A letter report issued by the General Accounting Office with an abstract that begins "The financial collapse of large firms and the effects on workers and retirees has raised questions about retirement funds being invested in employer securities and the laws governing such investments. Pensions are important source of income of many retirees, and the federal government has encouraged employers to sponsor and maintain pension and savings plans for their employees. The continued growth in these plans and their vulnerabilities has caused Congress to focus on issues related to participants investing in employer securities through employer-sponsored retirement plans. GAO's analysis of the 1998 plan data for the Fortune 1,000 firms showed that 550 of those companies held employer securities in their defined benefit plans or defined contribution plans, covering 13 million participants. Investment in employer securities through employer-sponsored retirement plans can present significant risks for employees. If the employees' retirement savings is largely in employer securities in these plans, employees risk losing not only their jobs should the company go out of business, but also a significant portion of their savings. Even if employers do not declare bankruptcy, employees are still subject to the dual risk of loss of job …

A letter report issued by the General Accounting Office with an abstract that begins "The U.S. government controls the export of defense-related items to minimize the risk such exports may pose to its interests. The U.S. export control system is primarily divided between two regulatory regimes, one managed by the Department of State for defense items and another managed by the Department of Commerce for dual-use items that have both military and commercial applications. Companies are responsible for determining which department to use and what requirements apply when exporting their items, but can obtain government assistance through two different processes. If companies have determined that their items are Commerce-controlled but are uncertain of export licensing requirements, they may request a classification from Commerce through the commodity classification process. Commerce can refer classification requests to State and the Department of Defense to confirm that the items are Commerce-controlled. However, if companies are unsure of which department has jurisdiction over their items, they can request a determination through the commodity jurisdiction process from State, which consults with Commerce and Defense. In implementing the commodity classification process, Commerce has improperly classified some State-controlled items as Commerce-controlled and has not adhered to regulatory time …

A letter report issued by the General Accounting Office with an abstract that begins "To expand the capabilities of the nation's active duty forces, the Department of Defense (DOD) relies on the 1.2 million men and women of the Reserve and National Guard. Currently, reserve components constitute nearly half of the total armed forces. Although DOD requires reservists to use TRICARE DOD's health care system for their own health care, using TRICARE is an option for their dependents. Nearly 80 percent of reservists had health care coverage when they were not on active duty, according to a GAO survey. The most frequently cited sources of coverage were civilian employer health plans and spouses' employer health plans. Few dependents of mobilized reservists experience disruptions in their health coverage--primarily because most maintained civilian health coverage while reservists were mobilized. Ninety percent of the reservists with civilian health coverage maintained that coverage. The 5-year cost of the coverage options delineated in the 2002 National Defense Authorization Act range from $89 million, for expanding the transition benefit allowing mobilizations, to $19.7 billion, for continuous coverage under the Federal Employees Health Benefits Program, as estimated by the Congressional Budget Office."

A letter report issued by the General Accounting Office with an abstract that begins "The demand for child care has increased dramatically in the past several decades as the number of mothers who work outside the home has grown. Welfare reform has further increased this demand. To support low-income parents moving into the workforce, welfare reform established the Child Care and Development Fund (CCDF). In fiscal year 2000, states spent $5.3 billion in CCDF funds to subsidize child care for low-income families. Out of concern for the quality of care that the CCDF funds, welfare reform legislation also required states to set aside at least 4 percent of the total grant to improve the quality and availability of child care. Department of Health and Human Services (HHS) regulations provide examples of allowable activities, such as providing child care providers with financial incentives for meeting state and local standards, improving the compensation of child care staff, and offering resource and referral services. However, the regulations do not limit states' use of funds to these activities; rather, the fund's block grant structure allows states considerable flexibility in choosing appropriate quality and availability improvements to pursue. Using primarily the four percent quality set-aside, …

