Correspondence issued by the General Accounting Office with an abstract that begins "Rebuilding Iraq is a U.S. national security and foreign policy priority. According to the President, the United States intends to help Iraq achieve democracy and freedom and has a vital national interest in the success of free institutions in Iraq. As of April 30, 2004, billions of dollars in grants, loans, assets, and revenues from various sources have been made available or pledged to the reconstruction of Iraq. The United States, along with its coalition partners and various international organizations and donors, has embarked on a significant effort to rebuild Iraq following multiple wars and decades of neglect by the former regime. The Coalition Provisional Authority (CPA), established in May 2003, was the U.N.-recognized coalition authority led by the United States and the United Kingdom that was responsible for the temporary governance of Iraq. Specifically, the CPA wasresponsible for overseeing, directing, and coordinating the reconstruction effort. On June 28, 2004, the CPA transferred power to a sovereign Iraqi interim government, and the CPA officially dissolved. To pave the way for this transfer, the CPA helped the Iraq Governing Council develop the Law of Administration for the State of …

Correspondence issued by the General Accounting Office with an abstract that begins "This letter responds to the request by the Chairwoman, Subcommittee on Civil Service and Agency Organization, House Committee on Government Reform that GAO provide answers to follow-up questions from recent hearing entitled "First Year on the Job: Chief Human Capital Officers.""

Correspondence issued by the General Accounting Office with an abstract that begins "The U.S. space policy states that access to and use of space is critical to preserving peace and protecting U.S. national security and also benefits the country's civil and commercial interests. Air Force guidance explains further that access to space requires the ability to launch critical space assets, when needed, by a mix of space launch systems from standard launch pads at major support facilities. This is to ensure that a launch failure or other catastrophic event does not prevent mission success. These critical space assets, or satellites, are used for a wide range of government activities such as communications, navigation, and ballistic missile warning. The Evolved Expendable Launch Vehicle (EELV) program, consisting of both Atlas V and Delta IV launch vehicles, was established as the strategic launch system to meet the nation's critical space mission needs and correspond with U.S. policy that requires U.S. government satellites to be launched on U.S. manufactured launch vehicles. Specifically, the EELV program's overarching objective called for the development of a national expendable launch capability for assured access to space that would reduce the overall recurring cost of launch by at least …

Correspondence issued by the General Accounting Office with an abstract that begins "On March 31, 2004, the Financial Accounting Standards Board (FASB) issued an exposure document on a proposed Statement, Share-Based Payment, an Amendment of FASB Statements No. 123 and 95, which addresses the accounting for compensation to employees in the form of equity shares, including stock options. GAO recognizes that this is a complex and controversial issue on which reasonable people can and do disagree. In light of the above, there has been a renewed interest for the Congress to legislate accounting rules for stock options. Notwithstanding our and others' views on the merits of various accounting methods for stock options, GAO believes that the principle of independence, both in fact and in appearance, is essential to the credibility of and confidence in any authoritative standard-setting processes. With respect to the role of FASB in this and other areas, we support its efforts, as the Securities and Exchange Commission's (SEC) designated independent private-sector standard-setting body, to identify issues for consideration, prepare exposure documents, conduct outreach efforts and solicit comments on exposure documents, and consider the resulting comments in finalizing and issuing new accounting standards. This time-tested and proven deliberative …

Testimony issued by the General Accounting Office with an abstract that begins "The collection, maintenance, and use of location-based (geospatial) information are essential to federal agencies carrying out their missions. Geographic information systems (GIS) are critical elements used in the areas of homeland security, healthcare, natural resources conservation, and countless other applications. GAO was asked to review the extent to which the federal government is coordinating the efficient sharing of geospatial assets, including through Office of Management and Budget (OMB) oversight. GAO's report on this matter, Geospatial Information: Better Coordination Needed to Identify and Reduce Duplicative Investments (GAO-04-703), is being released today. GAO's testimony focuses on the extent to which the federal government is coordinating the sharing of geospatial assets, including through oversight measures in place at the Office of Management and Budget (OMB), in order to identify and reduce redundancies in geospatial data and systems."

