[House Report 104-874]
[From the U.S. Government Publishing Office]
Union Calendar No. 477
104th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 104-874
_______________________________________________________________________
ACTIVITIES OF THE HOUSE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
ONE HUNDRED FOURTH CONGRESS
FIRST AND SECOND SESSIONS
1995-1996
(Pursuant to House Rule XI, 1(d))
January 2, 1997.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Union Calendar No. 477
104th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 104-874
_______________________________________________________________________
ACTIVITIES
of the
HOUSE COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT
ONE HUNDRED FOURTH CONGRESS
FIRST AND SECOND SESSIONS
1995-1996
(Pursuant to House Rule XI, 1(d))
January 2, 1997.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
WILLIAM F. CLINGER, Jr.,
Pennsylvania, Chairman
CARDISS COLLINS, Illinois BENJAMIN A. GILMAN, New York
HENRY A. WAXMAN, California DAN BURTON, Indiana
TOM LANTOS, California J. DENNIS HASTERT, Illinois \1\
ROBERT E. WISE, Jr., West Virginia CONSTANCE A. MORELLA, Maryland
MAJOR R. OWENS, New York CHRISTOPHER SHAYS, Connecticut
EDOLPHUS TOWNS, New York STEVEN SCHIFF, New Mexico
JOHN M. SPRATT, Jr., South Carolina ILEANA ROS-LEHTINEN, Florida
LOUISE McINTOSH SLAUGHTER, New York WILLIAM H. ZELIFF, Jr., New
PAUL E. KANJORSKI, Pennsylvania Hampshire
GARY A. CONDIT, California JOHN M. McHUGH, New York
COLLIN C. PETERSON, Minnesota STEPHEN HORN, California
KAREN L. THURMAN, Florida JOHN L. MICA, Florida
CAROLYN B. MALONEY, New York PETER BLUTE, Massachusetts
THOMAS M. BARRETT, Wisconsin THOMAS M. DAVIS, Virginia
GENE TAYLOR, Mississippi \5\ DAVID M. McINTOSH, Indiana
BARBARA-ROSE COLLINS, Michigan JON D. FOX, Pennsylvania \7\
ELEANOR HOLMES NORTON, District of ColumbiaTATE, Washington
JAMES P. MORAN, Virginia DICK CHRYSLER, Michigan
GENE GREEN, Texas GIL GUTKNECHT, Minnesota
CARRIE P. MEEK, Florida MARK E. SOUDER, Indiana
FRANK MASCARA, Pennsylvania \3\ WILLIAM J. MARTINI, New Jersey
CHAKA FATTAH, Pennsylvania JOE SCARBOROUGH, Florida
BILL K. BREWSTER, Oklahoma \2\ JOHN B. SHADEGG, Arizona
TIM HOLDEN, Pennsylvania \4\ MICHAEL PATRICK FLANAGAN, Illinois
ELIJAH CUMMINGS, Maryland \6\ CHARLES F. BASS, New Hampshire
------ STEVEN C. LaTOURETTE, Ohio
BERNARD SANDERS, Vermont (Independent)ARSHALL ``MARK'' SANFORD, South
Carolina
ROBERT L. EHRLICH, Jr., Maryland
SCOTT L. KLUG, Wisconsin \8\
James L. Clarke, Staff Director
Kevin M. Sabo, General Counsel
Judith McCoy, Chief Clerk
Bud Myers, Minority Staff Director
----------
\1\ Elected to Committee May 25, 1995 (H. Res. 157).
\2\ Elected to Committee June 13, 1995 (H. Res. 166).
\3\ Resigned from Committee July 11, 1995 (Communication to the
Speaker).
\4\ Elected to Committee July 18, 1995 (H. Res. 186).
\5\ Resigned from Committee February 28, 1996 (Communication to the
Speaker).
\6\ Elected to Committee April 25, 1996 (H. Res. 414).
\7\ Resigned from Committee June 25, 1996 (H. Res. 462).
\8\ Elected to Committee July 22, 1996 (H. Res. 485).
LETTER OF TRANSMITTAL
----------
House of Representatives,
Washington, DC, January 2, 1997.
Hon. Robin H. Carle,
Clerk of the House of Representatives
Washington, DC.
Dear Ms. Carle: I am pleased to submit the enclosed report
entitled ``Activities of the House Committee on Government
Reform and Oversight, 104th Congress, First and Second
Sessions.''
This report follows the committee's past practice of
publishing its activities report annually as an interim report
at the end of each first session of a Congress and as a
separate final report at the end of a full Congress.
The present report includes matters required by Rule XI,
1(d) to be reported to the House not later than January 2,
1997, on the activities of the committee and in carrying out
its duty under Rule X to ``review and study, on a continuing
basis, the application, administration, execution, and
effectiveness'' of laws whose subject matter is within the
jurisdiction of the committee.
The present report describes fully the committee's
jurisdiction and organization, and details its activities. Of
particular note, in an extraordinarily productive Congress are
committee efforts in Procurement Reform, the Line-Item Veto,
the Federal Government Management: Examining Government
Performance as We Near the Next Century investigative report,
and the committee investigations of the White House Travel
Office and FBI Background files matter.
Sincerely yours,
William F. Clinger, Jr., Chairman.
C O N T E N T S
----------
Page
Part One. General statement of organization and activities....... 1
I. Jurisdiction, authority, powers, duties..........................1
II. Historical background............................................9
III. Organization....................................................13
A. Subcommittees......................................... 13
B. Rules of the Committee on Government Reform and
Oversight............................................ 14
IV. Activities, 104th Congress......................................21
A. Investigative Reports................................. 21
B. Legislation........................................... 23
C. Reorganization plans.................................. 30
D. Committee Prints...................................... 30
E. Committee Action on Reports of the Comptroller General 31
Part Two. Report of Committee Activities......................... 33
I. Matters of Interest, Full Committee
A. General............................................... 33
1. Oversight plans of the committees of the U.S.
House of Representatives......................... 33
2. Views and Estimates for Fiscal Year 1997........ 35
3. Investigations.................................. 36
a. The Financial Holdings and Activities of
Secretary of Commerce Ronald H. Brown...... 36
b. The White House Travel Office Investigation. 37
c. The Security of FBI Background Investigation
Files...................................... 49
d. Questions Concerning Campaign Contributions
Made to or Solicited by Lippo Group, John
Huang and Others........................... 52
e. Misuse of Political Influence within the
Disciplinary Enforcement System at the
Department of Defense...................... 53
f. Health Care Task Force...................... 54
g. Labor Department Taxpayer Funded ``Toll-
Free'' Hotline............................. 54
h. National Reconnaissance Office.............. 54
i. Abuse of the American Express Government
Travel Payment Program..................... 54
j. Taxpayer Funded Trip to Disney World........ 55
4. Legislation..................................... 56
a. H.R. 5, the Unfunded Mandates Reform Act of
1995 (Public Law 104-4).................... 56
b. H.R. 2, Line Item Veto Act of 1995.......... 57
c. H.R. 1038, a bill to Revise and Streamline
the Acquisition Laws of the Federal
Government................................. 58
d. H.R. 1670, the Federal Acquisition Reform
Act of 1995................................ 59
e. H.R. 830, the Paperwork Reduction Act of
1995....................................... 60
f. S. 790, the Federal Reports Elimination and
Sunset Act of 1995......................... 63
g. H.R. 3864, General Accounting Office
Management Reform Act of 1996.............. 65
h. H.R. 3136, title III, subtitle E, the
``Congressional Review of Agency
Rulemaking,'' (Public Law No. 104-121,
title II, subtitle E)...................... 66
i. S. 1577, to Amend Title 44, United States
Code, to authorize appropriations for the
National Historical Publications and
Records Commission......................... 68
j. H.R. 2326, Health Care Fraud and Abuse
Prevention Act of 1995..................... 68
k. H.R. 3078, Federal Agency Anti-Lobbying Act. 69
l. ``Proceedings Against John M. Quinn, David
Watkins, and Matthew Moore (Pursuant to
Title 2, United States Code, Sections 192
and 194,'' House Report 104-598, May 29,
1996....................................... 70
B. Budget Process........................................ 72
C. Federal Procurement Policy--An Era of Reform.......... 74
1. Oversight of the Implementation of the Federal
Acquisition Streamlining Act of 1994 (FASA)
(Public Law 103-355)............................. 75
2. Review of the Federal Government's Acquisition
Strategy Regarding the Post Federal
Telecommunications System 2000 Program (Post-
FTS2000)......................................... 76
3. Review of the Department of Defense's
Acquisition of the Defense Information Systems
Network (DISN)................................... 77
4. Review of the General Services Administration's
(GSA) Management of the Multiple Award Schedule
(MAS) Program.................................... 78
5. Oversight of Reform of the Acquisition System of
the Federal Aviation Administration (FAA)........ 79
D. Government Performance and Results Act of 1993 (GPRA). 79
II. Investigations
a. investigations resulting in formal reports
Committee on Government Reform and Oversight, Hon. William F.
Clinger, Jr., Chairman......................................... 81
1. ``A Citizen's Guide on Using the Freedom of Information
Act and the Privacy Act of 1974 to Request Government
Records,'' House Report No. 104-156, June 22, 1995,
First Report by the Committee on Government Reform and
Oversight.............................................. 81
2. ``Creating a 21st Century Government,'' House Report No.
104-434, December 21, 1995, Second Report by the
Committee on Government Reform and Oversight, Together
with Additional Views.................................. 81
3. ``Laws Related to Federal Financial Management as
Amended Through December 31, 1995,'' House Report No.
104-745, August 2, 1996, Ninth Report by the Committee
on Government Reform and Oversight..................... 83
4. ``Sampling and Statistical Adjustment in the Decennial
Census: Fundamental Flaws,'' House Report No. 104-821,
September 24, 1996, Fourteenth Report by the Committee
on Government Reform and Oversight, Together with
Additional and Dissenting Views........................ 84
5. ``Investigation of the White House Travel Office Firings
and Related Matters,'' House Report No. 104-849,
September 26, 1996, Fifteenth Report by the Committee
on Government Reform and Oversight, Together with
Minority and Additional Views.......................... 86
6. ``Federal Government Management: Examining Government
Performance As We Near the Next Century,'' House Report
No. 104-861, September 28, 1996, Eighteenth Report by
the Committee on Government Reform and Oversight,
Together with Additional and Minority Views............ 90
7. ``Investigation into the White House and Department of
Justice on Security of FBI Background Investigation
Files,'' [Interim Report], House Report No. 104-862,
September 28, 1996, Nineteenth Report by the Committee
on Government Reform and Oversight, Together with
Additional Views....................................... 92
Government Management, Information, and Technology Subcommittee,
Hon. Stephen Horn, Chairman.................................... 97
1. ``Making Government Work: Fulfilling the Mandate for
Change,'' House Report No. 104-435, December 21, 1995,
Third Report by the Committee on Government Reform and
Oversight, Together with Additional Views.............. 97
2. ``Year 2000 Computer Software Conversion: Summary of
Oversight Findings and Recommendations,'' House Report
No. 104-857, September 27, 1996, Sixteenth Report by
the Committee on Government Reform and Oversight....... 105
3. ``Crude Oil Undervaluation: The Ineffective Response of
the Minerals Management Service,'' House Report No.
104-858, September 27, 1996, Seventeenth Report by the
Committee on Government Reform and Oversight........... 109
Human Resources and Intergovernmental Relations Subcommittee,
Hon. Christopher Shays, Chairman............................... 113
1. ``The FDA Food Additive Review Process: Backlog and
Failure to Observe Statutory Deadline,'' House Report
No. 104-436, December 21, 1995, Fourth Report by the
Committee on Government Reform and Oversight, Together
with Additional Views.................................. 113
2. ``The Federal Takeover of the Chicago Housing
Authority--HUD Needs to Determine Long-Term
Implications,'' House Report No. 104-437, December 21,
1995, Fifth Report by the Committee on Government
Reform and Oversight, Together with Additional Views... 116
3. ``Fraud and Abuse in Medicare and Medicaid: Stronger
Enforcement and Better Management Could Save
Billions,'' House Report No. 104-641, June 27, 1996,
Eighth Report by the Committee on Government Reform and
Oversight, Together with Additional Views.............. 118
4. ``Health Care Fraud: All Public and Private Payers Need
Federal Criminal Anti-Fraud Protections,'' House Report
No. 104-747, August 2, 1996, Eleventh Report by the
Committee on Government Reform and Oversight........... 120
5. ``Protecting the Nation's Blood Supply From Infectious
Agents: The Need for New Standards to Meet New
Threats,'' House Report No. 104-746, August 2, 1996,
Tenth Report by the Committee on Government Reform and
Oversight, Together with Additional Views.............. 121
National Security, International Affairs, and Criminal Justice
Subcommittee, Hon. William H. Zeliff, Jr., Chairman............ 124
1. ``National Drug Policy: A Review of the Status of the
Drug War,'' House Report No. 104-486, March 19, 1996,
Seventh Report by the Committee on Government Reform
and Oversight, Together with Additional Views.......... 124
2. ``A Two-Year Review of the White House Communications
Agency Reveals Major Mismanagement, Lack of
Accountability, and Significant Mission Creep,'' House
Report No. 104-748, August 2, 1996, Twelfth Report by
the Committee on Government Reform and Oversight,
Together with Dissenting Views......................... 131
3. ``Investigation into the Activities of Federal Law
Enforcement Agencies Toward the Branch Davidians,''
House Report No. 104-749, August 2, 1996, Thirteenth
Report by the Committee on Government Reform and
Oversight, prepared in conjunction with the Committee
on the Judiciary, Together with Additional and
Dissenting Views....................................... 135
Postal Service Subcommittee, Hon. John M. McHugh, Chairman....... 145
1. ``Voices for Change,'' House Report No. 104-438,
December 21, 1995, Sixth Report by the Committee on
Government Reform and Oversight........................ 145
b. other investigations
Civil Service Subcommittee....................................... 146
1. Restructuring of the Office of Personnel Management..... 146
2. Federal Workforce Restructuring Statistics.............. 147
3. Examining the Federal Retirement System................. 147
4. Contracting Out......................................... 148
5. Examination and review of the Federal Workforce
Restructuring Act of 1994.............................. 150
6. Review of the Ramspeck Act.............................. 151
7. Review of the Combined Federal Campaign................. 151
8. Contracting Federal Investigations--Policy and Oversight 152
9. Administration's AIDS Training Program.................. 153
10. Privatization of OPM Training Responsibilities......... 154
11. Review of Civilian Health and Medical Program of the
Uniformed Services (CHAMPUS)........................... 155
12. Review of Current Civil Service Reform Initiatives..... 156
13. Continuation of Civil Service Reform Review:
Performance and Accountability......................... 156
14. Review of Federal Employee Appeals Procedures.......... 157
15. Shutdowns of Federal Agencies Due to Lapses in
Appropriations......................................... 158
16. Employee Benefits in the Context of Total Compensation. 159
17. Medical Savings Accounts (MSA's) in the Federal
Employees Health Benefits Plan......................... 160
18. Veterans' Preference................................... 161
19. Soft Landings to Enhance Federal Downsizing?........... 163
20. Workforce Reductions: RIFs v. Buyouts: A Cost-Benefit
Comparison............................................. 166
21. Illegal Use of Buyouts................................. 169
22. Civil Service Reform Proposals......................... 171
23. Review of the Federal Employees Health Benefit (FEHB)
Program................................................ 173
24. Taxpayer Subsidy of Federal Unions..................... 176
25. Review of Federal Firefighters Pay and Benefits........ 177
26. Drug Testing Policies in the White House............... 180
27. Effects of Privatizing OPM Investigations.............. 183
District of Columbia Subcommittee................................ 184
1. Closing of Pennsylvania Avenue.......................... 184
2. Traffic Disruptions..................................... 186
3. District of Columbia Economic Recovery Act.............. 187
4. Public Law 104-8, District of Columbia Financial
Responsibility and Management Assistance Authority Act
of 1995................................................ 187
Government Management, Information, and Technology Subcommittee.. 189
1. Capital Budgeting....................................... 189
2. Integrity of Government Documents....................... 191
3. Federal Role in Privatization........................... 193
4. National Performance Review............................. 194
5. Strengthening Departmental Management................... 196
6. Consolidating Federal Programs and Organizations........ 197
7. Corporate Structures for Government Functions........... 199
8. Streamlining Federal Field Structures................... 201
9. Performance Measurement, Benchmarking, and Re-egineering 203
10. Agency Initiatives to Implement the Government
Performance and Results Act of 1993.................... 205
11. The General Services Administration's (GSA) Security
Measures at Federal Office Buildings................... 207
12. Controls Over Illegal Immigration--Along the Border and
Within the Interior.................................... 208
13. Budget and Financial Information--Annual Shareholders
Report: How Does the Citizen Know What is Going On?.... 209
14. The Inspector General Act of 1978...................... 211
15. Implementation of the Chief Financial Officers Act of
1990 and the Government Management Reform Act of 1994.. 213
16. Department of Defense's Financial Management Problems.. 215
17. Electronic Reporting Streamlining Act of 1995.......... 217
18. Use of Transportation by Senior Executive Branch
Officials in compliance with Federal Travel Guidelines. 218
19. The Government's Response to the Northridge Earthquake. 220
20. OMB 2000 Reforms: Where are they Heading?.............. 221
21. Using the Best Practices of Information Technology in
Government............................................. 223
22. Oversight of IRS Financial Management.................. 224
23. Is January 1, 2000 the Date for Computer Disaster?..... 226
24. Oversight of the General Accounting Office............. 228
25. Oversight of the General Services Administration....... 229
26. Federal Information Policy Oversight...................230230
27. Oil Royalties.......................................... 231
28. Field Hearing on the U.S. Border Patrol's Operation
Gatekeeper............................................. 232
29. Oversight of the Smithsonian Institution............... 234
Human Resources and Intergovernmental Relations Subcommittee..... 235
1. Efforts to Reorganize and Improve Program Performance
and Efficiency at the U.S. Department of Housing and
Urban Development (HUD)................................ 235
2. Efforts to Improve Program Performance and Efficiency at
the U.S. Department of Health and Human Services (HHS). 235
3. Efforts to Reorganize and Improve Program Performance
and Efficiency at the U.S. Department of Labor (DOL)... 236
4. Efforts to Reorganize and Improve Program Performance
and Efficiency at the U.S. Department of Education
(DOED)................................................. 237
5. Efforts to Reorganize and Improve Program Performance
and Efficiency at the U.S. Department of Veteran
Affairs (VA)........................................... 238
6. Examination of Programs and Operations of the
Corporation for National and Community Service......... 239
7. Revelations of Medicaid Fraud and Scams................. 240
8. Fraud and Abuse in Medicare and Medicaid................ 242
9. Lengthy FDA Delays in Reviewing Food Additive Petitions. 242
10. Bringing Health and Support Services to Women,
Minorities and Adolescents--Growing Segments of the
AIDS Population........................................ 243
11. Debating the Defining Federalism--the Sharing of Power
between the Federal Government and the States.......... 244
12. Joint Hearing on the FDA Regulation of Medical Devices,
including Silicone Gel Breast Implants................. 245
13. Federal Takeover of the Chicago Housing Authority...... 246
14. Management of Threats to the Nation's Blood Supply..... 247
15. The Occupational Safety and Health Administration's
(OSHA) New Strategy for Changing the Way it Does
Business............................................... 248
16. Management of U.S. Department of Housing and Urban
Development Funds in Public Housing Tenant Programs.... 249
17. Status of Major Computer System Development............ 250
18. Radioactive Contamination of 27 People, including
Researcher Dr. Maryann Ma, in June 1995 at the National
Institutes of Health (NIH)............................. 251
19. Unfunded Mandates in Medicaid.......................... 251
20. HUD Management of Tenant Initiative Programs........... 252
21. The Status of Efforts to Identify Persian Gulf War
Syndrome............................................... 253
22. Unfunded Mandates Reform Act of 1995: A One Year Review 256
23. Job Training That Works/Common Factors in Effective Job
Training Programs...................................... 257
24. Preventing Teen Pregnancy: Coordinating Community
Efforts................................................ 257
25. Food Safety: Oversight of the Food and Drug
Administration's Center for Veterinary Medicine........ 258
26. Food Safety: Monitoring of Food Borne Illnesses by the
Centers for Disease Control, Food and Drug
Administration and U.S. Department of Agriculture...... 259
27. The Development of Successful Public Housing Resident
Management (Field Hearing)............................. 260
28. Department of Education Oversight: Gatekeeping......... 260
29. Oversight of the Department of Labor's Efforts Against
Labor Racketeering..................................... 261
30. Oversight of the Department of Education and the
National Institute of Mental Health: Current Approaches
to Attention Deficit/Hyperactivity Disorders........... 262
31. Consumers and Health Informatics....................... 262
32. The Management of HUD's Section 8 Multi-Family Housing
Portfolio.............................................. 263
33. Off-Label Drug Use and FDA Review of Supplemental Drug
Applications........................................... 264
34. Investigation into Possible Misuse of ``New Age''
Training Programs by Federal Departments and Agencies.. 265
National Economic Growth, Natural Resources, and Regulatory
Affairs Subcommittee........................................... 266
1. Grantee Lobbying........................................ 266
2. Investigation of Improper EPA Lobbying on Pending
Legislation............................................ 267
3. OSHA's Ergonomics Standards............................. 270
4. Improper FDA Rulemaking................................. 271
5. Regulatory Reform....................................... 273
6. Privatization of Sallie Mae and Connie Lee.............. 278
7. Mismanagement of Grants by the Environmental Protection
Agency................................................. 279
8. Investigation of the White House Database (WhoDB)....... 280
9. The Effects of a Minimum Wage Increase.................. 281
10. The Impact of Regulations on Employment................ 283
11. Travel Practices of Department of Transportation
Administrators......................................... 285
12. Travel Practices of SEC Chairman Arthur Levitt......... 287
13. Travel Practices of NTSB Chairman Jim Hall............. 288
14. Cleaning Up the Superfund Program...................... 288
15. Havertown Superfund Site............................... 292
National Security, International Affairs, and Criminal Justice
Subcommittee................................................... 294
1. Office of National Drug Control Policy.................. 294
2. Federal Law Enforcement Actions in Relation to the
Branch Davidian Compound in Waco, TX................... 318
3. The Bureau of Census and its planning for the 2000
Census................................................. 327
4. Counterterrorism Activities in the United States........ 329
5. Army Ranger Training Deaths of February 15, 1995........ 331
6. The Ballistic Missile Defense Program................... 332
7. National Drug Control Strategy.......................... 334
8. Department of Defense Bulk Fuel: Appropriations v. Usage 346
9. Oversight of the National Aeronautics and Space
Administration......................................... 348
10. INS.................................................... 350
Postal Service Subcommittee...................................... 358
1. General Oversight of the U.S. Postal Service: The
Postmaster General and the General Accounting Office... 358
2. General Oversight of the U.S. Postal Service: The Postal
Rate Commission........................................ 358
3. General Oversight of the U.S. Postal Service: The Board
of Governors........................................... 359
4. General Oversight of the U.S. Postal Service: Major
Mailing Customers...................................... 360
5. General Oversight of the U.S. Postal Service: Postal
Employee Unions and Organizations...................... 360
6. General Oversight of the U.S. Postal Service: Postal
Reliant Businesses and Competitors..................... 361
7. General Oversight Hearing on the Postal Service: Return
of the Postmaster General.............................. 361
8. General Oversight of the U.S. Postal Service: Postal
Service Inspector General.............................. 362
9. Review of International Mail Market..................... 362
10. General Oversight of the U.S. Postal Service: The Board
of Governors, the Postmaster General, the Postal Rate
Commission, the Chief Postal Inspector and the General
Accounting Office...................................... 363
11. Joint Hearing with the Senate Subcommittee on Post
Office and Civil Service, of the Committee on
Governmental Affairs on International Postal Reform.... 365
12. Postal Reform: H.R. 210, a bill to provide for the
Privatization of the United States Postal Service; H.R.