A letter report issued by the General Accounting Office with an abstract that begins "The Department of Defense (DOD) uses employee benefits--that is, indirect compensation above and beyond a service member's basic pay--as a tool to recruit and retain personnel. DOD has instituted a number of benefits that reflect demographic changes in the active duty force since the draft ended and the military became an all-volunteer force in 1973. Many of these benefits address one of the most significant demographic changes--an increase in service members with family obligations. A second major demographic change in the active military has been a growing proportion of female service members. DOD has responded positively to most demographic changes by incorporating a number of family-friendly benefits; however, opportunities exist to improve current benefits in this area. In comparing the types of benefits offered by the military with those offered in the private sector, GAO did not identify significant gaps in the benefits available to military personnel. GAO did not make direct comparisons between individual military and private-sector benefits but did determine that all the core benefits offered by most private-sector firms--retirement pay, health care, life insurance, and paid time off--are offered by the military."

A letter report issued by the General Accounting Office with an abstract that begins "Federal agencies are increasingly expected to focus on achieving results and to demonstrate, in annual performance reports and budget requests, how their activities will help achieve agency or governmentwide goals. Assessing a program's impact or benefit is often difficult, but the dissemination programs GAO reviewed faced a number of evaluation challenges--either individually or in common. The breadth and flexibility of some of the programs made it difficult to measure national progress toward common goals. The programs had limited opportunity to see whether desired behavior changes occurred because change was expected after people made contact with the program, when they returned home or to work. The five programs GAO reviewed addressed these challenges with a variety of strategies, assessing program effects primarily on short-term and intermediate outcomes. Two flexible programs developed common measures to conduct nationwide evaluations; two others encouraged communities to tailor local evaluations to their own goals. Congressional interest was key to initiating most of these evaluations; collaboration with program partners, previous research, and evaluation expertise helped carry them out. Congressional concern about program effectiveness spurred two formal evaluation mandates and other program activities. Collaborations …

A letter report issued by the General Accounting Office with an abstract that begins "Federal welfare legislation passed in 1996 placed a greater emphasis on helping low-income families end dependence on government benefits by promoting job preparation and work. To reach this goal, the legislation gave states greater flexibility to design programs that use federal funds to subsidize child care for low-income families. Under the Child Care and Development Fund, this flexibility includes the freedom to largely determine which low-income families are eligible to receive child care subsidies. These maximum rates consist of two parts--a state subsidy and family co-payment. States also establish maximum reimbursement rates for child care. States reported considering market rate survey and budget and policy goals in setting maximum reimbursement rates. All states reported conducting market rate surveys in the past 2 years that obtained data on providers' fees, but 10 states reported that they did not base the reimbursement rates for child care providers on their most recent market rate surveys. In the nine communities visited, GAO calculated that hypothetical families' access to child care centers and family home providers varied widely as a result of the different subsidies and family co-payments established by each …

A letter report issued by the General Accounting Office with an abstract that begins "The U.S. payment system is a large and complex system of people, institutions, rules, and technologies that transfer monetary value and related information. The nation's payment system transfers an estimated $3 trillion dollars each day--nearly one third of the U.S. gross domestic product. Currently, settlement--the final step in the transfer of ownership involving the physical exchange of payment or securities--occurs only during the business week. Some retailers, however, generate approximately half their weekly sales on weekends--when depository and other financial institutions generally are closed--receiving cash, checks, and electronic payments that are not credited to their accounts until at least the next business day. Weekend settlement of financial transactions would provide small benefits to retailers and consumers, and little, if any, benefit to the economy as a whole. Because payment system actors and processes are interdependent, implementing weekend settlement would require payment service providers that clear and settle retail and wholesale payments to open on weekends, resulting in significantly increased operational costs. Although there are no direct federal prohibitions against weekend settlement, state laws that are not preempted by federal laws or regulations providing for weekend settlement …

