A letter report issued by the General Accounting Office with an abstract that begins "Medicare's physician fee schedule establishes payments for more than 7,000 different services, such as office visits, surgical procedures, and treatments. Before 1992, fees were based on charges physicians billed for these services. Since then, the Health Care Financing Administration (HCFA), which runs Medicare, has been phasing in a new fee schedule on the basis of the amount of resources used to provide that service relative to other services. The development of the resource-based practice expense component was a substantial undertaking. The implementation of the resource-based methodology has been the subject of considerable controversy, partly because of HCFA's adjustments to the underlying data and basic method and partly because payment changes were required to be budget-neutral--which means that total Medicare spending for physician services was to be the same under the new payment method as it was under the old one. As a result, Medicare payments to some specialties have increased while payments to other specialties have decreased. Oncologists claim that their practice expense payments are particularly inadequate for some office-based services, such as chemotherapy. Oncology practice expense payments in 2001 are eight percent higher than they …

A letter report issued by the General Accounting Office with an abstract that begins "Congress and the Health Care Financing Administration recognized that certain services needed to be excluded from the skilled nursing facility (SNF) prospective payment system (PPS) rate to help ensure beneficiary access to appropriate care and to financially protect the SNFs that take care of high-cost patients. The criteria used to identify services--high cost, infrequently provided during a SNF stay and likely to be overprovided--and the services currently excluded appear reasonable. Even so, questions remain about whether beneficiaries have appropriate access to services that are covered in the rate or whether additional services should have been excluded. A second concern is that Medicare coverage for excluded facility services has been shifted from part A to part B, which will increase beneficiary liability. and program spending might increase because certain services are excluded only when provided in hospital settings, thus discouraging the use of less expensive, clinically appropriate sites of service. Finally, excluding services from the PPS rate when they are provided in emergency rooms may lead to overuse of emergency rooms, unnecessarily increasing Medicare spending. The Centers for Medicare and Medicare Services (CMS) does not plan to …

A letter report issued by the General Accounting Office with an abstract that begins "The Farm Service Agency (FSA) within the Department of Agriculture provides financial assistance to farmers and ranchers who are unable to obtain commercial credit at reasonable rates and terms. FSA provides direct government-funded loans and repayment guarantees on farm loans made by commercial lenders. During the 1990s, GAO issued a series of reports highlighting the substantial financial risk associated with FSA's farm loan programs and multibillion-dollar portfolio. GAO recently reviewed FSA's farm loan programs to determine the outstanding principal owed on direct and guaranteed farm loans at the end of fiscal year 2000 and the losses incurred by FSA on direct and guaranteed farm loans in the same year. GAO found that FSA had more than $16.6 billion in outstanding farm loans as of September 2000. Farm loan losses incurred by FSA during fiscal year 2000 totalled about $486 million. Both figures represent a significant decrease when compared to figures for earlier years."

A letter report issued by the General Accounting Office with an abstract that begins "Since 1992, Congress has authorized more than $3 billion for the Cooperative Threat Reduction (CTR) program to help Russia, Belarus, Ukraine, Kazakhstan, Uzbekistan, Moldova, and Georgia secure and eliminate weapons of mass destruction. Concerned about proper oversight of equipment and services provided by the program, Congress required the Department of Defense (DOD) to report annually on whether the assistance was being used as intended. This report reviews (1) whether DOD's oversight procedures produce the necessary information to determine if the threat reduction assistance, including equipment provided and services furnished, is being used as intended and (2) whether DOD can improve its oversight. GAO found that DOD has procedures in place that reasonably ensure that at least 95 percent of the assistance is being used as intended and is adequately accounted for. Because of access restrictions imposed by the Russian government, a limited amount of equipment--less than five percent of the total value of assistance provided--is in locations where access by U.S. personnel is not permitted. DOD can enhance the quality of its program oversight by better targeting and expanding the scope of its formal audit and …

A letter report issued by the General Accounting Office with an abstract that begins "The Army is acquiring a new, state-of-the-art radar countermeasures system--called the Suite of Integrated Radio Frequency Countermeasures to help helicopters and other aircraft identify, track, and defeat radar-guided missiles in complex electronic environments where many radar systems could be operating simultaneously. The Army has identified software and hardware modification needed for its new radar countermeasures system. The Army expects that future tests will enable it to determine whether the modified software performs as required before the planned low-rate initial production decision in early 2002. However, the testing of the modified hardware is not scheduled for completion until September 2002. By deferring low-rate initial production decision, the Army would reduce the risk of incurring anticipated costs to retrofit articles if the system does not work as expected."