3717, the Postal Reform Act of 1996; H.R. 3690, the
Postal Service Core Business Act of 1996............... 366
13. Field Hearing on Chicago Mail Service and Postal
Operations............................................. 368
14. Qui Tam Provisions within the False Claims Act......... 369
15. USPS Contract for 8,879 Cargo Minivans................. 370
16. Review of Postal Service Bulk Business Mail Acceptance
Practices; Assessment of the Adequacy of the Postal
Service's Systems for Assessing, Collecting, and
Otherwise Protecting Revenue and/or Accountable Paper.. 371
17. Review of Selected Major Postal Service Procurements... 372
18. Evaluation of USPS Oversight of National Change of
Address Program Licensees.............................. 372
19. Final-Offer Arbitration as an Alternative Means of
Resolving Contract Disputes Between Postal Management
and Labor Unions....................................... 373
20. Review of the Quality and Quantity of Data Produced by
the Postal Service for the Rate Setting Process........ 374
21. Evaluation of the Management Practices, Working
Conditions, and Security at Postal facilities in
Southern California.................................... 374
22. Miscellaneous Investigative Issues..................... 375
23. Review of the Postal Service Board of Governors........ 376
24. Review of the Status of USPS Initiatives to Improve
Employee Working Conditions and Organizational
Performance............................................ 377
25. Continued Oversight of Internal Audits of the Existing
Inspector General...................................... 378
26. Oversight of the Implementation of the new Office of
Inspector General for the Postal Service as provided in
Public Law 104-208..................................... 379
27. Continued Oversight of Labor-Management Relations
within the Postal Service.............................. 380
28. Continuing Review of the Competitive Role of the U.S.
Postal Service......................................... 380
29. Continuing Review of Universal Mail Service and
Ratemaking in Canada................................... 381
30. Continuing Review of Mailing Costs for the Federal
Government............................................. 382
31. Continuing Review of Growth in Postal Service
Employment............................................. 382
32. Continuing Review of the Statutory Mail Box Restriction 383
33. Express Mail Accounts and Insufficient Controls for
Revenue Protection..................................... 383
34. Continuing Review of the role of the U.S. Postal
Service in the Electronic Information Age.............. 384
35. Review of Postal Inspection Service Investigations of
the Public Threat to the U.S. Mails in the Unabomber
Case................................................... 384
III. Legislation
a. new measures
Civil Service Subcommittee....................................... 385
1. H.R. 3586, Veterans' Employment Opportunities Act of
1996................................................... 385
2. H.R. 3481, Omnibus Civil Service Reform Act of 1996..... 385
3. S. 868, Federal Employees Emergency Leave Transfer Act.. 386
District of Columbia Subcommittee................................ 387
1. H.R. 1345, District of Columbia Financial Responsibility
and Management Assistance Act of 1995.................. 387
2. H.R. 2108, District of Columbia Convention Center and
Sports Arena Authorization Act of 1995................. 388
3. H.R. 2661, District of Columbia Fiscal Protection Act of
1995................................................... 389
4. H.R. 461, Closing of Lorton Correctional Complex........ 390
5. H.R. 1855, To amend Title 11, District of Columbia Code,
to restrict the authority of the Superior Court of the
District of Columbia over certain pending cases
involving child custody and visitation rights.......... 391
6. H.R. 3663, District of Columbia Water and Sewer
Authority Act of 1996.................................. 391
7. H.R. 3336, Bill granting the District of Columbia
temporary authority to waive reduction for early
retirement under the Civil Service Retirement System... 392
8. H.R. 3389, District of Columbia Pension Liability
Funding Reform Act of 1996............................. 393
9. H.R. 3664, District of Columbia Government Improvement
and Efficiency Act of 1996............................. 393
Government Management, Information, and Technology Subcommittee.. 393
1. H.R. 1271, Family Privacy Protection Act of 1995........ 393
2. H.R. 1756, The Department of Commerce Dismantling Act... 397
3. H.R. 2234, Debt Collection Improvement Act of 1995...... 399
4. H.R. 1162, Lockbox Deficit Reduction Proposals.......... 401
5. H.R. 1698, Mandatory Electronic Funds Transfer Expansion
Act of 1995............................................ 402
6. H.R. 1907, The Federal-aid Facility Privatization Act of
1995................................................... 402
7. H.R. 2521, the Statistical Consolidation Act of 1995.... 403
8. H.R. 3184, the Single Audit Act Amendments of 1996...... 405
9. H.R. 3869, the Electronic Reporting Streamlining Act of
1996................................................... 406
10. H.R. 3189, to delay privatization of the Office of
Federal Investigations of the Office of Personnel
Management............................................. 407
11. H.R. 1281, War Crimes Disclosure Act................... 408
12. H.R. 3802, Electronic Freedom of Information Amendments
of 1996................................................ 409
13. H.R. 3452, the Presidential and Executive Office
Accountability Act..................................... 410
14. H.R. 3872, the White House Inspector General Act of
1996................................................... 411
15. H.R. 3637, the Travel Reform and Savings Act of 1996... 412
16. S. 1130, Federal Financial Management Improvement Act
of 1996................................................ 413
17. Federal Budget Process Reform.......................... 414
18. Health Information Privacy Protection Act.............. 418
Human Resources and Intergovernmental Relations Subcommittee..... 419
1. H.R. 2086, the Local Empowerment and Flexibility Act of
1995................................................... 419
2. H.R. 2326, the Health Care Fraud and Abuse Prevention
Act of 1995 and H.R. 1850, the Health Care Fraud and
Abuse Act of 1995...................................... 420
National Economic Growth, Natural Resources, and Regulatory
Affairs Subcommittee........................................... 421
1. H.R. 450, the Regulatory Transition Act of 1995......... 421
2. H.R. 994, the Regulatory Sunset and Review Act of 1995.. 423
3. Grantee Lobbying Legislation............................ 424
4. Corrections Day......................................... 424
Postal Service Subcommittee...................................... 424
1. H.R. 1026, To designate the United States Post Office
building located at 201 East Pikes Peak Avenue in
Colorado Springs, Colorado, as the ``Winfield Scott
Stratton Post Office''................................. 424
2. H.R. 2077, To designate the United States Post Office
building located at 33 College Avenue in Waterville,
Maine, as the ``George J. Mitchell Post Office
Building''............................................. 425
3. H.R. 1826, To repeal the authorization of transitional
appropriations for the United States Postal Service,
and for other purposes................................. 425
4. H.R. 210, A bill to provide for the privatization of the
United States Postal Service........................... 426
5. H.R. 1963, The Postmark Prompt Payment Act of 1995...... 426
6. H.R. 1398, To designate the United States Post Office
located at 1203 Lemay Ferry Road, St. Louis, Missouri
as the ``Charles J. Coyle Post Office Building''....... 427
7. H.R. 1606, To designate the United States Post Office
building located at 24 Corliss Street, Providence,
Rhode Island, as the ``Harry Kizirian Post Office
Building''............................................. 428
8. H.R. 1880, To designate the United States Post Office
located at 102 South McLean, Lincoln, Illinois as the
``Edward Madigan Post Office Building''................ 428
9. H.R. 2262, To designate the United States Post Office
located at 218 North Alston Street in Foley, Alabama as
the ``Holk Post Office Building''...................... 429
10. H.R. 2704, A bill to provide that the United States
Post Office building located on the 2600 block of East
75th Street in Chicago, Illinois shall be known as the
``Charles A. Hayes Post Office Building''.............. 429
11. H.R. 855, to designate the United States Post Office
Building located at 153 East 110th Street, New York,
New York, as the ``Oscar Garcia Rivera Post Office
Building''............................................. 430
12. H.R. 2700, a bill to designate the United States Post
Office Building located at 7980 FM 327, Elmendorf,
Texas, as the ``Amos F. Longoria Post Office Building'' 430
13. H.R. 3139, a bill to redesignate the United States Post
Office building located at 245 Centereach Mall on
Middle Country Road in Centereach, New York, as the
``Rose Y. Caracappa United States Post Office
Building''............................................. 431
14. H.R. 3768, a bill to designate a United States Post
Office to be located in Groton, Massachusetts, as the
``Augusta `Gusty' Hornblower United States Post
Office''............................................... 431
15. H.R. 3834, a bill to redesignate the Dunning Post
Office in Chicago, Illinois, as the ``Roger P.
McAuliffe Post Office''................................ 432
16. H.R. 3877, a bill to designate the United States Post
Office Building in Camden, Arkansas, as the ``Honorable
David H. Pryor Post Office Building''.................. 432
17. H.R. 3610, the Omnibus Appropriations Act of 1996...... 433
18. H.R. 3690, the Postal Service Core Business Act of 1996 433
19. H.R. 3717, the Postal Reform Act of 1996............... 434
b. review of laws within committee's jurisdiction
Full Committee................................................... 439
Civil Service Subcommittee....................................... 441
District of Columbia Subcommittee................................ 449
Government Management, Information, and Technology Subcommittee.. 450
Human Resources and Intergovernmental Relations Subcommittee..... 458
National Economic Growth, Natural Resources, and Regulatory
Affiars Subcommittee........................................... 459
National Security, International Affairs, and Criminal Justice
Subcommittee................................................... 461
Postal Service Subcommittee...................................... 462
IV. Other Current Activities
a. general accounting office reports
Civil Service Subcommittee....................................... 465
District of Columbia Subcommittee................................ 501
Government Management, Information, and Technology Subcommittee.. 503
Human Resources and Intergovernmental Relations Subcommittee..... 541
National Economic Growth, Natural Resources, and Regulatory
Affairs Subcommittee........................................... 598
National Security, International Affairs, and Criminal Justice
Subcommittee................................................... 634
Postal Service Subcommittee...................................... 752
b. other reports and statements
District of Columbia Subcommittee................................ 759
Government Management, Information, and Technology Subcommittee.. 760
c. committee prints
Standing committee............................................... 764
Postal Service Subcommittee...................................... 764
V. Prior Activities of Current or Continuing Interest
District of Columbia Subcommittee................................ 767
Human Resources and Intergovernmental Relations Subcommittee..... 767
National Economic Growth, Natural Resources, and Regulatory
Affairs Subcommittee........................................... 768
National Security, International Affairs, and Criminal Justice
Subcommittee................................................... 769
Postal Service Subcommittee...................................... 770
Union Calendar No. 477
104th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 104-874
_______________________________________________________________________
ACTIVITIES OF THE HOUSE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
_______
January 2, 1997.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______________________________________________________________________
Mr. Clinger, from the Committee on Government Reform and Oversight,
submitted the following
REPORT
FINAL REPORT ON THE ACTIVITIES OF THE HOUSE COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT, 104TH CONGRESS, 1ST AND 2D SESSIONS, 1995 AND
1996
PART ONE. GENERAL STATEMENT OF ORGANIZATION AND ACTIVITIES
I. Jurisdiction, Authority, Powers, and Duties
The Rules of the House of Representatives provide for
election by the House, at the commencement of each Congress, of
19 named standing committees, one of which is the Committee on
Government Reform and Oversight.\1\ Pursuant to House
Resolutions 11 and 12 (adopted January 5, 1995), and House
Resolution 13 (adopted January 5, 1995), House Resolution 31
(adopted January 9, 1995) the membership of the Committee on
Government Reform and Oversight was set at 50, including one
independent. Subsequently, the membership was increased to 51,
pursuant to House Resolution 157 (adopted May 25, 1995), on
June 13, 1995, membership increased to 52, pursuant to House
Resolution 166 (adopted June 13, 1995), on July 12, 1995,
membership was decreased to 51 pursuant to communication to
Speaker, and on July 12, 1995, membership was set at 52,
pursuant to House Resolution 186 (adopted July 12, 1995); on
February 28, 1996, membership was decreased to 51, pursuant to
communication to Speaker; on April 25, 1996, membership was
increased to 52, pursuant to House Resolution 414 (adopted
April 25, 1996); on June 25, 1996, membership was decreased to
51, pursuant to communication to Speaker; and on July 22, 1996,
membership was increased to 52, pursuant to House Resolution
485 (adopted July 22, 1996).
---------------------------------------------------------------------------
\1\ Rule X.
---------------------------------------------------------------------------
Rule X sets forth the committee's jurisdiction, functions,
and responsibilities as follows:
RULE X
Establishment and Jurisdiction of Standing Committees
the committees and their jurisdiction
1. There shall be in the House the following standing
committees, each of which shall have the jurisdiction and
related functions assigned to it by this clause and clauses 2,
3, and 4; and all bills, resolutions, and other matters
relating to subjects within the jurisdiction of any standing
committee as listed in this clause shall (in accordance with
and subject to clause 5) be referred to such committees, as
follows:
* * * * * * *
(g) Committee on Government Reform and Oversight
(1) The Federal Civil Service, including intergovernmental
personnel; the status of officers and employees of the United
States, including their compensation, classification, and
retirement.
(2) Measures relating to the municipal affairs of the
District of Columbia in general, other than appropriations.
(3) Federal paperwork reduction.
(4) Budget and accounting measures, other than
appropriations.
(5) Holidays and celebrations.
(6) The overall economy and efficiency of Government
operations and activities, including Federal procurement.
(7) National archives.
(8) Population and demography generally, including the
Census.
(9) Postal service generally, including the transportation
of the mails.
(10) Public information and records.
(11) Relationship of the Federal Government to the States
and municipalities generally.
(12) Reorganizations in the executive branch of the
Government.
In addition to its legislative jurisdiction under the
preceding provisions of this paragraph (and its oversight
functions under clause 2(b) (1) and (2)), the committee shall
have the function of performing the activities and conducting
the studies which are provided for in clause 4(c).
* * * * * * *
general oversight responsibilities
2. (a) In order to assist the House in--
(1) its analysis, appraisal, and evaluation of (A)
the application, administration, execution, and
effectiveness of the laws enacted by the Congress, or
(B) conditions and circumstances which may indicate the
necessity or desirability of enacting new or additional
legislation, and
(2) its formulation, consideration, and enactment of
such modifications of or changes in those laws, and of
such additional legislation, as may be necessary or
appropriate,
the various standing committees shall have oversight
responsibilities as provided in paragraph (b).
(b)(1) Each standing committee (other than the Committee on
Appropriations and the Committee on the Budget) shall review
and study, on a continuing basis, the application,
administration, execution, and effectiveness of those laws, or
parts of laws, the subject matter of which is within the
jurisdiction of that committee, and the organization and
operation of the Federal agencies and entities having
responsibilities in or for the administration and execution
thereof, in order to determine whether such laws and the
programs thereunder are being implemented and carried out in
accordance with the intent of the Congress and whether such
programs should be continued, curtailed, or eliminated. In
addition, each such committee shall review and study any
conditions or circumstances which may indicate the necessity or
desirability of enacting new or additional legislation within
the jurisdiction of that committee (whether or not any bill or
resolution has been introduced with respect thereto) and shall
on a continuing basis undertake future research and forecasting
on matters within the jurisdiction of that committee. Each such
committee having more than twenty members shall establish an
oversight subcommittee, or require its subcommittees, if any,
to conduct oversight in the area of their respective
jurisdiction, to assist in carrying out its responsibilities
under this subparagraph. The establishment of oversight
subcommittees shall in no way limit the responsibility of the
subcommittee with legislative jurisdiction from carrying out
their oversight responsibilities.
(2) The Committee on Government Reform and Oversight shall
review and study, on a continuing basis, the operation of
Government activities at all levels with a view to determining
their economy and efficiency.
* * * * * * *
(c) Each standing committee of the House shall have the
function of reviewing and studying on a continuing basis the
impact or probable impact of tax policies affecting subjects
within its jurisdiction as described in clauses 1 and 3.
* * * * * * *
additional functions of committees
4. * * *
(c)(1) The Committee on Government Reform and Oversight
shall have the general function of--
(A) receiving and examining reports of the
Comptroller General of the United States and of
submitting such recommendations to the House as it
deems necessary or desirable in connection with the
subject matter of such reports;
(B) evaluating the effects of laws enacted to
reorganize the legislative and executive branches of
the Government; and
(C) studying intergovernmental relationships between
the United States and the States, and municipalities,
and between the United States and international
organizations of which the United States is a member.
(2) In addition to its duties under subparagraph (1), the
Committee on Government Reform and Oversight may at any time
conduct investigations of any matter without regard to the
provisions of clause 1, 2, or 3 (or this clause) conferring
jurisdiction over such matter upon another standing committee.
The committee's findings and recommendations in any such
investigation shall be made available to the other standing
committee or committees having jurisdiction over the matter
involved (and included in the report of any such other
committee when required by clause 2(1)(3) of Rule XI).
* * * * * * *
Rule XI provides authority for investigations and studies,
as follows:
RULE XI
Rules of Procedure for Committees
in general
1. * * *
(b) Each committee is authorized at any time to consider
such investigations and studies as it may consider necessary or
appropriate in the exercise of its responsibilities under Rule
X, and (subject to the adoption of expense resolutions as
required by clause 5) to incur expenses (including travel
expenses) in connection therewith.
* * * * * * *
(d) Each committee shall submit to the House, not later
than January 2 of each odd-numbered year, a report on the
activities of that committee under this rule and Rule X during
the Congress ending at noon on January 3 of such year.
* * * * * * *
committee rules
* * * * * * *
Power to sit and act; subpoena power
(m)(1) For the purpose of carrying out any of its functions
and duties under this rule and Rule X (including any matters
referred to it under clause 5 of Rule X), any committee, or any
subcommittee thereof, is authorized (subject to subparagraph
(2)(A) of this paragraph)--
(A) to sit and act at such times and places within
the United States, whether the House is in session, has
recessed, or has adjourned, and to hold such hearings,
and
(B) to require, by subpoena or otherwise, the
attendance and testimony of such witnesses and the
production of such books, records, correspondence,
memorandums, papers, and documents as it deems
necessary.
The chairman of the committee, or any member designated by such
chairman, may administer oaths to any witness.
(2)(A) A subpoena may be authorized and issued by a
committee or subcommittee under subparagraph (1)(B) in the
conduct of any investigation or series of investigations or
activities, only when authorized by a majority of the members
voting, a majority being present. The power to authorize and
issue subpoenas under subparagraph (1)(B) may be delegated to
the chairman of the committee pursuant to such rules and under
such limitations as the committee may prescribe. Authorized
subpoenas shall be signed by the chairman of the committee or
by any member designated by the committee.
(B) Compliance with any subpoena issued by a committee or
subcommittee under subparagraph (1)(B) may be enforced only as
authorized or directed by the House.
Use of committee funds for travel
(n)(1) Funds authorized for a committee under clause 5 are
for expenses incurred in the committee's activities; however,
local currencies owned by the United States shall be made
available to the committee and its employees engaged in
carrying out their official duties outside the United States,
its territories or possessions. No appropriated funds,
including those authorized under clause 5, shall be expended
for the purpose of defraying expenses of members of the
committee or its employees in any country where local
currencies are available for this purpose; and the following
conditions shall apply with respect to travel outside the
United States or its territories or possessions:
(A) No Member or employee of the committee shall
receive or expend local currencies for subsistence in
any country for any day at a rate in excess of the
maximum per diem set forth in applicable Federal law,
or if the Member or employee is reimbursed for any
expenses for such day, then the lesser of the per diem
or the actual, unreimbursed expenses (other than for
transportation) incurred by the Member or employee
during that day.
(B) Each Member or employee of the committee shall
make to the chairman of the committee an itemized
report showing the dates each country was visited, the
amount of per diem furnished, the cost of
transportation furnished, any funds expended for any
other official purpose and shall summarize in these
categories the total foreign currencies and/or
appropriated funds expended. All such individual
reports shall be filed no later than sixty days
following the completion of travel with the chairman of
the committee for use in complying with reporting
requirements in applicable Federal law and shall be
open for public inspection.
(2) In carrying out the committee's activities outside of
the United States in any country where local currencies are
unavailable, a member or employee of the committee may not
receive reimbursement for expenses (other than for
transportation) in excess of the maximum per diem set forth in
applicable Federal law, or if the member or employee is
reimbursed for any expenses for such day, then the lesser of
the per diem or the actual, unreimbursed expenses (other than
for transportation) incurred, by the member or employee during
any day.
(3) A member or employee of a committee may not receive
reimbursement for the cost of any transportation in connection
with travel outside the United States unless the member or
employee has actually paid for the transportation.
(4) The restrictions respecting travel outside of the
United States set forth in subparagraphs (2) and (3) shall also
apply to travel outside of the United States by Members,
officers, and employees of the House authorized under clause 8
of rule I, clause 1(b) of this rule, or any other provision of
these Rules of the House of Representatives.
(5) No local currencies owned by the United States may be
made available under this paragraph for the use outside of the
United States for defraying the expenses of a member of any
committee after--
(A) the date of the general election of Members in
which the Member has not been elected to the succeeding
Congress; or
(B) in the case of a Member who is not a candidate in
such general election, the earlier of the date of such
general election or the adjournment sine die of the
last regular session of the Congress.
The committee also exercises authority under a number of
congressional mandates.\2\
---------------------------------------------------------------------------
\2\ For legislation imposing duties specifically on the committee,
see, for example, sec. 203(e)(6) of the Federal Property and
Administrative Services Act of 1949 (40 U.S.C. 484(6)(e)), relating to
negotiated disposal of Federal surplus property. It requires that, with
limited exceptions, explanatory statements be sent ``to the appropriate
committees of the Congress'' in advance of negotiated disposal under
the act. It covers disposal of all real and personal property whose
estimated fair market is over $15,000 in the case of personal property
and over $100,000 in the case of real property. The current language
stems from a 1988 amendment (Public Law 100-612), which retained the
explanatory statement requirement but changed the dollar value
thresholds, which theretofore had been $1,000 for both personal
property and real property. The House and Senate Government Operations
Committees are expressly identified as the appropriate panels in House
Report 1763, 85th Congress, which accompanied the measure that
contained the 1958 amendment. See also GSA's Federal Property
Management Regulations at 41 CFR-47.304-12(d).
[N. B. The further examples given in the original footnote text
cover sections (section 414 of the 1969 Housing Act and section 304 of
the Intergovernmental Cooperation Act) have been repealed. The
reference to sections 191-194 of title 2, U.S.C., does not deem
pertinent here.]
---------------------------------------------------------------------------
5 U.S.C. sec. 2954
Information to committees of Congress on request
An Executive agency, on request of the Committee on
Government Operations of the House of Representatives or of any
seven members thereof, or on request of the Committee on
Government Operations of the Senate, or any five members
thereof, shall submit any information requested of it relating
to any matter within the jurisdiction of the committee.
18 U.S.C. sec. 1505
Obstruction of proceedings before departments, agencies, and committees
Whoever, with intent to avoid, evade, prevent, or obstruct
compliance, in whole or in part, with any civil investigation
demand duly and properly made under the Antitrust Civil Process
Act, willfully withholds, misrepresents, removes from any
place, conceals, covers up, destroys, mutilates, alters, or by
other means falsifies any documentary material, answers to
written interrogatories, or oral testimony, which is the
subject of such demand; or attempts to do so or solicits
another to do so; or
Whoever corruptly, or by threats or force, or by any
threatening letter or communication influences, obstructs, or
impedes or endeavors to influence, obstruct, or impede the due
and proper administration of the law under which any pending
proceeding is being had before any department or agency of the
United States, or the due and proper exercise of the power of
inquiry under which any inquiry or investigation is being had
by either House, or any committee of either House or any joint
committee of the Congress--
Shall be fined not more than $5,000 or imprisoned not more
than five years, or both.
