[Senate Hearing 108-]
[From the U.S. Government Printing Office]
LEGISLATIVE BRANCH APPROPRIATIONS FOR FISCAL YEAR 2005
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THURSDAY, MARCH 4, 2004
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:58 a.m., in room SD-116, Dirksen
Senate Office Building, Hon. Ben Nighthorse Campbell (chairman)
presiding.
Present: Senators Campbell, Stevens, and Durbin.
GENERAL ACCOUNTING OFFICE
STATEMENT OF DAVID M. WALKER, COMPTROLLER GENERAL
ACCOMPANIED BY:
GENE L. DODARO, CHIEF OPERATING OFFICER
SALLYANNE HARPER, CHIEF ADMINISTRATIVE OFFICER
STANLEY J. CZERWINSKI, CONTROLLER
opening statement of senator ben nighthorse campbell
Senator Campbell. The subcommittee will come to order.
Senator Durbin is running a little late and will be here in
just a few minutes.
Today's hearing is the first of four hearings we plan to
have to review the fiscal year 2005 legislative branch budget
request which totals roughly $4 billion.
Overall, legislative branch agencies have requested a 12
percent increase over the current fiscal year level. Clearly
this total level of spending will be very difficult, if not
impossible, to accommodate in view of the overall budget
constraints we face. We will be asking all agencies to have
another look at their budgets to ensure that there have been no
items requested which are not truly needed next year, and we
will also be exploring the impact of cutting budgets back to
current levels, if that is necessary, which it appears to be at
this point.
This morning we will take testimony from three agencies:
the General Accounting Office, the Government Printing Office,
and the Congressional Budget Office.
We will hear first from Mr. David Walker, Comptroller
General. Mr. Walker will be accompanied by Deputy Chief Gene
Dodaro. Welcome, Gene. And Mr. Stan Czerwinski, GAO's budget
officer. GAO's budget request of $486 million is a steady-state
budget, with the exception of the request for a permanent new
technology assessment capability.
The GAO will be followed by the Government Printing Office:
Mr. Bruce James, the Public Printer; accompanied by Mr. William
Turri, the Deputy Printer; and Steve Shedd, the Chief Financial
Officer. The GPO has many initiatives underway at this time to
restructure their agency, including the possible relocation of
their facility from its present North Capitol Street location.
The budget request of $151 million includes $25 million for
transformation efforts, but we do not have a delineation of
what those transformation efforts involve. It might be very
difficult to provide the funds without a detailed spending
plan.
And finally, we will hear from Mr. Douglas Holtz-Eakin, the
Director of the Congressional Budget Office, accompanied by Dr.
Elizabeth Robinson, CBO's new Deputy Director. CBO's budget
request of $35 million is a 5.5 percent increase over the
current fiscal year and would support the current staffing
level of 235 FTE.
So we welcome everyone this morning. Mr. Walker, if you
would like to proceed. If you would like to abbreviate your
comments, we will put your complete testimony in the record.
OPENING REMARKS OF DAVID WALKER
Mr. Walker. Thank you, Mr. Chairman. It is a pleasure to be
here again. On my far right is Stan Czerwinski, who is our
Controller. To my immediate right is Sallyanne Harper, who is
our Chief Administrative Officer and Chief Financial Officer,
and on my immediate left is Gene Dodaro, who is our Chief
Operating Officer.
Mr. Chairman, we believe that our fiscal year 2005 budget
request is both reasonable and responsible. We have asked for a
4.9 percent increase, primarily to cover automatic pay
increases and related costs, as well as price level increases.
This requested level will allow us to maintain our base
authorized FTEs, maintain operational support at fiscal year
2004 levels, and continue to meet the needs of the Congress at
present service levels.
Our requested budget reflects an offset of almost $5
million from nonrecurring fiscal year 2004 estimates, and it
represents a baseline review approach.
In times of tight budgets and fiscal pressures, I believe
it is especially important for GAO to lead by example in
connection with our budget request. We have done so as noted by
the fact that we are requesting the smallest percentage
increase of any legislative branch agency. In addition, we have
helped this subcommittee in your initial efforts to assure that
other legislative branch agencies ultimately employ a baseline
review approach in their budget submissions.
In the years ahead, our support to the Congress will likely
prove even more critical because of pressures created on our
Nation caused by large and growing fiscal imbalances. I believe
that GAO's help will prove to be invaluable as the Congress
seeks to review, reprioritize, and re-engineer existing
mandatory and discretionary spending programs and tax policies.
Maintaining a strong and adequately resourced GAO will also
help ensure that we can continue to provide an excellent return
on investment to the Congress and the country. Last year we
returned $78 for every dollar invested in GAO, number one in
the world. Nobody is even close.
Mr. Chairman and members of the subcommittee, I
respectfully request that you consider the modest nature of our
request and the unparalleled return on investment the Congress
and the country receives from your investment in GAO's work. I
would also respectfully request you consider the fact that many
independent sources have noted that we at GAO are leading in
the transformation of how the Government does business, and in
order to continue to do that, we will need your help and
reasonable resource levels.
PREPARED STATEMENT
Thank you, Mr. Chairman, Senator Durbin. I would be happy
to answer any questions you might have.
[The statement follows:]
Prepared Statement of David M. Walker
Mr. Chairman and Members of the Subcommittee: I am pleased to
appear before the subcommittee today, having recently completed my
fifth year as the Comptroller General of the United States and head of
the U.S. General Accounting Office. GAO exists to support the Congress
in meeting its constitutional responsibilities and to help improve the
performance and ensure the accountability of the federal government for
the benefit of the American people. In the years ahead, our support to
the Congress will likely prove even more critical because of the
pressures created by our nation's large and growing long-term fiscal
imbalance, which is driven primarily by known demographic and rising
health care trends. These pressures will require the Congress to make
tough choices regarding what the government does, how it does business,
and who will do the government's business in the future. GAO's work
covers virtually every area in which the federal government is or may
become involved, anywhere in the world. Perhaps just as importantly,
our work sometimes leads us to sound the alarm over problems looming
just beyond the horizon--such as our nation's enormous long-term fiscal
challenges--and help policymakers address these challenges in a timely
and informed manner.
My testimony today will focus on GAO's progress during my first
five years as Comptroller General. I will highlight our (1) fiscal year
2003 performance and results; (2) efforts to maximize our
effectiveness, responsiveness, and value; and (3) budget request for
fiscal year 2005 to support the Congress and serve the American people.
Following is a summary:
--The funding we received in fiscal year 2003 allowed us to conduct
work that addressed many of the difficult issues confronting
the nation, including diverse and diffuse security threats,
selected government transformation challenges, and the nation's
long-term fiscal imbalance. Perhaps the foremost challenge
facing government decision makers this year was ensuring the
security of the American people. By providing professional,
objective, and nonpartisan information and analyses, we helped
inform the Congress and the executive branch agencies on key
security issues, such as the nature and scope of threats
confronting the nation's nuclear weapons facilities, its
information systems, and all areas of its transportation
infrastructure, as well as the challenges involved in creating
the Department of Homeland Security. Our work was also driven
by changing demographic trends, which led us to focus on such
areas as the quality of care in the nation's nursing homes and
the risks to the government's single-employer pension insurance
program. Our work in these and other areas covered programs
that involve billions of dollars and touch millions of lives.
Importantly, in fiscal year 2003, GAO generated a $78 return
for each $1 appropriated to our agency.
--With the Congress's support, we have demonstrated that becoming
world class does not require a substantial increase in the
number of staff authorized, but rather maximizing the efficient
and effective use of the resources available to us. We have
worked with you to obtain targeted funding for areas critical
to GAO such as information technology, security, and human
capital management. We are grateful to the Congress for
supporting our efforts through pending legislation that, if
passed, would give us additional human capital flexibilities.
During tight budget times, these flexibilities would allow us,
among other things, more options to deal with mandatory pay and
related costs.
--In keeping with my belief that the federal government needs to
exercise a greater degree of fiscal discipline, we have kept
our request to $486 million, an increase of only 4.9 percent
over fiscal year 2004. I also applaud the Congress's request
that all legislative branch agencies examine how they could
work toward a more transparent budget presentation. In keeping
with the Congress's intent, we are continuing our efforts to
revamp our budget presentation to make the linkages between
funding and program areas more clear. I hope that in the future
the Congress will be able to use such performance information
to make tough choices on funding, thereby enabling it to avoid
across-the-board reductions that penalize agencies that
exercise fiscal discipline and generate high returns on
investment and real results.
FISCAL YEAR 2003 PERFORMANCE AND RESULTS
GAO is a key source of professional and objective information and
analysis and, as such, plays a crucial role in supporting congressional
decision making. For example, in fiscal year 2003, as in other years,
the challenges that most urgently engaged the attention of the Congress
helped define our priorities. Our work on issues such as the nation's
ongoing battle against terrorism, Social Security and Medicare reform,
the implementation of major education legislation, human capital
transformations at selected federal agencies, and the security of key
government information systems all helped congressional members and
their staffs to develop new federal policies and programs and oversee
ongoing ones. Moreover, the Congress and the executive agencies took a
wide range of actions in fiscal year 2003 to improve government
operations, reduce costs, or better target budget authority based on
GAO's analyses and recommendations. In fiscal year 2003, GAO served the
Congress and the American people by helping to identify steps to reduce
improper payments and credit card fraud in government programs;
restructure government and improve its processes and systems to
maximize homeland security; prepare the financial markets to continue
operations if terrorism recurs; update and strengthen government
auditing standards; improve the administration of Medicare as it
undergoes reform; encourage and help guide federal agency
transformations; contribute to congressional oversight of the federal
income tax system; identify human capital reforms needed at the
Department of Defense, the Department of Homeland Security, and other
federal agencies; raise the visibility of long-term financial
commitments and imbalances in the federal budget; reduce security risks
to information systems supporting the nation's critical
infrastructures; oversee programs to protect the health and safety of
today's workers; ensure the accountability of federal agencies through
audits and performance evaluations; and serve as a model for other
federal agencies by modernizing our approaches to managing and
compensating our people.
To ensure that we are well positioned to meet the Congress's future
needs, we update our 6-year strategic plan every 2 years, consulting
extensively during the update with our clients in the Congress and with
other experts (see app. I for our strategic plan framework).
The following table summarizes selected performance measures and
targets for fiscal years 1999 through 2005. Highlights of our fiscal
year 2003 accomplishments and their impact on the American public are
shown in the following sections.
TABLE 1.--SELECTED ANNUAL MEASURES AND TARGETS FOR FISCAL YEARS 1999-2005
[Dollars in billions]
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Fiscal year--
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Performance measure 1999 2000 2001 2002 2003 2003 2004 2005
Actual Actual Actual Actual Target Actual Target Target
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Financial benefits...................... $20.1 $23.2 $26.4 \1\ $37 $32.5 $35.4 $35.0 $36.0
.7
Other benefits.......................... 607 788 799 906 800 1,043 \2\ 900 900
Past recommendations implemented 70 78 79 79 77 82 \2\ 79 79
(percent)..............................
New recommendations made................ 940 1,224 1,563 1,950 1,250 2,175 \2\ 1,5 1,500
00
Testimonies............................. 229 263 151 216 180 189 \2\ 190 180
Timeliness (percent).................... 96 96 95 96 98 97 98 98
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\1\ Changes GAO made to its methodology for tabulating financial benefits in part caused our results to increase
beginning with the fiscal year 2002 results.
\2\ On the basis of past performance and expected future work, we revised these targets after we issued our
fiscal year 2004 performance plan. The original targets were 820 for other benefits, 77 percent for past
recommendations implemented, 1,250 for new recommendations made, and 200 for testimonies.
Source: GAO.
Benefits Reported
Many of the benefits produced by our work can be quantified as
dollar savings for the federal government (financial benefits), while
others cannot (other benefits). Both types of benefits resulted from
our efforts to provide information to the Congress that helped (1)
improve services to the public, (2) provide information that resulted
in statutory or regulatory changes, and (3) improve core business
processes and advance governmentwide management reforms.
In fiscal year 2003, our work generated $35.4 billion in financial
benefits--a $78 return on every dollar appropriated to GAO. The funds
made available in response to our work may be used to reduce government
expenditures or reallocated by the Congress to other priority areas.
Nine accomplishments accounted for nearly $27.4 billion, or 77 percent,
of our total financial benefits for fiscal year 2003. Six of these
accomplishments totaled $25.1 billion. Table 2 lists selected major
financial benefits in fiscal year 2003 and describes the work
contributing to financial benefits over $500 million.
TABLE 2.--GAO'S SELECTED MAJOR FINANCIAL BENEFITS FOR FISCAL YEAR 2003
[In millions of dollars]
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Description Amount
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Financial benefits exceeding $1 billion:
Updated the Consumer Price Index (CPI): Recommended 9,200
that the Bureau of Labor Statistics periodically
update the expenditure weights of its market basket of
goods and services used to calculate the CPI to make
it more timely and representative of consumer
expenditures. The Bureau agreed to do this every 2
years, and the CPI for January 2002 reflected the new
weights. The adjustments have resulted in, among other
things, lower federal expenditures on programs like
Social Security that use the CPI to calculate benefits
Eliminated Medicaid's upper payment limit loophole: 5,900
Identified a weakness in Medicaid's upper payment
limit methodology that allowed states to make
excessive payments to local, government-owned nursing
facilities and then have the facilities return the
payments to the states, creating the illusion that
they made large Medicaid payments in order to generate
federal matching payments. Closing the loophole
prevented the federal government from making
significant federal matching payments to states above
those intended by Medicaid............................
Made funds available for lighter-weight weapons 3,900
systems: Identified the Crusader artillery system as a
duplicative weapons system that was inconsistent with
the Department of the Army's plans to transform itself
into a lightweight combat force. The Department of
Defense (DOD) terminated the Crusader program,
resulting in costs avoided............................
Reduced the cost of federal housing programs: Improved 3,400
management of the Department of Housing and Urban
Development's unexpended balances resulting in the
recapture of unobligated funds........................
Reduced the cost of DOD's services acquisition process: 1,700
Examined the acquisition practices of leading
commercial companies and recommended a more strategic
approach for acquiring services at DOD, which was
implemented...........................................
Avoided costs associated with an increase in the 1,000
skilled nursing facilities rate: Determined that the
Congress's increase in the nursing component of
Medicare's daily rate for skilled nursing facilities
had little effect on increasing the ratios of nursing
staff to patients in these facilities. The nursing
component increase expired on October 1, 2002, and
despite arguments from the nursing facility industry,
the nursing component increase has not been reinstated
Selected financial benefits between $500 million and $1
billion:
Recovered Supplemental Security Income (SSI) 990
overpayments: Identified weaknesses in the Social
Security Administration's (SSA) efforts to recover SSI
overpayments that led to the development of SSA's
automated reconciliation process......................
Reduced DOD's implementation risks and purchase costs 780
for the Navy-Marine Corps intranet: Highlighted the
need for various management controls related to the
acquisition and implementation of the Navy-Marine
Corps intranet. As a result, DOD modified the Navy-
Marine Corps intranet contract and reduced contract
amounts in fiscal year 2002 and fiscal year 2003,
reduced program risks, and increased the likelihood
that the program will be acquired and implemented
successfully..........................................