A letter report issued by the General Accounting Office with an abstract that begins "The Joint Strike Fighter Program (JSFP), the military's most expensive aircraft program, is intended to produce affordable, next-generation aircraft to replace aging aircraft in military inventories. Although JSFP has made good progress in some technology areas, the program may not meet its affordability objective because critical technologies are not projected to be matured to levels GAO believes would indicate a low risk program at the planned start of engineering and manufacturing development in October 2001."

A letter report issued by the General Accounting Office with an abstract that begins "To protect themselves against large out-of-pocket expenses and help fill gaps in Medicare coverage, most beneficiaries buy supplemental insurance, known as Medigap; contribute to employer-sponsored health benefits to supplement Medicare coverage; or enroll in private Medicare+Choice plans rather than traditional fee-for-service Medicare. Because Medicare+Choice plans are not available everywhere and many employers do not offer retiree health benefits, Medigap is sometimes the only supplemental insurance option available to seniors. Medicare beneficiaries who buy Medigap plans have coverage for essentially all major Medicare cost-sharing requirements, including coinsurance and deductibles. But this "first-dollar" coverage may undermine incentives for prudent use of Medicare services, which could ultimately boost costs for the Medicare program. Although various proposals have been made to add a prescription drug benefit to Medicare, relatively few beneficiaries buy standardized Medigap plans with this benefit. Low enrollment in these plans may be due to the fact that fewer plans are being marketed with these benefits; their relatively high cost; and the limited nature of their prescription drug benefit, which still requires beneficiaries to pay more than half of their prescription drug costs. Most plans have a $3,000 …

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 …

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."

A letter report issued by the General Accounting Office with an abstract that begins "Since 1994, the United States has appropriated $227 million to support two multilateral science centers in Russia and Ukraine. The science centers pay scientists who once developed nuclear, chemical, and biological weapons and missile systems for the Soviet Union to conduct peaceful research. By employing scientists at the science centers, the United States seeks to reduce the risks that these scientists could be tempted to sell their expertise to terrorists. This report examines the (1) selection procedures the State Department uses to fund projects that meet program objectives and (2) monitoring procedures the State Department uses to verify that scientists are working on the peaceful research they are paid to produce. GAO found that State lacks complete information on the total number and locations of senior scientists and has not been granted access to senior scientists at critical research institutes under the Russian Ministry of Defense. GAO also found that State has designed an interagency review process to select and fund research proposals submitted by weapons scientists to the science centers in Russia and Ukraine. The overall goal is to select projects that reduce proliferation risks …

Correspondence issued by the General Accounting Office with an abstract that begins "This report identifies federal funding for fiscal years 1999 and 2000 that supported reproductive health activities of the following four nonprofit organizations: the Planned Parenthood Federation of America, the Population Council, the International Planned Parenthood Federation, and The Alan Guttmacher Institute. GAO found that these organizations used $184 million in federal funds for fiscal year 1999 and $196 million in federal funds for fiscal year 2000 to support domestic and international activities related to reproductive health. The Department of Health and Human Services and the U.S. Agency for International Development were the major sources of these funds. Four Senate committees and four House committees have jurisdiction over the authorization of the programs under which the funding was provided. In addition, the Senate and House Committees on Appropriations each have subcommittees that have jurisdiction over the appropriations for the programs through which the funds are provided."