31 U.S.C. sec. 712
Investigating the use of public money
The Comptroller General shall--
* * * * * * *
(3) analyze expenditures of each executive agency the
Comptroller General believes will help Congress decide whether
public money has been used and expended economically and
efficiently;
(4) make an investigation and report ordered by either
House of Congress or a committee of Congress having
jurisdiction over revenue, appropriations, or expenditures; and
(5) give a committee of Congress having jurisdiction over
revenue, appropriations, or expenditures the help and
information the committee requests.
31 U.S.C. sec. 719
Comptroller General reports
* * * * * * *
(e) The Comptroller General shall report on analyses
carried out under section 712(3) of this title to the
Committees on Governmental Affairs and Appropriations of the
Senate, the Committee on Government Operations and
Appropriations of the House, and the committees with
jurisdiction over legislation related to the operation of each
executive agency.\3\
---------------------------------------------------------------------------
\3\ For other requirements which relate to General Accounting
Office reports to Congress and which affect the committee, see secs.
232 and 236 of the Legislative Reorganization Act of 1970 (Public Law
91-510).
II. Historical Background
The committee was initially named the ``Committee on
Expenditures in the Executive Departments.'' Its antecedents
are summarized in Cannon's Precedents of the House of
Representatives, vol. VII, sec. 2041, p. 831 (1935), as
follows:
This committee was created, December 5, 1927, by the
consolidation of the eleven Committees on Expenditures
in the various Departments of the Government, the
earliest of which has been in existence since 1816. As
adopted in 1816, the rule did not include the
committees for the Departments of Interior, Justice,
Agriculture, Commerce, and Labor. The committees for
these Departments date, respectively, from 1860, 1874,
1889, 1905 and 1913.
The resolution providing for the adoption of the rules of
the 70th Congress discontinued the several committees on
expenditures and transferred their functions to the newly
created Committee on Expenditures in the Executive Departments:
On March 17, 1928, the jurisdiction of the committee
was further enlarged by the adoption of a resolution,
reported from the Committee on Rules, including within
its jurisdiction the independent establishments and
commissions of the Government.\4\
---------------------------------------------------------------------------
\4\ Examples of the wide-ranging scope of the committee's
jurisdiction may be found in Cannon's Precedents, supra VII, secs.
2042-2046, pp. 831-833 (1935).
---------------------------------------------------------------------------
From 1928 until January 2, 1947, when the Legislative
Reorganization Act of 1946 became effective, the committee's
jurisdiction was set forth in Rule XI, 34, of the House Rules
then in force (H. Doc. 810, 78th Cong., 2d Sess. (1945)), as
follows:
powers and duties of committees
* * * * * * *
34. The examination of the account and expenditures of the
several departments, independent establishments, and
commissions of the Government, and the manner of keeping the
same; the economy, justness, and correctness of such
expenditures; their conformity with appropriation laws; the
proper application of public moneys; the security of the
Government against unjust and extravagant demands;
retrenchment; and enforcement of the payment of moneys due the
United States; the economy and accountability of public
officers; the abolishment of useless offices, shall all be
subjects within the jurisdiction of the Committee on
Expenditures in the Executive Departments.
The Legislative Reorganization Act of 1946, section 121(b),
as adopted in paragraphs (a), (b), and (c) of Rule XI, 8, of
later Rules of the House (XI, 9, the 93d Congress), provided:
committee on government operations
(a) Budget and accounting measures, other than
appropriations.
(b) Reorganizations in the executive branch of Government.
(c) Such committee shall have the duty of--
(1) receiving and examining reports of the
Comptroller General of the United States and of
submitting such recommendations to the House as it
deems necessary or desirable in connection with the
subject matter of such reports;
(2) studying the operation of Government activities
at all levels with a view to determining the economy
and efficiency;
(3) evaluating the effects of laws enacted to
reorganize the legislative and executive branches of
the Government;
(4) studying intergovernmental relationships between
the United States and the States and municipalities,
and between the United States and international
organizations of which the United States is a member.
(d) For the purpose of performing such duties the
committee, or any subcommittee thereof when authorized by the
committee, is authorized to sit, hold hearings, and act at such
times and places within the United States, whether or not the
House is in session, is in recess, or has adjourned, to require
by subpoena or otherwise the attendance of such witnesses and
the production of such papers, documents, and books, and to
take such testimony as it deems necessary. Subpoenas may be
issued under the signature of the chairman of the committee or
of any subcommittee, or by any member designated by any such
chairman, and may be served by any person designated by any
such chairman or member.\5\
---------------------------------------------------------------------------
\5\ Paragraph (d) was adopted by the House Feb. 10, 1947.
---------------------------------------------------------------------------
Rule X, 1(h), of later Rules of the House, effective
January 3, 1975 (H. Res. 988, 93d Congress), added the
additional jurisdiction of general revenue sharing (formerly
within the jurisdiction of the Committee on Ways and Means),
and the National Archives (formerly within the jurisdiction of
the Committee on Post Office and Civil Service).
Rule X, 1(j)(6), of later Rules of the House listed the
additional jurisdiction of measures providing for off-budget
treatment of Federal agencies or programs, which was added by
sec. 225 of Public Law 99-177, the Balanced Budget and
Emergency Deficit Control Act of 1985 (December 12, 1985).
The 1946 act contained the following proviso:
Provided: That unless otherwise provided herein, any
matter within the jurisdiction of a standing committee
prior to January 2, 1947, shall remain subject to the
jurisdiction of that committee or of the consolidated
committee succeeding to the jurisdiction of that
committee.
This proviso was omitted from the Rules of the House adopted
January 3, 1954.\6\
---------------------------------------------------------------------------
\6\ H. Res. 5, 83d Cong. (99 Cong. Rec. 15). Cf. rules in H. Doc.
562, 82d Congress, 2d session p. 328 and in H. Doc. 739, 81st Congress,
2d session, p. 326.
---------------------------------------------------------------------------
Under the Constitution (Art. I, sec. 5, cl. 2), ``Each
House may determine the Rules of its Proceedings.'' Omission of
the proviso made no substantive change, since the scope of the
committee's jurisdiction prior to January 2, 1947, was embraced
within the committee's jurisdiction as stated in existing rules
and precedents.
The committee's membership, which was fixed at 21 when it
was consolidated on December 5, 1927, was increased to 25 when
the Legislative Reorganization Act of 1946 became effective on
January 2, 1947. In 1951, the committee's membership was
increased to 27.\7\ From 1953 until January 1963, the
committee's membership remained at 30.\8\
---------------------------------------------------------------------------
\7\ H. Res. 60, 83d Congress, 1st session (97 Cong. Rec. 194).
\8\ H. Res. 98, 83d Cong. (99 Cong. Rec. 436); H. Res. 94, 84th
Cong. (101 Cong. Rec. 484); H. Res. 89, 85th Cong. (103 Cong. Rec.
412); H. Res. 120, 86th Cong. (105 Cong. Rec. 841); H. Res. 137, 87th
Cong. (107 Cong. Rec. 1677).
---------------------------------------------------------------------------
Pursuant to H. Res. 108, 88th Congress, adopted January 17,
1963, the committee was enlarged to 31 members. In the 89th
Congress the membership of the committee was increased to 34
through passage of H. Res. 114, January 14, 1965. The committee
membership in the 90th and 91st Congresses of 35 was first
established by H. Res. 128, 90th Congress, approved January 16,
1967. The committee membership in the 92d Congress of 39 was
established by H. Res. 192, approved February 4, 1971. It was
raised to 41 by H. Res. 158, adopted January 24, 1973. The
committee membership of 42 was established by H. Res. 1238,
adopted July 17, 1974. It was increased to 43 by H. Res. 76 and
101, adopted January 20 and 28, 1975. Membership was maintained
at 43 in the 95th Congress by H. Res. 117 and 118, adopted
January 19, 1977. The committee membership was set at 39 in the
96th Congress by H. Res. 62 and 63, adopted January 24, 1979.
The committee membership was set at 40 in the 97th Congress by
H. Res. 44 and 45, adopted January 28, 1981. The committee size
was increased to 41 by the adoption of H. Res. 370 on February
24, 1982. Pursuant to House Res. 26 and 27, adopted January 6,
1983, the committee membership for the 98th Congress was set at
39.
In the 99th Congress, the membership of the committee was
set at 39, pursuant to House Res. 34 and 35, adopted January
30, 1985.
In the 100th Congress, the membership of the committee was
set at 39, pursuant to House Res. 45 and 54, adopted January 21
and 22, 1987, respectively.
The committee membership in the 101st Congress was
established at 39 by H. Res. 29 and H. Res. 45, adopted January
19 and 20, 1989. In the 102d Congress, the membership of the
committee was set at 41, pursuant to H. Res. 43, 44, and 45,
adopted January 24, 1991. The committee membership was set at
42 in the 103d Congress by adoption of H. Res. 8 and 9 on
January 5, 1993; H. Res. 34 on January 21, 1993; H. Res. 67 on
February 4, 1993; and H. Res. 92 and 93 on February 18, 1993.
The membership was increased to 44 by the adoption of H. Res.
185 on May 26, 1993 and H. Res. 219 on July 21, 1993. Beginning
September 28, 1949, the moneys appropriated to the committee
were, by House resolution in each session of Congress,
available for expenses incurred in conducting studies and
investigations authorized under Rule XI, whether made within or
without the United States.\9\ In the 103d Congress, these
matters are covered in paragraph (b) of clause 1 of Rule XI, as
set forth above and by clause 5 of Rule XI. The funds for the
committee's studies and oversight function during the first
session of the 103d Congress were provided by H. Res. 107
adopted March 30, 1993 (H. Rept. 103-38).
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\9\ See items under (1) in footnote 3, of the final calendar of the
committee for the 93d Congress (Dec. 31, 1974).
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The committee's name was changed to ``Committee on
Government Operations'' by House resolution adopted July 3,
1952.\10\ The Congressional Record indicates the reasons
underlying that change in name were, in part, as follows: \11\
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\10\ H. Res. 647, 82d Cong. (98 Cong. Rec. 9217). The Senate had
made a similar change of name on Mar. 3, 1952, after conference between
the chairman of the House and Senate Committees on Expenditures in the
Executive Departments to ensure both Houses would adopt the change in
name. S. Res. 280, 82d Cong. (98 Cong. Rec. 1701-1702). See also S.
Rept. No. 1231, 80th Congress, 2d Session, p. 3 (May 3, 1948).
\11\ Letter of Feb. 19, 1952, from the chairman, Senate Committee
on Expenditures in the Executive Departments, Senator McCellan to
Senator Hayden (98 Cong. Rec. 1702).
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This committee is proposing the indicated change in
the present title, in view of the fact that it is
misleading and the committees' functions and duties are
generally misunderstood by the public.
* * * * * * *
In suggesting the proposed change the committee based its
decision on what it considers to be the major or primary
function of the committee under the prescribed duties assigned
to it to study ``the operations of Government activities at all
levels with a view to determining its economy and efficiency.''
It was the unanimous view of the members of the committee that
the proposed new title would be more accurate in defining the
purposes for which the committee was created and in clearly
establishing the major purpose it serves.
On January 4, 1995, the 104th Congress opened with a
Republican majority for the first time in 40 years. The shift
in power from Democrats to Republicans has resulted in a
realignment of the legislative priorities and committee
structure of the House of Representatives. Perhaps more than
any other committee, the Government Reform and Oversight
Committee embodies the changes taking place in the House of
Representatives. The committee itself was created by
consolidating three committees into one, resulting in budget
and staff cuts of nearly 50 percent. The committees that were
merged include the Committee on Government Operations, the
Committee on the Post Office and Civil Service, and the
Committee on the District of Columbia.
In order to fulfill the Republican Contract with America,
the committee held a record number of hearings and mark-ups,
and members cast more votes during this 100 day period than in
any of the previous committees' histories. Over the course of
the first session, 295 bills and resolutions were referred to
the committee and its subcommittees, and 180 hearings and mark-
ups were held. Five of these measures have been signed into
law.
In addition to its greatly expanded legislative
jurisdiction, the Government Reform and Oversight Committee
serves as the chief investigative committee of the House, with
the authority to conduct governmentwide oversight. Because the
committee only authorizes money for a small number of Federal
agencies and programs, it is able to review government
activities with an independent eye.
III. Organization
A. SUBCOMMITTEES \12\
In the 104th Congress, significant steps were taken to
reduce the number of committees, subcommittees, and the number
of congressional staff. As a result, the Congress eliminated
the District of Columbia Committee and the Post Office and
Civil Service Committee. The jurisdiction of these committees
were merged into the Government Operations Committee and its
name was changed to the Committee on Government Reform and
Oversight.
---------------------------------------------------------------------------
\12\ The chairman and the ranking minority member of the committee
are ex-officio members of all subcommittees on which they do not hold a
regular assignment (committee Rule 9).
---------------------------------------------------------------------------
In order to perform its functions and to carry out its
duties as fully and as effectively as possible, the committee
under the leadership of its chairman, Hon. William F. Clinger,
Jr., of Pennsylvania, at the beginning of the 104th Congress,
established seven standing subcommittees, which cover the
entire field of executive expenditures and operations. The
names, chairpersons, and members of these subcommittees are as
follows:
Civil Service Subcommittee, John Mica, Chairman;
members: Charles Bass, Ben Gilman, Dan Burton, Connie
Morella, James Moran, Bernard Sanders, and Tim Holden.
District of Columbia Subcommittee, Tom Davis,
Chairman; members: Gil Gutknecht, John M. McHugh, Steve
LaTourette, Michael P. Flanagan, Eleanor Holmes Norton,
Barbara-Rose Collins, and Edolphus Towns.
Government Management, Information, and Technology
Subcommittee, Stephen Horn, Chairman; members: Michael
P. Flanagan, Peter Blute, Tom Davis, Jon Fox, Randy
Tate, Joe Scarborough, Charles Bass, Carolyn Maloney,
Major Owens, John Spratt, Paul Kanjorski, Collin
Peterson, and Tim Holden.
Human Resources and Intergovernmental Relations
Subcommittee, Christopher Shays, Chairman; members:
Mark Souder, Steven Schiff, Connie Morella, Tom Davis,
Dick Chrysler, Bill Martini, Joe Scarborough, Mark
Sanford, Edolphus Towns, Tom Lantos, Bernard Sanders,
Thomas Barrett, Gene Green, Chaka Fattah, and Henry
Waxman.
National Economic Growth, Natural Resources, and
Regulatory Affairs Subcommittee, David McIntosh,
Chairman; members: Jon Fox, J. Dennis Hastert, John M.
McHugh, Randy Tate, Gil Gutknecht, Joe Scarborough,
John Shadegg, Bob Ehrlich, Collin Peterson, Henry
Waxman, John Spratt, Louise M. Slaughter, Paul
Kanjorski, Gary Condit, and Carrie Meek.
National Security, International Affairs, and
Criminal Justice Subcommittee, William H. Zeliff, Jr.,
Chairman; members: Bob Ehrlich, Steven Schiff, Illeana
Ros-Lehtinen, John Mica, Peter Blute, Mark Souder, John
Shadegg, Karen Thurman, Robert Wise, Gene Taylor, Tom
Lantos, Louise M. Slaughter, Gary Condit, Bill K.
Brewster, and Elijah Cummings.
Postal Service Subcommittee, John M. McHugh,
Chairman; members: Mark Sanford, Ben Gilman,
Christopher Shays, David McIntosh, Bob Ehrlich,
Barbara-Rose Collins, Major Owens, Gene Green, and
Carrie Meek.
B. RULES OF THE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
Rule XI, 1(a)(1) of the House of Representatives provides:
The Rules of the House are the rules of its
committees and subcommittees so far as applicable,
except that a motion to recess from day to day, and a
motion to dispense with the first reading (in full) of
a bill or resolution, if printed copies are available,
are nondebatable motions of high privilege in
committees and subcommittees.
Rule XI, 2(a) of the House of Representatives provides, in
part:
Each standing committee of the House shall adopt
written rules governing its procedures.
In accordance with the foregoing, the Committee on
Government Reform and Oversight, on January 10, 1995, adopted
the rules of the committee. The rules read as follows:
Rule 1.--Application of Rules
Except where the terms ``full committee'' and
``subcommittee'' are specifically referred to, the following
rules shall apply to the Committee on Government Reform and
Oversight and its subcommittees as well as to the respective
chairmen.
[See House Rule XI, 1.]
Rule 2.--Meetings
The regular meetings of the full committee shall be held on
the second Tuesday of each month at 10:00 a.m., unless when
Congress has adjourned. The chairman is authorized to dispense
with a regular meeting or to change the date thereof, and to
call and convene additional meetings, when circumstances
warrant. A special meeting of the committee may be requested by
members of the committee following the provisions of House Rule
XI, 2(c)(2). Subcommittees shall meet at the call of the
subcommittee chairmen. Every member of the committee or the
appropriate subcommittee, unless prevented by unusual
circumstances, shall be provided with a memorandum at least
three calendar days before each meeting or hearing explaining
(1) the purpose of the meeting or hearing; and (2) the names,
titles, background and reasons for appearance of any witnesses.
The ranking minority member shall be responsible for providing
the same information on witnesses whom the minority may
request.
[See House Rule XI, 2(b).]
Rule 3.--Quorums
A majority of the members of the committee shall form a
quorum, except that two members shall constitute a quorum for
taking testimony and receiving evidence, and one-third of the
members shall form a quorum for taking any action other than
the reporting of a measure or recommendation. If the chairman
is not present at any meeting of the committee or subcommittee,
the ranking member of the majority party on the committee or
subcommittee who is present shall preside at that meeting.
[See House Rule XI, 2(h).]
Rule 4.--Committee Reports
Bills and resolutions approved by the committee shall be
reported by the chairman following House Rule XI, 2(l).
Every investigative report shall be approved by a majority
vote of the committee at a meeting at which a quorum is
present. Supplemental, minority, or additional views may be
filed following House Rule XI, 2(l)(5). The time allowed for
filing such views shall be three calendar days (excluding
Saturdays, Sundays, and legal holidays) unless the committee
agrees to a different time, but agreement on a shorter time
shall require the concurrence of each member seeking to file
such views. A proposed report shall not be considered in
subcommittee or full committee unless the proposed report has
been available to the members of such subcommittee or full
committee for at least three calendar days (excluding
Saturdays, Sundays, and legal holidays) before the
consideration of such proposed report in subcommittee or full
committee. If hearings have been held on the matter reported
upon, every reasonable effort shall be made to have such
hearings available to the members of the subcommittee or full
committee before the consideration of the proposed report in
such subcommittee or full committee.
Only those reports approved by a majority vote of the
committee may be ordered printed, unless otherwise required by
the Rules of the House of Representatives.
Rule 5.--Proxy Votes
In accordance with the Rules of the House of
Representatives, members may not vote by proxy on any measure
or matter before the committee or any subcommittee.
[See House Rule XI, 2(f).]
Rule 6.--Roll Calls
A roll call of the members may be had upon the request of
any member upon approval of a one-fifth vote.
[See House Rule XI, 2(e).]
Rule 7.--Record of Committee Actions
The committee staff shall maintain in the committee offices
a complete record of committee actions from the current
Congress including a record of the rollcall votes taken at
committee business meetings. The original records, or true
copies thereof, as appropriate, shall be available for public
inspection whenever the committee offices are open for public
business. The staff shall assure that such original records are
preserved with no unauthorized alteration, additions, or
defacement.
[See House Rule XI, 2(e).]
Rule 8.--Subcommittees; Referrals
There shall be seven subcommittees with appropriate party
ratios that shall have fixed jurisdictions. Bills, resolutions,
and other matters shall be referred by the chairman to
subcommittees within two weeks for consideration or
investigation in accordance with their fixed jurisdictions.
Where the subject matter of the referral involves the
jurisdiction of more than one subcommittee or does not fall
within any previously assigned jurisdiction, the chairman shall
refer the matter as he may deem advisable. Bills, resolutions,
and other matters referred to subcommittees may be reassigned
by the chairman when, in his judgment, the subcommittee is not
able to complete its work or cannot reach agreement therein. In
a subcommittee having an even number of members, if there is a
tie vote with all members voting on any measure, the measure
shall be placed on the agenda for full committee consideration
as if it had been ordered reported by the subcommittee without
recommendation. This provision shall not preclude further
action on the measure by the subcommittee.
[See House Rule XI, 1(a)(2).]
Rule 9.--Ex Officio Members
The chairman and the ranking minority member of the
committee shall be ex officio members of all subcommittees.
They are authorized to vote on subcommittee matters; but,
unless they are regular members of the subcommittee, they shall
not be counted in determining a subcommittee quorum other than
a quorum for taking testimony.
Rule 10.--Staff
Except as otherwise provided by House Rule XI, 5 and 6, the
chairman of the full committee shall have the authority to hire
and discharge employees of the professional and clerical staff
of the full committee and of subcommittees.
Rule 11.--Staff Direction
Except as otherwise provided by House Rule XI, 5 and 6, the
staff of the committee shall be subject to the direction of the
chairman of the full committee and shall perform such duties as
he may assign.
Rule 12.--Hearing Dates and Witnesses
The chairman of the full committee will announce the date,
place, and subject matter of all hearings at least one week
before the commencement of any hearings, unless he determines
that there is good cause to begin such hearings sooner. So that
the chairman of the full committee may coordinate the committee
facilities and hearing plans, each subcommittee chairman shall
notify him of any hearing plans at least two weeks before the
date of commencement of hearings, including the date, place,
subject matter, and the names of witnesses, willing and
unwilling, who would be called to testify, including, to the
extent he is advised thereof, witnesses whom the minority
members may request. The minority members shall supply the
names of witnesses they intend to call to the chairman of the
full committee or subcommittee at the earliest possible date.
Witnesses appearing before the committee shall, so far as
practicable, submit written statements at least 24 hours before
their appearance.
[See House Rules XI, 2 (g)(3), (g)(4), (j), and (k).]
Rule 13.--Open Meetings
Meetings for the transaction of business and hearings of
the committee shall be open to the public or closed in
accordance with Rule XI of the House of Representatives.
[See House Rules XI, 2 (g) and (k).]
Rule 14.--Five-Minute Rule
A committee member may question a witness only when
recognized by the chairman for that purpose. In accordance with
House Rule XI, 2(j)(2), each committee member may request up to
five minutes to question a witness until each member who so
desires has had such opportunity. Until all such requests have
been satisfied, the chairman shall, so far as practicable,
recognize alternately based on seniority of those majority and
minority members present at the time the hearing was called to
order and others based on their arrival at the hearing. After
that, additional time may be extended at the direction of the
chairman.
Rule 15.--Investigative Hearings; Procedure
Investigative hearings shall be conducted according to the
procedures in House Rule XI, 2(k). All questions put to
witnesses before the committee shall be relevant to the subject
matter before the committee for consideration, and the chairman
shall rule on the relevance of any questions put to the
witness.
Rule 16.--Stenographic Record
A stenographic record of all testimony shall be kept of
public hearings and shall be made available on such conditions
as the chairman may prescribe.