Ensured Defense Emergency Response funds are better 517
targeted: Identified millions of dollars in
unobligated DOD Emergency Response funding, a portion
of which the Congress rescinded or directed DOD to
reallocate for other fund purposes....................
------------------------------------------------------------------------
Source: GAO.
Many of the benefits that flow to the American people from our work
cannot be measured in dollar terms. During fiscal year 2003, we
recorded a total of 1,043 other benefits--up from 607 in fiscal year
1999. As shown in appendix II, we documented instances where
information we provided to the Congress resulted in statutory or
regulatory changes, where federal agencies improved services to the
public and where agencies improved core business processes or
governmentwide reforms were advanced.
These actions spanned the full spectrum of national issues, from
securing information technology systems to improving the performance of
state child welfare agencies. We helped improve services to the public
by
--Strengthening the U.S. visa process as an antiterrorism tool.--Our
analysis of the U.S. visa-issuing process showed that the
Department of State's visa operations were more focused on
preventing illegal immigrants from obtaining nonimmigrant visas
than on detecting potential terrorists. We recommended that
State reassess its policies, consular staffing procedures, and
training program. State has taken steps to adjust its policies
and regulations concerning the screening of visa applicants and
its staffing and training for consular officers.
--Enhancing quality of care in nursing homes.--In a series of reports
and testimonies since 1998, we found that, too often, residents
of nursing homes were being harmed and that programs to oversee
nursing home quality of care at the Centers for Medicare and
Medicaid Services were not fully effective in identifying and
reducing such problems. In 2003, we found a decline in the
proportion of nursing homes that harmed residents but made
additional recommendations to further improve care.
--Making key contributions to homeland security.--Drawing on an
extensive body of completed and ongoing work, we identified
specific vulnerabilities and areas for improvement to protect
aviation and surface transportation, chemical facilities, sea
and land ports, financial markets, and radioactive sealed
sources. In response to our recommendations, the Congress and
cognizant agencies have undertaken specific steps to improve
infrastructure security and improve the assessment of
vulnerabilities.
--Improving compliance with seafood safety regulations.--We reported
that when Food and Drug Administration (FDA) inspectors
identified serious violations at seafood processing firms, it
took FDA 73 days on average, well above its 15-day target.
Based on our recommendations, FDA now issues warning letters in
about 20 days.
We helped to change laws in the following ways:
--We highlighted the National Smallpox Vaccination program
volunteers' concerns about losing income if they sustained
injuries from an inoculation. As a result, the Smallpox
Emergency Personnel Protection Act of 2003 (Public Law No. 108-
20) provides benefits and other compensation to covered
individuals injured in this way.
--We performed analyses that culminated in the enactment of the
Postal Civil Service Retirement System Funding Reform Act of
2003 (Public Law No. 108-18), which reduced USPS's pension
costs by an average of $3 billion per year over the next 5
years. The Congress directed that the first 3 years of savings
be used to reduce USPS's debt and hold postage rates steady
until fiscal 2006.
We also helped to promote sound agency and governmentwide
management by
--Encouraging and helping guide agency transformations.--We
highlighted federal entities whose missions and ways of doing
business require modernized approaches, including the Postal
Service and the Coast Guard. Among congressional actions taken
to deal with modernization issues, the House Committee on
Government Reform established a special panel on postal reform
and oversight to work with the President's Commission on the
Postal Service on recommendations for comprehensive postal
reform. Our recommendations to the Coast Guard led to better
reporting by the Coast Guard and laid the foundation for key
revisions the agency intended to make to its strategic plan.
--Helping to advance major information technology modernizations.--
Our work has helped to strengthen the management of the complex
multibillion-dollar information technology modernization
program at the Internal Revenue Service (IRS) to improve
operations, promote better service, and reduce costs. For
example, IRS implemented several of our recommendations to
improve software acquisition, enterprise architecture
definition and implementation, and risk management and to
better balance the pace and scope of the program with IRS's
capacity to effectively manage it.
--Supporting controls over DOD's credit cards.--In a series of
reports and testimonies beginning in 2001, we highlighted
pervasive weaknesses in DOD's overall credit card control
environment, including the proliferation of credit cards and
the lack of specific controls over its multibillion-dollar
purchase and travel card programs. DOD has taken many actions
to reduce its vulnerabilities in this area.
Benefits to State and Local Governments
While our primary focus is on improving government operations at
the federal level, sometimes our work has an impact at the state and
local levels. To the extent feasible, in conducting our audits and
evaluations, we cooperate with state and local officials. At times, our
work results will have local applications, and local officials will
take advantage of our efforts. We are conducting a pilot to determine
the feasibility of measuring the impact of our work on state and local
governments. The following are examples we have collected during our
pilot where our work is relevant for state and local government
operations:
--Identity theft.--Effective October 30, 1998, the Congress enacted
the ``Identity Theft and Assumption Deterrence Act of 1998''
prohibiting the unlawful use of personal identifying
information, such as names, Social Security numbers, and credit
card numbers. GAO report GGD-98-100BR is mentioned prominently
in the act's legislative history. Subsequently, a majority of
states have enacted identity theft laws. Sponsors of some of
these state enactments--Alaska, Florida, Illinois, Michigan,
Pennsylvania, and Texas--mentioned the federal law and/or our
report. For example, in 1999, Texas enacted SB 46, which is
modeled after the federal law. Justice officials said that
enactment of state identity theft laws has multijurisdictional
benefits to all levels of law enforcement--federal, state, and
local.
--Pipeline safety.--Our report GAO-RCED-00-128, Pipeline Safety: The
Office of Pipeline Safety Is Changing How It Oversees the
Pipeline Industry, found that the Department of
Transportation's Office of Pipeline Safety was reducing its
reliance on states to help oversee the safety of interstate
pipelines. The report stated that allowing states to
participate in this oversight could improve pipeline safety. As
a result, the Office of Pipeline Safety modified its Interstate
Pipeline Oversight Program for 2001-2002 to allow greater
opportunities for state participation.
--Temporary Assistance for Needy Families Grant Program.--We reported
on key national and state labor market statistics and changes
in the levels of cash assistance and employment activities in
five selected states. We also highlighted the fact that the
five states had faced severe fiscal challenges and had used
reserve funds to augment their spending above the amount of
their annual Temporary Assistance for Needy Families block
grant from the federal government.
GAO's High-Risk Program
Issued to coincide with the start of each new Congress, our high-
risk update lists government programs and functions in need of special
attention or transformation to ensure that the federal government
functions in the most economical, efficient, and effective manner
possible. This is especially important in light of the nation's large
and growing long-term fiscal imbalance. Our latest report, released in
January 2003, spotlights more than 20 troubled areas across
government.\1\ Many of these areas involve essential government
services, such as Medicare, housing programs, and postal service
operations that directly affect the lives and well-being of the
American people.
---------------------------------------------------------------------------
\1\ U.S. General Accounting Office, High Risk Series: An Update,
GAO-03-119 (Washington, D.C.: January 2003).
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Our high-risk program, which we began in 1990, includes five high-
risk areas added in 2003: implementing and transforming the new
Department of Homeland Security; modernizing federal disability
programs; federal real property, Medicaid program; and Pension Benefit
Guaranty Corporation's (PBGC) single-employer pension insurance
program.\2\
---------------------------------------------------------------------------
\2\ We added this issue in July 2003 after we published the January
2003 update.
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In fiscal year 2003, we also removed the high-risk designation from
two programs: the Social Security Administration's Supplemental
Security Income program, and Asset Forfeiture programs administered by
the U.S. Departments of Justice and the Treasury.
In fiscal 2003, we issued 208 reports and delivered 112 testimonies
related to high-risk areas, and our related work resulted in financial
benefits totaling almost $21 billion. Our sustained focus on high-risk
problems also has helped the Congress enact a series of governmentwide
reforms to strengthen financial management, improve information
technology, and create a more results-oriented and accountable federal
government. The President's Management Agenda for reforming the federal
government mirrors many of the management challenges and program risks
that we have reported on in our performance and accountability series
and high-risk updates, including a governmentwide initiative to focus
on strategic management of human capital.
Following GAO's designation of federal real property as a high-risk
issue, the Office of Management and Budget (OMB) has indicated its
plans to add federal real property as a new program initiative under
the President's Management Agenda. OMB recently issued an executive
order on federal real property that addresses many of GAO's concerns,
including the need to better emphasize the importance of government
property to effective management. We have an ongoing dialog with OMB
regarding the high-risk areas, and OMB is working with agency officials
to address many of our high-risk areas. Some of these high-risk areas
may require additional authorizing legislation as one element of
addressing the problems.
Our fiscal year 2003 high-risk list is shown in table 3.
TABLE 3.--GAO'S 2003 HIGH-RISK LIST
------------------------------------------------------------------------
Year
High-risk area designated
high-risk
------------------------------------------------------------------------
Addressing challenges in broad-based transformations:
Strategic human capital management \1\.............. 2001
U.S. Postal Service transformation efforts and long- 2001
term outlook \1\...................................
Protecting information systems supporting the 1997
federal government and the nation's critical
infrastructures....................................
Implementing and transforming the new Department of 2003
Homeland Security..................................
Modernizing federal disability programs \1\......... 2003
Federal real property \1\........................... 2003
Ensuring major technology investments improve services:
Federal Aviation Administration (FAA) air traffic 1995
control modernization..............................
IRS business systems modernization.................. 1995
DOD systems modernization........................... 1995
Providing basic financial accountability:
DOD financial management............................ 1995
Forest Service financial management................. 1999
FAA financial management............................ 1999
IRS financial management............................ 1995
Reducing inordinate program management risks:
Medicare program \1\................................ 1990
Medicaid program \1\................................ 2003
Earned income credit noncompliance.................. 1995
Collection of unpaid taxes.......................... 1990
DOD support infrastructure management............... 1997
DOD inventory management............................ 1990
HUD single-family mortgage insurance and rental 1994
assistance programs................................
Student financial aid programs...................... 1990
Pension Benefit Guaranty Corporation's (PBGC) single- 2003
employer pension insurance program.................
Managing large procurement operations more efficiently:
DOD weapon systems acquisition...................... 1990
DOD contract management............................. 1992
Department of Energy contract management............ 1990
NASA contract management............................ 1990
------------------------------------------------------------------------
\1\ Additional authorizing legislation is likely to be required as one
element of addressing this high-risk area.
Source: GAO.
Testimonies
During fiscal year 2003 GAO executives testified at 189
congressional hearings--sometimes with very short notice--covering a
wide range of complex issues. Testimony is one of our most important
forms of communication with the Congress; the number of hearings at
which we testify reflects, in part, the importance and value of our
expertise and experience in various program areas and our assistance
with congressional decision making. The following figure highlights, by
GAO's three external strategic goals for serving the Congress, examples
of issues on which we testified during fiscal year 2003.
While the vast majority of our products--97 percent--were completed
on time for our congressional clients and customers in fiscal year
2003, we slightly missed our target of providing 98 percent of them on
the promised day. We track the percentage of our products that are
delivered on the day we agreed to with our clients because it is
critical that our work be done on time for it to be used by
policymakers. Though our 97 percent timeliness rate was a percentage
point improvement over our fiscal year 2002 result, it was still a
percentage point below our goal. As a result, we are taking steps to
improve our performance in the future by encouraging matrix management
practices among the teams supporting various strategic goals and
identifying early those teams that need additional resources to ensure
the timely delivery of their products to our clients.
MAXIMIZING GAO'S EFFECTIVENESS, RESPONSIVENESS, AND VALUE
The results of our work were possible, in part, because of the
changes we have made to maximize the value of GAO. With the Congress's
support, we have demonstrated that becoming world class does not
require substantial staffing increases, but rather maximizing the
efficient and effective use of the resources available to us. Since I
came to GAO, we have developed a strategic plan, realigned our
organizational structure and resources, and increased our outreach and
service to our congressional clients. We have developed and revised a
set of congressional protocols, developed agency and international
protocols, and better refined our strategic and annual planning and
reporting processes. We have worked with you to make changes in areas
where we were facing longer-term challenges when I came to GAO, such as
in the critical human capital, information technology, and physical
security areas. We are grateful to the Congress for supporting our
efforts through pending legislation that, if passed, would give us
additional human capital flexibilities that will allow us, among other
things, to move to an even more performance-based compensation system
and help to better position GAO for the future. As part of our ongoing
effort to ensure the quality of our work, this year a team of
international auditors will perform a peer review of GAO's performance
audit work issued in calendar year 2004.
Making GAO's Work Accessible to the American People
We continued our policy of proactive outreach to our congressional
clients, the press, and the public to enhance the visibility of our
products. On a daily basis we compile and publish a list of our current
reports. This feature has more than 18,000 subscribers, up 3,000 from
last year. We also produced an update of our video on GAO, ``Impact
2003.'' Our external Web site continues to grow in popularity, having
increased the number of hits in fiscal year 2003 to an average of 3.4
million per month, 1 million more per month than in fiscal year 2002.
In addition, visitors to the site are downloading an average of 1.1
million files per month. As a result, demand for printed copies of our
reports has dramatically declined, allowing us to phase out our
internal printing capability.
Promoting Sound Financial Management and Improving Strategic Management
For the 17th consecutive year, GAO's financial statements have
received an unqualified opinion from our independent auditors. We
prepared our financial statements for fiscal year 2003 and the audit
was completed a month earlier than last year and a year ahead of the
accelerated schedule mandated by OMB. For a second year in a row, the
Association of Government Accountants awarded us a certificate of
excellence; this year the award was for the fiscal year 2002 annual
performance and accountability report.
Aligning GAO's Workforce and Mission Needs
Given our role as a key provider of information and analyses to the
Congress, maintaining the right mix of technical knowledge and
expertise as well as general analytical skills is vital to achieving
our mission. Because we spend about 80 percent of our resources on our
people, we need excellent human capital management to meet the
expectations of the Congress and the nation. Accordingly, in the past
few years, we have expanded our college recruiting and hiring program
and focused our overall hiring efforts on selected skill needs
identified during our workforce planning effort and to meet succession
planning needs. For example, we identified and reached prospective
graduates with the required skill sets and focused our intern program
on attracting those students with the skill sets needed for our analyst
positions. Our efforts in this area were recognized by Washingtonian
magazine, which listed GAO as one of the ``Great Places to Work'' in
its November 2003 issue. Continuing our efforts to promote the
retention of staff with critical skills, we offered qualifying
employees in their early years at GAO student loan repayments in
exchange for their signed agreements to continue working at GAO for 3
years.
We also have begun to better link compensation, performance, and
results. In fiscal year 2002 and 2003, we implemented a new performance
appraisal system for our analyst, attorney, and specialist staff that
links performance to established competencies and results. We evaluated
this system in fiscal year 2003 and identified and implemented several
improvements, including conducting mandatory training for staff and
managers on how to better understand and apply the performance
standards, and determining appropriate compensation. We will implement
a new competency based appraisal system, pay banding and a pay for
performance system for our administrative professional and support
services staff this fiscal year.
