Correspondence issued by the General Accounting Office with an abstract that begins "The accounting system's self-regulatory system for auditors, which largely depends on voluntary contributions from the accounting industry, is plagued by fragmentation, lack of coordination, poor communication, and conflicts of interest. In GAO's view, the current self-regulatory system is broken, and oversight by the Securities and Exchange Commission (SEC) has fallen short in protecting the public interest. Because of the important role played by independent auditors, GAO believes that direct government intervention is needed to create a new body to oversee the auditing of public companies by the accounting profession. Concerns about the timeliness, relevancy, and transparency of the financial reporting model could be addressed by closer cooperation between SEC and the Financial Accounting Standards Board (FASB), adequate and independent funding for FASB operations, and periodic reporting to Congress on FASB matters."

Correspondence issued by the General Accounting Office with an abstract that begins "GAO reviewed the audit report covering the financial statements of the Former Members of Congress for fiscal years 2000 and 1999. GAO found no reportable instances of noncompliance. The audit reports included the auditors' opinions that the financial statements of the corporation were presented fairly in accordance with general accounting principles."

Correspondence issued by the General Accounting Office with an abstract that begins "GAO addressed the Air Force's plan to replace a portion of its KC-135 aerial refueling tanker fleet with leased Boeing 767 aircraft. Although the Air Force has a long term requirement to replace its aging fleet of KC-135 tankers, the urgency of the need in the short term is unclear. The Air Force stated that the leasing arrangement would allow it to acquire new tankers three years earlier than through its most recent procurement plan. This would allow the Air Force to retire old, less capable KC-135s, thus saving maintenance costs on those aircraft. Because the Air Force is still negotiating the lease details, it could not provide information on the cost effectiveness of leasing aircraft instead of purchasing them. Although GAO has not taken a position on the overall policy of leasing versus purchasing defense equipment, it found that, from a cost standpoint, leasing is more expensive in the long run. Because the 767 aircraft is larger than the KC-135, there will be some infrastructure improvement costs, such as for building or modifying hangars, taxiways, and runway aprons. Additional costs would likely include simulators and project management. …

Correspondence issued by the General Accounting Office with an abstract that begins "The District of Columbia Public Schools (DCPS) has been unable to meet the obligation to its special education students under the Individuals with Disabilities Education Act (IDEA). By 1998, DCPS was experiencing serious problems in conducting timely hearings requested by parents under IDEA and in issuing final decisions within the required timelines. This resulted in many complaints and law suits by parents. The amount of attorneys' fees awarded to parties who prevailed in the IDEA cases was costly to the District of Columbia. The District of Columbia Appropriations Acts for fiscal years 1999, 2000, and 2001 limited the amount of appropriated funds that could be paid to an attorney representing a prevailing party in an action brought against DCPS under IDEA. GAO reviewed DCPS's IDEA awards and payments for fiscal years 1999, 2000, and 2001 to determine if they exceeded the acts' limitations. GAO found that the limitations had little impact on the total amount awarded by the courts for the attorney's fees. The limitations apply only to the amount that the District of Columbia could pay to a prevailing party under IDEA and not the amount that …

Correspondence issued by the General Accounting Office with an abstract that begins "The Department of Energy is required to establish a technology infrastructure pilot program to improve technology partnership activities. The National Nuclear Security Administration (NNSA), in April 2002, reported that it was unable to implement the technology infrastructure pilot program in fiscal year 2001, because of other programming priorities. NNSA also said that it did not have any immediate plans to implement the pilot program in fiscal year 2002. Although it has not funded the pilot program, NNSA stated that it supports technology partnerships with private entities that fulfill mission requirements and agreed that the "cluster" type of infrastructure that the pilot program would promote is important for its facilities because community and economic development are enhanced."

Correspondence issued by the General Accounting Office with an abstract that begins "This report discusses the variation in Medicare home health use across states. Using home health claims for the first 6 months of 2001 from the Centers for Medicare and Medicaid, GAO compiled statistics on home health users, home health visits, home health episodes, and the percentage of home health users with multiple episodes for each state. A home health episode, the basis for Medicare payment under the prospective payment system, is up to a 60-day period of care during which any number of visits may be provided."