A letter report issued by the General Accounting Office with an abstract that begins "Ten years ago, Congress passed the Prescription Drug User Fee Act to speed up the review process used to ensure that new drugs and biological products are safe and effective. GAO found that the act has provided the Food and Drug Administration (FDA) with the funding needed to hire more drug reviewers, which has led to faster availability of new drugs to the United States. Approval times have shortened both for priority drugs--those that FDA expects to offer significant therapeutic benefits beyond drugs already on the market--and standard drugs, which are not thought to have significant therapeutic benefits beyond available drugs. Although the act has increased the funds available for FDA's drug and biological reviews, funds for other activities, such as the regulation of foods and medical devices, have shrunk as a share of FDA's overall budget. The 1997 amendments to the act, which shortened review schedules and set new performance goals to reduce overall drug development time, have increased reviewer workload at FDA. GAO found that some drug reviewers may have forgone training and professional development opportunities to ensure that the new goals were met. …

A letter report issued by the General Accounting Office with an abstract that begins "The Board of Governors of the Federal Reserve System (Federal Reserve Board) reviewed its policies regarding the size of the Federal Reserve Banks' combined capital surplus account to determine if opportunities exist to decrease the amount held in the account. The consolidated capital surplus account is the aggregate of separate surplus accounts held at each of the 12 Reserve Banks, and the account represents cumulative retained net earnings for the Reserve Banks--that is, cumulative net earnings not paid to the Department of the Treasury. The Reserve Banks use their capital surplus accounts to act as a cushion to absorb losses. The Financial Accounting Manual for Federal Reserve Banks says that the primary purpose of the surplus account is to provide capital to supplement paid-in capital for use in the event of loss. Selected major foreign central banks maintain accounts with functions similar to the Federal Reserve System's capital surplus account. Although their accounts are not fully comparable with the Federal Reserve System capital surplus account, the Bank of England, the Bundesbank, and the European Central Bank have capital surplus or reserve accounts in addition to their …

A letter report issued by the General Accounting Office with an abstract that begins "As the world's leading trading nation, the United States depends on a vast marine transportation system. Ninety-five percent of overseas trade tonnage moves by water, and the cargo moving through the U.S. marine transportation system contributes hundreds of billions of dollars to the U.S. gross domestic product. As it does with the nation's highway and aviation systems, the federal government participates with hundreds of public and private entities in maintaining and improving the marine transportation system. During fiscal years 1999, 2000, and 2001, federal expenditures for the commercial marine transportation system averaged $3.9 billion per year. Funding for about 80 percent of these expenditures came from the U.S. Treasury's general fund. During this same period, federal agencies collected $1 billion each year from marine transportation system users. During the same three-year period, federal expenditures for aviation and highway transportation systems averaged $10 billion and $25 billion, respectively, each year. Unlike the funding approach for the marine transportation system, which relies extensively on tax revenue, the federal funding approach for aviation and highway relies almost exclusively on assessments on users of the transportation systems."

A letter report issued by the General Accounting Office with an abstract that begins "From 1990 through 2001, the Export-Import Bank (Ex-Im Bank) of the United States provided export financing commitments totaling $31 billion to promote the export of U.S. goods and services for use in the energy sector. The energy sector is divided into fossil fuel, renewable, and nuclear energy. Financing is provided through a range of products, including loans and guarantees, export credit insurance, and working capital guarantees. Of the $28 billion Ex-Im Bank provided in loans and guarantees for energy-related projects from 1990 to 2001, 93 percent was used to finance fossil fuel projects, and 3 percent was for renewable energy projects. Trends in applications for fossil fuel and renewable energy projects largely mirrored trends in the energy projects financed because 90 percent of applications submitted were financed. Since 1990, Ex-Im Bank has not consistently provided information about its renewable energy program to Congress; its 1995 and 1998 annual reports did not address renewable energy. Ex-Im Bank's energy portfolio is affected by broad factors such as worldwide market conditions and to some degree by its policies, promotion efforts, and programs. The relatively small share of renewable energy …