To train our staff to meet the new competencies, we developed an
outline for a new competency-based and role- and task-driven learning
and development curriculum that identified needed core and elective
courses and other learning resources. We also completed several key
steps to improve the structure of our learning organization, including
hiring a Chief Learning Officer and establishing a GAO Learning Board
to guide our learning policy, to set specific learning priorities, and
to oversee the implementation of a new training and development
curriculum.
We also drafted our first formal and comprehensive strategic plan
for human capital to communicate both internally and externally our
strategy for enhancing our standing as a model professional services
organization, including how we plan to attract, retain, motivate, and
reward a high-performing and top-quality workforce. We expect to
publish the final plan this fiscal year. Our Employee Advisory Council
is now a fully democratically elected body that advises GAO's senior
executives on matters of interest to our staff. We also established a
Human Capital Partnership Board to gather opinions of a cross section
of our employees about upcoming initiatives and ongoing programs. The
15-member board will assist our Human Capital Office in hearing and
understanding the perspectives of its customers--our staff.
In addition, we will continue efforts to be ready to implement the
new human capital authorities included in legislation currently pending
before the Senate. This legislation, if passed, would give us more
flexibility to deal with mandatory pay and related costs during tight
budgetary times.
Managing Our Information Technology Resources
Our resourceful management of information technology was recognized
when we were named one of the ``CIO (Chief Information Officer) 100''
by CIO Magazine, recognizing excellence in managing our information
technology (IT) resources through ``creativity combined with a
commitment to wring the most value from every IT dollar.'' We were one
of three federal agencies named, selected from over 400 applicants,
largely representing private sector firms. In particular, we were cited
for excellence in asset management, staffing and sourcing, and building
partnerships, and for implementing a ``best practice''--staffing new
projects through internal ``help wanted'' ads.
We have expanded and enhanced the IT Enterprise Architecture
program we began in fiscal year 2002. We formally established an
Enterprise Architecture oversight group and steering committee to
prioritize our IT business needs, provide strategic direction, and
ensure linkage between our IT Enterprise Architecture and our capital
investment process. We implemented a number of user friendly Web-based
systems to improve our ability to obtain feedback from our
congressional clients, facilitate access to our information for the
external customer, and enhance productivity for the internal customer.
Among the new and enhanced Web-based systems were an application to
track and access General Counsel work by goal, team, and attorney; a
Web site on emerging trends and issues to provide information for our
teams and offices as they consult with the Congress; and an automated
tracking application for our staff to monitor the status of products to
be published.
In addition, we developed and released a system to automate an
existing data collection and analysis process, greatly expanding our
annual capacity to review DOD weapons systems programs. As a result, we
were able to increase staff productivity and efficiency and enhance the
information and services provided to the Congress. In the past, we were
able to complete a review annually of eight DOD weapons systems
programs. In fiscal year 2003 we reviewed 30 programs and reported on
26. Within the next year, that number will grow to 80 per year.
Increasing Information Security
We recognize the ongoing, ever present threat to our shared IT
systems and information assets and continue to promote awareness of
this threat, maintain vigilance, and develop practices that protect
information assets, systems, and services. As part of our continuing
emergency preparedness plan, we upgraded the level of
telecommunications services between our disaster recovery site and
headquarters, expanded our remote connectivity capability, and improved
our response time and transmission speed. To further protect our data
and resources, we drafted an update to our information systems security
policy, issued network user policy statements, hardened our internal
network security, expanded our intrusion detection capability, and
addressed concerns raised during the most recent network vulnerability
assessment.
We plan to continue initiatives to ensure a secure environment,
detect intruders in our systems, and recover in the event of a
disaster. We are also continuing to make the investments necessary to
enhance the safety and security of our staff, facilities, and other
assets for the mutual benefit of GAO and the Congress. In addition, we
plan to continue initiatives designed to further increase employees'
productivity, facilitate knowledge sharing, and maximize the use of
technology through tools available at the desktop and by reengineering
the systems that support our business processes.
Providing a Safe and Secure Workplace
On the basis of recommendations resulting from our physical
security evaluation and threat assessment, we continue to implement
initiatives to improve the security and safety of our building and
personnel. In terms of the physical plant improvements, we upgraded the
headquarters fire alarm system and installed a parallel emergency
notification system. We completed a study of personal protective
equipment, and based on the resulting decision paper, we have
distributed escape hoods to GAO staff. We have also made a concerted
effort to secure the perimeter and access to our building. Several
security enhancements will be installed in fiscal year 2004, such as
vehicle restraints at the garage ramps; ballistic-rated security guard
booths; vehicle surveillance equipment at the garage entrances; and
state-of-the-art electronic security comprising intrusion detection,
access control, and closed-circuit surveillance systems.
Preparing for Peer Review
A team of international auditors, led by the Office of the Auditor
General of Canada, will conduct a peer review for calendar year 2004 of
our performance audit work. This entails reviewing our policies and
internal controls to assess the compliance of GAO's work with
government audit standards. The review team will provide GAO with
management suggestions to improve our quality control systems and
procedures. Peer reviews will be conducted every 3 years.
GAO'S FISCAL YEAR 2005 REQUEST TO SUPPORT THE CONGRESS
GAO is requesting budget authority of $486 million for fiscal year
2005. The requested funding level will allow us to maintain our base
authorized level of 3,269 full-time equivalent (FTE) staff to serve the
Congress, maintain operational support at fiscal year 2004 levels, and
continue efforts to enhance our business processes and systems. This
fiscal year 2005 budget request represents a modest increase of 4.9
percent over our fiscal year 2004 projected operating level, primarily
to fund mandatory pay and related costs and estimated inflationary
increases. The requested increase reflects an offset of almost $5
million from nonrecurring fiscal year 2004 initiatives, including
closure of our internal print plant, and $1 million in anticipated
reimbursements from a planned audit of the Securities and Exchange
Commission's (SEC) financial statements. Our requested fiscal year 2005
budget authority includes about $480 million in direct appropriations
and authority to use $6 million in estimated revenue from reimbursable
audit work and rental income.
To achieve our strategic goals and objectives for serving the
Congress, we must ensure that we have the appropriate human capital,
fiscal, and other resources to carry out our responsibilities. Our
fiscal year 2005 request would enable us to sustain needed investments
to maximize the productivity of our workforce and to continue
addressing key management challenges: human capital, and information
and physical security. We will continue to take steps to ``lead by
example'' within the federal government in these and other critical
management areas.
If the Congress wishes for GAO to conduct technology assessments,
we are also requesting $545,000 to obtain four additional FTEs and
contract assistance and expertise to establish a baseline technology
assessment capability. This funding level would allow us to conduct one
assessment annually and avoid an adverse impact on other high priority
congressional work.
A summary of the requested changes between our fiscal year 2004 and
2005 budget is reflected in table 4:
TABLE 4.--SUMMARY OF REQUESTED CHANGES FOR FISCAL YEAR 2005 BUDGET
----------------------------------------------------------------------------------------------------------------
Cumulative
Budget category FTEs Amount percentage
change
----------------------------------------------------------------------------------------------------------------
Fiscal year 2004 resources: \1\
Appropriation.............................................. .............. $457,606 ..............
Estimated revenue (offsetting collections)................. .............. $5,971 ..............
------------------------------------------------
Total fiscal year 2004 resources......................... 3,269 $463,577 ..............
================================================
Fiscal year 2005 requested changes:
Mandatory pay and related costs............................ .............. $21,821 4.7
Costs to maintain current operating levels................. .............. $4,007 5.5
Nonrecurring fiscal year 2004 costs........................ .............. ($4,499) ..............
New financial audit responsibility for SEC................. .............. ($1,000) ..............
Continuing improvements/new initiatives.................... .............. $2,203 ..............
------------------------------------------------
Subtotal increased funding required to support GAO .............. $22,532 4.9
operations..............................................
================================================
Fiscal year 2005 budget authority required to support GAO opera- 3,269 $486,109 ..............
tions.......................................................
Less: Estimated revenue (offsetting collections)............... 3,269 ($6,119) ..............
------------------------------------------------
Fiscal year 2005 appropriation........................... .............. $479,990 ..............
Establish a baseline technology assessment capability.......... 4 $545 ..............
------------------------------------------------
Total fiscal year 2005 appropriation..................... 3,273 $480,535 ..............
----------------------------------------------------------------------------------------------------------------
\1\ Includes rescission of 0.59 percent ($2,751).
Source: GAO.
CONCLUDING REMARKS
We are grateful to the Congress for providing support and resources
that have helped us in our quest to be a world class professional
services organization. The funding we received in fiscal year 2004 is
allowing us to conduct work that addressed many difficult issues
confronting the nation. By providing professional, objective, and
nonpartisan information and analyses, we help inform the Congress and
executive branch agencies on key issues, and covered programs that
continue to involve billions of dollars and touch millions of lives.
I am proud of the outstanding contributions made by GAO employees
as they work to serve the Congress and the American people. In keeping
with my strong belief that the federal government needs to exercise
fiscal discipline, our budget request for fiscal year 2005 is modest,
but would maintain our ability to provide first class, effective, and
efficient support to the Congress and the nation to meet 21st century
challenges in these critical times.
This concludes my statement. I would be pleased to answer any
questions the Members of the Subcommittee may have.
Appendix I: Serving the Congress--GAO's Strategic Plan Framework
Appendix II: GAO Accomplishments That Helped Change Laws, Improve
Services, or Promote Sound Management
GAO Efforts That Helped to Change Laws and/or Regulations
Consolidated Appropriations Resolution, 2003, Public Law 108-7.--
The law includes GAO's recommended language that the administration's
competitive sourcing targets be based on considered research and sound
analysis.
Smallpox Emergency Personnel Protection Act of 2003, Public Law
108-20.--GAO's report on the National Smallpox Vaccination program
highlighted volunteers' concerns about losing income if they sustained
injuries from an inoculation. This statute provides benefits and other
compensation to covered individuals injured in this way.
Postal Civil Service Retirement System Funding Reform Act of 2003,
Public Law 108-18.--Analyses performed by GAO and OPM culminated in the
enactment of this law that reduces USPS's pension costs by an average
of $3 billion per year over the next 5 years. The Congress directed
that the first 3 years of savings be used to reduce USPS's debt and
hold postage rates steady until fiscal 2006.
Accountability of Tax Dollars Act of 2002, Public Law 107-289.--A
GAO survey of selected non-CFO Act agencies demonstrated the
significance of audited financial statements in that community. GAO
provided legislative language that requires 70 additional executive
branch agencies to prepare and submit audited annual financial
statements.
Emergency Wartime Supplemental Appropriations Act, 2003, Public Law
108-11.--GAO assisted congressional staff with drafting a provision
that made available up to $64 million to the Corporation for National
and Community Service to liquidate previously incurred obligations,
provided that the Corporation reports overobligations in accordance
with the requirements of the Antideficiency Act.
Intelligence Authorization Act for Fiscal Year 2003, Public Law
107-306.--GAO recommended that the Director of Central Intelligence
report annually on foreign entities that may be using U.S. capital
markets to finance the proliferation of weapons, including weapons of
mass destruction, and this statute instituted a requirement to produce
the report.
GAO Efforts That Helped to Improve Services to the Public
Strengthening the U.S. Visa Process as an Antiterrorism Tool.--Our
analysis of the U.S. visa-issuing process showed that the Department of
State's visa operations were more focused on preventing illegal
immigrants from obtaining nonimmigrant visas than on detecting
potential terrorists. We recommended that State reassess its policies,
consular staffing procedures, and training program. State has taken
steps to adjust its policies and regulations concerning the screening
of visa applicants and its staffing and training for consular officers.
Enhancing Quality of Care in Nursing Homes.--In a series of reports
and testimonies since 1998, we found that, too often, residents of
nursing homes were being harmed and that programs to oversee nursing
home quality of care at the Centers for Medicare and Medicaid Services
were not fully effective in identifying and reducing such problems. In
2003, we found a decline in the proportion of nursing homes that harmed
residents but made additional recommendations to further improve care.
Making Key Contributions to Homeland Security.--Drawing upon an
extensive body of completed and ongoing work, we identified specific
vulnerabilities and areas for improvement to protect aviation and
surface transportation, chemical facilities, sea and land ports,
financial markets, and radioactive sealed sources. In response to our
recommendations, the Congress and cognizant agencies have undertaken
specific steps to improve infrastructure security and improve the
assessment of vulnerabilities.
Improving Compliance with Seafood Safety Regulations.--We reported
that when Food and Drug Administration (FDA) inspectors identified
serious violations at seafood processing firms, it took FDA 73 days on
average, well above its 15-day target. Based on our recommendations,
FDA now issues warning letters in about 20 days.
Strengthening Labor's Management of the Special Minimum Wage
Program.--Our review of this program resulted in more accurate
measurement of program participation and noncompliance by employees and
prevented inappropriate payment of wages below the minimum wage to
workers with disabilities.
Reducing National Security Risks Related to Sales of Excess DOD
Property.--We reported that DOD did not have systems and procedures in
place to maintain visibility and control over 1.2 million chemical and
biological protective suits and certain equipment that could be used to
produce crude forms of anthrax. Unused suits (some of which were
defective) and equipment were declared excess and sold over the
Internet. DOD has taken steps to notify state and local responders who
may have purchased defective suits. Also, DOD has taken action to
restrict chemical-biological suits to DOD use only--an action that
should eliminate the national security risk associated with sales of
these sensitive military items. Lastly, DOD has suspended sales of the
equipment in question pending the results of a risk assessment.
Protecting the Retirement Security of Workers.--We alerted the
Congress to potential dangers threatening the pensions of millions of
American workers and retirees. The pension insurance program's ability
to protect workers' benefits is increasingly being threatened by long-
term, structural weaknesses in the private-defined, pension benefit
system. A comprehensive approach is needed to mitigate or eliminate the
risks.
Improving Mutual Fund Disclosures.--To improve investor awareness
of mutual fund fees and to increase price competition among funds, we
identified alternatives for regulators to increase the usefulness of
fee information disclosed to investors. Early in fiscal year 2003, the
Securities and Exchange Commission issued proposed rules to enhance
mutual fund fee disclosures using one of our recommended alternatives.
GAO Efforts That Helped to Promote Sound Agency and Governmentwide
Management
Encouraging and Helping Guide Agency Transformations.--We
highlighted federal entities whose missions and ways of doing business
require modernized approaches, including the Postal Service, and the
Coast Guard. Among congressional actions taken to deal with
modernization issues, the House Committee on Government Reform
established a special panel on postal reform and oversight to work with
the President's Commission on the Postal Service on recommendations for
comprehensive postal reform. We also reported this year on the Coast
Guard's ability to effectively carry out critical elements of its
mission, including its homeland security responsibilities. We
recommended that the Coast Guard develop a blueprint for targeting its
resources to its various mission responsibilities and a better
reporting mechanism for informing the Congress on its effectiveness.
Our recommendations led to better reporting by the Coast Guard and laid
the foundation for key revisions the agency intended to make to its
strategic plan.
Helping DOD Recognize and Address Business Modernization
Challenges.--Several times we have reported and testified on the
challenges DOD faces in trying to successfully modernize about 2,300
business systems, and we made a series of recommendations aimed at
establishing the modernization management capabilities needed to be
successful in transforming the department. DOD has implemented some key
architecture management capabilities, such as assigning a chief
architect and creating a program office, as well as issuing the first
version of its business enterprise architecture in May 2003. In
addition, DOD has revised its system acquisition guidance. By
implementing our recommendations, DOD is increasing the likelihood that
its systems investments will support effective and efficient business
operations and provide for timely and reliable information for decision
making.