Testimony issued by the General Accounting Office with an abstract that begins "The U.S. government's framework for preventing, detecting, and prosecuting money laundering has been expanding through additional pieces of legislation since its inception in 1970 with the Bank Secrecy Act (BSA). The purpose of the BSA is to prevent financial institutions from being used as intermediaries for the transfer or deposit of money derived from criminal activity and to provide a paper trail for law enforcement agencies in their investigations of possible money laundering. The most recent changes arose in October 2001 with the passage of the USA PATRIOT Act, which, among other things, extends antimoney laundering (AML) requirements to other financial service providers previously not covered under the BSA. GAO was asked to testify on its previous work and the ongoing work it is doing for the Senate Committee on Banking, Housing, and Urban Affairs on the depository institution regulators' BSA examination and enforcement process."

Testimony issued by the General Accounting Office with an abstract that begins "Since the tragic events of September 11, 2001, the National Capital Region (NCR), comprising jurisdictions including the District of Columbia and surrounding jurisdictions in Maryland and Virginia, has been recognized as a significant potential target for terrorism. GAO was asked to report on (1) what federal funds have been allocated to NCR jurisdictions for emergency preparedness; (2) what challenges exist within NCR to organizing and implementing efficient and effective regional preparedness programs; (3) what gaps, if any, remain in the emergency preparedness of NCR; and (4) what has been the role of the Department of Homeland Security (DHS) in NCR to date."

Testimony issued by the General Accounting Office with an abstract that begins "The Oil for Food program was established by the United Nations and Iraq in 1996 to address concerns about the humanitarian situation after international sanctions were imposed in 1990. The program allowed the Iraqi government to use the proceeds of its oil sales to pay for food, medicine, and infrastructure maintenance. The program appears to have helped the Iraqi people. From 1996 through 2001, the average daily food intake increased from 1,300 to 2,300 calories. From 1997-2002, Iraq sold more than $67 billion of oil through the program and issued $38 billion in letters of credit to purchase commodities. However, over the years numerous allegations have surfaced concerning potential fraud and program mismanagement. GAO (1) reports on its estimates of the illegal revenue acquired by the former Iraqi regime in violation of U.N. sanctions, (2) provides observations on program administration; and (3) describes the current and future challenges in achieving food security."

Correspondence issued by the General Accounting Office with an abstract that begins "In a May 18, 2004 letter, the Chairman of the House Select Committee on Homeland Security observed that many management and integration challenges remain at the Department of Homeland Security (DHS) and to strengthen the departmentwide reforms and transformation underway at DHS the Select Committee is considering options such as the Chief Operating Officer (COO) concept to help address these challenges. This letter describes the roles and responsibilities of an effective COO and presents certain options that could serve to strengthen and streamline management functions in a department as large and diverse as DHS. As agreed, we have summarized our reports on the COO concept, organizational transformation, as well as DHS's management and transformation challenges."

Correspondence issued by the General Accounting Office with an abstract that begins "In response to the September 11, 2001, terrorist attacks on the United States, the Congress enacted the Air Transportation Safety and System Stabilization Act (Stabilization Act) that provided, among other things, $5 billion in emergency assistance to compensate the nation's air carriers for losses incurred as a result of the attacks. Pursuant to a previous congressional request, we monitored the Department of Transportation's (DOT) progress in administering the emergency assistance program. As a result of our work, we reported on the payment process DOT employed to administer the program, details on the losses claimed by the air carriers, and the payments disbursed under the program. Now, Section 824 of the Vision 100 Century of Aviation Reauthorization Act requires that we report on the criteria and procedures used by DOT to compensate air carriers under the Stabilization Act emergency assistance program with a particular focus on whether it is appropriate to compensate air carriers for the decrease in value (asset impairment) of their aircraft after September 11, 2001, and to ensure that comparable air carriers receive comparable percentages of the maximum compensation payable. DOT published its criteria and procedures …