A letter report issued by the General Accounting Office with an abstract that begins "Since September 1996, the Federal Aviation Administration (FAA) has been developing the Standard Terminal Automation Replacement System (STARS) project to replace the outdated computer equipment that air traffic controllers currently use in some facilities to control air traffic within 5 to 50 nautical miles of an airport. Comparing the currently projected cost and deployment schedule for STARS with the original cost and schedule is difficult because the program presently bears little resemblance to the program envisioned in 1996. FAA has officially changed the cost, schedule, and requirements for STARS twice. In October 1999, FAA estimated the cost for its new approach at $1.4 billion, with a schedule to begin deploying STARS in 2002 at 188 facilities and complete installation at all facilities by 2008. The second change occurred in March 2002, when FAA lowered its estimate from $1.4 billion to $1.33 billion, reduced the number of facilities receiving STARS from 188 to 74, and changed the date to complete installation at all facilities from 2008 to 2005. FAA responded to the Department of Transportation Inspector General's concerns about the agency's plans for deploying STARS in Philadelphia …

A letter report issued by the General Accounting Office with an abstract that begins "The National Railroad Passenger Corporation (Amtrak), the nation's intercity passenger rail operator, was created by Congress in 1970 after the nation's railroads found passenger service to be unprofitable. It is a private corporation. Its financial situation has never been strong, and it has been on the edge of bankruptcy several times. Early this year, Amtrak stated that federal financial assistance would have to more than double for the corporation to survive. Given Amtrak's worsening financial condition and the potential for intercity passenger rail to play a larger role in the nation's transportation system, there is growing agreement that the mission, funding, and structure of the current approach to providing intercity passenger rail merits reexamination. If Amtrak had been liquidated on December 31, 2001, secured creditors and unsecured creditors--including the federal government and Amtrak employees--and stockholders would have had $44 billion in potential claims against and ownership interests in Amtrak's estate. It is unlikely that secured and unsecured creditors' claims would have been fully satisfied, because Amtrak's assets available to satisfy these claims and interests are old, have little value, or appear unlikely to have a value …

A letter report issued by the General Accounting Office with an abstract that begins "The Supplemental Security Income (SSI) program is the nation's largest cash assistance program for the poor. The program paid $33 billion in benefits to 6.8 million aged, blind, and disabled persons in fiscal year 2001. Benefit eligibility and payment amounts for the SSI population are determined by complex and often difficult to verify financial factors such as an individual's income, resource levels, and living arrangements. Thus, the SSI program tends to be difficult, labor intensive, and time consuming to administer. These factors make the SSI program vulnerable to overpayments. The Social Security Administration (SSA) has demonstrated a stronger commitment to SSI program integrity and taken many actions to better deter and detect overpayments. Specifically, SSA has (1) obtained legislative authority in 1999 to use additional tools to verify recipients' financial eligibility for benefits, including strengthening its ability to access individuals' bank account information; (2) developed additional measures to hold staff accountable for completing assigned SSI workloads and resolving overpayment issues; (3) provided field staff with direct access to state databases to facilitate more timely verification of recipient's wages and unemployment information; and (4) significantly increased, since …

A letter report issued by the General Accounting Office with an abstract that begins "Medication errors and adverse drug reactions are a significant concern for the Department of Veterans Affairs (VA) and the Department of Defense (DOD) because their large beneficiary populations receive many prescriptions. Each agency has taken steps to reduce the risk of medication errors, such as making patients' medical records more accessible to providers and performing checks for drug interactions. Although each agency has designed safeguards to protect its own patients, some VA and DOD patients receive medication from both agencies. Shared patients face a higher risk of medication error. Joint (DOD and VA) venture sites with inpatient facilities provide services to shared inpatients in the same manner as they do for their own beneficiaries; that is, medications are ordered using the facility's guidelines and filled through the inpatient pharmacy at that facility. Gaps in safeguards result primarily from VA's and DOD's separate, uncoordinated information and formulary systems. Joint venture sites have tried to address some of these safety gaps. For instance, all sites have made patient information more accessible by providing additional, although incomplete, access to the other agency's patient information system."