Helping to Advance Major Information Technology Modernizations.--
Our work has helped to strengthen the management of the complex,
multibillion-dollar information technology modernization program at the
Internal Revenue Service (IRS) to improve operations, promote better
service, and reduce costs. For example, IRS implemented several of our
recommendations to improve software acquisition, enterprise
architecture definition and implementation, and risk management and to
better balance the pace and scope of the program with its capacity to
effectively manage it.
Improving Internal Controls and Accountability over Agency
Purchases.--Our work examining purchasing and property management
practices at FAA identified several weaknesses in the specific controls
and overall control environment that allowed millions of dollars of
improper and wasteful purchases to occur. Such weaknesses also
contributed to many instances of property items not being recorded in
FAA's property management system, which allowed hundreds of lost or
missing property items to go undetected. Acting on our findings, FAA
established key positions to improve management oversight of certain
purchasing and monitoring functions, revised its guidance to strengthen
areas of weakness and to limit the allowability of certain
expenditures, and recorded assets into its property management system
that we identified as unrecorded.
Strengthening Government Auditing Standards.--Our publication of
the Government Auditing Standards in June 2003 provides a framework for
audits of federal programs and monies. This comes at a time of urgent
need for integrity in the auditing profession and for transparency and
accountability in the management of scarce resources in the government
sector. The new revision of the standards strengthens audit
requirements for identifying fraud, illegal acts, and noncompliance,
and gives clear guidance to auditors as they contribute to a government
that is efficient, effective, and accountable to the people.
Supporting Controls over DOD's Credit Cards.--In a series of
reports and testimonies beginning in 2001, we highlighted pervasive
weaknesses in DOD's overall credit card control environment, including
the proliferation of credit cards and the lack of specific controls
over its multibillion dollar purchase and travel card programs. We
identified numerous cases of fraud, waste, and abuse and made 174
recommendations to improve DOD's credit card operations. DOD has taken
many actions to reduce its vulnerabilities in this area.
Senator Campbell. Do any of your colleagues have any
comments or they are just resources?
Mr. Walker. They are here to answer questions.
Senator Campbell. Senator Durbin, do you have an opening
statement?
Senator Durbin. Yes, I do. Thank you, Mr. Chairman.
[The statement follows:]
Prepared Statement of Senator Richard J. Durbin
Mr. Chairman, thank you for scheduling today's hearing, the
first of four budget oversight hearings to be held by the
Legislative Branch Subcommittee this year. I'm glad we're all
here and ready to begin working on this year's budget. Based on
the events of last week, this is obviously going to be a very
challenging year. I'm very happy to see that we are moving
ahead with the hearing over on this side of the Capitol.
Mr. Chairman, I am happy to be working with you on this
important bill again this year. I think we did a good job
working together last year and finishing the bill in a timely
manner. With any luck, we can do so again this year.
This is an important Subcommittee. There are 12 other
Appropriations Subcommittees that fund all of the Executive
Branch Agencies and Departments. The Legislative Branch has
this one Subcommittee in which we need to fund all of the tools
and resources required of a co-equal branch of government.
Today we are going to hear from three important Legislative
Branch agencies, the General Accounting Office, the Government
Printing Office, and the Congressional Budget Office. I join
Chairman Campbell in welcoming David Walker, the Comptroller
General of the United States, Bruce James, the U.S. Public
Printer, and Douglas Holtz-Eakin, the Director of the
Congressional Budget Office to today's hearing.
Gentlemen, I know I don't have to tell you that this is
going to be a very challenging year for this Committee. The
budget constraints under which we are expected to work seem
unrealistic to say the least.
However, it is important to the Members of this
Subcommittee that you have the resources you need to do your
jobs effectively and efficiently.
To the extent that any of your budget requests have holes
in them which could negatively impact your performance during
fiscal year 2005, I hope you will share those concerns with us.
First, Mr. Walker, I want you to know how much I appreciate
everything you do for us here in the Senate. I particularly
appreciate the guidance I have received from you and your staff
on matters relating to the Capitol Visitor Center. I know this
has been a tremendous task, but I think it is extremely
important for Members to have access to your external oversight
of this project as we make decisions about how to move forward
on the CVC. I hope you will spend several minutes today
discussing the GAO Human Capital Reform Act, which was approved
in the House last week and will now be voted on in the Senate.
This legislation will certainly give you broader flexibility in
constructing your workforce. I look forward to hearing how this
works for you and if you think it is worth pursuing in other
federal agencies.
Mr. James, you are doing a tremendous job as Public
Printer. I am looking forward to hearing your testimony about
your plans to relocate the Government Printing Office. You
certainly have a vision for the future of the GPO and I hope
you will walk us through it. I would also like to hear a little
about your voluntary separation incentive program. The 10
percent staff reduction and savings of $21.7 million was very
impressive, and I understand that you are about to undergo
another voluntary separation incentive program in April.
Mr. Holtz-Eakin, I see you have a relatively flat budget,
consisting mainly of increases in salaries and benefits. The
Congressional Budget Office does great work in providing
important information to the Congress. Over the years I have
had concerns about your experiment with the dynamic
scorekeeping initiative and I would appreciate it if you would
provide the subcommittee with an update on where this
experiment stands.
Mr. Chairman, I will conclude here and request that my
entire statement, as well as a series of questions, be made a
part of the record.
STRATEGIC HUMAN CAPITAL MANAGEMENT
Senator Campbell. We will go to a couple of questions.
In looking at your testimony, Mr. Walker, the GAO listed
strategic human capital management as among its top high risk
issues for the Federal Government. Can you tell me what that
involves in laymen's terms?
Mr. Walker. What it involves is making sure that we have
the right number of people with the right skills and knowledge
in the right agencies doing the right things. It also means
modernizing Federal management practices for how we treat
people. It also means civil service reforms in order to provide
management with reasonable flexibility to make decisions while
incorporating adequate safeguards to prevent abuse of employees
and also making sure that we have certain principles that are
timeless in nature that apply across Government so we do not
have the balkanization of the civil service, among other
things, Mr. Chairman.
PAY-FOR-PERFORMANCE
Senator Campbell. That sounds commendable.
Under your current pay-for-performance system, how do you
determine how many people will be given pay raises, and who
makes that decision? Are the increases all tied to performance?
Mr. Walker. Well, first, we have several categories of
employees at GAO.
Senator Campbell. How many employees are there at GAO?
Mr. Walker. About 3,260. With regard to our categories, we
have our auditors, analysts, and investigators. That is one
category. That comprises over 70 percent of our employees. We
have attorneys, which is another category, and then we have our
administrative, professional and support staff. The auditors,
investigators, and analysts have been involved in pay-for-
performance since the late 1980's. The attorneys have also been
involved in pay-for-performance since the late 1980's. The
administrative, professional and support staff are moving to a
pay-for-performance (PFP) system. Right now they are under the
current GS system, which provides for periodic and optional
quality step increases. We have designed a new competency-based
performance appraisal system for them as well as a pay-for-
performance system. So, for next fiscal year, almost all of our
employees will be under a pay-for-performance system. Those not
in PFP are our wage grade individuals.
We have a modern, effective, and credible competency-based
performance appraisal system, which provides for a meaningful
distinction in performance among all individuals, and is tied
to our strategic plan. It is focused on the results that we
want to deliver for the Congress and the country.
RATING PERFORMANCE
Senator Campbell. Does the immediate supervisor do the
rating of the performance?
Mr. Walker. Yes, Mr. Chairman. There is a designated
performance manager. That designated performance manager will
come up with a proposed rating, but then there are a number of
review processes that take place in order to provide reasonable
assurance that there is consistency, equity and
nondiscrimination in how we go about completing the process.
There is reporting all the way up to the Executive Committee,
which involves myself, my two colleagues on my immediate right
and left, as well as our general counsel. There is also
transparency with regard to results. We post the results,
maintaining privacy, but the overall results, so that all of
our employees can see what the results are.
We are clearly leading the Government in this regard, Mr.
Chairman. There is no doubt about it.
GAO HUMAN CAPITAL FLEXIBILITIES
Now, the last thing I would mention is we do have
legislation that has already passed the House. It has passed
the Senate once. It is coming back to the Senate because the
House version was slightly different. That bill would give us
the ability to improve our pay-for-performance system. It has
broad-based bipartisan and bicameral support. We are hoping
that the Senate will pass it via unanimous consent in the near
future.
TRAINING GAO EMPLOYEES
Senator Campbell. Tell the committee a little bit about the
training for fiscal year 2005, which is about a 4 percent
increase over 2004. What does that training include? What kind
of training is it and do you have a strategic plan for the
training? And how much of that is directly related to
maintaining technical skills? Just give us a little information
about it.
Mr. Walker. Well, as you know, Mr. Chairman, we are a
professional services and knowledge-based organization. We are
only as good as our people, and therefore, we have to do
everything that we can to attract, retain, and train our
people.
During this past year, we hired Carol Willett, who is our
Chief Learning Officer and who formerly was a top training
official at the CIA. She has been working with the Executive
Committee and all of our employees and others to modernize our
training and learning curriculum.
Four percent is, I think, a modest increase, but it is only
the hard dollars. In other words, that is only the dollars that
we actually spend on consultants or outside activities. We
obviously invest a lot more in the way of time in helping to
execute our training program.
We are basically training on professional standards. We are
training on technical matters, including subject matter
expertise. We are training on leadership skills. We are
training on changed management experience. So it is a very
comprehensive curriculum. Our objective is to be world-class in
this regard, and I think we are headed there.
Mr. Dodaro. Senator, one additional comment on the training
at GAO. One-third of our employees right now have been with GAO
less than 5 years because of changing demographics and bringing
in new people. So training this next generation of people is
very important to build our institutional knowledge for the
Congress. It is very important to keep that up.
EFFECT OF FUNDING FREEZE
Senator Campbell. We understand about fast turnovers. We
have them here too.
Well, let me ask you, as I am going to ask all three
panels. You heard me say we are going to have some limited
funds and we might not be able to increase the amount that you
need. What happens if we cannot? How is this going to impact
your budget if we have to have a freeze in spending at the
current level?
Mr. Walker. Well, Mr. Chairman, to a great extent it
depends upon what other actions Congress takes. For example, if
you look at our proposed increase, which is the smallest of any
legislative branch entity, 4.9 percent, most of that is
mandatory increases. For example, we were told to include in
our request a 3.5 percent increase in compensation for all of
our employees. So if Congress ends up mandating that we have to
give an automatic pay increase to all of our employees and
since 81 percent of our costs represent payroll costs, then it
is going to be extremely difficult for us to deal with a flat-
line budget.
There are things that we have started to look at as to what
we might be able to defer or cancel, but the fact of the matter
is that when 81 percent of our costs represent people costs, we
do not have a whole lot of flexibility. We have to start
talking about how many people we can have.
Senator Campbell. So if we have a freeze in the budget, you
are going to have to reduce your manpower.
Mr. Walker. We may have to reduce our manpower. We would
obviously only do that as a last resort, but I think it could
be possible. If Congress mandates pay increases and does not
fund those pay increases, it is going to make it that much
worse.
But I will also reinforce that our human capital
legislation that is pending before the Senate at the present
point in time is of critical importance not only to keep us in
the lead in human capital reform, but to give us additional
flexibility to deal with the difficult budget situation next
year. It is critically important.
GAO TRAVEL PATTERNS
Senator Campbell. Okay, thank you. That was my last
question, but I would like you to provide for the record
something about your travel which, as I understand, seems to be
relatively high for the number of people that are employed. If
you would send it over to us. I would like to know the number
of people who traveled, the average cost of the trip, the
average duration of the trip, and the number of people that
went on each trip, and how much travel was spent on training,
the number of trips that were made overseas and why they went
overseas, and a number of other things.
Mr. Walker. I will be happy to provide it, Mr. Chairman. I
would note for the record on a preliminary basis it is my
understanding that our per capita travel costs are actually
down compared with where they were 10 years ago, but I will be
happy to provide all that information and any explanations.
[The information follows:]
Question. It seems as though GAO's travel budget is very
high considering the number of people employed by the agency.
Your request for fiscal 2005 looks like it would average over
$3,500 per person. Why is travel so high?
Answer. Our congressional mandates and requests require us
to follow the federal dollar no matter where it goes--across
our expansive country or across the globe. As a world-class
professional services organization, we rely on travel to (1)
meet our professional standards, including generally accepted
governmental auditing standards; (2) conduct our work in
supporting the Congress; and (3) provide staff technical
training needed to comply with minimum annual continuing
professional education requirements. We collect original
information, directly observe program activities first hand,
and have high standards in the conduct of our work that require
adequate standards of evidence. Travel provides the means to
conduct first-hand research that contributes to effective
oversight of federal programs. We conduct our work in an
unbiased manner that usually means we take responsibility for
gathering the relevant data, rather than relying on material
provided by others. Our credibility is enhanced by what we
learn on travel. The ability to ``be on the ground'' increases
the value and credibility of our work. Also, we are often able
to obtain various types of evidence, e.g., access to internal
agency databases that would not be available at a distance.
First-hand observation and data gathering also helps us make
decisions about data reliability when we observe or talk to
those persons who are responsible for entering the data. Also,
travel provides developmental opportunities for inexperienced
analysts that can only be gained from on-site work.
GAO is committed to gaining as much as possible from
travel. We weigh many factors before approving engagement
travel. We strive to be as knowledgeable as possible on the
issues before conducting fieldwork. We assess the overall cost
of each trip, including staff time, as well as travel dollars.
We also judiciously prioritize the use of funds and assess
possible alternatives to travel. We actively focus on reducing
costs by limiting the number of travelers; minimizing time
spent on per diem; using alternative, more cost-effective
airports and indirect flights to reduce transportation costs;
and consolidating purposes to avoid multiple trips.
GAO drastically reduced travel spending in the mid-1990s
due to budget constraints. Travel spending, as a percentage of
our total budget, has remained relatively flat since then at
less than 3 percent. In fiscal year 1995, our travel per capita
cost averaged $3,632 in 2004 dollars--slightly higher than our
estimated fiscal year 2004 travel per capita cost of $3,482.
Recently, we convened a task force of senior managers to
further review our travel practices and identify ways to
improve our effectiveness and efficiency. The task force will
be making recommendations to the Comptroller General and the
Executive Committee later this year.
Question. For the record, can you give the committee a
detailed analysis showing the following? The number of people
who traveled in fiscal year 2003.
Answer. In fiscal year 2003, 2,324 staff traveled--over 70
percent of our staff on board at the end of the fiscal year.
Staff that conduct fieldwork and gather data conduct the
majority of our travel. Typically, they are recurring
travelers.
Question. What was the average duration of each trip?
Answer. The average duration per trip in fiscal year 2003
was 4 days.
Question. What was the average number of people that went
on each trip?
Answer. In fiscal year 2002, the average number of staff
per trip was 2. Generally, most engagement related trips
require a minimum of 2 staff to ensure data integrity and the
reliability of interview write-ups. Other travel may only
involve 1 GAO employee.