Correspondence issued by the General Accounting Office with an abstract that begins "GAO reviewed the audit report covering the financial statements of the Non Commissioned Officers Association of the United States of America, Incorporated, for fiscal years 2000 and 1999. GAO found no reportable instances of noncompliance. The audit reports included the auditors' opinions that the financial statements of the corporation were presented fairly in accordance with general accounting principles."

Correspondence issued by the General Accounting Office with an abstract that begins "GAO reviewed the audit reports covering the financial statements of the Foundation of the Federal Bar Association for fiscal years 2000 and 1999. GAO found no reportable instances of noncompliance. 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 "Between fiscal years 1996 and 2001, the United States provided $3.45 billion in direct contributions and $24.2 billion in voluntary or indirect contributions to 33 U.N. peacekeeping operations in such areas as the Congo, Sierra Leone, Kosovo, Bosnia, and, most recently, Afghanistan. The prospects for implementing peace agreements are enhanced if all major parties to the conflict participate in negotiating the agreements and if these agreements include specific authority and mechanisms for their enforcement. Peace operations are more likely to succeed if the military forces carrying out the operations have clear objectives, sufficient resources, and the authority to carry out their tasks. Military forces can help create a secure environment for civilian work to proceed. Moreover, the slow or late deployment of a peace operation's civil administrators might impede efforts to establish good governance. Finally, peace operations tend to be more successful when locals participate at every reasonable opportunity."

Correspondence issued by the General Accounting Office with an abstract that begins "The Internal Revenue Service (IRS) plans to spend $2.9 billion to modernize its information systems. This report reviews the latest draft of IRS' Investment Decision Management Business Case Procedure, which guides the agency's information technology (IT) investments. GAO discusses changes to the guidance that would ensure that the economic analyses in IRS business cases are consistent with commonly accepted principles. IRS' draft guidance on business case documentation represents an important step toward ensuring that IRS management has relevant information on which to base its critical IT investment decisions. However, some aspects of IRS' guidance are inconsistent with commonly held principles of public sector cost-benefit analysis. Most important, the guidance does not require the computation of a comprehensive social net present value (NPV)--the standard for deciding whether a government investment can be justified on economic grounds. The two partial NPV computations that IRS' guidance requires are inappropriate because they do not incorporate the proper values for all relevant benefits and costs for investment projects with significant effects outside of IRS. In addition, IRS' two NPV's are not additive, so even if all benefits and costs were properly valued, decision …

Correspondence issued by the General Accounting Office with an abstract that begins "This letter answers several questions that arose from a recent GAO testimony (GAO-02-528T) on human capital management. GAO discusses (1) early retirement and early separation incentives, (2) expanded management flexibilities, (3) federal financial management, (4) hiring processes, (5) what federal managers must do to motivate and empower their employees, and (6) what the federal government must do to be competitive as an employer of choice."

Correspondence issued by the General Accounting Office with an abstract that begins "GAO reviewed the financial statement audit reports for the Naval Sea Cadet Corps for fiscal years 2000 and 1999. GAO found no reportable instances of noncompliance. The audit report included the auditor's opinion 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 "The terrorist attacks on the World Trade Center on September 11 caused enormous losses in New York City. These include the direct costs of the destruction to lives and property, as well as cleanup, and the indirect costs of lost income brought about by business closings and related spending reductions. It is expected that some of the losses will be covered by payments from private insurance, emergency federal relief funds, and charitable contributions. Other losses, however, may never be recovered because some individuals and businesses were uninsured or may not qualify for federal relief or charity. In reviewing eight studies from seven different organizations on the economic impact of the attacks, GAO found that they varied in the standard economic criteria used for analyzing economic impacts. In addition, the studies used different periods of time to estimate future costs that might be incurred. GAO found that the study by the New York City Partnership provided the most comprehensive estimates. The study estimated that the attacks on the two World Trade Center buildings cost $83 billion (in 2001 dollars) in total losses including both direct and indirect costs and …