A letter report issued by the General Accounting Office with an abstract that begins "Oregon Inlet is the primary route to the ocean for hundreds of commercial and recreational fishing vessels operating in the Outer Banks region of North Carolina. However, the inlet experiences more high winds, strong tides, and shifting sand than any other inlet on the coast of the United States. This high-energy environment often creates sand bars and large breaking waves at the inlet's entrance to the ocean, commonly known as the ocean bar. These conditions, especially when combined with the severe storms that frequent the area, can swamp a boat or run it aground, imperiling both life and property. During the past 19 years, the Army Corps of Engineers has had difficulty maintaining the ocean bar navigation channel at Oregon Inlet at its authorized 14-foot depth. Specifically, from 1983 through 1994, the Corps spent on average $4.1 million per year dredging the channel, but was only able to maintain the authorized 14-foot depth on average 23 percent of the time. After 1994, the Corps spent an average of $2 million per year, but the percentage of time the channel depth was maintained at its authorized depth …

A letter report issued by the General Accounting Office with an abstract that begins "The United States is increasingly dependent on space for its security and well being. The Department of Defense's (DOD) space systems collect information on capabilities and intentions of potential adversaries. They enable military forces to be warned of a missile attack and to communicate and navigate while avoiding hostile action. DOD's efforts to strengthen space control are targeted at seeking to promote better coordination among DOD components, prioritization of projects, visibility and accountability over funding, and interoperability among systems. Among other things, DOD is drafting a space control strategy that is to outline objectives, tasks, and capabilities for the next 20 years. It has also aggregated funding for space programs so that it can compare space funding, including space control funding, to its total budget, make decisions about priorities, and conduct future-trend analyses. In addition, DOD has changed its acquisition policy to include separating technology development from product development and encouraging an evolutionary, or phased, approach to development. There are, however, substantial challenges to making DOD's space control efforts successful. One challenge is putting needed plans in place to provide direction and hold the services accountable …

A letter report issued by the General Accounting Office with an abstract that begins "In 2001, almost 40 percent of all 16- and 17-year-olds in the United States and many 14- and 15-year-olds worked at some time in the year. Children in the United States are often encouraged to work, and many people believe that children benefit from early work experiences by developing independence, confidence, and responsibility. However, the public also wants to ensure that the work experiences of young people enhance, rather than harm, their future opportunities. The number and characteristics of working children have changed little over the past decade. According to Bureau of Labor Statistics data, as in 1990, as many as 3.7 million children aged 15 to 17 worked in 2001. The number of children who die each year from work-related injuries has changed little since 1992, but the number of children who incurred nonfatal injuries while working is more difficult to determine because data from different sources provide different estimates of the number of injuries and trends over time. The Department of Labor devotes many resources to ensuring compliance with the child labor provisions of the Fair Labor Standards Act, including conducting nationwide campaigns designed …

A letter report issued by the General Accounting Office with an abstract that begins "Some surveys suggest that as many as two-thirds of American households have donated money to charitable organizations in response to the terrorist attacks of September 11. Although it may be difficult to precisely tally the amount of money raised, 34 of the larger charities have reported raising an estimated $2.4 billion since September 11. Of the estimated $2.4 billion reported collected by the larger charities, about two-thirds were reported to have been distributed. Fund distribution rates vary widely among these charities, in part because of differences in their operating mission. Charities reported distributing these funds for a broad range of assistance to the families of those killed or injured, for those more indirectly affected through the loss of their jobs or homes, and for disaster relief workers. To distribute aid, charities had to make extensive efforts to identify victims and survivors as there were no uniform contact lists for families of victims; charity officials also said privacy issues affected the sharing of information among charities. Charities also faced challenges in providing aid to non-English speaking people in need of assistance; some charities have focused their efforts …