Correspondence issued by the General Accounting Office with an abstract that begins "GAO reviewed the progress of the new 155mm Lightweight Howitzer program. GAO found that since July 2000, all key program milestones have continued to slip. Only the initial fielding date for the howitzer remains unchanged. Since July 2000, the total program cost estimates have increased from $1,129.9 million to $1,250.2 million, an increase of $120.3 million. In addition, GAO found four technical problems yet to be addressed in the program: (1) cracking of the spades used to anchor the howitzer, (2) loose spade latches that create difficulties in removing the spades from the ground, (3) the spade damper--a device intended to help the spade dig into the soil to stabilize the gun--does not work properly in all soil types, and (4) the durability of the optical sight being developed for the gun. Design solutions have been identified for each of these problems, according to the Army-Marine Corps Lightweight Howitzer Joint Program Office. These design changes have not been fully incorporated and field tested to date."

Correspondence issued by the General Accounting Office with an abstract that begins "GAO reviewed the American Council of Learned Societies' financial statement audit reports to determine whether it complied with the financial reporting requirements of the law. GAO found no reportable instances of noncompliance, and the audit reports included the auditors' opinions that the financial statements of the corporation were presented fairly in accordance with generally accepted accounting principles."

Correspondence issued by the General Accounting Office with an abstract that begins "GAO examined the Bureau of the Census' estimates of e-commerce in 1999 to determine whether GAO should revise the results of its 2000 report on sales tax issues from e-commerce (GAO/GGD/OCE-00-165). This report uses private-sector forecasts of Internet and total remote sales as the basis for several scenarios illustrating the impact of such sales on state and local sales and use tax revenues. The scenarios show that considerable uncertainty exists about the size of the impacts and how various assumptions about sales, compliance, and other factors contribute to that uncertainty. Census' new e-commerce estimates do not provide a basis for revising the results GAO found in its 2000 report. Census' definition of e-commerce is broader than Internet sales. Because of the way firms provide information on their e-commerce sales to Census, Internet sales cannot be separated from the broader e-commerce sales at a level of detail that allows GAO to compare Census' results with the Internet sales estimates used in its 2000 report."

Correspondence issued by the General Accounting Office with an abstract that begins "GAO provided a list of potential questions that Senate committees could use to help determine the leadership and management experiences and capabilities of nominees to leadership posts in major executive branch agencies. These questions cover a wide range of management-related issues in different organizations within each agency and, therefore, would not be relevant to all nominees. GAO suggests that these questions be used to prompt informal and formal discussions on management challenges."

Correspondence issued by the General Accounting Office with an abstract that begins "For fiscal year 2002, Congress has before it two separate budget requests for the Internal Revenue Service (IRS)--the traditional request prepared by the administration and a separate request prepared by the IRS Oversight Board. There are some significant differences between the two requests. The administration is requesting about $9.4 billion while the Board is requesting an additional $300 million. This correspondence addresses several questions related to (1) the differences between the two requests, (2) IRS' hiring plans for its Staffing Tax Administration for Balance and Equity initiative, (3) the productivity of IRS staff, and (4) business systems modernization."

Correspondence issued by the General Accounting Office with an abstract that begins "Research and development are major factors in the growth and progress of industry and the national economy. However, basic research done by the nation's research institutions--universities and colleges, federal laboratories, and nonprofit research centers--may not translate into marketable technologies. To link the ideas and resources of the research institutions with the commercialization experience of small businesses, Congress authorized the Small Business Technology Transfer (STTR) Pilot Program in 1992 and reauthorized it in fiscal year 1997. The STTR program is scheduled to expire in September 2001. Each of the five participating federal agencies manages its own program, while the Small Business Administration plays a central administrative role, issuing policy directives and annual reports for the program. The program, which requires that small businesses partner with a nonprofit research institution, is closely modeled to the Small Business Innovation Research (SBIR) Program. In preparation for the review and potential reauthorization of the STTR program, this correspondence identifies participating companies' views on (1) the contributions that the companies and the research institutions made to research and development, (2) the results of research and development, and (3) options for the future relationship between …

Guidance issued by the General Accounting Office with an abstract that begins "This publication supersedes GAO-01-238G, Grant Financial System Requirements: Checklist for Reviewing Systems Under the Federal Financial Management Improvement Act, January 2001. The Federal Financial Management Improvement Act (FFMIA) of 1996 requires that agencies implement and maintain financial management systems that substantially comply with federal financial management systems requirements. The Joint Financial Management Improvement Program (JFMIP) seeks to promote understanding of key financial management systems concepts and requirements, to provide a framework for establishing integrated financial management systems to support program and financial managers, and to describe specific requirements of financial management systems. This checklist reflects JFMIP's first functional requirements document issued for grant financial systems to assist (1) agencies in implementing and monitoring agency grant financial systems and (2) managers and auditors in reviewing their grant financial systems to determine if they substantially comply with FFMIA. This checklist is not required to be used in assessing grant financial systems. Rather, it is provided as a tool for use by experienced staff and is one in a series of documents GAO has issued to help agencies improve or maintain effective operations."

