden on passengers or in carry-on luggage. These weaknesses have raised questions about the need for alternative approaches. In assessing alternatives, five outcomes should be considered: improving screener performance, establishing accountability, ensuring cooperation among stakeholders, moving people efficiently, and minimizing legal and liability issues."

Testimony issued by the General Accounting Office with an abstract that begins "A safe and secure civil aviation system is a critical component of the nation's overall security, physical infrastructure, and economic foundation. Billions of dollars and a myriad of programs and policies have been devoted to achieving such a system. Although it is not fully known at this time what actually occurred or what all the weaknesses in the nation's aviation security apparatus are that contributed to the horrendous terrorist acts of Semptember 11, 2001, it is clear that serious weaknesses exist in the nation's aviation security system and that their impact can be far more devastating than previously imagined. There are security concerns with (1) airport access controls, (2) passenger and carry-on baggage screening, and (3) alternatives to current screening practices, including practices in selected other countries. Controls for limiting access to secure areas, including aircraft, have not always worked as intended. In May of 2000, special agents used counterfeit law enforcement badges and credentials to gain access to secure areas at two airports, bypassing security checkpoints and walking unescorted to aircraft departure gates. In June 2000, testing of screeners showed that significant, long-standing weaknesses--measured by the screeners' …

A chapter report issued by the General Accounting Office with an abstract that begins "This report examines how best practices offer improvements to the way the Department of Defense defines and matches weapon system requirements to available resources such as cost, schedule, and mature technologies. GAO identified three factors that were key to matching needs and resources before product development began. First, developers employed the technique of systems engineering to identify gaps between resources and customer needs before committing to a new product development. Second, customers and developers were flexible. Leeway existed to reduce or defer customer needs to future programs or for the developer to make an investment to increase knowledge about a technology or design feature before beginning product development. Third, the roles and responsibilities of the customer and the product developer were matched, with the product developer being able to determine or significantly influence product requirements. In cases where these factors were not present at program launch, product development began without a match between requirements and resources. Invariably, this imbalance favored meeting customer needs by adding resources, which resulted in increased costs and later deliveries."