Question. What was the average cost per trip?
Answer. The average cost per trip was $1,014 in fiscal year
2003.
Question. How much travel was spent to attend conferences
not directly associated with a specific job? How much travel
was spent for training?
Answer. In fiscal year 2003, we spent 7 percent of our
travel funds to support training and development activities,
including conferences and speeches, many of which were related
to specific jobs. Presently, we do not segregate the cost for
each of these activities, but plan to do so in the future.
These trips allow staff to attend training and professional
conferences to gain and share information, as well as to
represent GAO in their professional capacity.
Question. What was the number of trips that were made
overseas and why?
Answer. In fiscal year 2003, 380 trips were made outside
the contiguous United States to areas such as Afghanistan and
Iraq. Our International Affairs and Trade team conducted travel
to assess peacekeeping transitions, review the U.S. public
diplomacy, monitor sensitive exports, review refugee
protections, assess embassy conditions, review ocean container
security, and assess the global health fund. Travel by other
teams and offices included issues related to joint strike
fighter allies, foreign military sales shipments, foreign
schools, port security, force protection, contractors on the
battlefield, plutonium production reactors and radioactive
sources, international aviation consumer benefits, postal work-
sharing, border security, and collaboration with the other
Supreme Audit Institutions.
Question. What has been the average increase over the past
five years in per diem and transportation costs?
Answer. Per diem costs represent about sixty-two percent of
our total travel costs. Between fiscal years 2001 and 2003, in
the 20 major cities that we travel to most often, per diem
costs increased an average of 4 percent, while domestic
airfares increased an average of almost 7 percent from
Washington, D.C., and international airfares increased an
average of 10 percent. Between fiscal years 2001 and 2003, per
diem costs increased 18 percent in Atlanta, 16 percent in
Chicago, 23 percent in Denver, 25 percent in Seattle, and 21
percent in Washington, D.C. Since fiscal year 1999,
transportation costs have increased almost 40 percent.
TECHNOLOGY ASSESSMENT
Senator Campbell. Thank you.
Would you mind if I yield to the chairman?
Senator Durbin. No, of course, not.
Senator Campbell. Before we turn to our ranking member, I
would like to yield to the chairman of the full committee.
Senator Stevens, do you have any comments or questions?
Senator Stevens. Well, first to express my regret for your
decision yesterday, Mr. Chairman.
Senator Campbell. My granddaughter, 4 years old, is very
happy with it.
Senator Stevens. I was just going to say you would like to
get to know your grandchildren before they enter college, which
is what my experience has been.
Mr. Walker, I note that you are going to have four
additional staff devoted to establishing a technology
assessment capability. Now, I am one of the few survivors of
the Office of Technology Assessment Board. It was one of the
most controversial boards that we ever had, and it brought in
the private sector, it brought in Government, it brought in
academia, and the oversight of Members of the House and the
Senate.
Being what you are, an office that serves the Congress,
both the House and the Senate, and knowing the propensity for
these issues to involve horrendous political controversies, why
are you doing this?
Mr. Walker. Well, Senator, first, it was not our idea. The
fact of the matter is there are a number of parties in Congress
and individuals on both ends of the Hill and both sides of the
aisle who are interested in some limited technology assessment
capability. They specifically asked us to include a proposal
for consideration by the Congress as to whether or not if there
was some limited technology assessment capability, what we
thought would make sense.
Our view, Senator, is this is a decision for the Congress
to make. I think there was a general view that it does not
necessarily make sense to create a new entity, and to the
extent that there was an existing entity within the legislative
branch that could meet this need, that GAO was the logical
entity to do it.
The additional FTE's and the $545,000 would be for
additional skills that we think we would need in order to be
able to properly address this.
But it is really up to the Congress as to whether or not
you want to expand our mission for us to do this.
Senator Stevens. We have two shared staffs, the GAO and the
Congressional Research Service. We had a meeting yesterday of
the Joint Committee of the Library, which I am honored to be
chairman of, and we discovered yesterday that CRS has hired
four technology assessment scientists.
Now, I would respectfully suggest that you should take this
issue to the Government Affairs Committee and let both Houses
review this. Obviously, with the loss of the Technology
Assessment Board concept, we do need in Congress some
substantial advice on technology assessment. Actually the old
Board came out of the SST controversy, and we decided we did
not have the capability. We reviewed that and created a Board
that assisted us for some time.
I personally favor restoring the Board and having some
Members of Congress in constant oversight of what is going on
on a bipartisan basis and a bicameral basis. But I do not think
that either entity of the Congress should proceed to fill this
gap without some direction from the Congress itself. Enough
said on that.
On your pay-for-performance concept, did you generate that
or was that pursuant to an act of Congress?
SOURCE OF PAY-FOR-PERFORMANCE
Mr. Walker. No. This is at our generation, Senator. We have
been a leader in the Federal Government for years in pay-for-
performance, and we are looking to provide additional
flexibility for pay-for-performance. We have also been a leader
in the Federal Government in the so-called broad-banding
concept which is moving away from the 15 General Schedule (GS)
levels and to have flatter and more flexible classification
systems and pay systems. So we have been in this business for a
while, Senator.
Senator Stevens. Again, I remember when I was chairman of
the Government Affairs Committee, we had China Lake and San
Diego experiments on the whole concept of unit management
rather than directed management by law. But we had some
parameters from the Congress in setting it up. You do not have
any parameters. Right?
Mr. Walker. Well, Senator, we actually do. And the other
thing is----
Senator Stevens. Where do you have it from?
Mr. Walker. Well, we had legislation in 1980 that gave us
the authority to go to broad-banding and additional pay-for-
performance. We had legislation in the year 2000, and now we
have legislation pending before the Senate, the GAO Human
Capital Reform Act of 2003. It has actually already passed the
Senate once, but the House passed a bill that was slightly
different, and so now we have for consideration by the Senate
that legislation, which is of critical importance to, number
one, help us to continue to make progress on pay-for-
performance, and second, to give us additional flexibility if
we have a tight budget year next year.
Senator Stevens. All right. My memory is that the past
performances ended up with the chiefs being able to divide the
money for performances and the Indians sitting there at the
desks and not having annual increases. I would be very
interested to see how you are going to balance the rights of
those who are permanent employees from the temporary super
stars you have got.
Mr. Walker. Senator, I would be happy to provide you some
information. We have, I think, successfully addressed that
issue. There is no such thing, as you know, as a perfect
performance appraisal system, but I clearly believe, Senator,
that we are in the lead in the Federal Government in this
regard. I would be happy to provide you some additional data
and statistics with regard to this.
FEDERAL DEFICIT
Senator Stevens. My staff tells me that you have expressed
some rather strong views on the deficit. Is that right?
Mr. Walker. Well, Senator, let me tell you what I have
done. As you know, I am the audit partner on the consolidated
financial statements of the U.S. Government. My comments really
are twofold. One, that if you look at how we keep score, both
as it relates to financial reporting, the financial statements
of the U.S. Government, which were just released, I might add,
last Friday for fiscal year 2003, that it does not provide a
full and complete picture of our true financial condition. For
example, it does not adequately consider the difference between
promised Social Security benefits and promised Medicare
benefits and the resources that are there, the payroll taxes,
et cetera. So we actually have huge unfunded commitments that
are not given enough transparency.
I have also noted concern about the fact that given known
demographic trends, the retirement of the baby boom generation
and rising health care costs, that we are likely to face a
structural deficit in future years that is going to require the
Congress to take a look at entitlement programs, discretionary
spending, and tax policy in the way that you deem appropriate
to try to address that gap.
Senator Stevens. Have you addressed the lack of a capital
budget for the United States?
Mr. Walker. I have touched on that somewhat, Senator. One
of the problems we have is the way that we keep score is
problematic, and one of the challenges that we have, as you
know, Senator, is we treat capital transactions the same way
that we do operating expenses.
There are different ways that one could approach that. You
would not necessarily have to have a capital budget, but as you
yourself have noted, in the case of trying to make major
capital purchases, we need to figure out how we can go about
doing that in a way to recognize that we need to modernize our
platforms, we need to modernize our infrastructure, and those
are investments that end up inuring benefits over a number of
years rather than just in the year that you appropriate the
money.
Senator Stevens. I do not want to prolong this, but I
showed to a group of Senators yesterday a chart that I had of
the infrastructure investment by China per year and the
increase in infrastructure investment of the United States per
year, and it has declined. We are supposed to be involved in a
world economy, competing globally. If we continue to take the
position that the Federal Government should not spend for the
infrastructure that is necessary for growth, then by definition
we will not have any growth. And I think we face a challenge
internationally in terms of our place in the global marketplace
that cannot be handled unless we address the subject of a
capital budget and, if necessary, the concept of bonding some
of that expansion. So I would welcome your review of that.
Again, I am still on the Government Affairs Committee. I
hope to raise this before the Government Affairs Committee so
that we might consider it after the election. It is not
something we address in an election year. But clearly, we
cannot deal with this situation, and I mentioned it this
morning in another committee. When we have energy development
in Alaska, we have to take our roads allowances for our
highways and build the roads to that energy development. In any
other place in the world, the government provides
infrastructure. As a matter of fact, if you want to build a
building in China, you go to one entity and get one permit and
you outline the necessity for your infrastructure and it is
there within literally weeks. You could not build a building in
this town in less than 4 years. So I do think we either get on
to the capital budget concept and infrastructure renewal--the
bridges we have and interstate highways were built in
Eisenhower's day, and many of them are decaying and are really
seriously in need of replacement or modernization.
So I would welcome your comments on these things. I do not
think we should become deficit blind, and if we do not wake up,
we are going to be a third class power, not only militarily but
economically.
Mr. Walker. Senator, I would love to meet with you sometime
on this, and we have done work on this in the past, as you
know. So I would welcome the opportunity.
Senator Stevens. I would welcome the opportunity to work
with you on the technology assessment activity, but I would
urge you to go to Government Affairs and get some outline so
later we do not have a political squabble over who you have
hired and what they have done.
Mr. Walker. We will do it.
Senator Stevens. Mr. Dodaro?
Mr. Dodaro. Senator, that is a good idea and we will pursue
that, but I just want to note for the record that we were
required to do a pilot in the technology assessment area 2
years ago. We did one, and we were required to have an
evaluation of it by outside parties.
Senator Stevens. Who required it?
Mr. Dodaro. It was required by the Congress in our
appropriation bill. We did it on biometrics.
Senator Stevens. I do remember that.
Mr. Dodaro. Yes, and we were deemed to have done it
successfully, but it required some additional changes. And we
were kind of viewed as an interim gap for the Congress, with
CRS providing quick turnaround using secondary research, and
the National Academy of Sciences doing long-term studies. GAO
was looked at as a potential option to meet an intermediary
need.
Senator Stevens. If we are not careful, though, we are
going to have different arms of the Congress giving us
different advice on the same technology.
Mr. Dodaro. Yes, exactly, Senator. We do not dispute your
concerns about this. I think it is important to work it
through.
Senator Stevens. Thank you very much, Mr. Chairman. Thank
you, Senator Durbin.
Senator Campbell. We will now turn to Senator Durbin.
RETURN ON INVESTMENT
Senator Durbin. I just wanted to make one observation. I
want to thank Mr. Walker and all those in the GAO. I note that
you have, in your testimony, acknowledged that the GAO has had
a $78 return on every dollar appropriated. Have you considered
taking over the thrift savings plan?
Mr. Walker. It is not in our line of business.
Senator Durbin. If we had a G fund and it was a GAO fund,
that return?
Mr. Walker. Some have suggested we ought to do an IPO, but
I do not think that is appropriate.
Senator Durbin. Two questions I would like to ask you. One
is related to technology. It is my impression that the
technology of the United States Senate is two steps behind the
world and three steps behind the House. I happen to live with
House Members and I hear what they are doing. It just amazes me
that there is such a dichotomy and divergence here between the
technology that is being used on the other side of the Hill and
what we are using in the Senate. We seem to be late to the
party time and again. I will not dwell on that other than to
say I am going to send you a note and ask you to please look
into this because I think that there are things that, for some
reason, we are very slow to come to in changes here.
Let me ask you one specific question. I feel very strongly
about the human capital issue and the fact that to attract the
best and brightest of the new young men and women who are
available requires some attentiveness to the issue of student
loans. I have found that time and again that some of the very
best people cannot afford to make the Government service choice
because of their student loan indebtedness.
Now, I created this idea a few years ago. I have to tell
you candidly that I do not think it got off to a strong start
in the Senate because, frankly, no one wanted to take on the
responsibility of deciding how to establish standards. Have you
used this program in GAO and can you tell me whether or not you
think it has value to you in terms of human capital?
STUDENT LOAN REPAYMENTS
Mr. Walker. Senator, I believe we were the first agency in
the Federal Government to adopt the student loan repayment
program. We are the second largest user of student loan
repayments in the entire Federal Government as far as the
number of student loan repayments and the amount of dollars
involved. Number one is the State Department. Needless to say,
we are a lot smaller than the State Department.
To give you just some statistics off the top, last year we
gave about $1.2 million--pardon me--last year, fiscal year
2003, $945,000 in student loan repayments, that averaged about
$4,000 each.
We have criteria that we set up where we look at the nature
of the position, what the skills and knowledge are for the
position. As you know, there are statutory limits as to how
much you can do in a given year and how much you can do over a
period of time.
One of the things that we have done is, in addition to
trying to attract and retain critical skills, we have really
structured our student loan repayment program to try to help us
maximize the chance that we can keep top new talent for at
least 3 years. And the reason I say that is that our statistics
show over time that if we can keep people for 3 years, then
many times we can keep them for many years because they
understand what public service is all about. They understand
the difference they can make at GAO. They understand that we
are a very unique place where you will be challenged your
entire career and you can work in different areas and yet still
work for the same entity. And it has been extremely successful.
It is a very popular program. It is very successful, and we are
using it strategically to help us attract, retain, and motivate
top talent.
TAX FORGIVENESS OF STUDENT LOANS
Senator Durbin. The second thing I will be asking the GAO
is to take a look at the student loan redemption or forgiveness
programs across the board, which I have some pride of
authorship. But I also want to be candid. I do not think they
are being applied fairly and evenly in all agencies. I think we
ought to try to establish some common standards and what you
have just described sounds like a good start. So that will be
my second request of you.
Mr. Walker. Thanks, Senator. One thing I would mention that
would be helpful and it would involve an amendment to the
Internal Revenue Code, which obviously raises a jurisdictional
issue, but as you know, right now the student loan repayment is
on a taxable basis. We could really leverage these dollars
quite a bit if these were nontaxable because actually what we
have right now is a situation where if somebody gets a student
loan repayment, they have to include it in their income. If
they end up leaving within a period of time, they have to pay
back the full gross amount, in other words, including the
taxes. It is a way that you could end up potentially further
leveraging the dollars without appropriating additional money,
but it would involve an amendment to the tax code.
ADDITIONAL COMMITTEE QUESTIONS
Senator Durbin. Thanks very much. Thanks, Mr. Chairman.
Senator Campbell. Thank you and we thank this panel for
appearing.