Guidance issued by the General Accounting Office with an abstract that begins "This publication supersedes GAO-04-218G, Acquisition/Financial Systems Interface Requirements: Checklist for Reviewing Systems under the Federal Financial Management Improvement Act (Exposure Draft), December 2003. The Federal Financial Management Improvement Act of 1996 (FFMIA) requires that agencies implement and maintain financial management systems that substantially comply with federal financial management system requirements. These requirements are described in detail in the Office of Management and Budget's (OMB) guidance and in the Federal Financial Management System Requirements series issued by the Joint Financial Management Improvement Program (JFMIP). JFMIP intends for its requirements series to promote understanding of key financial management systems concepts and requirements, to provide a framework for establishing integrated financial management systems that support program and financial managers, and to describe specific requirements of financial management systems."

Testimony issued by the General Accounting Office with an abstract that begins "A successful terrorist attack on Department of Energy (DOE) sites containing the material used in nuclear weapons, called special nuclear material, could have devastating consequences for the site and its surrounding communities. Because of these risks, DOE needs an effective safeguards and security program. A key component of an effective program is the design basis threat (DBT), a classified document that identifies, among other things, the potential size and capabilities of terrorist forces. The terrorist attacks of September 11, 2001, rendered the then-current DBT obsolete resulting in DOE issuing a new version in May 2003. GAO examined the issues that could impede the ability of DOE's Office of Energy, Science and Environment to fully meet the threat contained in the May 2003 DBT by the department's fiscal year 2006 deadline."

Correspondence issued by the General Accounting Office with an abstract that begins "In February 2004, we issued our opinions on the calendar year 2003 financial statements of the Bank Insurance Fund (BIF), the Savings Association Insurance Fund (SAIF), and the FSLIC Resolution Fund (FRF). We also issued our opinion on the effectiveness of the Federal Deposit Insurance Corporation's (FDIC) internal controls as of December 31, 2003, and our evaluation of FDIC's compliance with significant provisions of selected laws and regulations for the three funds for the year ended December 31, 2003. The purpose of this report is to discuss issues identified during our audits of the 2003 financial statements regarding accounting procedures and internal controls that could be improved and to recommend improvements to address these issues. Although these issues were not material in relation to the financial statements, we believe they warrant management's attention. We conducted our audits in accordance with U.S. generally accepted government auditing standards."

Correspondence issued by the General Accounting Office with an abstract that begins "The terrorist attacks of September 11, 2001, and Operation Iraqi Freedom have prompted major changes in the employment of naval forces around the globe. These two events resulted in an ultimate surging to deploy seven carrier strike groups and the largest amphibious task force assembled in decades. According to the Navy, at the time of the September 11 attacks and in preparation for Operation Iraqi Freedom, only a small number of ships at peak readiness were forward deployed. However, most of the Navy's ships were not available for use because they were in early stages of their training cycles. This prompted the Navy, in March 2003, to develop a concept to enhance its deployment readiness strategy. The Navy's Fleet Response Plan, implemented in May 2003, evolved from a concept to institutionalize an enhanced surge capability. Because of potential budget implications, Congress asked us to review the assumption that the Navy's implementation of its Fleet Response Plan would reduce the duration of aircraft carrier depot maintenance intervals between deployment periods from approximately 18 months to 9 months. Specifically, our objectives were to identify the likely impacts and risks for …

Correspondence issued by the General Accounting Office with an abstract that begins "GAO has long held the position that financial regulators can benefit from improved information sharing. As regulators are faced with the challenges of overseeing a myriad of financial products, along with the individuals and organizations that develop and sell them, information sharing among regulators serves as a key defense against fraud and market abuses. However, our system of financial regulation is fragmented and, in many cases, isolated among numerous federal and state financial regulators overseeing the securities, insurance, and banking industries. While there has been a greater effort to improve communication in recent years, the routine sharing of information between the regulators of the three major financial industries--securities, insurance, and banking--continues to be a source of concern. At Congress' request, we have issued reports and testimonies in recent years discussing the benefits of improved sharing of criminal and regulatory information and the consequences of failing to adequately share such information. This report focuses on three areas where greater attention is needed to improve information-sharing capabilities among financial services regulators. First, we highlight the need for insurance regulators to have more consistent access to the Federal Bureau of Investigation …