Rule 17.--TV, Radio, and Photographs
An open meeting or hearing of the committee or a
subcommittee may be covered, in whole or in part, by television
broadcast, radio broadcast, and still photography, or by any of
such methods of coverage, unless closed subject to the
provisions of House Rule XI, 3.
Rule 18.--Additional Duties of Chairman
The chairman of the full committee shall:
(a) Make available to other committees the findings
and recommendations resulting from the investigations
of the committee or its subcommittees as required by
House Rule X, 4(c)(2);
(b) Direct such review and studies on the impact or
probable impact of tax policies affecting subjects
within the committee's jurisdiction as required by
House Rule X, 2(c);
(c) Submit to the Committee on the Budget views and
estimates required by House Rule X, 4(g), and to file
reports with the House as required by the Congressional
Budget Act;
(d) Authorize and issue subpoenas as provided in
House Rule XI, clause 2(m), in the conduct of any
investigation or activity or series of investigations
or activities within the jurisdiction of the committee;
and
(e) Prepare, after consultation with subcommittee
chairmen and the minority, a budget for the committee
which shall include an adequate budget for the
subcommittees to discharge their responsibilities.
(f) Make any necessary technical and conforming
changes to legislation reported by the committee upon
unanimous consent.
Rule 19.--Special Affidavits and Depositions
If the House provides the committee with authority to take
affidavits and depositions, the following rules apply:
(a) The Chairman, upon consultation with the ranking
minority member or the committee, may authorize the
taking of affidavits, and of depositions pursuant to
notice or subpoena. Such authorization may occur on a
case-by-case basis, or by instructions to take a series
of affidavits or depositions. Notices for the taking of
depositions shall specify a time and place for
examination. Affidavits and depositions shall be taken
under oath administered by a member or a person
otherwise authorized by law to administer oaths.
Consultation with the ranking minority member will
include three (3) business days written notice before
any deposition is taken, unless otherwise agreed to by
the ranking minority member or committee.
(b) The committee shall not initiate procedures
leading to contempt proceedings in the event a witness
fails to appear at a deposition unless the deposition
notice was accompanied by a committee subpoena
authorized and issued by the chairman. Notwithstanding
committee Rule 18(d), the chairman shall not authorize
and issue a subpoena for a deposition without the
concurrence of the ranking minority member or the
committee.
(c) Witnesses may be accompanied at a deposition by
counsel to advise them of their constitutional rights.
Absent special permission or instructions from the
chairman, no one may be present in depositions except
members, staff designated by the chairman or ranking
minority member, an official reporter, the witness and
any counsel; observers or counsel for other persons or
for the agencies under investigation may not attend.
(d) A deposition will be conducted by members or
jointly by--
(1) No more than two staff members of the
committee, of whom--
(A) One will be designated by the
chairman of the committee, and
(B) One will be designated by the
ranking minority party member of the
committee, unless such member elects
not to designate a staff member.
(2) Any member designated by the chairman.
Other staff designated by the chairman or
ranking minority member may attend, but are not
permitted to pose questions to the witness.
(e) Questions in the deposition will be propounded in
rounds. A round will include as much time as necessary
to ask all pending questions, but not more than one
hour. In each round, the member or staff member
designated by the chairman will ask questions first,
and the member or staff member designated by the
ranking minority member will ask questions second.
(f) Objections by the witness as to the form of
questions shall be noted for the record. If a witness
objects to a question and refuses to answer, the
members or staff may proceed with the deposition, or
may obtain, at that time or at a subsequent time, a
ruling on the objection by telephone or otherwise from
the chairman or his designee. The committee shall not
initiate procedures leading to contempt for refusals to
answer questions at a deposition unless the witness
refuses to testify after his objection has been
overruled and after he has been ordered and directed to
answer by the chairman or his designee upon a good
faith attempt to consult with the ranking minority
member or her designee.
(g) The committee staff shall insure that the
testimony is either transcribed or electronically
recorded, or both. If a witness' testimony is
transcribed, he shall be furnished with an opportunity
to review a copy. No later than five days thereafter,
the staff shall enter the changes, if any, requested by
the witness, with a statement of the witness' reasons
for the changes, and the witness shall be instructed to
sign the transcript. The individual administering the
oath, if other than a member, shall certify on the
transcript that the witness was duly sworn in his
presence, the transcriber shall certify that the
transcript is a true record of the testimony, and the
transcript shall be filed, together with any electronic
recording, with the clerk of the committee in
Washington, D.C. Affidavits and depositions shall be
deemed to have been taken in Washington, D.C. once
filed there with the clerk of the committee for the
committee's use. The ranking minority member will be
provided a copy of the transcripts of the deposition
once the procedures provided above have been completed.
(h) Unless otherwise directed by the committee, all
depositions and affidavits received in the
investigation shall be considered nonpublic until
received by the committee. Once received by the
committee, use of such materials shall be governed by
the committee rules. All such material shall unless
otherwise directed by the committee, be available for
use by the members of the committee in open session.
(i) A witness shall not be required to testify if
they have not been provided a copy of the House
Resolution and the amended committee Rules.
(j) Committee Rule 19 expires on July 8, 1996.
IV. Activities, 104th Congress
SUMMARY
1. In the 104th Congress, the committee approved and
submitted to the House of Representatives 19 investigative
reports. In addition, the committee issued 15 committee prints.
2. In the 104th Congress, 436 bills and resolutions were
referred to the committee and studied. Of these, the committee
reported 42. In addition, 14 Memorials, 4 Petitions, and 8
Presidential messages were referred to the committee.
3. Pursuant to its duty of studying reports of the
Comptroller General, the committee received officially and
studied 1,536 such reports during the 104th Congress. In
addition, 1,237 executive communications, were referred to the
committee under clause 2 of rule XXIV of the House of
Representatives.
4. The full committee met 43 days during the 104th
Congress, while the subcommittees met a total of 270 days in
public hearings, markups, and meetings.
The significant actions taken by the committee with respect
to these and a considerable number of other matters are
discussed in detail below.
A. INVESTIGATIVE REPORTS
During the 104th Congress, the Committee on Government
Reform and Oversight approved and submitted to the Congress 19
reports of an investigative nature.
For convenience, the published reports are listed here with
the names of the originating subcommittees. A more detailed
discussion of the material will be found in part two below in
the breakdown of the committee's activities by subcommittee:
First Report (H. Rept. 104-156): ``A Citizen's Guide
on Using the Freedom of Information Act and the Privacy
Act of 1974 to Request Government Records.''
Second Report (H. Rept. 104-434): ``Creating a 21st
Century Government.'' *
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* Denotes report accompanied by additional, dissenting, minority,
separate, or supplemental views.
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Third Report (H. Rept. 104-435): ``Making Government
Work; Fulfilling the Mandate for Change.'' *
(Subcommittee on Government Management, Information,
and Technology)
Fourth Report (H. Rept. 104-436): ``The FDA Food
Additive Review Process: Backlog and Failure to Observe
Statutory Deadlines.'' * (Subcommittee on Human
Resources and Intergovernmental Relations)
Fifth Report (H. Rept. 104-437): ``The Federal
Takeover of the Chicago Housing Authority--HUD Needs to
Determine Long-Term Implications.'' * (Subcommittee on
Human Resources and Intergovernmental Relations)
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* Denotes report accompanied by additional, dissenting, minority,
separate, or supplemental views.
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Sixth Report (H. Rept. 104-438): ``Voices for
Change.'' (Subcommittee on the Postal Service)
Seventh Report (H. Rept. 104-486): ``National Drug
Policy: A Review of the Status of the Drug War.''*
(Subcommittee on National Security, International
Affairs, and Criminal Justice)
Eighth Report (H. Rept. 104-641): ``Fraud and Abuse
in Medicare and Medicaid: Stronger Enforcement and
Better Management Could Save Billions.''* (Subcommittee
on Human Resources and Intergovernmental Relations)
Ninth Report (H. Rept. 104-745): ``Laws Related to
Federal Financial Management As Amended Through
December 31, 1995.''
Tenth Report (H. Rept. 104-746): ``Protecting the
Nation's Blood Supply From Infectious Agents: The Need
For New Standards to Meet New Threats''* (Subcommittee
on Human Resources and Intergovernmental Relations)
Eleventh Report (H. Rept. 104-747): ``Health Care
Fraud: All Public and Private Payers Need Federal
Criminal Anti-Fraud Protection.'' (Subcommittee on
Human Resources and Intergovernmental Relations)
Twelfth Report (H. Rept. 104-748): ``A Two-Year
Review of the White House Communications Agency Reveals
Major Mismanagement, Lack of Accountability, and
Significant Mission Creep.''* (Subcommittee on National
Security, International Affairs, and Criminal Justice)
Thirteenth Report (H. Rept. 104-749): ``Investigation
into the Activities of Federal Law Enforcement Agencies
Toward the Branch Davidians.''* (Subcommittee on
National Security, International Affairs, and Criminal
Justice prepared in conjunction with the Committee on
the Judiciary)
Fourteenth Report (H. Rept. 104-821): ``Sampling and
Statistical Adjustment in the Decennial Census:
Fundamental Flaws.''*
Fifteenth Report (H. Rept. 104-849): ``Investigation
of the White House Travel Office Firings and Related
Matters.''*
Sixteenth Report (H. Rept. 104-857): ``Year 2000
Computer Software Conversion: Summary of Oversight
Findings and Recommendations.'' (Subcommittee on
Government Management, Information, and Technology)
Seventeenth Report (H. Rept. 104-858): ``Crude Oil
Undervaluation: The Ineffective Response of the
Minerals Management Service.'' (Subcommittee on
Government Management, Information, and Technology)
Eighteenth Report (H. Rept. 104-861): ``Federal
Government Management: Examining Government Performance
as We Near the Next Century.''*
Nineteenth Report (H. Rept. 104-862): ``Investigation
into the White House and Department of Justice on
Security of FBI Background Investigation Files.''*
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* Denotes report accompanied by additional, dissenting, minority,
separate, or supplemental views.
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B. LEGISLATION
The legislative jurisdiction of the Committee on Government
Reform and Oversight covers a wide range of important
governmental operations. In accordance with jurisdiction
assumed from the former Committee on Government Operations, the
committee receives all budget and accounting measures other
than appropriations; all measures relating to the overall
economy and efficiency of Government operations and activities,
including Federal procurement, intergovernmental relationships,
general revenue sharing (the latter subject was formerly within
the jurisdiction of the Committee on Ways and Means), and the
National Archives (formerly within the jurisdiction of the
Committee on Post Office and Civil Service); all reorganization
plans and bills providing for the establishment of new
departments in the executive branch such as the Department of
Energy and the Department of Education; and most other
reorganization legislation, examples of which are legislation
to reorganize the intelligence community, international trade,
and regulatory agencies. Other legislation includes debt
collection and proposals relating to delinquent payments and
paperwork reduction. It also receives legislation dealing with
the General Services Administration, including the Federal
Property and Administrative Services Act of 1949 and special
bills authorizing the Administrator of General Services to make
specific transfers of property, plus legislation dealing with
the General Accounting Office, the Office of Management and
Budget, the Administrative Expenses Act, the Travel Expenses
Act, the Employment Act of 1946, and the Javits-Wagner-O'Day
Act relating to the sale of products and services of blind and
other handicapped persons. In addition, the committee has
jurisdiction over the Freedom of Information provisions of the
Administrative Procedure Act, the Privacy Act, the Government
in the Sunshine Act, and the Federal Advisory Committee as well
as the Inspector General Act.
Rule X, 2(b) of the standing Rules of the House, requires
the committee to see and review the administration of all laws
in the legislative jurisdiction, and Rule XI, 1(d) requires
that the committee report to the House thereon by the end of
each Congress. The present report outlines the extent and
nature of the committee and subcommittee activities
constituting the review.
On January 4, 1995, as the first session of the 104th
Congress convened, the new Republican House majority moved to
fulfill its promise of true government reform by implementing
its Contract with America. Pursuant to the Contract, 14 bills
were introduced as the opening bells rang to promote jobs,
enhance wages, take back our Nation's streets, and restore
openness, accountability, and fiscal responsibility in our
Federal Government. Of the Contract bills, four were referred
to the Committee on Government Reform and Oversight for
immediate review and action. They included: H.R. 2, the Line-
Item Veto Act; H.R. 5, the Unfunded Mandates Reform Act; H.R.
9, the Job Creation and Wage Enhancement Act; and H.R. 450,
(830) the Paperwork Reduction Act. The actions taken on each
are described below.
During the 104th Congress, as noted above, the committee
studied 436 bills and resolutions referred to it and reported
42 to the House. The measures reported or ordered reported are
discussed more fully in part two below. However, they are
listed here for convenience in the order of approval by the
committee and with the name of the subcommittee that initially
considered them:
H.R. 5, To curb the practice of imposing unfunded
Federal mandates on States and local governments, to
ensure that the Federal Government pays the costs
incurred by those governments in complying with certain
requirements under Federal statutes and regulations,
and to provide information on the cost of Federal
mandates on the private sector, and for other purposes.
(H. Rept. 104-1, Pt. 2, S. 1; Public Law 104-4.)
H.R. 2, To give the President item veto authority
over appropriation acts and targeted tax benefits in
revenue acts. (H. Rept. 104-11, Pt. 2, S. 4; Public Law
104-50.)
H.R. 830, To amend chapter 35 of title 44, United
States Code, to further the goals of the Paperwork
Reduction Act to have Federal agencies become more
responsible and publicly accountable for reducing the
burden of Federal paperwork on the public, and for
other purposes. (H. Rept. 104-37, S. 244; Public Law
104-13.)
H.R. 450, To ensure economy and efficiency of Federal
Government operations by establishing a moratorium on
regulatory rulemaking actions, and for other purposes.
(Subcommittee on National Economic Growth, Natural
Resources, and Regulatory Affairs, H. Rept. 104-39, Pt.
1, S. 219.)
H.R. 1271, To provide protection for family privacy.
(Subcommittee on Government Management, Information,
and Technology, H. Rept. 104-94.)
H.R. 1345, To eliminate budget deficits and
management inefficiencies in the government of the
District of Columbia through the establishment of the
District of Columbia Financial Responsibility and
Management Assistance Authority, and for other
purposes. (Subcommittee on the District of Columbia, H.
Rept. 104-96, Public Law 104-8.)
H.R. 1826, To repeal the authorization of
transitional appropriations for the United States
Postal Service, and for other purposes. (Subcommittee
on the Postal Service, H. Rept. 104-174.)
H.R. 1606, To designate the United States Post Office
building located at 24 Corliss Street, Providence,
Rhode Island, as the ``Harry Kiziran Post Office
Building.'' (Subcommittee on the Postal Service, Public
Law 104-100.)
H.R. 1026, To designate the United States Post Office
building located at 201 East Pikes Peak Avenue in
Colorado Springs, Colorado, as the ``Winfield Scott
Stratton Post Office.'' (Subcommittee on the Postal
Service, passed House and Senate as H.R. 1026; Public
Law 104-44.)
H.R. 1655, To authorize appropriations for fiscal
year 1996 for intelligence and intelligence-related
activities of the U.S. Government, the Community
Management Account, and the Central Intelligence Agency
Retirement and Disability System, and for other
purposes. (H. Rept. 104-138, Pt. 2, S. 922; Public Law
104-93.)
H.R. 1670, To revise and streamline the acquisition
laws of the Federal Government, to reorganize the
mechanisms for resolving Federal procurement disputes,
and for other purposes. (H. Rept. 104-222, Pt. 1.)
H.R. 2108, To permit the Washington Convention Center
Authority to expend revenues for the operation and
maintenance of the existing Washington Convention
Center and for preconstruction activities relating to a
new convention center in the District of Columbia, to
permit a designated authority of the District of
Columbia to borrow funds for the preconstruction
activities relating to a sports arena in the District
of Columbia and to permit certain revenues to be
pledged as security for the borrowing of such funds,
and for other purposes. (Subcommittee on the District
of Columbia, H. Rept. 104-227; Public Law 104-28.)
H.R. 1756, To abolish the Department of Commerce,
(Title 1.) (H. Rept. 104-260, Pt. 1, S. 929.)
S. 790, To provide for the modification or
elimination of Federal reporting requirements. (H.
Rept. 104-327; Public Law 104-66.)
H.R. 994, To require the periodic review and
automatic termination of Federal regulations.
(Subcommittee on National Economic Growth, Natural
Resources, and Regulatory Affairs, H. Rept. 104-284,
Pt. 1.)
H.R. 2661, To amend the District of Columbia Self-
Government and Government Reorganization Act to permit
the District of Columbia to expend its own funds during
any portion of a fiscal year for which Congress has not
enacted the budget of the District of Columbia for the
fiscal year, and to provide for the appropriation of a
monthly pro-rated portion of the annual Federal payment
to the District of Columbia for such fiscal year during
such portion of the year. (Subcommittee on the District
of Columbia, H. Rept. 104-408.)
H.R. 1398, To designate the United States Post Office
building located at 1203 Lemay Ferry Road, St. Louis,
Missouri, as the ``Charles J. Coyle Post Office
Building.'' (Subcommittee on the Postal Service, passed
House.)
H.R. 1880, To designate the United States Post Office
building located at 102 South McLean, Lincoln,
Illinois, as the ``Edward Madigan Post Office
Building.'' (Subcommittee on the Postal Service; Public
Law 104-157.)
H.R. 2262, To designate the United States Post Office
building located at 218 North Alston Street in Foley,
Alabama, as the ``Holk Post Office Building.''
(Subcommittee on the Postal Service, passed House.)
H.R. 2704, To provide that the United States Post
Office building that is to be located on the 2600 block
of East 75th Street in Chicago, Illinois, shall be
known and designated as the ``Charles A. Hayes Post
Office Building.'' (Subcommittee on the Postal Service,
passed House.)
H.R. 2202, Immigration in the Natural Interest Act of
1995. (Subcommittee on Civil Service, H. Rept. 104-469,
Pt. II.)
H.R. 2700, To designate the United States Post Office
building located at 7980 FM 327, Elmendorf, Texas, as
the ``Amos F. Longeria Post Office Building.''
(Subcommittee on the Post Office; Public Law 104-255.)
H.R. 3184, To streamline and improve the
effectiveness of chapter 75 of title 31, United States
Code (commonly referred to as the ``Single Audit
Act.'') (Subcommittee on Government Management,
Information, and Technology, H. Rept. 104-607; Public
Law 104-156.)
H.R. 2086, To increase the overall economy and
efficiency of Government operations and enable more
efficient use of Federal funding, by enabling local
governments and private, nonprofit organizations to use
amounts available under certain Federal assistance
programs in accordance with approved local flexibility
plans. (Subcommittee on Human Resources and
Intergovernmental Relations, H. Rept. 104-847.)
H.R. 885, To designate the United States Post Office
building located at 153 East 110th Street, New York,
New York, as the ``Oscar Garcia Rivera Post Office
Building.'' (Subcommittee on the Postal Service, passed
House.)
H.R. 3139, To redesignate the United States Post
Office building located at 245 Centereach Mall on
Middle Country Road in Centereach, New York, as the
``Rose Y. Caracappa United States Post Office
Building.'' (Subcommittee on the Postal Service; Public
Law 104-187.)
H.R. 3663, To amend the District of Columbia Self-
Government and Governmental Reorganization Act to
permit the Council of the District of Columbia to
authorize the issuance of revenue bonds with respect to
water and sewer facilities, and for other purposes.
(Subcommittee on the District of Columbia, H. Rept.
104-635; Public Law 104-184.)
H.R. 3664, To make miscellaneous and technical
corrections to improve the operations of the government
of the District of Columbia. (Subcommittee on the
District of Columbia.)
H.R. 3586, To amend title 5, United States Code, to
strengthen veterans' preference, to increase employment
opportunities for veterans, and other purposes.
(Subcommittee on Civil Service, H. Rept. 104-675.)
H.R. 3452, To make certain laws applicable to the
Executive Office of the President, and for other
purposes. (Subcommittee on Government Management,
Information, and Technology, H. Rept. 104-820, Pt. 1;
Public Law 104-331.)
H.R. 1281, To amend title 5, United States Code, and
the National Security Act of 1947 to require disclosure
under the Freedom of Information Act of information
regarding certain individuals who participated in Nazi
war crimes during the period in which the United States
was involved in World War II. (Subcommittee on
Government Management, Information, and Technology, H.
Rept. 104-819, Pt. 1; Public Law 104-309.)
H.R. 3841, To amend the civil service laws of the
United States, and for other purposes. (Subcommittee on
Civil Service, H. Rept. 104-831, passed House.)
H.R. 3864, To reform the management practices of the
General Accounting Office, and for the other purposes.
(Public Law 104-316.)
H.R. 3802, To amend section 552 of title 5, United
States Code, popularly known as the Freedom of
Information Act, to provide for public access to
information in an electronic format, and for other
purposes. (Subcommittee on Government Management,
Information, and Technology, H. Rept. 104-795; Public
Law 104-231.)
H.R. 3869, To amend the Federal Advisory Committee
Act to direct the Director of the Office of Management
and Budget to conduct a negotiated rulemaking for the
purpose of establishing electronic data reporting
standards for the electronic interchange of certain
data that is required to be reported under existing
Federal law. (Subcommittee on Government Management,
Information, and Technology.)
H.R. 3637, To amend chapter 57 of title 5, United
States Code, and title 31, United States Code, to
provide employees who transfer in the interest of the
Government more effective and efficient delivery of
relocation allowances by reducing administrative costs
and improving services, and for other purposes.
(Subcommittee on Government Management, Information,
and Technology.)
H.R. 3625 (S. 1577), To authorize appropriations for
the National Historical Publications and Records
Commission for fiscal years 1998, 1999, 2000, and 2001.
(Subcommittee on National Security, International
Affairs, and Criminal Justice, S. Rept. 104-283; Public
Law 104-274.)
H.R. 3768, To designate a United States Post Office
to be located in Groton, Massachusetts, as the
``Augusta `Gusty' Hornblower United States Post
Office.'' (Subcommittee on the Postal Service.)
H.R. 3834, To redesignate the Dunning Post Office in
Chicago, Illinois, as the ``Roger P. McAuliffe Post
Office.'' (Subcommittee on the Postal Service; Public
Law 104-189.)
H.R. 3877, To designate the United States Post Office
building in Camden, Arkansas, as the ``Honorable David
H. Pryor Post Office Building.'' (Subcommittee on the
Postal Service; Public Law 104-268.)
S. 868, To provide authority for leave transfer for
Federal employees who are adversely affected by
disasters or emergencies, and for other purposes.
(Subcommittee on Civil Service, S. Rept. 104-151;
passed House.)
OTHER LEGISLATIVE ACTION
The following bills were referred to the Committee on
Government Reform and Oversight, however, the committee was
discharged from further consideration, therefore, the bills
were not reported by the committee. Latest action is shown:
H.R. 9, to create jobs, enhance wages, strengthen
property rights, maintain certain economic liberties,
decentralized and reduce the power of the Federal
Government with respect to the States, localities, and
citizens of the United States, and to increase the
accountability of Federal officials. (Reported amended
by Committee on Commerce, H. Rept. 104-33, Pt. I;
amended from Committee on Science, Pt. II; passed House
amended and received in Senate and referred to
Governmental Affairs.)
H.R. 564, a bill to provide that receipts and
disbursements of the Highway Trust Fund, the Airport
and Airway Trust Fund, the Inland Waterways Trust Fund,
and the Harbor Maintenance Trust Fund shall not be
included in the totals of the budget of the U.S.
Government as submitted by the President or the
congressional budget. (Subcommittee on Government
Management, Information, and Technology.)