Correspondence issued by the General Accounting Office with an abstract that begins "GAO reviewed the financial statement audit reports for the National Academy of Public Administration for fiscal year 2000. GAO found no reportable instances of noncompliance. The audit report included the auditor's opinion 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 reviewed the audit report covering the financial statements of the National Tropical Botanical Garden for fiscal years 2000 and 1999. GAO found no reportable instances of noncompliance. The audit reports included the auditors' opinions that the financial statements of the corporation were presented fairly in accordance with generally accepted accounting principles."

Testimony issued by the General Accounting Office with an abstract that begins "Improperly defined intellectual property rights in a government contract can result in the loss of an entity's critical assets or limit the development of applications critical to public health or safety. Conversely, successful contracts can spur economic development, innovation, and growth, and dramatically improve the quality of delivered goods and services. Contracting for intellectual property rights is difficult. The stakes are high, and negotiating positions are frequently ill-defined. Moreover, the concerns raised must be tempered with the understanding that government contracting can be challenging even without the complexities of intellectual property rights. Further, contractors often have reasons for not wanting to contract with the government, including concerns over profitability, capacity, accounting and administrative requirements, and opportunity costs. Within the commercial sector, companies identified a number of specific intellectual property concerns that affected their willingness to contract with the government. These included perceived poor definitions of what technical data is needed by the government, issues with the government's ability to protect proprietary data adequately, and unwillingness on the part of government officials to exercise the flexibilities available concerning intellectual property rights. Some of these concerns were on perception rather …

Testimony issued by the General Accounting Office with an abstract that begins "Congress is considering expanding the number of federal agencies required to prepare audited financial statements to include all executive branch agencies that have budget authority of $25 million or more. The Federal Financial Management Improvement Act of 1996 builds on the Chief Financial Officers (CFO) Act by encouraging agencies to have systems that generate timely, accurate, and useful information with which to make informed decisions on an ongoing basis. The 26 non-CFO Act agencies that GAO surveyed reported that they anticipate significant benefits from audited financial statements."

Testimony issued by the General Accounting Office with an abstract that begins "Rightsizing is the aligning of the number and location of staff assigned to U.S. embassies with foreign policy priorities, security, and other constraints. GAO is developing a framework to enable the executive branch to assess the number and mix of embassy staff. The framework will link staffing levels to the following three critical elements of overseas operations: (1) physical security and real estate, (2) mission priorities and requirements, and (3) operational costs. GAO reviewed policies and practices at the U.S. Embassy in Paris because of its large size and history of rightsizing decisions. GAO found that about 700 employees from 11 agencies work in main buildings at the Paris Embassy. Serious security concerns in at least one embassy building in Paris suggest the need to consider staff reductions unless building security can be improved. Staffing levels are hard to determine because agencies use different criteria and priorities to place staff. The lack of comprehensive cost data on all agencies' operations, which is estimated at more than $100 million annually in France, and the lack of an embassywide budget eliminate the possibility of cost-based decisionmaking on staffing. The number …

Testimony issued by the General Accounting Office with an abstract that begins "The following eight "encroachment" issues are hampering the military's ability to carry out realistic training: endangered species' critical habitat, unexploded ordnance and munitions, competition for radio frequency spectra, protected marine resources, competition for airspace, air pollution, noise pollution, and urban growth around military installations. Officials at all the installations and major commands GAO visited in the continental United States reported that encroachment had affected some of their training range capabilities, requiring work-arounds that are unrealistic. Service officials believe that population growth is responsible for current encroachment problems in the United States and is likely to cause more training range losses in the future. Despite concerns about encroachment, military readiness reports do not indicate the extent to which encroachment is harming training. Improvements in readiness reporting can better reveal shortfalls in training, but the ability to fully assess training limitations and their impact on capabilities and readiness will be limited without (1) more complete baseline data on training range capabilities, limitations, and requirements and (2) consideration of how live training capabilities may be complemented by training devices and simulations. Progress in addressing individual encroachment issues has been made, but …