Correspondence issued by the General Accounting Office with an abstract that begins "The Centennial of Flight Commission (Commission) was created on November 13, 1998, by the Centennial of Flight Commemoration Act (Public Law 105-389, as amended by Public Law 106-68). The purpose of the Commission is to commemorate the 100th anniversary of the Wright brothers' flight at Kitty Hawk, North Carolina, on December 17, 1903. The Commission is to provide recommendations and advice to the President, the Congress, and federal agencies on the most effective ways to encourage and promote national and international participation and sponsorships in commemoration of the centennial of powered flight. We are required by the act to audit the financial transactions of the Commission. This report presents the results of our audit of the Commission's financial transactions for fiscal year 2003 and through May 19, 2004, with cumulative information since the Commission's inception. We previously reported the results of our audits on Commission financial transactions for fiscal years 1999 and 2000, 2001, and 2002. This will be our final audit of the Commission because, in accordance with Public Law 105-389, the Commission must issue its final report to the President and the Congress no later than …

Testimony issued by the General Accounting Office with an abstract that begins "As the demand for and the cost of prescription drugs rise, many consumers have turned to the Internet to purchase them. However, the global nature of the Internet can hinder state and federal efforts to identify and regulate Internet pharmacies to help assure the safety and efficacy of products sold. Recent reports of unapproved and counterfeit drugs sold over the Internet have raised further concerns. This testimony summarizes a GAO report: Internet Pharmacies: Some Pose Safety Risks for Consumers, GAO-04-820 (June 17, 2004). GAO was asked to examine (1) the extent to which certain drugs can be purchased over the Internet without a prescription; (2) whether the drugs are handled properly, approved by the Food and Drug Administration (FDA), and authentic; and (3) the extent to which Internet pharmacies are reliable in their business practices. GAO attempted to purchase up to 10 samples of 13 different drugs, each from a different pharmacy Web site, including sites in the United States, Canada, and other foreign countries. GAO assessed the condition of the samples it received and forwarded the samples to their manufacturers to determine whether they were approved by …

Testimony issued by the General Accounting Office with an abstract that begins "Under the current Social Security benefit formula, retired workers can receive benefits at age 65 that equal about 50 percent of preretirement earnings for an illustrative low-wage worker but only about 30 percent for an illustrative high-wage worker. Factors other than earnings also influence the distribution of benefits, including the program's provisions for disabled workers, spouses, children, and survivors. Changes in the program over time also affect the distribution of benefits across generations. Social Security faces a long-term structural financing shortfall. Program changes to address that shortfall could alter the way Social Security's benefits and revenues are distributed across the population and affect the income security of millions of Americans. The Chairman of the Senate Special Committee on Aging asked us to discuss how selected Social Security reform proposals might affect the distribution of benefits and taxes."

Testimony issued by the General Accounting Office with an abstract that begins "Interstate pipelines carrying natural gas and hazardous liquids (such as petroleum products) are safer to the public than other modes of freight transportation. The Office of Pipeline Safety (OPS), the federal agency that administers the national regulatory program to ensure safe pipeline transportation, has been undertaking a broad range of activities to make pipeline transportation safer. However, the number of serious accidents--those involving deaths, injuries, and property damage of $50,000 or more--has not fallen. Among other things, OPS takes enforcement action against pipeline operators when safety problems are found. OPS has several enforcement tools to require the correction of safety violations. It can also assess monetary sanctions (civil penalties). This testimony is based on ongoing work for the House Committee on Transportation and Infrastructure and for other committees, as required by the Pipeline Safety Improvement Act of 2002. The testimony provides preliminary results on (1) the effectiveness of OPS's enforcement strategy and (2) OPS's assessment of civil penalties."