H.R. 842, a bill to provide off-budget treatment for
the Highway Trust Fund, the Airport and Airway Trust
Fund, the Inland Waterways Trust Fund, and the Harbor
Maintenance Trust Fund. (Subcommittee on Government
Management, Information, and Technology.)
H.R. 1022, a bill to provide regulatory reform and to
focus national economic resources on the greatest risks
to human health, safety, and the environment through
scientifically objective and unbiased risk assessments
and through the consideration of costs and benefits in
major rules, and for other purposes. (Subcommittee on
National Economic Growth, Natural Resources, and
Regulatory Affairs. Considered by House Unfinished
Business. Committee Amendment in the Nature of a
Substitute Considered as an Original Bill for the
Purpose of Amendment. House agreed to Amendments
Adopted by the Committee of the Whole. Motion to
Recommit with Instructions Failed in House by Yea-Nay
Vote: 174-250 (Record Vote No. 182). Passed House
(Amended) by Recorded Vote: 286-141 (Record Vote No.
183). Received in the Senate and referred to Senate
Committee on Governmental Affairs.)
H.R. 1182, a bill to permit certain Federal employees
who retired or became entitled to receive compensation
for work injury before December 9, 1980, to elect to
resume coverage under the Federal employees' group life
insurance program. (Subcommittee on Civil Service.)
H.R. 1508, a bill to require the transfer of title to
the District of Columbia of certain real property in
Anacostia Park to facilitate the construction of
National Children's Island, a cultural, educational,
and family oriented park. (Subcommittee on the District
of Columbia. Reported Amended by the Committee on
Resources, H. Rept. 104-277, Pt. I; called up by House
under Suspension of Rules and passed House. Received in
the Senate and referred to Governmental Affairs.)
H.R. 1530, to authorize appropriations for fiscal
year 1996 for military activities of the Department of
Defense, to prescribe military personnel strengths for
fiscal year 1996, and for other purposes. (Reported
amended by the Committee on National Security, H. Rept.
104-131; passed House amended; passed Senate amended;
House agreed to Conference Rept. 104-406; called up by
House as Privileged Matter. Public Law No. 104-106.)
H.R. 2017, to authorize an increased Federal share of
the costs of certain transportation projects in the
District of Columbia for fiscal years 1995 and 1996,
and for other purposes. (Subcommittee on the District
of Columbia. Reported Amended by the Committee on
Transportation and Infrastructure, H. Rept. 104-217,
Pt. 1; called up by House under Suspension of Rules and
passed House and Senate. Public Law 104-21.)
H.R. 2077, to designate the U.S. Post Office building
located at 33 College Avenue in Waterville, Maine, as
the ``George J. Mitchell Post Office Building.''
(Called up by House by Unanimous Consent. Passed House
and Senate by Voice Vote. Public Law No. 104-27.)
H.R. 2564, to provide for the disclosure of lobbying
activities to influence the Federal Government, and for
other purposes. (Reported by the Committee on
Judiciary, H. Rept. 104-339, Pt. 1; called up by House
by Suspension of Rules and passed House by Voice Vote.
Public Law 104-65.)
H.R. 2276, to establish the Federal Aviation
Administration as an independent establishment in the
executive branch, and for other purposes. (Reported
amended from the Committee on Transportation and
Infrastructure, H. Rept. 104-475, Pt. I. Passed House
amended March 12, 1996 and received in Senate and
referred to Commerce, Science and Transportation March
13, 1996.)
H.R. 2636, to transfer jurisdiction over certain
parcels of Federal real property located in the
District of Columbia, and for other purposes. (Reported
amended from the Committee on Transportation and
Infrastructure, H. Rept. 104-368, Pt. I. In addition,
it was reported amended from the Committee on
Resources, H. Rept. 104-368, Pt. II. Passed House
amended on July 31, 1996, and received in the Senate
and referred to the Committee on Energy and Natural
Resources on August 1, 1996, S. Rept. 104-391.)
H.R. 3107, to impose sanctions on persons exporting
certain goods or technology that would enhance Iran's
ability to explore for, extract, refine, or transport
by pipeline petroleum resources, and for other
purposes. (Reported amended from International
Relations Committee, H. Rept. 104-523, Pt. I; reported
amended from Ways and Means Committee, H. Rept. 104-
523, Pt. II. Passed House as amended, passed Senate
with amendments. Presented to the President July 24,
1996 became Public Law 104-172.)
H.R. 3235, to amend the Ethics in Government Act of
1978, to extend the authorization of appropriations for
the office of Government Ethics for 3 years, and for
other purposes. (Reported from the Committee on the
Judiciary, H. Rept. 104-595, Pt. I. Passed House under
suspension of rules and passed Senate on July 24, 1996.
Presented to the President July 26, 1996, became Public
Law 104-179.)
H.R. 3237, to provide for improved management and
operation of intelligence activities of the Government
by providing for a more corporate approach to
intelligence, to reorganize the agencies of the
Government engaged in the intelligence activities so as
to provide an improved Intelligence Community for the
21st century, and for other purposes. (Reported amended
from Intelligence Committee, H. Rept. 104-620, Pt. I,
and reported amended from National Security Committee,
H. Rept. 104-620, Pt. II.)
H.R. 3936, to encourage the development of a
commercial space industry in the United States, and for
other purposes. (Reported amended the Committee on
Science, H. Rept. 104-801, Pt. I, passed House under
suspension of rules and received in the Senate on
September 18, 1996.)
C. REORGANIZATION PLANS
The most recent authority of the President to transmit
reorganization plans to Congress was reestablished by Public
Law 98-614. Approved November 8, 1984, this authority expired
on December 31, 1984. Legislation extending executive
reorganization authority was not enacted during the first
session of the 104th Congress.
D. COMMITTEE PRINTS
Fifteen committee prints, resulting from work by the
committee staff, were issued during the 104th Congress, as
follows:
``Rules of the Committee on Government Reform and
Oversight, House of Representatives, Together with
Selected Rules of the House of Representatives
(Including Clause 2 of House Rule XI) and Selected
Statutes of Interest.'' (Full committee.) (January
1995.)
``Oversight Plans for all House Committees with
Accompanying Recommendations by the Committee on
Government Reform and Oversight, House of
Representatives (Required by Clause 2 of House Rule
XI).'' (Full committee.) (March 1995.)
``Mail Service in the United States: Exploring
Options for Improvement.'' Report of the U.S. Postal
Service and the Postal Rate Commission, to the
Committee on Government Reform and Oversight. (Full
committee.) (December 1995.)
``Legislative Manual (1st Edition) of the Committee
on Government Reform and Oversight.'' (Full committee.)
(February 1996.)
``The Federal Acquisition Reform Act of 1996 and the
Information Technology Management Reform Act of 1996--
Divisions D and E of the National Defense Authorization
Act of Fiscal Year 1996.'' (Full committee.) (February
1996.)
``Rules of the Committee on Government Reform and
Oversight, House of Representatives Together with
Selected Rules of the House of Representatives
(Including Clause 2 of House Rule XI) and Selected
Statutes of Interest.'' (Full committee.) (March 1996.)
``Correspondence Between the White House and Congress
in the Proceedings Against John M. Quinn, David
Watkins, and Matthew Moore As Part of the Committee
Investigation into the White House Travel Office
Matter.'' (Full committee.) (May 1996.)
``Interim Report of the Activities of the House
Committee on Government Reform and Oversight 104th
Congress, First Session.'' (Full committee.) (May
1996.)
``Deposition Transcripts from the Committee
Investigation into the White House Office Travel
Matter, Volume 1.'' (Full committee.) (May 1996.)
``Business Meeting in the Proceedings Against John M.
Quinn, David Watkins, and Matthew Moore As Part of the
Committee Investigation into the White House Travel
Office Matter.'' (Full committee.) (June 1996.)
``Deposition Transcripts from the Committee
Investigation into the White House Office Travel
Matter, Volume 2.'' (Full committee.) (October 1996.)
``Deposition Transcripts from the Committee
Investigation into the White House Office Travel
Matter, Volume 3.'' (Full committee.) (October 1996.)
``Deposition Transcripts from the Committee
Investigation into the White House Office Travel
Matter, Volume 4.'' (Full committee.) (October 1996.)
``Deposition Transcripts from the Committee
Investigation into the White House Office Travel
Matter, Volume 5.'' (Full committee.) (October 1996.)
``United States Government Policy and Supporting
Positions (Plum Book).'' (Full committee.) (November
1996.)
E. COMMITTEE ACTION ON REPORTS OF THE COMPTROLLER GENERAL
Rule X, 4(c)(1)(A), of the rules of the House, imposes the
duty upon this committee to receive and examine reports of the
Comptroller General referred to and to make such
recommendations to the House as it deems necessary or desirable
in connection with the subject matter of the reports.
In discharging this responsibility, each report of the
Comptroller General received by the committee is studied and
analyzed by the staff and referred to the subcommittee of this
committee to which has been assigned general jurisdiction over
the subject matter involved.
The committee has received a total of 35 General Accounting
Office Reports to the Congress for processing during the 104th
Congress. After preliminary staff study, these reports were
referred to subcommittees of this committee as follows:
Civil Service Subcommittee........................................ 6
District of Columbia Subcommittee................................. 4
Government Management, Information, and Technology Subcommittee... 3
Human Resources and Intergovernmental Relations Subcommittee...... 7
National Economic Growth, Natural Resources, and Regulatory
Affairs Subcommittee.......................................... 5
National Security, International Affairs, and Criminal Justice
Subcommittee.................................................. 4
Postal Service Subcommittee....................................... 6
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________________________________________________
Total....................................................... 35
Furthermore, in implementation of section 236 of the
Legislative Reorganization Act of 1970, the committee now
regularly receives GAO reports that are not addressed to
Congress but contain recommendations to heads of the Federal
agencies. These are generally reports to the agency heads their
written statements of actions taken with respect to such
recommendations, as required by section 236. The committee
received a total of 1,065 such GAO reports to Federal agencies
or other committees and Members within the legislative branch.
Periodic reports are received from the subcommittees on
actions taken with respect to individual reports, and monthly
reports are made to the chairman as to reports received. During
the 104th Congress, the committees used the reports to further
specific investigations and reviews. In most cases, additional
information concerning the findings and recommendations of the
Comptroller General was requested and received from the
administrative agency involved, as well as from the General
Accounting Office. More specific information on the actions
taken appears in part two below.
Complete files are maintained by the committee on all
Comptroller General's reports received. Detailed records are
kept showing the subcommittee to which the report is referred,
the date of referral, and the subsequent action taken.
The committee will review all of the Comptroller General's
reports received during the Congress in the light of additional
information obtained and actions taken by the subcommittees,
and determinations will be made whether specific
recommendations to the House are necessary or desirable under
rule X.
PART TWO. REPORT OF COMMITTEE ACTIVITIES
I. Matters of Interest, Full Committee
A. GENERAL
1. Oversight Plans of the Committees of the U.S. House of
Representatives.
The 104th Congress adopted a new Rule that provides for
each standing committee of the House to formally adopt
oversight plans at the beginning of each year. Specifically,
the Rule states in part:
Rule X, clause (2)(d)(1). Not later than February 15
of the first session of a Congress, each standing
committee of the House shall, in a meeting that is open
to the public and with a quorum present, adopt its
oversight plans for that Congress. Such plans shall be
submitted simultaneously to the Committee on Government
Reform and Oversight and to the Committee on House
Oversight.
On March 31, 1995, Committee Chairman William F. Clinger,
Jr., submitted the oversight plans of each committee together
with recommendations to ensure the most effective coordination
of such plans.
RECOMMENDATIONS OF THE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
Oversight Plans of the Committees of the House
Collectively, the committee oversight plans cover a wide
array of Federal programs and management issues. The challenges
of dealing with the serious, pervasive problems that continue
to impede effective management and efficient program delivery
is formidable.
A major breakthrough in prospects for improving Federal
management, as well as congressional oversight of Federal
programs, has been provided by two recent laws: the Chief
Financial Officers Act and Government Performance and Results
Act. Together, these acts provide a framework necessary to help
achieve improved government accountability and stewardship and
to lower costs by focusing on results. The Congress framed it
this way: Set goals, operate programs, and measure results
using reliable financial and management information.
While these acts are still in the process of being
implemented, efforts already completed or underway in response
to both acts offer committees a valuable source of information
and insight into the management problems and issues. These
include issues that impact individual programs, as well as
those that cut across agency programs and organizational
boundaries.
The committees of the House should: (1) conduct oversight
to ensure that these statutes are being aggressively
implemented, and (2) use the information produced by the
implementation of these statutes and the General Accounting
Office's (GAO) high risk list to assess the management
weaknesses in the agencies within their jurisdiction.
Chief Financial Officers Act
One of the underlying historical impediments to better
management of government programs has been the lack of reliable
financial information. With passage of the CFO Act, the
Congress has said that this must change and change quickly. The
long-needed fiscal accountability that the act is designed to
bring about is essential to effective program management and
congressional oversight.
Agencies, which represent organizations larger than the
Nation's largest private corporations, have typically not been
able to perform even the most rudimentary bookkeeping
functions. Agency financial management systems are badly
deteriorated-OMB reports that most do not meet standards and
almost all agencies have been unable to pass the test of an
independent financial statement audit.
A primary element of the Chief Financial Officers Act, as
expanded by the Government Management Reform Act of 1994, is
the requirement for all 24 major agencies to have audited
financial statements. (The act also calls for governmentwide
financial statements, audited by GAO, by fiscal year 1997.)
Also, agencies must now have:
financial information that is linked with program
and budget data for use in both management control and
planning;
reports on program cost trends and other
performance indicators from which managers can make informed
decisions on running government operations effectively and
efficiently
Since passage of the initial legislation in 1990, the CFO
Act has already provided:
significantly more accurate information on the
government's financial status and operations, as well as an
understanding of how unreliable the financial information being
provided to the Congress and program managers has been;
a better understanding of the pervasiveness of
management control problems; and
substantial savings from recoveries and better use
of funds.
Annual financial statement audits, which are done by the
agency Inspectors General (IGS) or by GAO, continue to provide
valuable information on the results of program operations and
the current financial condition of agencies. This information
can be of great use to committees in their oversight efforts.
Audits, for example, have identified:
Despite over $400 billion in adjustments needed to
correct errors in Defense's financial data over the last 3
years, Defense is still unable to render an accurate accounting
of its hundreds of billions of dollars in assets. This
unreliable data has traditionally served as the basis for
Defense's reports to the Congress.
Duplicate, erroneous, and even fraudulent payments
to Defense contractors totaling billions of dollars.
Unneeded Defense inventories of almost $40
billion.
The IRS being unable to effectively collect or
accurately account for $1.25 in annual revenues; audits show
that only a fraction of over $100 billion in recorded tax
receivables was collectible.
GAO's ongoing financial audit work includes the IRS, the
Bank Insurance Fund, the Resolution Trust Corporation, and the
Pension Benefit Guaranty Corporation, all for fiscal year 1994,
and the Department of the Navy for fiscal year 1995. IG's are
conducting (in some instances with contracted assistance from
accounting firms) fiscal year 1994 audits in the Departments of
Education, HHS, Army, Air Force, NASA, Veterans Affairs, EPA,
Labor, Agriculture, HUD, Interior, and other agencies.
Government Performance and Results Act
Effective implementation of the Chief Financial Officers
Act is also a vital element to the success of the Government
Performance and Results Act (GPRA). GPRA seeks to change the
focus of Federal management and accountability from a
preoccupation with inputs, such as the amount of program
appropriations, to measured results and outcomes of Federal
programs. Successful implementation of the act will help
address the question: What are the American people getting for
their investment in the Federal Government? Information on
performance in relation to agency goals can also be helpful to
the Congress.
Experiences of State governments and foreign countries that
are leaders in public management show that GPRA's three key
elements: strategic planning; performance measurement; and
public reporting and accountability could influence the basic
culture of the government so that is more results-oriented.
Accurate results-oriented information will greatly assist the
Congress in its efforts to oversee current programs and in
making informed decisions for the future.
But making the major changes in the way Federal agencies
are managed and held accountable called for under GPRA will
require agencies to develop the capacity to manage for results.
This will not be accomplished quickly or easily. Therefore, the
act's provisions are being phased in with a series of pilot
projects over the next several years.
Already, 70 pilots have been designated ranging in size
from small programs to entire agencies, including the IRS, SSA,
and the Defense Logistics Agency. As agencies implement the
act, oversight committees should have opportunities to work
with agencies in improving performance by providing managers
freedom to experiment and find innovative ways to improve
program results, while increasing accountability for achieving
those results.
2. Views and Estimates for Fiscal Year 1997.
On February 27, 1996, pursuant to section 301(d) of the
Congressional Budget and Impoundment Control Act of 1974, as
amended by the Balanced Budget and Emergency Deficit Control
Act of 1985, the committee submitted its views and estimates to
the Committee on the Budget on matters that were included in
the President's fiscal year 1997 budget within the committee's
jurisdiction.
3. Investigations.
a. The Financial Holdings and Activities of Secretary of
Commerce Ronald H. Brown.--Beginning in February 1994,
Representative William F. Clinger, Jr., then-ranking member of
the Committee on Government Operations, wrote to Secretary of
Commerce, Ronald H. Brown, requesting that Secretary Brown
answer questions arising from his Financial Disclosure
Statement. The questions focused on appearances of a conflict
in Secretary Brown's holdings and/or role in such companies as
Harmon International, Inc., First International Communication,
Inc., Corridor Communication, Inc., Albimar Communications,
Inc., and Kellee Communications Inc., as well as his business
relationship with Ms. Nolanda Hill, the owner of First
International Communications and Corridor Communications.
Secretary Brown's responses, through intermediaries,
generated follow-up letters by Representative Clinger on March
23, 1994, July 11, 1994, July 20, 1994, and at least one
meeting between committee staff and Commerce Department
officials before Mr. Clinger requested that Mr. Stephen D.
Potts, Director of the U.S. Office of Government Ethics,
investigate the matter pursuant to 5 C.F.R. Section 2638.401
et. seq. on October 5, 1994. On that same day, Representative
Clinger asked Department of Commerce Inspector General, Frank
DeGeorge, to investigate Secretary Brown's relationship with
the aforementioned companies as well as Boston Bank of Commerce
and Boston Bank of Commerce Associates to determine whether it
raised any conflicts of interest with Secretary Brown's
official responsibilities.
In a December 21, 1994, letter, Inspector General DeGeorge
deferred to OGE Director Potts, stating, ``this office and OGE
agreed that if issues or problems arose during their review
which needed investigation, OGE, pursuant to their statutory
authority, would refer those matters to this office for
appropriate investigation. To date, we have not been asked by
OGE to look into any matter. At the end of the OGE review, we
will review their findings to determine whether there are any
indications of conflicts or other violations warranting further
investigation.''
In a letter dated December 29, 1994, Office of Government
Ethics Director Stephen D. Potts stated, ``We found that the
manner in which Commerce's ethics officials reviewed the
financial disclosure forms was consistent with the manner in
which we require and expect agencies to carry out these
responsibilities.'' Despite acknowledging in his letter
repeated discrepancies in Secretary Brown's disclosure reports,
Director Potts concluded that appearances of conflict had been
avoided due to Secretary Brown's divestiture of holdings,
resignation from managerial roles or receipt of waivers.
These responses, however, failed to address fully the
concerns of Representative Clinger who on January 4, 1995,
became chairman of the Government Reform and Oversight
Committee of the 104th Congress, thus necessitating further
investigation into Secretary Brown's activities.
Chairman Clinger noted in a January 23, 1995, letter to
Secretary Brown that Secretary Brown had failed to disclose
income he received during his Commerce tenure from First
International Communications Limited Partnership during 1993.
Furthermore, First International Communications Limited
Partnership's primary source of income was a debt instrument
payable by Corridor Broadcasting Corporation, an entity
controlled by Nolanda Hill, Secretary Brown's business
associate in First International. In addition, Corridor
Broadcasting Corporation had defaulted on a $26 million loan
held by the Federal Deposit Insurance Corporation, which
ultimately cost American taxpayers some $23 million.
Secretary Brown's failure to address the potential
conflicts of interest involving his business affiliations,
coupled with ongoing efforts by the committee's investigative
staff, led to Chairman Clinger's February 27, 1995, request
that Attorney General Janet Reno appoint an Independent
Counsel, under the Independent Counsel Act, 28 U.S.C. Sec. 591
et. seq., to investigate the holdings and activities of
Secretary Brown. Chairman Clinger raised allegations concerning
Secretary Brown's: (i) submission of incomplete, inaccurate and
misleading financial disclosure statements; (ii)
supplementation of salary; (iii) potential conflicts of
interest; (iv) misinformation to Congress; and (v) refusing to
respond to Congress.
In addition to questions raised concerning Secretary
Brown's affiliation with the business previously mentioned, the
February 27, 1995, request noted that Secretary Brown: (i)
failed to disclose either as a gift or loan, $108,000 used as a
down-payment for a townhouse purchased by Secretary Brown and
his son, Michael Brown, in Washington, DC; (ii) failed to
report future income of some $190,955, which he knew he would
receive in the wake of his divestiture of his interest in First
International; (iii) supplemented his Federal salary by
receiving some $412,000, in direct payments, loan forgiveness
and payments to his creditors by business partners; (iv)
undertook official actions which benefited his business
partners and associates; and (v) misled the Congress concerning
compensation paid by business partners to members of his
immediate family.
On July 6, 1995, a three-judge Federal appeals court panel
announced its selection of former Federal prosecutor Daniel S.
Pearson to serve as an independent counsel in the matter of
Secretary Ronald H. Brown.
No committee hearings were held during the first session of
the 104th Congress on the matter of Secretary of Commerce
Ronald H. Brown. In the wake of Secretary Brown's death in
April 1996, Independent Counsel Pearson suspended his
investigation and turned over matters remaining open--including
the Nolanda Hill inquiry--to the Justice Department, Criminal
Division.
b. The White House Travel Office Investigation.--At
approximately 10 a.m., on May 19, 1993, all seven members of
the White House Travel Office staff were fired and the five
Travel Office employees present in the White House that day
were ordered to vacate the White House compound within 2 hours.
Returning to the Travel Office by 10:30 a.m., the fired Travel
Office employees found their desks already occupied by
employees of World Wide Travel, the Arkansas travel agency
which arranged for press charters during the Clinton
Presidential campaign, Catherine Cornelius and others.
Two White House Travel Office employees were out of the
White House Travel Office on May 19, 1993, one on a White House
advance trip to South Korea, the other on vacation. They
learned of their firings, respectively, via CNN telecast and a
son who saw Tom Brokaw announce the firings on network news
that night. The seven White House Travel Office employees had
served from 9 to 32 years in the White House Travel Office.
The five Travel Office employees who were present in the
White House for their firings ultimately were given additional
time to complete their White House out-processing. By early
afternoon, they heard then-White House Press Secretary Dee Dee
Myers announce at a press briefing that they were subject of an
FBI criminal investigation. They had been given no such
indication at the time of their dismissals. After completing
out-processing, the five Travel Office employees present on May
19, 1993, were driven out of the White House compound in a
panel van with no passenger seats. They were seated on the
floor and wheel wells of the van along with boxes of their
gathered personal effects.
While the Travel Office employees served at the pleasure of
the President, their precipitous firings and replacement by the
Clinton campaign's primary travel agency immediately raised a
storm of criticism. Administration claims that it had acted in
order to save the press and taxpayers money were met with
skepticism by a White House press corps which responded with a
litany of complaints of over billing and undocumented billings
by World Wide itself throughout the 1992 campaign. In addition,
the Clinton administration's announcement that an FBI criminal
investigation had been launched was highly improper and, in
fact, questionable when it was announced. Furthermore, White
House contacts with the FBI in the days leading up to and
immediately following the Travel Office firings also were
considered improperly handled by Attorney General Janet Reno,
who publicly admonished the administration for them.