Correspondence issued by the General Accounting Office with an abstract that begins "This report discusses the validity of the results of a 1998 study of the Canadian lynx. The Forest Service contracted with Dr. John Weaver of the Wildlife Conservation Society in New York City to help survey the Canadian lynx in the Cascade Mountains of Washington and Oregon. In a March 1999 interim report, Dr. Weaver concluded that the Canadian lynx lives in some forests in Washington and Oregon. In March 2000, the Fish and Wildlife Service placed the lynx on its list of threatened species in the forested portions of 13 states, including Washington and Oregon. Issues have since been raised about whether the study's results were falsified. GAO found no evidence that the study was deliberately falsified."

Correspondence issued by the General Accounting Office with an abstract that begins "Well-designed and properly implemented general and application controls are essential to protect the Bureau of Public Debt's (BPD) computer resources and operational environment from inappropriate disclosure and modification of sensitive information, misuse or damage of computer resources, and disruption of critical operations. BPD needs to take preventive measures to further reduce threats to its computer resources and operating environment from unintentional errors or omissions or intentional modification, disclosure, or destruction of data and programs by disgruntled employees, intruders, or hackers. BPD has addressed most of the vulnerabilities GAO identified as part of its audits for fiscal years 1997 through 1999 and has already taken steps to resolve the new vulnerabilities GAO cited in its fiscal year 2000 audit. However, further actions are required to fully address the vulnerabilities discussed in this letter."

Correspondence issued by the General Accounting Office with an abstract that begins "GAO reviewed the audit report covering the financial statements of the Military Order or the World Wars for fiscal year 2000. GAO found no reportable instances of noncompliance. The audit reports included the auditors' opinions that the financial statements of the corporation were presented fairly on a modified cash basis of accounting."

Correspondence issued by the General Accounting Office with an abstract that begins "The 1997 peer review of the Department of Defense (DOD) Inspector General (IG) done by the Environmental Protection Agency IG resulted in a qualified opinion. The peer review report questioned the quality assurance system used by the DOD IG and said that the reviewed audits did not fully comply with Government Auditing Standards. The 2000 peer review done by the Department of the Treasury IG for Tax Administration (TIGTA) also resulted in a unqualified opinion. Although TIGTA cited several problems, the peer review report concluded that the quality assurance system used by the DOD IG reasonably ensured compliance with auditing standards. However, after the peer review had been completed, a letter was sent to Congress, the press, and others questioning the integrity of the documentation that the DOD IG provided to the TIGTA peer review staff. A DOD IG internal investigation later confirmed that the work papers for one of the audits chosen for peer review had been altered and destroyed. The report concluded that these actions violated Government Auditing Standards, internal DOD IG audit policies, and the expectations of the external peer review staff. TIGTA then withdrew …

Correspondence issued by the General Accounting Office with an abstract that begins "The Department of Veterans Affairs' (VA) information technology (IT) program faces many challenges, including filling its chief information officer position, improving computer security, and refining its process for selecting, controlling, and evaluating its information technology investments. This correspondence answers several questions from Congress on these and other challenges facing VA's IT program."

Correspondence issued by the General Accounting Office with an abstract that begins "This report evaluates how the Small Business Administration (SBA) has managed its Women's Business Center Program. GAO found that the two offices that run the program--the Office of WOmen's Business Ownership (program office) and the Office of Procurement and Grants (grants office)--have addressed the weaknesses cited in GAO's 1999 report. For example, files from the program office that GAO reviewed were generally complete, and the few documents that GAO could not locate were provided promptly. The program office was also able to provide various historical documents for 1999 and 2000, and the program office and grants office had tried to improve coordination with each other, such as through better recordkeeping."