[The following questions were not asked at the hearing, but
were submitted to the Office for response subsequent to the
hearing:]
Questions Submitted by Senator Ben Nighthorse Campbell
Question. You are requesting about $4 million for training in
fiscal year 2005. Does this include both the cost of training provided
by GAO's internal staff or is it only training provided by contractors?
Answer. The requested amount includes (1) contractor costs to
develop and/or provide training, (2) tuition costs to enable GAO-
sponsored groups or individuals to participate in job-related courses
offered by private and public vendors, and (3) costs for training
manuals and online tutorials. It does not include the time cost of
training provided to or received by GAO staff.
Question. What kind of training is provided by contractors and what
is done by GAO's internal staff?
Answer. Training that addresses development of core analytic
skills, GAO policies, standards, and culture, and quality assurance
procedures and practices are developed in-house using GAO subject
matter experts and adjunct faculty. Professional development topics
that are more general in nature, such as coaching, teambuilding, or
project management, are outsourced. We seek to provide a blend of face-
to-face classroom interaction, online learning and web-based
performance support tools. Learning programs delivered in each of these
ways have been developed in-house, developed jointly with outside
contractors or consultants, and purchased from outside vendors.
Question. How many people has GAO dedicated to its internal
training function, and what is the cost of this effort?
Answer. GAO has about 15 staff, at an estimated cost of $1.9
million, assigned to its internal training function. These staff are
responsible for overseeing contractor training development and
delivery; developing training materials; coordinating training delivery
to GAO staff; providing subject matter expertise, conducting training
courses, and assessing course development and content; and working with
GAO managers and staff to identify options for maintaining and
enhancing course offerings.
Question. How much of that is directly related to maintaining or
enhancing technical skills? How much is directly related to supervisory
and management training?
Answer. GAO's total investment in training approximates that spent
by comparable professional services organizations. Our request provides
funding for development and delivery of courses in our newly revised
curriculum not only to maintain individual professional competence, but
also to enhance it, thus promoting a work force that continually
improves its skills and knowledge. To this end, we require analyst and
specialist employees complete 80 hours of continuing professional
education credits every 2 years. The proposed new mandatory curriculum
for analyst staff includes 256 hours to maintain or enhance technical
skills through orientation to GAO processes and customers, core
analytic skills training, and professional development at an estimated
cost of about $2 million. This training is critically important because
about 38 percent of our analyst staff have 5 years or less with GAO.
Also, about 172 hours of training in the new mandatory curriculum will
focus on leadership development for senior and management-level analyst
staff at an estimated cost of $687,000. Teams and offices provide
training on substantive professional development and subject matter
expertise at an estimated cost of $1.6 million.
We plan to develop a mandatory curriculum for our administrative,
professional, and support staff which will include components for
technical skills, as well as supervisory and management training.
Question. Do you have a strategic plan for training in GAO? If so,
could you supply it for the record?
Answer. Human capital elements, such as training, have always been
broadly reflected in our agency strategic plan. However, we felt the
need to have a separate human capital plan due to the importance of
human capital management as the cornerstone of GAO's management
framework and the high interest in such a plan. During fiscal year
2003, we made substantial progress towards finalizing our first formal
and separate strategic plan planning document for human capital that
communicates our strategy for becoming a model, professional
organization, including how we plan to attract, retain, train,
motivate, and reward a high-performing and top quality workforce.
Management has reviewed the draft human capital strategic plan and we
are following it in practice. We are waiting for enactment of our
pending human capital legislation. Thereafter, we will finalize the
plan and provide copies to the committee.
GOVERNMENT PRINTING OFFICE
STATEMENT OF BRUCE R. JAMES, PUBLIC PRINTER
ACCOMPANIED BY:
BILL TURRI, DEPUTY PUBLIC PRINTER AND CHIEF OPERATING OFFICER
STEVE SHEDD, CHIEF FINANCIAL OFFICER
MARC NICHOLS, INSPECTOR GENERAL
SUMMARY STATEMENT OF BRUCE R. JAMES
Senator Campbell. We will now hear from the Government
Printing Office, Bruce James, the Public Printer; Marc Nichols,
Inspector General; William Turri, the Deputy Printer; and Steve
Shedd, the Chief Financial Officer.
Mr. James, why do you not go ahead and proceed. If you
would like to abbreviate your comments, your complete testimony
will be in the record.
Mr. James. Thank you, Mr. Chairman. I am pleased to be with
you here today to offer testimony in support of the Government
Printing Office's appropriations request and to answer any
questions you may have. At the table with me is Bill Turri, the
Deputy Public Printer of the United States and the Chief
Operating Officer, and to my immediate right is Steve Shedd,
our Chief Financial Officer, and to my far right is Marc
Nichols, our Inspector General.
Last year at this hearing, I discussed the importance of
developing a strategic plan for the GPO that is aligned with
the changing information requirements of the agencies of
Government, the national library community, and the general
public. I also testified about the importance of stabilizing
GPO's finances by stopping the long string of financial losses.
We have made great strides toward the development of a
strategic plan that can be accepted by Congress, employees of
GPO, the printing and information industries, and the library
community. We are wrapping up the first phase, the fact
finding, and are only waiting for the final reports from GAO's
study of the future information dissemination needs of the
Government. We expect to complete a final plan before the
beginning of next fiscal year.
Meantime, as you know, we have proceeded to make changes to
our organization that will be required regardless of the final
plan. We have taken the steps necessary to stabilize the
financial condition of the GPO by reorganizing and streamlining
our business units, reducing employment, and shutting
unnecessary operations. We conducted a successful early
retirement program last year and have another underway. By the
summer, we will have reduced overall agency employees by 20
percent from the time that I arrived at the GPO a little over 1
year ago. We have changed our capital investment program to
require faster paybacks for taxpayers. If there are no
unanticipated setbacks as the year progresses, we should end
this fiscal year at or near the breakeven point rather than the
$33 million loss I inherited, all while measurably improving
our service levels to agencies, libraries and the public.
Next year we will begin to roll out a series of new
printing and digital information products now being developed
by our New Products and Revenues Group which is supported by
our Office of Innovation and New Technology, both of which
report directly to me.
While I cannot bring before you a finished strategic plan
today, I can tell you that every sign is pointing to the
necessity of maintaining a centralized public source for
Federal Government documents that takes into account the fact
that more than 50 percent of our documents are born digital and
will never be printed by the Government except on demand, as
needed. This calls for a different type of dissemination
system, one that can deal with multiple electronic versions of
the same document, authenticate electronic documents as
official and reliable, and preserve the digital record of the
American Government in perpetuity.
Congress is fortunate to have in place an organization for
providing such services to the American people staffed by more
than 2,000 printing and information professionals who together
have more than 55,000 years of experience in collecting,
processing, and the distribution of United States Government
documents. The men and women of the GPO are here to serve you
and guide our brothers and sisters throughout the Government
into the complex world of 21st century digital information.
PREPARED STATEMENT
We appreciate the trust and confidence that Congress has
placed in us and this subcommittee in particular for your
support of our initiatives. To continue to serve your needs and
those of the courts and the executive branch agencies, we are
asking for a $25 million technology investment. We will use
this to modernize our document handling systems, which will
reduce future costs and lead to lower appropriations for
congressional printing and binding and other Government
documents.
With that, we would be pleased to entertain your questions.
[The statement follows:]
Prepared Statement of Bruce R. James
Mr. Chairman and Members of the Subcommittee: It is an honor to be
here today to present the appropriations request of the U.S. Government
Printing Office (GPO) for fiscal year 2005.
2003 Results.--I'm pleased to report that 2003 was an
extraordinarily eventful and productive year for the GPO. With funding
from the Legislative Branch Appropriations Act for 2004 and the
approval of the Joint Committee on Printing, we conducted a highly
successful voluntary separation incentive program that allowed us to
reduce our workforce level by more than 300 positions, or 10 percent,
yielding annual savings of $21.7 million. Together with our efforts to
shutter GPO's failing retail bookstores, which will generate savings of
$1.5 million in the first year, and the other steps we have taken to
better manage our operations, our finances are being restored to a
positive basis.
We have undertaken additional measures in recent weeks that will
yield further financial benefits. With the approval of the Joint
Committee on Printing, we are implementing another voluntary separation
incentive program that is targeted at reducing an additional 250
positions, yielding an annual savings of $16.5 million for fiscal year
2005. This program will be financed through our revolving fund during
the April-July period of this year. The Joint Committee has also
approved our plan to end the financial losses at our Denver regional
printing plant by closing it. Barring any unforeseen developments,
these and related actions we are taking to improve efficiency and
economy will allow us to complete fiscal year 2004 at or near the
break-even point, halting a decade-long pattern of year-end losses and
setting the GPO on the road to sustained financial health.
Transforming the GPO.--Apart from restoring our finances, during
2003 we began the transformation of the GPO into a 21st century digital
information processing facility. We carried out a broad reorganization
to redirect the GPO's management, expanded our workforce development
resources, began modernizing the GPO's product lines with new offerings
such as Public Key Infrastructure technology, and initiated planning
for the restructuring of our Federal Depository Library Program. We
also improved emergency preparedness for our employees and for
continuity-of-government operations. Across the board--from our
customers in Congress, Federal agencies, and among the public, from the
printing industry, the library and information communities, and from
our employee representatives--we're getting strong support for the
direction we're heading.
Transforming the GPO for the long term will require much more than
the changes we've already achieved. As you know, in the coming weeks
the General Accounting Office will be concluding its congressionally-
mandated study of Federal printing and information policy. The study
will establish a baseline of current operations on which we can
confidently build a strategic plan for the GPO's future involving
consultations with all of our stakeholders. The plan will include
recommendations for reforming the 19th century statutes comprising
Title 44 of the U.S. Code, the laws that authorize our programs and
operations.
Dealing with the GPO's building needs is a major transformational
issue that we are also addressing. As reports in The Washington Post,
The Washington Times, Roll Call, and The Hill have detailed recently,
we've begun a process that we expect to culminate by 2007 in the
relocation of the GPO from our aging, oversized quarters on North
Capitol Street to modern, efficient facilities--preferably in the
District of Columbia--that are sized and equipped to meet our needs in
the 21st century. Rather than burden the taxpayers with this project,
we want to investigate opportunities to finance it through the
redevelopment of our current structures. In addition to benefiting the
GPO and our customers, this approach will also generate significant
benefits for the District. We have obtained the approval of the Joint
Committee on Printing to proceed with the initial stages of this
project and we will continue to consult closely with Congress as we
proceed. As part of these efforts, we are seeking specific statutory
approval to utilize up to $500,000 in our revolving fund to finance the
services of experts to help us in this process.
Beyond our planning and building efforts, the transformation of the
GPO will require investments in new technology for collecting,
processing, and distributing Government information. This will
establish the GPO's leadership in using the best leading-edge digital
technology in support of Congress, Federal agencies, and the public.
The GPO has a vastly expanded role to play in content management,
authentication of documents, meeting the challenges associated with
versioning of electronic data, on-demand printing, the transfer of
information from one generation of technology to the next, and the
preservation of digital information in perpetuity. The 19th century is
not coming back. These are the baseline services that the GPO must be
prepared to provide if we are to carry out our mission effectively in
the 21st century. In addition to our request for funding for
continuation of services, our appropriations request for fiscal year
2005 reflects this investment requirement, which is essential to the
GPO's future and the future information activities of the customers we
by law support.
Fiscal Year 2005 Request.--Our appropriations request is designed
to provide for the: Continuation of our congressional printing and
binding operations at required levels; continuation of our document
dissemination services at required levels; investment in GPO's future
as a 21st century digital information processing facility; separate
funding for the GPO's Office of the Inspector General; and
modernization of business practices through appropriate legislative
changes
Continuation of Services.--For the Congressional Printing and
Binding Appropriation, which covers printing and related services for
Congress, we are requesting $88.8 million. This is a reduction of $1.8
million, or 2 percent, from the level approved by Congress for fiscal
year 2004.
For the Salaries and Expenses Appropriation of the Superintendent
of Documents, we are requesting $33 million. This is a reduction of
$1.2 million, or about 3.6 percent, from the fiscal year 2004 approved
level. This appropriation provides for the cataloging and indexing of
Government publications, and the distribution of Government
publications to Federal Depository and International Exchange libraries
and other recipients authorized by law.
The reductions in these two appropriations have been made possible
by reduced printing workloads, our continued application of cost-saving
digital information technologies, and increased efficiency in
operations, including savings from the buyout conducted in 2003.
Investment in the GPO's Future.--The most strategic of our fiscal
year 2005 requests is a proposal for $25 million to be appropriated to
our revolving fund, to remain available until expended, which will be
used in carrying out a multi-year plan to transform the information
technology used at the GPO in meeting Federal agency customer
requirements for printed and digital documents as well as the public's
increasing demand for authenticated, official Government information to
be available from the Internet.
Our vision is to move the GPO forward from a predominantly ink-on-
paper distributor of printing requirements to a life-cycle manager of
digital Government information, electronically collecting, organizing,
processing, and protecting the flow of public documents from their
origination in Congress and Federal agencies through their
dissemination, in perpetuity, to depository libraries and the public.
To make this transformation effective, our technology plan has
identified a series of initiatives that will sustain and improve the
GPO's current information technology (IT) baseline; consolidate data
center capabilities; modernize the GPO's IT infrastructure; reengineer
the GPO's business processes to synchronize with IT capabilities;
provide effective enterprise resource management; and ensure continuing
IT security. This vision embraces the GPO's historic role of serving as
the gateway to the Government's public documents while utilizing
technologies that meet the demands of the 21st century. It will
necessarily be modified by our strategic plan, the development of which
will depend on the conclusions reached by the GAO's study.
The funding we are requesting today will be used to generate
efficiency and reduce costs tomorrow. Already, Congress is seeing the
results of investment in the GPO, as last year's appropriation to fund
our buyout is already generating savings that are showing up in our
reduced requests for the Congressional Printing and Binding and
Salaries and Expenses Appropriations for fiscal year 2005. As with all
of our initiatives undertaken since my taking office as Public Printer,
this transformation will be conducted under the oversight and guidance
of the Joint Committee on Printing, the Appropriations Committees, and
our legislative oversight committees in the House of Representatives
and the Senate, and in consultations with our customers throughout
Congress, Federal agencies, and the library and information
communities.
Office of the Inspector General.--Rather than continue to finance
the GPO's IG through our revolving fund, we are requesting that this
function be funded annually by direct appropriations, as IG operations
are throughout much of the Government. For fiscal year 2005, we are
requesting $4.2 million and 25 full-time equivalent (FTE's) positions
for this purpose.
Financing the IG through the revolving fund requires that the fees
for various services be increased to reimburse this cost. A direct
appropriation will alleviate that cost burden on Congress and agency
customers and make our services more competitively priced. It will also
provide greater independence for the IG and his staff to monitor the
GPO's operations.
Legislative Changes.--In addition to our funding request, we are
requesting several authorities to support our transformational efforts
and further our mission:
--Extension of our early retirement and separation incentive
authority, which expires at the end of fiscal year 2004.
Utilized in 2003 and again this year, this authority has been
extremely useful in achieving orderly reductions in staffing
that are providing significant savings to GPO operations.
--Authorization to use up to $500,000 to contract for expert services
to assist us in our effort to relocate the GPO and to finance
this project through redevelopment of our existing structures.