Testimony issued by the General Accounting Office with an abstract that begins "Flaws in software code can introduce vulnerabilities that may be exploited to cause significant damage to federal information systems. Such risks continue to grow with the increasing speed, sophistication, and volume of reported attacks, as well as the decreasing period of the time from vulnerability announcement to attempted exploits. The process of applying software patches to fix flaws--patch management--is critical to helping secure systems from attacks. At the request of the House Committee on Government Reform and the Subcommittee on Technology, Information Policy, Intergovernmental Relations, and the Census, GAO reviewed the (1) reported status of 24 selected agencies in performing effective patch management practices, (2) tools and services available to federal agencies, (3) challenges to this endeavor, and (4) additional steps that can be taken to mitigate risks created by software vulnerabilities. This testimony highlights the findings of GAO's report, which is being released at this hearing."

Testimony issued by the General Accounting Office with an abstract that begins "GAO summarized the results of its investigation of some of the business practices of certain U.S. Internet pharmacies that sold narcotics without a prescription. At the request of the Chairman, Permanent Subcommittee on Investigations, Senate Committee on Governmental Affairs, GAO attempted to obtain information about the sources of hydrocodone that it purchased without a prescription from eight U.S. online pharmacies. Hydrocodone is an addictive narcotic pain medication, and illicit use of this drug has increased significantly in recent years."

Testimony issued by the General Accounting Office with an abstract that begins "The September 11, 2001, terrorist attacks precipitated a shift in how the FBI uses its investigative and intelligence resources to prevent future terrorist incidents. The attacks led to the FBI's commitment to transform and reorganize itself. Today's testimony discusses (1) the FBI's progress in transforming to focus on counterterrorism and intelligence-related priorities, (2) competition the FBI faces from other agencies and the private sector for intelligence staff, and (3) human capital flexibilities that may enhance the FBI's ability to address its priorities."

Testimony issued by the General Accounting Office with an abstract that begins "Since 2001, the U. S. airline industry has confronted financial losses of previously unseen proportions. From 2001 through 2003, the industry reported losses of about $23 billion, and two of the nation's largest airlines went into bankruptcy. Since September 11, 2001, the U.S. government has provided struggling airlines with $7.0 billion in direct assistance and many billions more in indirect assistance in the form of loan guarantees, a tax holiday, and pension relief. Under the 2003 Emergency Wartime Supplemental Appropriations Act (P.L. 108-11) and Vision 100--Century of Aviation Reauthorization Act (P.L. 108-176), Congress mandated that GAO review measures taken by air carriers to reduce costs, improve their revenues and profits, and strengthen their balance sheets. Later this year, GAO will provide a report to Congress in response to these mandates. This statement provides a preliminary summary of that work and focuses on three main questions: (1) what have been the major challenges to the airline industry since 1998; (2) what costcutting measures have airlines reported taking to remain financially viable; and (3) what is the financial condition of the airline industry?"

Testimony issued by the General Accounting Office with an abstract that begins "More than a decade after the 1991 Persian Gulf War, there is continued interest in the federal response to the health concerns of Gulf War veterans. Gulf War veterans' reports of illnesses and possible exposures to various health hazards have prompted numerous federal research projects on Gulf War illnesses. This research has been funded primarily by the Department of Veterans Affairs (VA), the Department of Defense (DOD), and the Department of Health and Human Services (HHS). In 1993, the President named the Secretary of VA as the responsible party for coordinating research activities undertaken or funded by the executive branch of the federal government on the health consequences of service in the Gulf War. In 2002, a congressionally mandated federal advisory committee--the VA Research Advisory Committee on Gulf War Veterans' Illnesses (RAC)--was established to provide advice on federal Gulf War illnesses research needs and priorities to the Secretary of VA. This statement is based on GAO's report entitled Department of Veterans Affairs: Federal Gulf War Illnesses Research Strategy Needs Reassessment (GAO-04-767). The testimony presents findings about the status of research on Gulf War illnesses and VA's communication and …