A letter report issued by the General Accounting Office with an abstract that begins "The Department of Energy (DOE), the largest civilian contracting agency in the federal government, relies primarily on contractors to operate its sites and carry out its diverse missions, such as maintaining the nuclear weapons stockpile, cleaning up radioactive and hazardous wastes, and performing research. Although federal law generally requires federal agencies to use competition in selecting a contractor, until the mid-1990s, DOE contracts for the management and operation of its sites generally fit within an exception that allowed for the use of noncompetitive procedures. Since 1996, DOE has made progress toward implementing contract reform initiative in three key areas--developing alternative contracting approaches, increasing competition, and using performance-based contracts. However, DOE continues to encounter challenges in implementing these initiatives. Although DOE has made strides in implementing contract reform initiatives, it is difficult to determine whether contractors' performance has improved because objective performance information is scarce. Over the past 8 years, DOE has primarily gauged progress by measuring its implementation of the reforms, such as the number of contracts competed each year, and by reviewing individual contract performance incentives. DOE faces a fundamental challenge to ensuring the effectiveness …

A letter report issued by the General Accounting Office with an abstract that begins "The federal government spends billions of dollars annually to provide services to the needy directly, or through contracts with a large network of social service providers. Faith-based organizations (FBO), such as churches and religiously affiliated entities, are a part of this network and have a long history of providing social services to needy families and individuals. In the past, religious organizations were required to secularize their services and premises, so that their social service activities were distinctly separate from their religious activities, as a condition of receiving public funds. Beginning with the passage of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Congress enacted "charitable choice" provisions, which authorized religious organizations to compete on the same basis as other organizations for federal funding under certain programs without having to alter their religious character or governance. The statutory provisions cover several programs, including Temporary Assistance for Needy Families (TANF) and Welfare to Work. Similar provisions also apply to the Community Services Block Grant and the substance abuse prevention and treatment programs. GAO found that faith-based organizations receive a small proportion of the government funding provided …

A letter report issued by the General Accounting Office with an abstract that begins "Immunizations are considered one of the leading public health achievements of the 20th century. Mandatory immunization programs have eradicated polio and smallpox in the United States and reduced the number of deaths from several childhood diseases, such as measles, to near zero. A consistent supply of many different vaccines is needed to support this effort. Recent childhood vaccine shortages have prompted federal authorities to recommend deferring some immunizations and have caused states to reduce immunization requirements. At the state and local levels, 49 state immunization programs reported rationing one or more vaccines. Shortages have also prompted most states to waive or change immunization requirements for school and day care programs so that children who have not received all mandatory immunizations could enroll. Many factors contributed to recent vaccine shortages, and while these have largely been resolved, the potential exists for future shortages. On the supply side, some manufacturers had production problems, causing them to fall below their expected output, while others discontinued making some vaccines altogether. On the demand side, one manufacturer could not keep pace with the greater-than-expected demand for a new recommended vaccine. Federal …

A letter report issued by the General Accounting Office with an abstract that begins "Clinical research is critical for the development of strategies for the prevention, diagnosis, prognosis, treatment, and cure of diseases. Clinical research has been defined as patient-oriented research, epidemiologic and behavioral studies, and outcomes research and health services research. The National Institutes of Health (NIH) is the principal federal agency that funds clinical research supporting individual clinical investigators, clinical trials, general and specialized clinical research centers, and clinical research training. For many years, there have been concerns that clinical research proposals are viewed less favorably than basic research during the peer review process at NIH and that clinical research has not received its fair share of NIH funding. In November 2000, the Clinical Research Enhancement Act was enacted to address some of these concerns. NIH reports that it has increased its financial support of clinical research and that spending on clinical research has kept pace with total NIH research spending. NIH has taken some steps to improve its peer review of clinical research applications. The Center for Scientific Review recently added two new peer review study sections for the review of clinical research applications--one for clinical cardiovascular …