--Authority to accept contributions of property, equipment, and
services to support and enhance the work of the GPO. We have
improved the language we submitted last year by adding
additional reporting requirements to ensure full
accountability.
--Elimination of the current, long-outdated limit of 25 percent on
discounts for our sales publications. This would enable us to
match current sales discount practices in the private sector
and improve our documents sales practices.
--Elimination of the current 5-year retention period for Government
documents in selective depository libraries. This requirement,
which would be replaced with regulations issued by the
Superintendent of Documents in consultation with the library
community, is imposing excessive costs for documents management
on libraries and undermining the efficiency of program
participation.
--Authorization to use up to $10,000 in our Revolving Fund to support
the activities of the Benjamin Franklin Tercentenary
Commission, established by Public Law 107-202. The Commission
is working on ways for the Federal Government to appropriately
observe the tercentenary of Benjamin Franklin's birth in 2006.
The GPO's support for this important work could involve
printing, mailing, travel, or associated expenses. We are
deeply committed to cooperating with the Commission and its
private sector counterpart, the Benjamin Franklin Tercentenary
Consortium.
--An increase in our representation allowance to $15,000 to support
activities promoting the GPO.
Mr. Chairman and Members of the Subcommittee, thank you for all the
support you have shown for our efforts to bring transformation to the
GPO, reduce the costs of its operations, and improve the provision of
our services to Congress, Federal agencies, and the public. This past
year has been one of unparalleled accomplishment at the GPO, and with
your support we can continue that record of achievement. I look forward
to working with you and the Appropriations Committees in your review
and consideration of our request. This concludes my prepared statement,
and I would be pleased to answer any questions you may have.
BUSINESS-LIKE OPERATIONS
Senator Campbell. You stated that you would like to run the
GPO like a business, which around here sometimes is a buzzword.
That is what almost candidate for office says about the Federal
Government. You run it like a business and with most
businesses, if they are not making a profit, you have got to
shut it down because it is the profit margin that keeps it
going.
What are you going to do to make it more businesslike?
Explain what that buzzword means.
Mr. James. Well, Senator, I think we have taken a number of
steps. I think we are seeing results from those steps. We have
streamlined the organization to eliminate multiple levels of
reporting. We have begun to build metrics to be able to predict
and measure what it is that we are supposed to be doing. We are
streamlining the ways that we go about dealing with Government
agencies. I think we have taken a number of steps. I think
those steps are paying off.
Senator Campbell. You closed the bookstores, the outlets.
Mr. James. We did.
Senator Campbell. Has that saved a considerable amount?
Mr. James. It will save millions over the years, Senator,
about $1.5 million per year.
Senator Campbell. And if people want a document that they
normally would get in that bookstore, how do they get it now?
Mr. James. Well, they get it online. They can certainly
come online and look at our bookstore online, or they can call
our 800 number and receive help from a real, live human being
who will find that document and Federal Express it to them.
INVESTMENT REQUEST
Senator Campbell. Good.
Your budget includes $25 million for transformation
efforts, and you mentioned that your final strategic plan will
not be done until next fiscal year. Is that correct?
Mr. James. Well, we certainly hope, Mr. Chairman, that we
will complete that plan this summer. We are on track to
complete it and to begin to make the investments we need
beginning in the next fiscal year. I am a little reluctant. I
know your staff has pushed us hard to give solid specifics.
Senator Campbell. Yes. There is some concern about
appropriating the money before the plan is complete.
Mr. James. I think by the time that you would move forward
with this, I think we will be able to give you more facts. I am
just a little concerned about putting the cart in front of the
horse in talking about how we are going to spend the money
before we get the agreement on the plan not only from Congress
but from the various stakeholders that we have.
Senator Campbell. Do you still think you might get the
strategic plan done by the summer, though?
Mr. James. We will have it done.
Senator Campbell. Your budget includes 16 new staff for the
depository library program. Are those needed at this time?
Mr. James. You bet. The depository library program is
changing and it is changing because of the nature of the way
the Government is creating information. For many years we sent
to depositories hard copies, first in paper, then in
microfiche, and we began to send CD-ROM's 15 years ago. It is
now not only a combination of those products but last month, 66
percent of all the documents we sent to our depository
libraries were only digital. And they need a considerable
amount of help in learning how to use digital tools to mine
that data for their clients.
Senator Campbell. Let me ask you the same thing I asked the
former panel, and that is, if we have a flat budget and cannot
increase the amount of money that you are asking for, what is
going to get cut or hurt?
Mr. James. Well, I think we will not come back to you in
tears. We will manage the business. It may cause us to change
the timing on some of the investments we are making in the
future, but we will continue forward.
ADDITIONAL COMMITTEE QUESTIONS
Senator Campbell. I have a couple other questions too and I
will submit those in writing, if you would get to those.
Mr. James. Thank you.
Senator Campbell. Thank you for appearing. I appreciate it.
Mr. James. Thank you, Mr. Chairman.
[The following questions were not asked at the hearing, but
were submitted to the Office for response subsequent to the
hearing:]
Questions Submitted by Senator Ben Nighthorse Campbell
Question. What would be the benefits of continuing to invest in the
GPO, as we did last year with an appropriation of $10 million to your
revolving fund?
Answer. We are asking Congress to invest in the GPO only where we
can show that savings will result. Using the $10 million appropriation
to our revolving fund for fiscal year 2004, we conducted a retirement
incentive program that resulted in annual savings of $21.7 million. Our
request for $25 million for the revolving fund for fiscal year 2005
will be used to carry out a multi-year plan to transform the
information technology used at the GPO in meeting Federal agency
customer requirements for printed and digital documents as well as the
public's increasing demand for authenticated, official Government
information to be available over the Internet. This plan, to be carried
out in concert with the pending results of the General Accounting
Office's study of the GPO, as requested by this Committee, will
generate new efficiencies and significantly reduce the future costs of
our operations to Congress, Federal agencies, and the public.
Question. Can you tell the subcommittee about your plans for
relocating the GPO? Have you determined GPO's specific new space
requirements?
Answer. The GPO's current facilities are outdated, inefficient, and
too large to support our changing operations, particularly as we
transform those operations to meet the demands of the 21st century. Our
central office complex here in Washington, DC, is composed of 4 aging
multi-story buildings totaling 1.5 million square feet of space,
completed between 1903 and 1940. The buildings have numerous
inefficiencies that have been well-documented. At one time housing over
8,000 employees, they now are too big for our current workforce of less
than 2,500. Multiple stories make it difficult and costly to handle
materials. Deteriorating utilities and elevators require constant
upgrading. Floor loading limitations in the older buildings have long
restricted their use.
The nature and age of the buildings is imposing growing costs just
to maintain the structures in serviceable condition. These costs must
be recovered through the rates charged to the GPO's customers.
Currently, 12 percent of our costs, about $35 million annually, are for
building-related expenses (including utilities, maintenance and repair,
security). The GPO will need to spend between $275 million and $530
million over the next 5-10 years to maintain, repair, and secure our
current facilities. If there is no change in our situation, these costs
will have to be recovered from Congress, Federal agencies, and the
public through our printing rates and sales prices.
Our objective is to secure a modern, inline production facility
that is appropriately sized and equipped to meet the GPO's current and
future needs, which are still in the process of being determined
through our planning process. Optimally, this facility would be located
conveniently in the District of Columbia to enable us to serve
Congress, Federal agencies, and the public efficiently. We envision
entering into an agreement with a private sector concern to redevelop
our current buildings and use the revenue generated from the
redevelopment to acquire, construct, and equip a new GPO facility. The
redevelopment agreement would also be configured to provide a revenue
stream that would be used to underwrite GPO's operations into the
future. This financing approach should obviate the need for
congressional appropriations to accomplish the relocation project,
remove the burden of building-related expenses on GPO's rate and price
structures, and ensure the continuation of the GPO's information
production and dissemination services well into the 21st century.
Question. How many people took the buyout with the funding we
provided you last year? What is the annual savings from this reduction?
Did this reduction affect your request for appropriations for 2005? How
is your current buyout effort proceeding?
Answer. A total of 319 employees took the buyout we conducted last
year, resulting in annual savings of $21.7 million. These savings--more
accurately characterized as a reduction to our costs--have been a
primary factor in eliminating the loss pattern that the GPO sustained
over the past several years. We are currently conducting another buyout
with the target of reducing our current employment level by 250 by July
1, 2004. This buyout, which has been approved by the Joint Committee on
Printing, will be financed through the GPO's revolving fund. It will
generate annual savings of $16.5 million beginning in fiscal year 2005.
It is proceeding well and we expect to meet the targeted goal of
reducing employment by 250 positions.
Question. You've requested authority to accept contributions of
property, equipment, and services to support and enhance the work of
the GPO. How do you see this authority working? How would GPO avoid a
conflict of interest in accepting gifts?
Answer. Last year we requested authority to accept contributions of
property and services on behalf of the GPO and to make donations of
surplus property and equipment to specified Federal, state, local, and
charitable entities. The authority to accept contributions of voluntary
services, such as those provided by interns, and to make donations was
approved in the fiscal year 2004 Legislative Branch Appropriations Act.
For fiscal year 2005 we are renewing our request to accept
contributions of equipment and property, which was approved by this
Committee last year.
Currently, GPO is not authorized by law to accept contributions of
equipment and property. This authority would allow us to accept the
placement of prototype equipment for beta-testing and systems trials
without requiring a Government investment, providing us with the
flexibility we need to evaluate new and emerging technologies onsite in
this period of rapid technological change. It would also permit us to
work with the private and non-profit sector on the development of
programs designed to increase the public visibility of GPO's
operations, such as the creation of a printing museum similar to the
U.S. Postal Service Museum located nearby.
The authority we are requesting is similar to donation acceptance
authorities possessed by many Federal agencies, such as the Library of
Congress, the U.S. Court of Veterans Appeals, the Department of Housing
and Urban Development, the Consumer Product Safety Commission, the
Department of Commerce, the Administrative Office of United States
Courts, and the Department of Labor. Acceptance of contributions of
equipment and property would be solely on behalf of the GPO and subject
to the usual limitations covering donations to the Government. To
assure accountability, our request this year includes additional
language that would require reporting on all contributions to the
Appropriations Committees and the Joint Committee on Printing.
Question. What are the benefits from providing a direct
appropriation for your Inspector General?
Answer. The GPO's Office of the Inspector General, established
under the provisions of 44 U.S.C. 3901 et. seq., is currently funded
through the GPO's revolving fund. The costs of this office are
distributed as overhead to the various revenue-generating operations of
in-plant printing, printing procurement, and documents distribution.
The rates for the GPO's products and services must be adjusted to
recover our overhead costs, including those of the IG. Along with other
actions we are taking to reduce costs and improve efficiency, we are
asking Congress to provide direct appropriated funding to cover this
mandatory expense to help reduce cost pressures on our rates and
prices.
Equally as important, we believe it is necessary to have direct
funding to the GPO's IG to ensure a level of independence for this
operation that is appropriate to its mission. The IG is responsible for
conducting audits and investigations relating to the GPO, yet is
dependent on the Public Printer to provide approval for the necessary
staffing, funding, equipment, and training necessary to carry out this
mission. By law the Public Printer has ``no authority to prevent or
prohibit the Inspector General from initiating, carrying out, or
completing any audit or investigation.'' However, providing the IG with
the capability to execute its mission independent of the GPO's
management would put this office on a par with how most Federal IG
operations are funded today.
Question. What efforts have you undertaken to identify and make use
of new and emerging information technologies?
Answer. The GPO has implemented a variety of strategies over the
past year to identify, evaluate, and incorporate new and emerging
information technologies into our operations. An Office of Innovation
and New Technology (INT) was established to identify new technologies
and practices that will help us move forward. Reporting directly to the
Public Printer, INT also helps create associations with other public
and private sector entities to carry out the GPO's mission. During
2003, we announced a partnership with the National Archives and Records
Administration in support of permanent online public access.
Along with INT, we have expanded our participation in technology
and trade forums and shows to gain greater exposure to new
developments. Through management reorganization and associated
strategic and contingency planning functions, we are also carrying out
broader outreach to the technology community. We have begun modernizing
the GPO's product lines with new planned offerings such as Public Key
Infrastructure technology. We are participating in the ongoing General
Accounting Office long-range study of Federal printing and information
policy, and expect to be able to use the study's results to help guide
technology evaluation and acquisitions programs at the GPO. We have
also revised our capital acquisitions policy to establish a more
rigorous standard for return-on-investment to ensure we gain the
maximum value from taxpayers' technology dollar.
Question. Tell us what you see as the future of the depository
library program. Why are additional staff needed in fiscal year 2004?
What will be the impact if we are unable to provide these additional
staff?
Answer. The ongoing transition to a more electronic Federal
Depository Library Program (FDLP) will continue into fiscal year 2005
and beyond. Approximately 63 percent of the new titles entering the
FDLP in fiscal year 2003 were electronic and this percentage will
continue to grow. Currently, there are more than 262,000 titles in the
FDLP electronic collection and it is expected to increase substantially
over time.
New challenges associated with discovering, acquiring, cataloging,
and preserving digital documents for the FDLP electronic collection,
working through these changes with our depository library partners, and
carrying out our cataloging and indexing responsibilities will require
an increase of sixteen FTEs for the Salaries and Expenses (S&E)
Appropriation in fiscal year 2005. The increase will support the
following activities:
--Fourteen of the additional FTEs would be dedicated to preservation
activities associated with maintaining and providing permanent
public access to materials in the FDLP legacy and electronic
collections and a proactive program that emphasizes
consultation and education and promotes best practices for our
depository partners during this transition.
--Two FTEs would be added to our cataloging and indexing efforts to
ensure that the full range of in-scope electronic information
being published by our Government is brought under
bibliographic control and made publicly available.
While every effort to reallocate resources from traditional
pursuits has and will provide some of the required personnel, not
increasing the FTE level would mean that we would not be completely
able to carry out our program responsibilities in fiscal year 2005.
Question. You completed a management reorganization last year. How
has that helped your transformation efforts at the GPO? Do you
anticipate additional realignments?
Answer. Last year we implemented an organizational model that is
relatively new to the Federal Government but widely used in industry,
wherein the chief executive officer (Public Printer) focuses on
organizational policy and long-range planning and the second in command
(Deputy Public Printer) serves as chief operating officer focusing on
the day-to-day operations of the business. This has streamlined
decision-making and is designed to keep the overall GPO organization
focused on movement forward while ensuring that the day-to-day tasks of
the agency are fulfilled. The reorganization of the top-level
management structure has been followed by organizational restructurings
at lower levels. There will be further organizational change in the
future as the result of the development and implementation of the GPO's
strategic plan.
Question. Last year you reached an agreement with OMB on executive
printing. Can you tell us how that agreement is working? Where do you
expect this to go in fiscal year 2004 and fiscal year 2005?
Answer. The OMB/GPO Compact on printing (June 6, 2003) successfully
resolved the longstanding controversy over executive printing by
proposing a new system that will enable Federal agencies to choose
their own printers, using technology and support services provided by
the GPO. Our hope is that the volume of printing paid through the GPO
will increase at lower costs while providing all documents for
cataloging and entry into the GPO's Federal Depository Library Program
and related dissemination programs. As called for by the Compact,
during fiscal year 2004 we are operating a demonstration project at an
agency selected by OMB, the Department of Labor. We plan to deploy the
system established by the Compact government-wide in early fiscal year
2005.