Members of the House and the Senate immediately raised
concerns about the manner in which the Travel Office firings
took place. In the face of press, public and congressional
outcry, the White House placed five of the seven Travel Office
employees on administrative leave with pay on May 25, 1993, and
announced that it would conduct a White House Management Review
of the Travel Office and the administration's role in the
Travel Office firings. The fired Travel Office director and
deputy director retired.
On June 1, 1993, William F. Clinger, Jr., the then-ranking
minority member of the House Government Operations Committee,
requested that then Chairman John Conyers, Jr., hold hearings
on the White House Travel Office firings.
Then-White House Chief Thomas F. (Mack) McLarty and then-
Office of Management and Budget Director Leon Panetta released
the White House Travel Office Management Review on July 2,
1993, and announced the reprimands of four White House
staffers. Reprimanded were: Associate Counsel to the President,
William H. Kennedy III; Assistant to the President for
Management and Administration, David Watkins; former Special
Assistant to the President for Management and Administration,
Catherine A. Cornelius; and Deputy Assistant to the President
and Director of Media Affairs, Jeff Eller. At least three of
the four first learned of the ``reprimands'' during their
televised announcement. None of the reprimands were documented
in the personnel files of any of the four.
Also on July 2, 1993, the Supplemental Appropriations Act
of 1993 (Public Law 103-50) required the U.S. General
Accounting Office (GAO) to ``conduct a review of the action
taken with respect to the White House Travel Office.''
In addition to the White House Management Review and the
GAO Report entitled White House Travel Office Operations
(released on May 2, 1994), at least three other reports were
prepared concerning various aspects of the White House Travel
Office firings. These reports were prepared by: the Office of
Professional Responsibility (OPR) of the U.S. Department of
Justice (dated March 18, 1994, and released by the committee on
October 24, 1995); a Federal Bureau of Investigation Internal
Review of FBI Contacts with the White House (dated June 1,
1993), and the Department of Treasury Inspector General Report
``Allegation of Misuse of IRS RE: ULTRAIR'' (dated June 11,
1993).
On September 23, 1993, after consultations with majority
staff of the Government Operations Committee, Mr. Clinger
withdrew his request for committee hearings on the White House
Travel Office firings, ``contingent upon the adequacy of the
GAO effort'' which had been mandated by Congress through Public
Law 103-50.
Individually and collectively, the five reports prepared
concerning the White House Travel Office left many questions
unanswered and, in fact, raised many more. Several Members of
Congress, including Mr. Clinger, sought to have these questions
answered through further investigation and congressional
hearings. In a letter dated October 7, 1994, Mr. Clinger and 16
other House Members again requested congressional hearings on
the White House Travel Office in order to ``address serious
questions arising from, or unanswered by, the General
Accounting Office (GAO) Report to Congress, White House Travel
Office Operations (GAO/GGD-94-132).''
Mr. Clinger's request was accompanied by a 71-page minority
analysis of issues unaddressed by any of the previous five
reports. This analysis reviewed contradictions concerning:
memoranda drafted by Catherine Cornelius outlining its new
organizational structure and placing her in charge; activities
of Harry Thomason and Darnell Martens; mismanagement by David
Watkins; White House reasons justifying the Travel Office
firings; contacts between Dee Dee Myers and Darnell Martens;
public disclosure of the FBI investigation; possible influence
on the FBI; the integrity of Travel Office records; the role of
the President; the reprimands, and inaccuracies and
insufficiencies in the GAO report on the White House Travel
Office.
Soon after the November 1994 congressional elections, Mr.
Clinger, chairman of the Government Reform and Oversight
Committee of the 104th Congress, announced that he would hold
hearings on the White House Travel Office firings. In December
1994, the Public Integrity Division of the U.S. Department of
Justice indicted former White House Travel Office Director
Billy R. Dale on one charge of embezzlement and one charge of
conversion.
The committee investigative staff conducted interviews and
gathered documents from various participants in the Travel
Office matter on a voluntary basis throughout the spring and
summer of 1995. White House document production, however,
proved problematic and led to numerous meetings and phone
conversations with Clinton administration representatives in
the White House Counsel's Office, the Department of Justice,
Department of the Treasury as well as the General Accounting
Office.
In the fall of 1995, Chairman Clinger scheduled the
committee's first hearing on the White House Travel Office for
October 24, 1995. The hearing focused on the accuracy and
completeness of the five White House Travel Office reports and
to consider whether further hearings were required to address
unanswered issues. The panel at the October 24, 1995, hearing
included authors of each of the five reports, respectively.
This hearing purposely avoided all areas that might have
impacted upon the trial of former Travel Office Director Billy
R. Dale which was to commence on October 26, 1995.
The committee reviewed which of seven key Travel Office
issues each report addressed. These issues were: the
completeness of the review of references to ``Highest Levels''
involvement at the White House in the Travel Office firings;
whether any assessment of White House Standards of Conduct was
performed and whether administration staffers had violated
those standards; whether inquiries were made into the role of
Hollywood producer Harry Thomason in the firings; the role of
Mr. Thomason's and his firm, Thomason, Richland and Martens
(TRM) in seeking contracts involving the Interagency Committee
on Aviation Policy (ICAP); whether the issue of competitive
bidding by the White House Travel Office and by the White House
itself in dealing with the Travel Office was reviewed; and
whether thorough investigations into FBI and IRS actions and
reactions to the White House inquiries had been undertaken.
The hearing made clear that, given limitations on their
scopes, none of the reports had addressed fully the issues
raised by the Travel Office firings. The Treasury Inspector
General IRS report redactions made it impossible to determine
whether the IRS addressed any of the seven issues. The OPR and
FBI reports only partially addressed two issues, ``FBI
actions'' and references to ``Highest Levels of the White
House'' and never addressed the other five. Despite its far
greater understanding of the participants and circumstances
leading to the Travel Office firings--or because of it--the
White House Travel Office Management Review only briefly and
superficially addressed Harry Thomason's role, FBI actions and
references to ``Highest Levels'' of the White House while
ignoring competitive bidding, IRS action, standards of conduct
and ICAP contracts. Similarly, the GAO relied on the White
House Management Review in its report on Mr. Thomason's role
and only partially addressed FBI actions and ``Highest Levels''
while leaving ICAP, competitive bidding and standards of
conduct unaddressed. IRS disclosure laws prevented the GAO from
publicly addressing IRS actions.
The October 24, 1995 hearing also made clear that the GAO
and OPR reports, the most independent of the five, were hobbled
by what their respective authors referred to as an
unprecedented lack of cooperation by the White House in their
investigations. It was determined in the hearing that the White
House had denied both GAO and OPR documents which were critical
to their investigations, documents which well might have
affected their conclusions. Accordingly, both GAO and OPR never
received any of the documents subsequently produced by the
White House.
The criminal trial of former Travel Office Director Billy
R. Dale began on October 26, 1995, and concluded on November
17, 1995, with Mr. Dale's acquittal of both charges. After the
acquittal was announced, Chairman Clinger requested that the
Public Integrity Section of the Department of Justice turn over
all documents related to the criminal prosecution for review by
the committee.
At year-end 1995, the committee planned hearings on: the
role of Mr. David Watkins in the Travel Office firings; the
experiences of the fired seven Travel Office employees; the
role of Mr. Harry Thomason; and the role of the FBI and IRS. In
January 1996, the committee subpoenaed all of Mr. Thomason's
documents related to the Travel Office and filed a ``6103
Waiver'' with the IRS in which representatives of UltrAir
authorized the IRS, Department of Treasury and others to
release all relevant documents concerning the IRS audit of
UltrAir in the wake of the Travel Office firings. The
Department of the Treasury had promised prompt delivery of all
documents pending receipt of the expanded 6103 waiver.
At 8:30 p.m. on January 3, 1996, the White House delivered
a document production to committee offices. Included in that
production was a 9-page, undated draft memorandum written by
David Watkins, a copy of which was simultaneously released to
the media. Mr. Watkins wrote in this memorandum, which he
characterized as a ``soul cleansing'' memorandum, that he had
made his ``first attempt to be sure the record is straight,
something I have not done in previous conversations with
investigators--where I have been as vague and protective as
possible.'' The Watkins draft memo ascribed a far greater
Travel Office role to First Lady Hillary Rodham Clinton than
the White House or Mrs. Clinton ever had admitted:
On Monday morning you [then-White House Chief of
Staff McLarty] came to my office and met with me and
Patsy Thomasson. At that meeting you explained that
this was on the First Lady's ``radar screen.'' I
explained to you that I had decided to terminate the
Travel Office employees and you expressed relief that
we were finally going to take action (to resolve the
situation in conformity with the First Lady's wishes).
We both knew there would be hell to pay if, after our
failure in the Secret Service situation earlier, we
failed to take swift and decisive action in conformity
with the First Lady's wishes.
Mr. Watkins concluded that his memo:
[Made] clear that the Travel Office incident was
driven by pressures for action originating outside my
Office. If I thought I could have resisted those
pressures, undertaken more considered action, and
remained in the White House, I certainly would have
done so. But after the Secret Service incident, it was
made clear that I must more forcefully and immediately
follow the direction of the First Family. I was
convinced that failure to take immediate action in this
case would have been directly contrary to the wishes of
the First Lady, something that would not have been
tolerated in light of the Secret Service incident
earlier in the year.
The Watkins draft memorandum was responsive to the
September 1995, document request by the committee. Moreover,
back in October 1995, the White House Counsel's Office had
informed the committee that it had produced most of the
substantive documents pursuant to that request.
The White House explained weeks afterwards that it first
discovered the Watkins draft memorandum on December 29, 1995.
The memorandum was reviewed by the White House Counsel's office
and copied to several administration officials as well as the
personal attorneys for Mack McLarty, Patsy Thomasson, Harry
Thomason, and the President and First Lady by January 2, 1996.
The White House released the Watkins draft memorandum to the
media on the evening of January 3, 1996, at the same time it
released the documents to the committee.
On January 5, 1996, Chairman Clinger issued subpoenas to
both David Watkins and Harry Thomason for all records
concerning the White House Travel Office and related matters.
On January 11, 1996, Chairman Clinger issued interrogatories
concerning the origin and chain-of-custody of the original and
all copies of the Watkins draft memorandum to be answered in
writing and under oath by:
Jane C. Sherburne, Special Counsel to the President.
Jon Yarowsky, Associate Counsel to the President.
Natalie Williams, Associate Counsel to the President.
Miriam R. Nemetz, Associate Counsel to the President.
Christopher D. Cerf, Associate Counsel to the
President.
Nelson Cunningham, General Counsel, Office of
Administration.
Patsy Thomasson, Deputy Director of White House
Personnel.
Also on January 11, 1996, the committee issued bipartisan
subpoenas for all relevant records to the White House Executive
Office of the President and the White House Office of
Administration as well as bipartisan personal subpoenas to Mack
McLarty, Bruce Lindsey, Todd Stern, Patsy Thomasson, Catherine
Cornelius and Margaret Williams. The documents subpoenaed were
due on January 22, 1996.
In the wake of the White House's release of the Watkins
draft memorandum, Clinton officials, attorneys and surrogates
launched attacks on the character and managerial skills of
former Travel Office Director Billy Dale. First Lady Hillary
Rodham Clinton also assailed Mr. Dale's management in various
interviews. As a result, Chairman Clinger wrote President
Clinton on January 16, 1996, requesting that the White House
cease its continued attack on Mr. Dale.
On January 17, 1996, the committee held its second hearing
on the Travel Office matter. David Watkins was the sole witness
at this hearing, at which he requested that no still or video
cameras be allowed to record his testimony, invoking a House
rule. In the hearing, he testified under oath regarding his
draft memorandum and other records he had turned over to the
committee pursuant to a personal subpoena. Watkins testified,
``Was there pressure? Did I feel pressure of the desires and
wishes of others? Yes, I did.'' Watkins testified he had felt,
``a lot of internal pressure,'' and was asked by whom. ``The
pressure that I felt was coming from the First Lady was
conveyed primarily through Harry Thomason and Vince Foster.''
Mr. Watkins' May 12, 1993, notes, first received by the
committee under personal subpoena, stated that Harry Thomason
told him on that day that the First Lady wanted the Travel
Office staff fired that day. In a May 14, 1993, telephone call
to the First Lady, Watkins testified, he was told, ``We should
get our people in and get those people out.''
In the wake of the discovery of the Watkins memorandum
where inconsistencies between Mr. Watkins' statements to the
GAO and his undated memorandum and contemporaneous notes became
clear, Chairman Clinger asked GAO to advise the committee
concerning what sanctions exist for intentionally providing
false information to GAO. GAO responded in a letter dated
January 17, 1996, which addressed the relevant statutes and
legal precedents. In a January 23, 1996, response to GAO,
Chairman Clinger asked that GAO compare and contrast the notes
of its interviews with Mr. Watkins with copies of interviews
conducted with Mr. Watkins by various investigative agencies,
Mr. Watkins' draft memorandum and contemporaneous notes and
other materials. Chairman Clinger asked that GAO identify all
of the material inconsistencies between the documents provided
and GAO's own interview notes and to determine whether they met
the materiality test required by any applicable statute.
The seven fired Travel Office employees testified on
January 24, 1996, when the committee held its third hearing on
the White House Travel Office firings. The seven fired Travel
Office employees testified about their work in the White House
Travel Office and the management of press charters, the events
leading to their firings on May 19, 1993, and their
investigation at the hands of the FBI and IRS. Individually,
they testified of the costs of their respective legal defenses
which, all told, amounted to some $700,000.
While all seven acknowledged that they served at the
pleasure of the President, they questioned the manner in which
the firings were undertaken. Mr. Dale testified:
If the President or the First Lady or anyone else
wanted us out in order to give the business to their
friends and supporters, that was their privilege. But
why can't they just admit that is what they wanted to
do rather than continue to make up accusations to hide
that fact?
Mr. Billy Dale testified in the hearing that records
disappeared from the Travel Office in the period immediately
preceding the firings and disputed allegations of Travel Office
mismanagement as a ``convenient excuse'' intended to justify
the firings. Five of the Travel Office employees testified
about being placed on administrative leave within a week of the
firings and subsequently finding employment elsewhere in the
Federal Government. Mr. Dale and former White House Travel
Office Deputy Director Gary Wright had retired from Federal
service in the aftermath of the firings in 1993.
In a letter to the committee dated January 23, 1996, Mr.
David L. Clark, Director of Audit Oversight and Liaison for the
General Accounting Office, evaluated current White House Travel
Office management using the 29 criteria identified in its May
1994, report on the Travel Office. The evaluation was based on
work performed by GAO in the Travel Office in the fall of 1995.
GAO stated:
We found that the Travel Office had developed
policies and implemented procedures during the period
January 1995 through August 1995 to address all but 3
of the 29 criteria. For those three, we found that the
Travel Office had not (1) billed customers within its
stated 15-day requirement, (2) paid vendors within its
stated 45-day requirement, and (3) performed bank
reconciliations regularly.
GAO also reported:
[T]he Travel Office had a policy requiring monthly
reconciliations of its checkbook with the cash balance
reported by its bank. As of April 1994, we found that
staff were performing the reconciliations as required.
However, from January 1995 through August 1995, Travel
Office staff performed no bank reconciliations because
other tasks were given a higher priority. Immediately
prior to our review, the Travel Office reconciled all
outstanding bank statements and found deposits totaling
$200,000 that had not been entered into its checkbook.
These funds were all owed to vendors who had previously
furnished goods and services for press trips. White
House officials informed us that future monthly
reconciliations will be performed as required.
GAO's discovery of a $200,000 discrepancy in White House
Travel Office deposits for calendar year 1995 is a matter of
some concern given that the White House alleged in May 1993,
that it had fired the entire Travel Office staff and launched
an FBI criminal investigation on the basis of a $18,200
discrepancy in Travel Office petty cash funds.
On January 30, 1996, General Counsel Robert P. Murphy of
the General Accounting Office wrote Chairman Clinger addressing
inconsistencies between statements made by David Watkins to GAO
and Watkins' undated draft memorandum and notes taken by
Watkins which were dated May 31, 1993, and Watkins' GAO
interview and other relevant documents.
On February 1, 1996, Chairman Clinger and Senate Judiciary
Committee Chairman Orrin Hatch (R-UT) introduced a bill to
reimburse the legal expenses of the seven fired White House
Travel Office employees. The bill would reimburse nearly
$500,000 spent by Mr. Billy Dale on his defense as well as the
Travel Office expenses still due by his six colleagues. In a
1994 appropriation, Congress previously reimbursed $150,000 in
their legal expenses.
On February 7, 1996, the committee issued additional
bipartisan personal subpoenas to a number of current and former
White House employees, volunteers, friends and others involved
in the Travel Office matter, including Matt Moore.
On February 13, 1996, following consultation with Chairman
Clinger, the GAO asked Federal prosecutors to investigate
possible false statements made to GAO by David Watkins, having
concluded that statements made or attributed to Mr. Watkins
were inconsistent with statements he made in his GAO interview.
Justice Department officials submitted the referral to the
Independent Counsel and asked the court to approve the
expansion of the scope of Independent Counsel Kenneth Starr to
include this referral.
The Government Reform and Oversight Committee submitted a
list of 26 interrogatories to First Lady Hillary Rodham Clinton
on February 15, 1996. These interrogatories were to be answered
in writing and under oath by the First Lady by February 29,
1996. The White House subsequently asked for an extension and
the chairman of the Committee on Government Reform and
Oversight agreed to a 3-week extension. The White House
provided the First Lady's sworn responses to the committee on
the second due date, March 21, 1996. Her responses were
released to the media at the same time. In the responses, the
First Lady insisted she had no decisionmaking role in the
Travel Office firings and that her statements to GAO were
accurate. As to conversations with Harry Thomason, Vince Foster
and David Watkins, the First Lady had very few specific
recollections.
Chairman Clinger submitted H. Res. 369, which was referred
to the Committee on Rules, on February 29, 1996. H. Res. 369
provided special authority to the Committee on Government
Reform and Oversight to obtain testimony for purposes of
investigation and study of the White House Travel Office
matter. The bill was limited, deliberately, to provide
deposition authority to the Committee on Government Reform and
Oversight only for its investigation of the Travel Office
matter. Deposition authority allowed the committee to obtain
sworn testimony from witnesses while minimizing the number of
hearings needed in order to complete the investigation.\13\
---------------------------------------------------------------------------
\13\ Precedents for such deposition authority have included: 1)
President Nixon Impeachment Proceedings (93d Congress, 1974, H. Res.
803); 2) Assassinations Investigation (95th Congress, 1977, H. Res.
222); 3) Koreagate (95th Congress, 1977, H. Res. 252 and H. Res. 752);
4) Abscam (97th Congress, 1981, H. Res. 67); 5) Iran-Contra (100th
Congress, 1987, H. Res. 12); 6) Judge Hastings Impeachment Proceedings
(100th Congress, 1987, H. Res. 320); 7) Judge Nixon Impeachment
Proceedings (100th Congress, 1988, H. Res. 562); and 8) October
Surprise (102d Congress, 1991, H. Res. 258.
---------------------------------------------------------------------------
The House approved H. Res. 369 on March 7, 1996. Thereupon,
the Committee on Government Reform and Oversight notified
witnesses it wished to testify under oath before the committee.
Depositions commenced in late March 1996. Initially, they were
expected to be completed by June 1996.\14\
---------------------------------------------------------------------------
\14\ With the subsequent revelation that the White House improperly
had obtained some 900 confidential FBI background files on former
officials of the Reagan and Bush administrations, the last of the
depositions in fact was conducted in mid-September 1996.
---------------------------------------------------------------------------
The White House made a March 15, 1996, production of
documents pursuant to the committee's January 11, 1996,
subpoena. That production contained yet another unproduced May
3, 1994, handwritten letter from David Watkins to Mrs. Clinton.
No explanation for the White House's failure to produce this
document for nearly 2 years during the course of numerous other
document requests was proffered until two requests for a chain-
of-custody were made. Mr. Quinn finally responded on April 8,
1996, stating only that the letter was located in a stack of
unsorted, miscellaneous papers and memorabilia in the Office of
Personal Correspondence having been forwarded to Carolyn Huber
from the First Lady. Ms. Huber forwarded the original letter to
the First Lady on March 4, 1996. Mr. Quinn stated that Mrs.
Clinton did not look at the letter until March 12, 1996, at
which time she immediately sent the only copy of the White
House document to her personal lawyer, David Kendall. Mr.
Kendall reviewed the original and returned a copy, and later
the original, to Special White House Counsel Jane Sherburne.
On March 22, 1996, the three-judge Federal appeals panel
which appointed Kenneth K. Starr Whitewater Independent Counsel
approved an expansion of Independent Counsel Starr's mandate to
include the issue of whether David Watkins lied about First
Lady Hillary Rodham Clinton's role in the Travel Office firings
and related matters. Attorney General Janet Reno referred the
Watkins matter to the three-judge panel after the Justice
Department had concluded the Watkins could be investigated by
an independent counsel.
By a vote of 350 to 43 on March 19, 1993, the House of
Representatives passed H.R. 2937, a bill to reimburse the legal
expenses and related fees incurred by former employees of the
White House Travel Office with respect to the termination of
their employment in that office on May 19, 1993.
In document productions from individuals subpoenaed, the
committee was provided with a copy of a February 15, 1996,
White House Memorandum from John M. Quinn, Counsel to the
President and Jane Sherburne, Special Counsel to the President,
to a witness who had been subpoenaed by the Committee on
Government Reform and Oversight to provide all records related
to the White House Travel Office matter in the witness'
possession to the committee. The memorandum from Mr. Quinn and
Ms. Sherburne stated, in part:
Last week, the Committee [on Government Reform and
Oversight] issued personal subpoenas to you and other
current and former White House employees. These
personal subpoenas call for personal as well as White
House records. The Counsel's Office will handle
production of your responsive White House records,
i.e., records created or obtained during the course of
your official duties. Accordingly, you should forward
any White House records you believe may be responsive
to the Counsel's Office and we will determine whether
they should be produced to the Committee. You should
provide any responsive personal records directly to the
Committee. [Emphasis in original.]
The existence of the February 15, 1996, memorandum from Mr.
Quinn and Ms. Sherburne greatly concerned the committee because
the February 7, 1996, subpoenas served were personal subpoenas.
Those subpoenaed to provide all relevant White House Travel
Office records in their possession remain personally
responsible for making a complete production, whether or not
the White House chooses to withhold any or all of their
documents from production to the committee. Given the White
House's continuing unwillingness to make a complete production
of records it has been subpoenaed to provide the committee, its
instructions in the February 15, 1996, memo by Mr. Quinn and
Ms. Sherburne to witnesses served personal subpoenas suggests
that the White House intends to play an intermediary role in
the case of current and former White House staffers, volunteers
and others in a manner which may lead to their being held
personally liable for a failure to produce all relevant
records.
In the wake of its discovery of the February 15, 1996,
memorandum by Mr. Quinn and Ms. Sherburne, the committee wrote
letters to each individual who had been issued a personal
subpoena informing them that all records responsive to the
committee's January and February 1996, subpoenas must be
produced by May 8, 1996. Chairman Clinger sent similar letters
to White House Counsel Quinn and Attorney General Reno
informing them that all records responsive to White House and
Justice Department subpoenas were to be produced by May 8,
1996.