Testimony issued by the General Accounting Office with an abstract that begins "Hazardous substances that leak from underground storage tanks can contaminate the soil and water and pose continuing health risks. Leaks of methyl tertiary butyl ether--a fuel additive--have forced several communities to close their wells. GAO surveyed all 50 states and the District of Columbia to determine whether tanks are compliant with the Environmental Protection Agency's (EPA) underground storage tank (UST) requirements. About 1.5 million tanks have been closed since the program was created, leaving about 693,000 tanks subject to UST requirements. Eighty-nine percent of these tanks had the required protective equipment installed, but nearly 30 percent of them were not properly operated and maintained. EPA estimates that the rest were inactive and empty. More than half of the states do not meet the minimum rate recommended by EPA for inspections. State officials said that they lacked the money, staff, and authority to conduct more inspections or more strongly enforce tank compliance. States reported that even tanks with the required leak prevention and detection equipment continue to leak, although the full extent of the problem is unknown. EPA is seeking better data on leaks from upgraded tanks and is …

Testimony issued by the General Accounting Office with an abstract that begins "The Department of Veterans Affairs (VA) spent $21 billion in fiscal year 2001 to treat 3.8 million veterans--most of whom had service-connected disabilities or low incomes. Since 1997, VA has used the Veterans Equitable Resource Allocation (VERA) system to allocate most of its medical care appropriation. GAO found that VERA has had a substantial impact on network resource allocations and workloads. VERA shifted $921 million from networks primarily in the northeast and midwest to networks in the south and west in fiscal year 2001. VERA, along with other VA initiatives, has provided an incentive for networks to serve more veterans. In GAO's view, VERA's overall design is a reasonable approach to allocating resources according to workloads. It provides a predetermined dollar amount per veteran served to each of VA's 22 health care networks. This amount varies depending upon the health care needs of the veteran served and local cost differences. However, GAO identified weaknesses in VERA's implementation. First, VERA excludes about one fifth of VA's workload in determining each network's allocation. Second, VERA does not account well for cost differences among networks resulting from variation in their patients' …

Testimony issued by the General Accounting Office with an abstract that begins "The Department of Labor's Office of Workers' Compensation Programs (OWCP) paid $2.1 billion in medical and death benefits and received 174,000 new injury claims during fiscal year 2000. GAO found that (1) one in four appealed claims' decisions are reversed or remanded to OWCP district offices for additional consideration and a new decision because of questions about or problems with the initial claims decision; (2) OWCP set a goal of informing 96 percent of claimants within 110 days of the date of the hearing; (3) nearly all doctors used by OWCP to provide opinions on injuries claimed were board certified and state licensed and were specialists in areas consistent with the injuries they evaluated; and (4) OWCP has used mailed surveys, telephone surveys, and focus groups to measure customer satisfaction. The Labor inspector general is monitoring fraud within OWCP's workers compensation program and using the claims examiners as one source to identify potentially fraudulent claims. This testimony is based on a May report (GAO-02-637)."

Testimony issued by the General Accounting Office with an abstract that begins "The Transportation Equity Act for the 21st Century changed the budgetary treatment of programs financed by the Highway Trust Fund. The act guaranteed annual funding levels for most highway and transit programs and linked highway user tax receipts, such as those from motor fuel and truck tire taxes, to the annual funding levels for highway programs. Revenue aligned budget authority adjustments are made to the annual guaranteed funding level provided in the act as highway account receipt levels change. For the first time, the adjustment for fiscal year 2003 is negative--decreasing the guaranteed level of highway funding by $4.369 billion. GAO found that the amounts distributed to the Highway Trust Fund for the first nine months of fiscal year 2001, as adjusted based on the Internal Revenue Service's certifications, were reasonable and adequately supported."

Testimony issued by the General Accounting Office with an abstract that begins "This testimony addresses GAO's fiscal year 2001 performance and results, current challenges and future plans, and GAO's budget request for fiscal year 2003."