Question. How important is employee workforce development to your
transformation efforts at the GPO? What changes have you implemented in
your workforce development program?
Answer. Workforce development is critical to GPO's transformation
process. It is the means by which GPO will move our current workforce
into our future mission. Last year we doubled our workforce development
program and increased our training budget to help us shape the staffing
capabilities we will need for the future. We also revised our training
policy to support mission-related training, not just job-related
training. To guide our workforce development for GPO's future mission,
we will conduct a systematic needs assessment across GPO and a
corresponding skills assessment of the current workforce.
GPO has made a number of changes in order to ensure the success of
the workforce development. A new Director of Workforce Development
position was established and a new Director has been selected. The
Director works under the leadership of the Chief Human Capital Officer.
A Workforce Development Advisory Committee, involving the key leaders
in each major area of GPO, has been working on the critical aspects of
the needs assessment. A working committee involving management and key
labor representatives has also been involved in formulating a process
for ensuring that the needs assessment and the skill assessment is
reflective of the differences that exist in GPO across organizations
and occupations. These efforts have been widely promoted throughout
GPO.
Question. What is the status of emergency planning at the GPO?
Answer. Over the past year, the GPO has completely revised its
Emergency Action Plan. New procedures for emergency evacuations and
``shelter in place'' were developed and published in an Interim Plan.
Both plans were exercised and based on the results, adjustments to the
procedures were made, and the final version of the Plan will be
published this month. We also completed a number of physical security
improvements such as raising the height of outside air intakes to
preclude easy introduction of toxic substances into our heating and
ventilation system. We also upgraded the ventilation control and fire
alarm systems in our passport production building. We further reduced
the number and operating hours of building access points and
implemented more rigorous metal detection and package x-ray policies.
This month we are installing an upgraded access system based on smart
card technology which will allow us to incorporate digitally signed
certificates and biometric identification data into our building and
computer access control systems. Finally, we are in the final phase of
acquiring an emergency mass notification system, which will enable us
to individually notify and instruct all of our employees in a matter a
few minutes during an emergency. Collectively, these actions represent
a significant upgrade of our ability to protect and secure GPO
employees and property.
In the area of continuity of business operations, we this week
signed the Memorandum of Understanding with the Congress which will
enable the GPO to backup our critical computer databases and
applications at the Legislative Alternate Computing Facility (ACF). In
preparation for this, we have been consolidating databases and systems
at our main North Capitol Street facility into a state-of-the-art data
center, which we currently back up on a daily basis. As we implement
our new capability at the ACF, we will be able to back up systems
continuously and thus will be able to provide virtually uninterrupted
support to Congress and our other Government customers in all but the
most catastrophic disasters. Last summer, we initiated a comprehensive
program to complete enterprise-wide risk assessments and security
upgrades for all of our business applications and databases. This
effort will be complete by the end of fiscal year 2004 and will further
secure the integrity and security of our operations.
CONGRESSIONAL BUDGET OFFICE
STATEMENT OF DOUGLAS HOLTZ-EAKIN, DIRECTOR
ACCOMPANIED BY ELIZABETH ROBINSON, DEPUTY DIRECTOR
Senator Campbell. Now we will hear from our third panel
from CBO, Douglas Holtz-Eakin, the Director, accompanied by
Elizabeth Robinson, the Deputy Director. Mr. Holtz-Eakin, if
you would like to proceed, your complete testimony will be in
the record. I see you have got abbreviated notes right there in
front of you.
Mr. Holtz-Eakin. I have very little to say.
Senator Campbell. They look like the kind of notes I use
too.
Mr. Holtz-Eakin. I thank you for the chance for us to be
here this morning to talk about CBO's budget request for 2005.
I want to take the opportunity to introduce Beth Robinson, who
has done a sterling job in under a year as the Deputy Director
of CBO. And I want to thank the committee for its support with
our----
Senator Campbell. May I interrupt you? What was your
background before you got to the position, Ms. Robinson?
Ms. Robinson. It was an eclectic one. I have training as a
geophysicist actually.
Senator Campbell. A geophysicist.
Ms. Robinson. Yes, and I spent some time on the Hill at the
Office of Technology Assessment.
Senator Campbell. Does the geophysicist background help you
with CBO?
Ms. Robinson. Well, sometimes I wonder, but basically a lot
of skills that you learn to handle large data sets, to get the
computers to give you the answer you want, we use a lot at CBO.
Senator Campbell. I have got an eclectic background too,
and I am not sure it helps me being a Senator.
Mr. Holtz-Eakin. She is being very modest. One of the
reasons I was attracted to her is, in fact, that she has a
background in science; and the range of issues that rolls
through the CBO is quite broad. She brings skills that we did
not previously have.
Senator Campbell. Welcome aboard. Please proceed.
OVERVIEW OF CBO'S REQUEST
Mr. Holtz-Eakin. Briefly, this year we have a request that
would be an increase of $1.6 million for pay and benefits for
the existing FTEs at CBO and an additional roughly $200,000
that would cover a variety of needs--including our alternative
computing facility communications, which are part of the
disaster recovery system at CBO, and some higher costs for the
Federal Accounting Standards Advisory Board, and other things
are detailed in the written request.
The total would be a budget of $35.5 million, an increase
of $1.8 million, or 5.5 percent. We view this as essentially a
current-services request, which will allow us to maintain our
level of productivity, which we hope is well documented in our
submission, in supporting the Congress in its need for
budgetary and economic advice.
We have made great progress, I think, in being responsive,
cutting the time required to produce reports and being timely
in their delivery for the deliberations of Congress. I would be
happy to expand on that if necessary.
As you mentioned in your opening remarks, we recognize that
Congress may desire an even more limited request, and we
respect Congress' desire to limit the growth of spending in the
Federal budget and will work with this committee as necessary
to meet any target that you might provide.
I will point out that we have modest opportunities in the
non-pay part of CBO's budget, which is only 12 percent of the
budget. Many of those would be one-time reductions, which we
will entertain as possible. But to the extent that there was an
ongoing need for budgetary stringency, it would be concentrated
in our personnel, which constitute 88 percent of the CBO
budget. Moving to a freeze, for example, given the current pay
and benefits requirements, would create the need to reduce by
about 12 full-time equivalents at CBO.
Senator Campbell. Twelve employees, twelve FTEs?
Mr. Holtz-Eakin. With more flexibility on the scale of the
pay increase, that, of course, could be different, and we could
ameliorate that to some extent through the non-pay part of the
budget.
PREPARED STATEMENT
But certainly we would work with you. We look forward to
additional guidance on the kind of request that is appropriate
and would be happy to answer your questions.
[The statement follows:]
Prepared Statement of Douglas Holtz-Eakin
Mr. Chairman and Members of the Subcommittee, I am pleased to
present the fiscal year 2005 budget request for the Congressional
Budget Office (CBO). The mission of CBO is to provide the Congress with
timely objective, nonpartisan analyses of the economy and the budget
and to furnish the information and cost estimates required for the
Congressional budget process.
The Congressional Budget Office's proposed budget for fiscal year
2005 is effectively a ``current-services'' request, in which the
increases from 2004 are primarily for pay, benefits, and general
inflation. The request totals $35,455,000, a $1.8 million, or 5.5
percent, increase over the appropriation for fiscal year 2004 (after
the rescission of 0.59 percent).
The total increase requested is dominated by $1.6 million for
expected increases in staff salaries and benefits. Funding for salaries
and benefits constitutes 88 percent of CBO's budget, and those costs
will grow by 5.5 percent in 2005. Additional factors include a new
$75,000 charge for telecommunications services associated with the
Alternate Computing Facility, a component of the legislative branch's
disaster recovery system, and a $32,000, or 8.1 percent, increase in
CBO's portion of the cost of operating the Federal Accounting Standards
Advisory Board (FASAB). The remainder of CBO's budget request increases
by 3.2 percent over that in 2004, a rate of growth affected by the fact
that this portion of the budget will absorb almost half of the 0.59
percent rescission in 2004.
With the requested funds for 2005, CBO plans to continue to support
the Congress in exercising its responsibilities for the budget of the
United States government. CBO participates in the Congressional budget
process by providing analyses required by law or requested by the House
and Senate Budget Committees; the Committees on Appropriations, Ways
and Means, and Finance; other committees; and individual Members. In
particular, CBO:
--Reports on the outlook for the budget and the economy to help the
Congress prepare for the legislative year;
--Analyzes the likely effects of the President's budgetary proposals
on outlays and revenues;
--Estimates the costs of legislative proposals, including formal cost
estimates for all bills reported by committees of the House and
Senate and for unfunded mandates on states and localities and
the private sector;
--Constructs statistical, behavioral, and computational models to
project short- and long-term costs and revenues of government
programs; and
--Conducts policy studies of governmental activities having major
economic and budgetary impacts.
In fiscal year 2005, CBO's request will allow the agency to build
on current efforts:
--Increase the number and reduce the preparation time of reports and
in-depth analyses for the Congress, extending progress begun in
2003. The request will support a workload estimated at 2,120
legislative and mandate cost estimates, 82 major analytical
reports (11 percent more than in 2003, which itself represented
a 76 percent increase over 2002), 74 other publications, and a
heavy schedule of Congressional testimony.
--Consolidate gains from additional staff resources provided by the
Congress for 2004 to augment the agency's ability to estimate
revenues and conduct dynamic analyses of the budget. Overall,
the request will support 235 full-time-equivalent positions,
the same number as in 2004. It includes an across-the-board pay
adjustment of 3.5 percent for staff earning a salary of
$100,000 or less, which is consistent with the pay adjustment
requested by other legislative branch agencies, along with a
projected increase in benefits of 7.0 percent.
--Fund a combination of promotions and merit increases for all staff,
including those whose salary exceeds $100,000 and who do not
receive automatic annual across-the-board increases.
--Provide $429,000 for CBO's share of FASAB's budget.
--Provide $75,000 (previously paid by the House of Representatives)
for telecommunications services for the Alternate Computing
Facility.
--Complete the replacement of CBO's Budget Analysis Data System, the
agency's primary budget-tracking system, with a lower-cost,
more-capable in-house system. After accomplishing that
replacement midyear in 2005, CBO plans to continue to develop
and exploit the capabilities of the new system--to improve the
speed and breadth of the agency's analyses--during the
remainder of the year and into the next, but at a much lower
annual development cost.
Before I close, I would like to thank the Committee for its support
of CBO's 2004 budget request, in particular, the two new positions that
it approved to strengthen the agency's ability to forecast the economy
and project revenues. And I would also cite the Committee's ongoing
support of the student loan repayment benefit, which is an increasingly
valuable tool in CBO's recruiting.
I look forward to answering any questions that you might have about
this request.
STAFFING IN DIFFICULT AREAS
Senator Campbell. Thanks.
In fiscal year 2004, the committee agreed to provide two
additional staff for CBO. Are those staffers both on board?
Mr. Holtz-Eakin. Those were identified to address needs for
enhanced precision in our baseline receipts forecasts, and also
to meet the desire for Congress to have some more dynamic
analysis of macro-economic effects and also some budgetary
proposals. We have not only enhanced the FTEs and are hiring
for those, but we have also done some internal reallocations to
make sure that there are people available in some of the tough
cross-cutting areas, in particular finance. A lot of the
difficulties in forecasting baseline revenues in the past
several years have involved large run-ups in the stock market
and then declines and associated bonuses and options. Finance
people are difficult to hire, hard to retain. If Senator Durbin
were here, I would point out that that has been one of our
targets for student loan repayment. It has been successful.
Senator Campbell. They make more in New York.
Mr. Holtz-Eakin. We have had some success on that front,
and we have got more firepower in those areas.
PROGRAM CHANGES
Senator Campbell. You have $227,000 in what is described as
program changes. What are those program changes and what is the
money for, necessary at this time?
Ms. Robinson. The largest component of that is twofold. One
is a new $75,000 charge for disaster recovery for the physical
data connections between CBO and alternate computing facility.
The second one is an investment in our defense-modeling
capability, of the defense budget itself. We had been
contracting in the past for some data sets and other things,
and we find, actually, that these contractors are retiring. It
is a very specific $75,000 expense to bring that capability in-
house.
Senator Campbell. Thank you.
INCREASED PRODUCTIVITY
Your budget also discusses your effort to increase staff
productivity. What are you doing to accomplish that goal?
Mr. Holtz-Eakin. Well, there are two major problems. The
first is management: setting clear objectives for deadlines for
studies, keeping track of progress for those deadlines, and
making sure in our merit review system that productivity is a
component of the merit review. So internal management issues
are one aspect, but there are also some changes in the nature
of the process, the most notable being moving toward a more
modern platform for publication, moving from word processors to
a real desktop publishing system.
RETENTION OF EMPLOYEES
Senator Campbell. How does the CBO compare with other
Federal agencies on the retention of employees?
Mr. Holtz-Eakin. I do not have the precise statistics, but
I think we have been very successful.
Senator Campbell. Could you provide that for the committee?
Mr. Holtz-Eakin. Yes.
[The information follows:]
Employee retention is defined by the amount of turnover and
agency experiences. The chart below describes the Congressional
Budget Office's (CBO's) turnover among management and
professional staff over the last two fiscal years. (Clerical
staff are not included because CBO's workforce is less than 10
percent clerical, and the agency experiences very little
turnover among clerical staff.)
Comparing the Congressional Budget Office's turnover with
other agencies' is challenging because agencies maintain their
data in disparate ways. The chart shows the information that we
have been able to gather.
----------------------------------------------------------------------------------------------------------------
Fiscal Year 2002 Fiscal Year 2003
-------------------------------------------------------------------------
Staff on Turnover Staff on Turnover
Board Separations (percent) Board Separations (percent)
----------------------------------------------------------------------------------------------------------------
Congressional Budget Office........... 190 18 9.47 193 28 14.51
General Accounting Office............. n/a n/a 8.80 n/a n/a 7.70
Congressional Research Service........ 554 31 5.60 609 22 3.61
Library of Congress \1\............... 2,622 146 5.57 2,725 123 4.51
Executive Branch Agencies \2\......... 1,232,496 71,866 5.83 1,244,493 86,285 6.93
----------------------------------------------------------------------------------------------------------------
\1\ Includes Congressional Research Service as part of the Library of Congress.
\2\ Does not include the Federal Bureau of Investigation, the Postal Service, or intelligence agencies (such as
the Central Intelligence Agency and the National Security Agency). Source: www.fedscope.opm.gov.
Notes:
Data are for permanent employees in management and professional positions.
n/a = not available; GAO does not track staff by the category of management and professional and therefore could
not provide this breakdown.
SUBCOMMITTEE RECESS
Senator Campbell. Well, I have no further questions.
Senator Durbin might and/or Senator Stevens, and if they do,
they will submit those in writing to you. If you could get
those back to us. Okay?
Mr. Holtz-Eakin. Thank you very much.
Senator Campbell. I thank you and with that, the
subcommittee is recessed.
[Whereupon, at 11:43 a.m., Thursday, March 4, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]