Chairman Clinger also announced on May 2, 1996, that he had
scheduled a committee business meeting for Thursday, May 9,
1996, at 9 a.m. to consider a privileged resolution to compel
production of any subpoenaed records relating to the White
House Travel Office which were not provided to the committee by
May 8, 1996.
On May 9, 1996, the Government Reform and Oversight
Committee voted to hold White House Counsel Jack Quinn and
former White House aides David Watkins and Matthew Moore in
contempt of Congress for failing to turn over subpoenaed
documents. Also on May 9, 1996, White House Counsel Quinn wrote
Chairman Clinger a letter claiming blanket privilege on behalf
of President Clinton over 3,000 pages of documents being
withheld from the committee. Attached to this letter was a
letter from Attorney General Janet Reno endorsing the claim of
executive privilege. At that time, however, the Attorney
General had not reviewed any of the documents for which she had
approved the President's claim of executive privilege.
On May 30, 1996, the day on which the contempt resolution
against White House Counsel Quinn was scheduled for a vote on
the floor of the House, the White House delivered to the
committee 1,000 of the 3,000 pages responsive to the
committee's subpoenas over which it previously had claimed
executive privilege. Accompanying this production was a
privilege log of 2,000 documents which the White House
continued to withhold. In the wake of this production, the
committee postponed the contempt vote on the floor of the House
against White House Counsel Quinn in order to review the
records produced and the privilege log.
In reviewing the 1,000 pages of documents produced on May
30, 1996, the committee discovered Bernard W. Nussbaum's
December 20, 1993, request of Billy Dale's confidential FBI
background file from the FBI Liaison Office. Even though it was
dated 7 months after Mr. Dale's firing, the form indicated that
the White House was requesting Mr. Dale's confidential FBI file
because it was considering him for ``Access (S).'' Chairman
Clinger immediately called on the White House and the FBI to
explain why the Dale file had been requested by and provided to
the White House even as the Justice Department was undertaking
a criminal investigation of Mr. Dale. (See The Security of FBI
Background Investigation Files, below.)
In the wake of this development, Chairman Clinger called on
the White House to release the remaining 2,000 pages of
documents over which it had claimed executive privilege, as it
once had claimed executive privilege--inappropriately--over the
Billy Dale FBI file request memo. After the White House refused
this request, claiming that the remaining 2,000 pages were
``unquestionably within the scope of [executive] privilege,''
Ranking Member Cardiss Collins agreed to act as an intermediary
in a successful effort to allow the committee to review
documents it deemed essential to its investigation while having
the White House certify that no other documents remained
outstanding.
Chairman Clinger and committee staff began a review of the
remaining 2,000 pages of documents in the presence of White
House personnel on June 27, 1996. The chairman found these
documents heavily redacted and also found that the White House
privilege log released the previous month provided insufficient
detail of their contents. The chairman advised the White House
of these concerns in a June 28, 1996, letter to White House
Counsel Quinn.
After personally spending 6 hours reviewing redacted White
House documents, Chairman Clinger wrote a July 31, 1996, letter
to the White House requesting that it produce all responsive
documents, in unredacted form, in three categories: 1)
communications with outside attorneys relating to interviews,
depositions or Grand Jury appearances; 2) briefing materials
and questions prepared for Congress; and 3) the review of the
late Vince Foster's White House office. The White House
produced these documents, some 1,400 pages in all, on August
15, 1996.
Meanwhile, in response to a press inquiry on August 1,
1996, President Clinton angrily denied having made any pledge
to reimburse Billy Dale's legal expenses despite the fact that
White House spokesman Mike McCurry had said in January 1996,
that the President would sign such a bill if it came to his
desk and a second White House spokesman had repeated those
remarks the very morning of the President's outburst. In
addition, President Clinton improperly referred to Mr. Dale's
Justice Department plea bargain negotiations. The details of
those negotiations were leaked under highly questionable
circumstances by the Clinton Justice Department in the days
following Mr. Dale's November 1995, acquittal by a jury in less
than 2 hours of the two charges against him. Mr. Robert
Bennett, who is defending President Clinton against charges of
sexual harassment made by Ms. Paula Jones, first raised--and
mischaracterized--these plea negotiations in the days following
the Dale acquittal.
The provision to reimburse the Travel Office-related legal
expenses of Mr. Dale and his six colleagues was passed in the
Senate on September 28, 1996, as part of the Omnibus
Consolidated Appropriations Act of 1997, and signed into law by
President Clinton on September 30, 1996.
On September 18, 1996, the Committee on Government Reform
and Oversight approved the committee's report of its
``Investigation of the White House Travel Office Firings and
Related Matters'' by voice vote and submitted it to the full
House to be printed.
On October 15, 1996, Chairman Clinger wrote a letter to
Independent Counsel Kenneth W. Starr enclosing copies of the
committee's Travel Office Report and its interim report on the
FBI Background Investigation Files matter. This letter also
addressed Chairman Clinger's concerns about the internal
discrepancies in testimony, witnesses' lack of recall of
material events, and conflicts between the White House's
documentary evidence and the sworn accounts of Jane Sherburne,
Harry Thomason, Craig Livingstone, Anthony Marceca, William
Kennedy, Bernard Nussbaum and Thomas F. ``Mack'' McLarty.
c. The Security of FBI Background Investigation Files.--On
May 30, 1996, in the course of its Travel Office investigation,
the committee discovered a December 20, 1993, White House
request of Billy Dale's confidential FBI background file from
the FBI Liaison Office. Even though it was dated 7 months after
Mr. Dale's firing, the form indicated that the White House was
requesting Mr. Dale's confidential FBI file because it was
considering him for ``Access (S).'' The Billy Dale FBI
background file request memo was found in a White House
production of 1,000 pages of documents over which the White
House previously had claimed executive privilege. Chairman
Clinger immediately called on the White House and the FBI to
explain why the Dale file had been requested by and provided to
the White House even as the Justice Department was undertaking
a criminal investigation of Mr. Dale.
By June 5, 1996, the White House had claimed that the Billy
Dale FBI background file request was a routine request
mistakenly made by an unnamed file clerk. In response, Chairman
Clinger requested of the White House and Attorney General Janet
Reno a list of all such White House requests for confidential
FBI background reports on private citizens and government
employees not seeking employment by the Clinton administration
or access to the White House. The following day, the White
House claimed that the General Accounting Office had requested
the Dale Confidential FBI background file. The GAO denied this
immediately.
By June 7, 1996, the White House had acknowledged that it
obtained the FBI files of approximately 338 former White House
employees, including many former Reagan and Bush administration
employees but alleged that the files never were read. Then
Anthony Marceca, a former detailee hand-picked by White House
Office of Personnel Security Director Craig Livingstone to work
in that office, contradicted the White House when he told
Livingstone's attorney that he, Marceca, in fact had read all
the files and had passed on any derogatory information to
Livingstone.
The White House admitted to having an additional 71
improperly sought FBI background files by June 14, 1996, the
day that FBI Director Louis J. Freeh released the findings of
an FBI review of the matter. Freeh concluded that 408 files had
been sought and received by the White House ``without
justification.'' Director Freeh further stated, ``The prior
system of providing files to the White House relied on good
faith and honor. Unfortunately, the FBI and I were victimized.
I promise the American people that it will not happen again on
my watch.''
Also on June 14, 1996, Livingstone revealed problems in his
own background in a sworn deposition before the Committee on
Government Reform and Oversight, including problems with his
employment history and the use of illegal drugs. On June 15,
1996, the White House delivered a document production to the
committee which included letters from former Associate White
House Counsel William H. Kennedy III, to then-Defense Secretary
Les Aspin and others seeking the assignment of Army
investigator Anthony Marceca to a White House detail in the
Office of Personnel Security.
The committee held four hearings on the FBI files matter in
the summer of 1996. The first hearing on June 19 addressed the
issue of how confidential FBI background files were handled
during previous administrations. Among the witnesses were
former White House Counsels and Deputy White House Counsels,
the head of the Office of Personnel Security during the Reagan
and Bush administrations and her assistant of 12 years. These
witnesses testified that access to confidential FBI background
files historically had been strictly limited to at most the
White House Counsel, his Deputy and the Director of the Office
of Personnel Security. By contrast, the assistant to the former
Office of Personnel Security Director testified that during 7
months of service in the Clinton administration, White House
interns 18-20 years old--and without any security clearance--
had access to the confidential FBI background files.
On June 21, Attorney General Janet Reno turned over the
investigation of the White House requests for confidential FBI
background files to Independent Counsel Kenneth W. Starr.
General Reno stated, ``I have concluded it would constitute a
conflict of interest for the Department of Justice itself to
investigate the matter involving an interaction between the
White House and the FBI, a component of the Department of
Justice.''
The committee's second hearing on the FBI files matter was
held on June 26, with former White House Counsel Bernard
Nussbaum, former Associate White House Counsel Bill Kennedy,
Office of Personnel Security Director (then on administrative
leave) Craig Livingstone and former Army detailee Anthony
Marceca and Lisa Wetzl, a former assistant to Livingstone,
testifying as to the handling of these files during the Clinton
administration. While Livingstone announced his resignation
from this position at the June 26 hearing and the White House
immediately announced a replacement, the question, ``Who hired
Craig Livingstone?'' never was answered definitively by any of
the witnesses. Mr. Livingstone testified that it had been his
life-long dream to serve in the White House of a Democratic
administration yet most improbably could not recall who made
him the offer which made that dream come true. Nor was this
question answered in the months to follow.
It was learned during this hearing that whoever did hire
Livingstone was able to overrule or overcome Kennedy's concerns
about Livingstone's background. Mr. Livingstone admitted his
drug history in committee depositions and during the June 26
hearing. It had also been reported that he was fired from a
previous job for lying about his employment history and was
fired by a store which had employed him for improperly
returning merchandise.
Messrs. Livingstone and Marceca and Ms. Wetzl testified
that the improper request and receipt of hundreds of
confidential FBI background files of former Reagan and Bush
administration officials was undertaken due to their reliance
on a faulty White House access list provided by the Secret
Service.
In order to pursue the committee's investigation into the
FBI files matter, Chairman Clinger initially had sought to
depose FBI agents. Director Freeh recommended, instead, that
the committee be allowed to review relevant FBI background
files, and the chairman agreed to this. On July 16, committee
Chief Investigative Counsel Barbara Olson reviewed the FBI
background files of Livingstone and Marceca. In the Livingstone
FBI file, notes of a Nussbaum interview indicated Nussbaum's
understanding that Livingstone came highly recommended by Mrs.
Clinton, who knew Livingstone's mother. Summarizing an
interview with then-White House Counsel Nussbaum concerning
Livingstone, FBI Agent Sculimbrene wrote, in part, in a
memorandum:
Bernard Nussbaum, Counsel to the President, advised
that he has known [Livingstone] for the period of time
that he has been employed in the new administration.
[Livingstone] had come highly recommended to him by
HILLARY CLINTON, who has known his mother for a longer
period of time.
While the White House--and Livingstone's mother--subsequently
claimed that Mrs. Clinton did not know Livingstone's mother,
the factual accuracy of such a relationship was far less
important than the fact that, at the time of Livingstone's
hiring, Nussbaum understood him to come highly recommended to
the position by a First Lady who knew his mother, details he
had denied under oath.
No less troubling was the committee's subsequent discovery
of continuing FBI involvement in this matter despite General
Reno's obvious concern about the inherent conflict of interest
between the White House and the Department of Justice in the
FBI files investigation. The committee learned that despite the
Attorney General's concerns, FBI Counsel Howard Shapiro
provided the White House with a ``heads-up'' concerning Chief
Investigative Counsel Olson's visit to the FBI and review of
the Livingstone and Marceca files, including the Nussbaum
interview summary which contradicted Nussbaum's testimony to
the committee in a deposition and a hearing. Counsel Shapiro
called Deputy White House Counsel Kathleen Wallman with this
``heads-up.'' Ms. Wallman in turn contacted White House Special
Counsel Jane Sherburne who informed numerous others of the
Livingstone file, including Mr. Nussbaum in advance of his
grand jury appearance.
On July 17, 1996, two FBI agents appeared at the home of
Dennis Sculimbrene, the FBI agent whose interview summary
referred to the hiring of Livingstone, showed him the summary
and asked him for notes of the interview. FBI agents also
searched his work area for information related to Livingstone's
hiring and his background investigation. This, too, appeared to
violate General Reno's sentiments that such actions would,
``constitute a conflict of interest for the Department of
Justice itself to investigate the matter involving an
interaction between the White House and the FBI, a component of
the Department of Justice.''
The question of whether a faulty White House access list
could explain what the Clinton administration had called a
``bureaucratic snafu'' was addressed in the committee's third
hearing on the FBI files matter on July 17, 1996. Secret
Service Special Agents Arnold Cole, John Libonati and Jeffrey
Undercoffer testified at this hearing. Their testimony, based
on recovered lists, charted the transitions of nearly 500
former White House officials from ``Active'' to ``Inactive''
status from 1982 through 1993. The Secret Service agents also
testified the lists it provided the White House would indicate
``Active'' or ``Inactive'' status or ``A'' and ``I'' for those
listed unless a custom list had been requested. Special Agent
Cole also testified that, soon after the Clinton White House
blamed the FBI files ``snafu'' on a faulty Secret Service list,
Livingstone came to him and explained that the office knew
which lists to use even as it improperly requested hundreds of
confidential FBI background files.
Chairman Clinger reviewed Livingstone's file for the first
time on July 18, 1996, in the company of Chief Investigative
Counsel Olson. Chairman Clinger requested information
concerning any communication of information in Livingstone's
file to the White House. On July 19, 1996, FBI Counsel Howard
Shapiro wrote Chairman Clinger a letter informing him that the
FBI had advised the White House as to the contents of the
Livingstone file: ``because issues raised in Mr. Nussbaum's
interview [in Livingstone's FBI file] has been discussed in
connection with the committee's oversight investigation, it was
determined that the Bureau had a responsibility to advise
affected parties. Therefore, after arrangements were made for
your staff to review the files, the Department of Justice, and
then the White House, were advised of the results of this
review.''
On August 1, 1996, the committee held a hearing on
Shapiro's ``heads up'' to the White House on the Livingstone
matter. Shapiro not only admitted to the ``heads up;'' he also
acknowledged hand-carrying retired FBI Agent Gary Aldrich's
manuscript on the Clinton White House, ``Unlimited Access'' to
White House Counsel Quinn.
On October 15, 1996, Chairman Clinger wrote a letter to
Independent Counsel Kenneth W. Starr enclosing copies of the
committee's Travel Office Report and its interim report on the
FBI Background Investigation Files matter. This letter also
addressed Chairman Clinger's concerns about the internal
discrepancies in testimony, witnesses' lack of recall of
material events, and conflicts between the White House's
documentary evidence and the sworn accounts of Jane Sherburne,
Harry Thomason, Craig Livingstone, Anthony Marceca, William
Kennedy, Bernard Nussbaum and Thomas F. ``Mack'' McLarty.
d. Questions concerning campaign contributions made to or
solicited by Lippo Group, John Huang and others.--In September
and October 1996, it was reported that two former Department of
Commerce employees had been involved in political activities
while working at the Commerce Department. Former Deputy
Assistant Secretary for International Economic Policy John
Huang and Melinda Yee, former Special Assistant to the late
Secretary of Commerce Ron Brown, allegedly were involved in
fund raising and/or other political activities on behalf of the
Clinton campaign while on the Federal Government payroll.
Following his tenure at Commerce, Huang became a senior fund
raiser at the Democratic National Committee. Some of the
largest campaign contributions he solicited while there
allegedly were made in violation of Federal Election Commission
laws.
Prior to joining the Clinton administration, Mr. Huang was
a senior executive of the Lippo Group, an Indonesia-based
conglomerate which provided him an $800,000 bonus shortly
before he accepted a Commerce Department post where his work
raised conflict of interest issues with his former employer.
Mr. Huang and James Riady, whose family controls the Lippo
Group, had known President Clinton since the 1980's. Throughout
that period, Huang and Riady raised substantial sums of money
for Clinton's gubernatorial and Presidential campaigns.
Subsequently, it was reported that together they participated
in scores of meetings in the Clinton White House. Policy
matters were discussed at some of these meetings, possibly in
violation of Federal Election Commission campaign law. Follow-
up articles addressed a number of other campaign finance
irregularities arising during the course of the Clinton
campaign, including contributions made by individuals barred by
law from making them.
In October 1996, Chairman Clinger initiated a series of
document requests for materials relevant to this inquiry, which
is ongoing. The Democratic National Convention has refunded
$1.5 million in contributions from illegal or questionable
sources.
e. Misuse of political influence within the disciplinary
enforcement system at the Department of Defense.--On August 2,
1996, the committee received allegations that high-level White
House and Department of Defense (DOD) officials had misused
their positions and influence to circumvent the DOD
disciplinary enforcement system. The allegations charged that
White House officials had pressured the Deputy Under Secretary
of Defense to employ a former Air Force officer who had
recently been dismissed following confirmed charges of official
misconduct. The former officer was alleged to have been re-
hired to a senior Schedule-C political appointee position
within the Office of the Secretary of Defense (OSD).
Pursuing the allegations, the committee first confirmed
that the former officer had, in fact been re-hired within OSD,
then reviewed the charges of TDY fraud, government cell phone
fraud, government AMEX Travel Card abuse and sexual harassment
which had originally been lodged against the officer. The
committee examined the complete Defense Systems Information
Agency Inspector General (DISA IG) and Air Force Office of
Special Investigations (AFOSI) investigative files on the case.
Staff interviewed the DISA IG and AFOSI case investigators, the
reviewing Air Force Staff Judge Advocate and Deputy Staff Judge
Advocate, and the retired officer's former commanding officers.
All records and interviews substantiated the validity of the
initial charges. The Staff Judge Advocate confirmed that while
the evidence was sufficient to warrant administrative action,
the Air Force had agreed to forego disciplinary proceedings in
return for the officer's resignation.
Committee staff then met with the Deputy Under Secretary of
Defense and representatives of the Secretary of Defense to
discuss the decision to employ the dismissed officer as a high-
level political appointee at an annual salary of well over
$100,000. Although both the Deputy Under Secretary and the
Secretary's senior staff were made aware of the past misconduct
and the officer's forced resignation, the Secretary declined to
take action to remove the officer from his subsequent
employment.
The committee then referred the matter to the appropriate
House and Senate authorizing and appropriating committees for
additional action.
f. Health Care Task Force.--In February 1993,
Representative Clinger called into question the secretive
manner in which the administration's Health Care Task Force was
conducting business. After requesting information from an
unresponsive White House on whether the Task Force was meeting
in compliance with statutes concerning open meetings,
recordkeeping, conflict of interest requirements and costs,
Representative Clinger requested a GAO audit. In a required
charter, the Clinton administration claimed Task Force costs
would be less than $100,000. The GAO audit, however, placed the
total cost at $13.8 million.
g. Labor Department Taxpayer Funded ``Toll-Free''
Hotline.--Following reports of a telephone hotline set up by
the Department of Labor to gather support for increasing the
minimum wage from minimum wage earners, Chairman Clinger sent a
letter to Secretary Reich requesting information on the costs
and purpose of the telephone bank, and to ascertain whether the
Department was in compliance with appropriate information
collection laws. Shortly thereafter, the hotline was shut down.
After several delays, the Department reported that, although
total costs were not yet available, the Department had capped
the total cost of the politically inspired hotline at $25,000.
The minimum wage brings workers an annual salary of $8,840.
h. National Reconnaissance Office.--Chairman Clinger and
subcommittee Chairman Horn have asked the GAO to review reports
due from Defense Department and the Central Intelligence Agency
on revelations that the National Reconnaissance Office secretly
accumulated $1.7 billion in unspent appropriated funds. After
the GAO report has been completed and reviewed, the committee
will determine if further action, including possible financial
management reforms, is warranted.
i. Abuse of the American Express Government Travel Payment
Program.--In the fall of 1995, the Committee on Government
Reform and Oversight reviewed two audit reports, one from the
Commerce Department and the other from the U.S. Information
Agency. Each of these reports highlighted problems associated
with the American Express Government Travel Payment Program.
At the U.S. Information Agency, the audit report cited
$2,200,000 in delinquent funds for the Agency's centrally
billed credit card account, and $240,000 in delinquent funds
for the Agency employees' individually billed credit card
accounts. At the Commerce Department, delinquency was found
among 293 employees. The committee also learned from these
reports that American Express Travel Cards were being used for
personal expenditures on a large scale. At the Commerce
Department, 567 employees were found to have used the travel
cards for personal use. At the U.S. Information Agency,
employees were found to have charged $116,000 in retail
purchases, much of which was found to be for personal use.
As a result of these reports, the committee endeavored to
study the breadth of the problems associated with the American
Express Government Travel Payment Program throughout the
Federal Government. In March 1996, committee staff met with
members of the Office of Management and Budget and the General
Services Administration and agreed on parameters by which
agencies would submit records and/or analysis of the
irregularities in their offices.
The number and amount of delinquent charges on Government
employees' American Express cards is massive. At the Department
of Justice, the Inspector General reports that the sum of
Centrally Billed Accounts and Individually Billed Accounts
brings monthly delinquency to $1.1 million and identified 768
transactions as ``possible misuse.'' Upon investigation, the
Department of Justice Inspector General found charges to retail
establishments like Victoria's Secret and Gucci. One such
personal charge was to the Boston Red Sox.
The Environmental Protection Agency chose to examine only
its Region 5 office. In that region, misuse ranged from $10.40
to $21,281. Twenty-four Environmental Protection Agency
employees improperly charged $2,000 or more on their Government
credit cards.
Although the State Department Inspector General reported
only $82,000 in possible misuse over a 6 month period, of the
$6.4 million in retail charges, $3.2 million represents cash
transactions from automatic teller machines or traveler checks.
The State Department Inspector General reports total
delinquency among Government credit card holders at between
$847,805 and $1,093,034 each month.
On September 25, 1996, Chairman Clinger wrote to Franklin
D. Raines, the Director of the Office of Management and Budget,
for his assurance that these abuses are being corrected. In
addition, the chairman sought to ensure that provisions in a
new contract being negotiated by the General Services
Administration were designed to prevent the widespread abuse
discovered in the course of the committee's investigation. The
committee is awaiting a response from Director Raines.
j. Taxpayer Funded Trip to Disney World.--After learning of
a Disney World training seminar conducted at taxpayer expense
for as many as 400 Federal employees, Chairman Clinger wrote on
behalf of the committee to the Departments of Interior,
Agriculture, and Defense to obtain an accounting of the exact
costs of the trip, the number of employees involved, and an
explanation of how the training related to the Departments'
missions. The trip was taken just 1 week after the Federal
Government shut down as a result of disagreements on how to
achieve a balanced budget. Chairman Clinger spelled out his
concern that hundreds of thousands of dollars may have been
spent for what appears to be a lavish, taxpayer-funded
vacation.
4. Legislation.
a. H.R. 5, the Unfunded Mandates Reform Act of 1995 (Public
Law 104-4)
a. Report Number and Date.--House Report No. 104-1, Pt. 2;
January 13, 1995.
b. Summary of Measure.--The Unfunded Mandates Reform Act of
1995 was intended to relieve the burden of unfunded Federal
mandates on State, local and tribal governments and the private
sector. It was designed to ensure that Congress and the
executive branch (1) had information on the costs of unfunded
Federal mandates, and (2) were accountable to States and
localities, the private sector, and the public for imposing new
mandates without paying for them.
Title I of the Unfunded Mandates Reform Act (Public Law
104-4) amended Title IV of the Congressional Budget Act to
provide that Congress must have Congressional Budget Office
(CBO) estimates for the costs of mandates it would impose on
State and local governments and the private sector through
reported legislation. Intergovernmental mandates projected to
cost State, local or tribal governments over $50 million in the
aggregate must be funded. Legislation that does not meet these
requirements will be subject to a point of order on the House
and Senate floor, where a majority of members must vote to
waive the point of order before Congress can consider an
intergovernmental mandate without paying its costs.
Title II of the law requires Federal agencies to analyze
the effects of their rules on State and local governments and
the private sector, and prepare written statements detailing
the costs and benefits of rules expected to cost either State,
local and tribal governments or the private sector over $100
million in the aggregate. Agencies must consult with State and
local elected officials throughout the process. Agencies also
must select the least costly or most cost-effective rule where
possible.
Title III provides for a look back at existing mandates. It
requires the Advisory Commission on Intergovernmental Relations
to re-evaluate existing mandates and to make recommendations to
Congress and the President within 1 year as to whether some or
all should be changed or repealed.
Title IV provides for limited judicial review of agency
actions under Title II.
The differences between H.R. 5 as reported by the committee
and Public Law 104-4 are fairly technical in nature and do not
dramatically alter the purpose or effect of the legislation.
c. Legislative History/Status.--Government Reform and
Oversight Committee Chairman William F. Clinger, Jr., joined
with Representatives Rob Portman (R-OH), Gary Condit (D-CA) and
Tom Davis (R-VA) to introduce H.R. 5, the Unfunded Mandates
Reform Act, on January 4, 1995. The bill was referred to the
Committee on Government Reform and Oversight, with secondary
referrals given to the Committees on Rules, Budget, and
Judiciary.
d. Hearings and Committee Actions.--On January 10, 1995,
the committee voted to report H.R. 5 by a voice vote after a
mark up in which 18 amendments were offered and 4 were adopted.
Of those amendments adopted, three were offered by
Representative Steve Horn (R-CA) and one was offered by
Representative Paul Kanjorski (D-PA). The committee did not
consider sections 201, 202, or Title III of H.R. 5 based on
consultations with the Parliamentarian that those provisions
were not in the committee's jurisdiction.
S. 1, the companion bill in the Senate (also titled the
Unfunded Mandates Reform Act of 1995), moved through the Senate
Governmental Affairs Committee on a parallel track.
House floor consideration of H.R. 5 began on January 19,
1995, and concluded on February 1, 1995. The Conference Report
on S. 1 was passed by the House on March 16, 1995, and was
signed into law on March 22, 1995.
b. H.R. 2, Line Item Veto Act of 1995
a. Report Number and Date.--House Report No. 104-11, Pt.
II, January 30, 1995, together with minority and additional
views.
b. Summary of Measure.--H.R. 2, the House-passed Line Item
Veto Act of 1995, was designed to supplement the President's
existing impoundment authority by creating a new enhanced
rescission process for individual appropriations and targeted
tax benefits contained in Federal tax and spending bills. The
bill as sent to the President addresses not only individual
appropriations and limited tax benefits, but also provides
item-veto authority for increases in new direct spending.
Under the Line Item Veto Act, the President may strike any
whole dollar amount of discretionary spending in an
appropriations act, conference report, or joint explanatory
statement to accompany a conference report.
In the case of entitlements, the President is permitted to
cancel specific provisions of law which provide new direct
spending relative to the current budget baseline. Any new
direct spending program or legislative expansion of an existing
entitlement would therefore be subject to the line item veto.
For limited tax benefits, the act permits the Joint
Committee on Taxation to determine which provisions, if any, in
a revenue or reconciliation bill meet the definition of a
limited tax benefit. If the Joint Committee's determinations
are included in the revenue or reconciliation bill which is
sent to the President, its determinations are binding upon the
President's cancellation authority. If no Joint Committee
determinations are included in the bill, the President is
permitted to make his own determination of what qualifies as a
limited tax benefit using the definition contained in the Line
Item Veto Act.
Tax or spending items item-vetoed by the President are
automatically canceled and may only be reinstated if both
Houses of Congress vote to disapprove the President's
cancellations within a fixed time period. All moneys saved are
set aside in a lockbox account for the purposes of deficit
reduction. If both Houses disapprove the President's
recommendations by a bill or joint resolution, the President
retains his constitutional authority to veto the disapproval
measure, forcing the Congress to obtain a two-thirds vote in
each House to override. The Line Item Veto Act permits the
President to choose between using its new item-veto process or
the existing impoundment process contained in title X of the
Congressional Budget Act.
c. Legislative History/Status.--H.R. 2 was introduced on
January 4, 1995, and was approved and ordered reported, as
amended, by the Committee on Government Reform and Oversight on
January 25, 1995. On January 26, 1995, the Committee on Rules
asserted its sequential referral by marking-up the bill. The
Rules Committee ordered the bill reported with two amendments
which more closely defined the format of the President's
special disapproval message. An amendment in the nature of a
substitute to H.R. 2, incorporating both the Government Reform
and Oversight and Rules Committee amendments, passed the House
of Representatives on February 6, 1995.
On February 14, 1995, the Senate Budget Committee reported
two competing versions of S. 4 while the Senate Committee on
Governmental Affairs reported its version of the bill on March
7, 1995. The Senate approved the bill, as amended on March 23,
1995, and requested a conference. The bill S. 4 passed the
House on March 28, 1996 and was signed into law by the
President on April 9, 1996, to become Public Law 104-130.
d. Hearings and Committee Actions.--A joint hearing was
held on January 12, 1995, by the House Committee on Government
Reform and Oversight and the Senate Committee on Governmental
Affairs. In the first panel, testimony was received from
Senators John McCain and Dan Coats, and from Representatives
Gerald Solomon, Jack Quinn, Mark Neumann and Michael Castle.
All spoke in favor of the bill. Governor William Weld of
Massachusetts then testified to the effectiveness of the line-
item veto in controlling State expenditures. Dr. Alice Rivlin,
Director of the Office of Management and Budget, spoke on
behalf of the Clinton administration and expressed support for
the legislation as enhancing the President's authority to cut
spending. Dr. Robert Reischauer, Director of the Congressional
Budget Office, then cautioned that the bill would provide the
President with greater potential power than a constitutionally
approved item-veto. Judge Gilbert S. Merritt, Chief Judge of
the Sixth Circuit and chairman of the Executive Committee of
the Judicial Conference, expressed concern over applying the
line-item veto to appropriations acts for the judiciary. The
hearing ended with the final panel, which consisted of Joseph
Winkelmann of Citizens Against Government Waste, David Keating
of the National Taxpayers' Union, and Dr. Norman Ornstein of
the American Enterprise Institute, taking different views of
the bill. Mr. Winkelmann and Mr. Keating strongly supported
H.R. 2, while Dr. Ornstein regarded the bill as more of a
transfer of congressional power to the President than a process
for true spending restraint.
c. H.R. 1038, a bill to revise and streamline the
acquisition laws of the Federal Government.
a. Report Number and Date.--None.
b. Summary of Measure.--On February 24, 1995, Chairman
William F. Clinger, Jr., of the Committee on Government Reform
and Oversight, Chairman Floyd D. Spence of the Committee on
National Security, and Chairman Benjamin A. Gilman of the
Committee on International Relations, introduced H.R. 1038 to
revise and streamline the acquisition laws of the Federal
Government. The bill addressed two issues: repeal of the
recoupment of research and development costs, and a rewrite of
the Procurement Integrity laws.
c. Legislative History/Status.--Included as part of H.R.
1670, the Federal Acquisition Reform Act of 1995 in May 1995,
which subsequently was modified and included in the conference
report to S. 1124, the Fiscal Year 1996 Department of Defense
Authorization Act (Public Law 104-106).
d. Hearings and Committee Actions.--The bill was referred
to the Subcommittee on Government Management, Information, and
Technology, which met pursuant to notification on February 28,
1995, to solicit additional proposals for further simplifying
and streamlining the Federal procurement system. At the
hearing, testimony was received from various procurement
specialists in the contracting community representing
government and industry.
Generally, the comments of the witnesses were as follows:
those representing the government expressed the need for less
congressional micro-management and greater flexibility and
authority for agency contracting officers; those representing
businesses, both large and small, reiterated their long held
views about reducing government rules and regulations so they
could sell to government agencies like they do to private
sector buyers; and those representing other groups complained
that existing laws are too complicated and too confusing.
The various proposals for reform brought forward by the
witnesses ranged from minor technical corrections to a complete
overhaul of the system.
d. H.R. 1670, The Federal Acquisition Reform Act of 1995
a. Report Number and Date.--Report No. 104-222, Pt. 1,
together with additional minority views; August 1, 1995.
b. Summary of Measure.--During this time of declining
Federal budgets, Chairman Clinger and his colleagues sought to
eliminate the mass of requirements littering the current
Federal procurement system that has led to too much money being
spent for too little product. H.R. 1670 would remove from
statute many of these unnecessary government-unique
requirements which are often non-value added obstacles to doing
business with the Federal Government.
This legislation would make changes to the current
competition standard; increase the government's purchase of
commercial items; streamline current procurement integrity
statutes; provide that it is the policy of the Federal
Government to acquire goods and services from the private
sector; and consolidate current contract disputes and bid
protest forums into two streamlined entities, one for
Department of Defense acquisitions and the other for the
civilian agencies.
c. Legislative History/Status.--On June 14, 1995, a version
of H.R. 1670 was offered on the floor of the House of
Representatives as an amendment to the fiscal year 1996
Department of Defense Authorization Act; adopted and amended by
Congresswoman Cardiss Collins' second degree amendment to
remove Title I of H.R. 1670, and replace it with language which
would retain the current statutory competition standard and
include further statutory revisions.
An amendment in the nature of a substitute to H.R. 1670 was
developed prior to committee mark-up to reflect the views of
other Members of Congress (both Republican and Democrat),
industry associations, senior industry executives, the
administration, government contracting officials,
representatives of both large and small business, and from
other interested individuals. The Committee on Government
Reform and Oversight met on July 27, 1995, to consider H.R.
1670. The bill, as amended, was favorably reported to the House
by voice vote and without further amendment by the full
committee.
H.R. 1670 was passed on the floor of the House of
Representatives on September 14, 1995, by an overwhelming vote
of 423-0. The bill was sent to the Senate and referred to the
Committee on Governmental Affairs.
H.R. 1670 was included in a modified form as Division D in
the final conference report to accompany S. 1124, the
Department of Defense Authorization Act for Fiscal Year 1996.
S. 1124 was signed by the President on February 10, 1996, and
became Public Law 104-106.
Included in the Omnibus Consolidated Appropriations Act for
Fiscal Year 1997 (Public Law 104-208) was language to change
the short titles of both Division D and Division E (the
Information Technology Management Reform Act of 1996) of Public
Law 104-106 to the Clinger-Cohen Act of 1996.
d. Hearings and Committee Actions.--A joint hearing by the
Committee on Government Reform and Oversight and the Committee
on National Security was held on May 25, 1995, to solicit views
on H.R. 1670 as introduced on May 18, 1995. Procurement experts
representing both government and industry provided comment.
Statements presented by industry representatives emphasized
that H.R. 1670 would shift presumptions of private and public-
sector business interaction from a negative one to a positive
one, and would permit things to be done cheaper, faster, and
better than currently is being done today. These
representatives identified H.R. 1670 as clearly making a long-
term mark on the acquisition system to prepare it for the 21st
century.
e. H.R. 830, The Paperwork Reduction Act of 1995
a. Report Number and Date.--Report No. 104-37, February 15,
1995.
b. Summary of Measure.--The Paperwork Reduction Act is
intended to:
1. Reauthorize appropriations for the Office of
Management and Budget's (OMB) Office of Information and
Regulatory Affairs (OIRA) to carry out the provisions
of the Paperwork Reduction Act of 1980 as amended.
2. Strengthen OIRA and agency responsibilities for
the reduction of paperwork burdens on the public,
particularly through the inclusion of all federally
sponsored collections of information in a clearance
process involving public notice and comment, public
protection, and OIRA review.
3. Establish policies to promote the dissemination of
public information on a timely and equitable basis, and
in useful forms and formats.
4. Strengthen agency accountability for managing
information resources in support of efficient and
effective accomplishment of agency missions and
programs.
5. Improve OIRA and other central management agency
oversight of agency information resources management
(IRM) policies and practices.
The legislation was premised on the committee's continuing
belief in the principles and requirements of the Paperwork
Reduction Act of 1980. All of the legislation's amendments to
the 1980 act, as amended in 1986, are intended to further its
original purposes--to strengthen OMB and agency paperwork
reduction efforts, to improve OMB and agency information
resources management, including in specific functional areas
such as information dissemination, and to encourage and provide
for more meaningful public participation in paperwork reduction
and broader information resources management decisions.
With regard to the reduction of information collection
burdens the legislation increases the act's 1986 goal of an
annual 5 percent reduction in the public paperwork burdens to
10 percent during the first 2 years of authorization and 5
percent thereafter. OMB is required to include in its annual
report to Congress recommendations to revise statutory
paperwork burdens if this goal is not reached. The legislation
includes third-party disclosure requirements in the definition
of collection of information to overturn the Supreme Courts
decision, Dole v. United Steelworkers of America (494 U.S. 26
(1990)). This will ensure that collection and disclosure
requirements are covered by the OMB paperwork clearance
process. The act is also amended to require each agency to
develop a paperwork clearance process to review and solicit
public comment on proposed information collections before
submitting them to OMB for review. Public accountability is
also strengthened through requirements for public disclosure of
communications with OMB regarding information collections (with
protections for whistle blowers complaining of unauthorized
collections), and for OMB to review the status of any
collection upon public request. In combination with more
general requirements, such as encouraging data sharing between
the Federal Government and State, local and tribal governments,
the legislation strives to further the act's goals of
minimizing Government information collection burdens, while
maximizing the utility of Government information.
The legislation also adds further detail to strengthen
other functional areas such as statical policy and information
dissemination. The dissemination provisions, for example,
delineate clear policies that were not articulated in the act's
previous references to dissemination. The provisions require
OMB to develop governmentwide policies and guidelines for
information dissemination and to promote public access to
information maintained by Federal agencies. In turn, the
agencies are to: ensure that the public has timely and
equitable access to public information; solicit public input on
their information dissemination activities; and not establish
restrictions on dissemination or redissemination. Emphasis is
placed on efficient and effective use of new technology and a
reliance on a diversity of public private sources of
information to promote dissemination of Government information,
particularly in electronic formats.
With regard to over-arching information resources
management (IRM) policies, the legislation charges agency heads
with the responsibility to carry out agency IRM activities to
improve agency productivity, efficiency, and effectiveness. It
makes program officials responsible and accountable for those
information resources supporting their program. The IRM mandate
is strengthened by focusing on managing information resources
in order to improve program performance, including the delivery
of services to the public and the reduction of information
collection burdens on the public.
To improve accountability for agency IRM responsibilities,
as well as responsibilities for paperwork reduction, the agency
responsibilities provided in the act are amended to complement
and more directly parallel OMB's functional responsibilities.
Further, to prompt agencies to reform their management
practices, the bill requires each agency head to establish an
IRM steering committee, develop an IRM strategic planning
process, and develop IRM performance measures linked to program
performance. In these various pursuits, the goal is to
integrate the management of information resources with program
management and assure the use of the resources to achieve
agency missions. With the Federal Government spending
approximately $25 billion a year on information technology, the
stakes are too high not to press for the most efficient and
effective management of information resources. The reduction of
information collection burdens on the public and maximizing the
utility of Government information will not otherwise occur.
c. Legislative History/Status.--H.R. 830, the Paperwork
Reduction Act of 1995, was introduced on February 6, 1995, by
Government Reform and Oversight Committee Chairman William F.
Clinger, Jr., for himself, Congressmen Norman Sisky, David
McIntosh, chairman of the Subcommittee on National Economic
Growth, Natural Resources, and Regulatory Affairs, and other
Members of Congress.
The President signed the bill on May 22, 1995, as Public
Law 104-13.
d. Hearings and Committee Actions.--After introduction,
H.R. 830 was referred to the Committee on Government Reform and
Oversight. On February 6, 1995, Chairman Clinger referred the
bill to the Subcommittee on National Economic Growth, Natural
Resources, and Regulatory Affairs for consideration. On
February 7, 1995, the subcommittee, under the direction of
Chairman McIntosh, held a hearing to consider reauthorization
of appropriations for the Paperwork Reduction Act, OIRA's
implementation of the act, and OIRA's conduct of regulatory
review under Presidential Executive order. Testimony included
comment and discussion of H.R. 830.
Witnesses at the February 8, 1995 hearing were: Sally
Katzen, Administrator, Office of Information and Regulatory
Affairs; Mr. James McIntyre, former Director of the Office of
Management and Budget and currently an attorney; Mr. James
Miller, former Director of the Office of Management and Budget
and current chairman of the Citizens for a Sound Economy; Mr.
Gene Dodaro, Assistant Comptroller General, General Accounting
Office accompanied by Mr. Chris Hoenig, also of GAO; Mr. Robert
Coakley, executive director, Council on Regulatory and
Information Management; Jack Sheehan, legislative director,
United Steelworkers of America; and Bob Stolmeier, president,
KLC Corp.
At the hearing, Clinton administration witness Sally Katzen
testified squarely in support of H.R. 830:
It is truly gratifying to be here today in what I
hope is the last phase of improving and strengthening
the Paperwork Reduction Act. For more than 2 years
Congress has had legislative proposals to update and
expand the Paperwork Reduction Act consistent with and
building upon its original purposes. My commendations
to the congressional staff who have worked
professionally and constructively to develop a
consensus, a bipartisan approach, which is contained in
H.R. 830 and in the Senate, 244, which the Senate
Governmental Affairs Committee reported out on February
1. We are pleased to report that the administration
supports those efforts.
After taking into consideration the testimony of the
witnesses at the February 7 hearing, and after further
consultation with the staff of the House Small Business
Committee, the Senate Committee on Governmental Affairs, and
with staff of the General Accounting Office and Office of
Management and Budget, the subcommittee held a mark-up of H.R.
830 on February 8, 1995. The full committee held its mark-up on
February 10, 1995, and voted, 40 in favor and 4 against, to
report H.R. 830, as amended, favorably to the full House.
f. S. 790, The Federal Reports Elimination and Sunset Act
of 1995
a. Report Number and Date.--Report No. 104-327, November 8,
1995.
b. Summary of Measure.--During consideration of S. 244 the
Paperwork Reduction Act of 1995 (PRA), the Senate adopted two
amendments which dealt with the elimination or modification of
certain congressionally mandated reporting requirements and
also placed a sunset on other similar reports. These amendments
were offered by Senators John McCain (R-AZ) and Carl Levin (D-
MI). Conferees meeting to resolve differences between the House
and Senate versions of the PRA agreed to offer the McCain and
Levin amendments as separate and freestanding legislation. The
PRA was signed into law on May 22, 1995, as Public Law 104-13
without the McCain and Levin amendments.
After the President signed the Paperwork Reduction Act of
1995 into law, House and Senate staffers in both the majority
and minority began meeting to initiate the work necessary to
present this bill to the House Government Reform and Oversight
Committee and the Senate Governmental Affairs Committee.
The Paperwork Reduction Act sets the standard by which
Congress can continue to alleviate the paperwork burden on
executive branch agencies. The Federal Report Elimination and
Sunset Act of 1995 continues that work. By mandate, executive
branch agencies annually produce thousands of reports to
Congress. Many are outdated and no longer necessary. This bill
eliminates or modifies nearly 200 such reporting requirements
and establishes a sunset on all others.
S. 790 was needed not merely to alleviate the burden on the
executive branch but to also allow the Government to focus its
energy on more important issues, thereby better utilizing their
time. On December 21, 1982, President Ronald Reagan signed the
Congressional Reports Elimination Act of 1982 into law (Public
Law 97-375) and 13 years later the Federal Reports Elimination
and Sunset Act continues, with the same strong bi-partisan
support that the 1982 act received, to relieve the Federal
Government of needless and burdensome paperwork. President
Reagan said in his statement that this was a, ``useful and
constructive step in reducing unnecessary paperwork and in
improving executive branch operations.'' Also, given increasing
costs of report production, this bill will help control costs
in keeping with this committee's efforts to increase the
efficiency of the Federal Government.
c. Legislative History/Status.--Senators McCain and Levin
introduced S. 790, the Federal Reports Elimination and Sunset
Act of 1995, on May 11, 1995. It was reported favorably by the
Senate Committee on Governmental Affairs and was approved by
the Senate by a unanimous voice vote on July 17, 1995.
In his floor speech, Senator Levin compared S. 790 to S.
2157, which he and Senator Cohen introduced in 1994. The
Senator explained that the list of reports included in S. 790
was first compiled by sending out letters asking all 89
executive and independent agencies to identify those reports
required by law which were no longer necessary or useful and
could be eliminated or modified. Agencies were asked to produce
a clear and substantiated justification for each recommendation
made.
Following Senate approval, S. 790 was sent to the U.S.
House of Representatives on July 18, 1995, and held at the
Clerk's desk. On September 12, 1995, S. 790 was referred to the
House Committee on Government Reform and Oversight. On
September 14, 1995, Congressman Robert Ehrlich (R-MD)
introduced the House companion to S. 790, H.R. 2331, with 9
additional co-sponsors. Congressman Ehrlich echoed the concerns
of the Paperwork Reduction Act conferees by urging his
colleagues to co-sponsor H.R. 2331 and, ``lighten the red tape
burden on executive branch agencies so that our government can
operate with fewer restrictions and greater efficiency.'' The
Congressman also stated that he has, ``the upmost confidence
that the President will want to sign this important piece of
legislation into law because it allows executive branch
agencies to focus more resources on important current issues as
opposed to focusing on outdated and unnecessary reporting
requirements.''
d. Hearings and Committee Actions.--The Government Reform
and Oversight Committee, working in cooperation with the Senate
Governmental Affairs Committee, distributed a copy of this
report to all the House and Senate full committee chairmen and
ranking minority members to elicit their views as to whether
the changes being made would impede their committees
legislative and oversight functions. Their responses were
incorporated into the final amendments to this bill.
On September 21, 1995, S. 790 was amended and reported by a
unanimous voice vote by the full Committee on Government Reform
and Oversight. Committee Chairman William F. Clinger, Jr. (R-
PA) praised the Reports Elimination and Sunset Act of 1995 by
stating, ``this legislation will continue the very positive
work this committee started with the Paperwork Reduction Act in
a continuing effort to eliminate Federal paperwork burdens.''
Congresswoman Cardiss Collins (D-IL), the committee's ranking
minority member, also expressed her support.
During the committee's September 21, 1995 consideration of
S. 790, two en-bloc amendments were offered and passed without
objection. The first, by Congresswoman Collins, modified the
bill as requested by the International Relations Committee,
deleting some of the reports that were slated for elimination
and making some minor technical changes. It was approved by a
voice vote.
The second amendment was offered by Congressman Ehrlich and
also passed by a voice vote. A portion of the Ehrlich amendment
reinstated the Estimated expenditures under the Food Stamp
Program report, at the request of the House Agriculture
Committee. The information contained in this report was
necessary to the committee as it prepared to vote on the Farm
bill.
Also included in this en-bloc amendment was a request from
the U.S. Railroad Retirement Board modifying a report dealing
with 5-year retirement fund projections to allow for greater
accuracy in projecting funds numbers. S. 790 was approved by
the Government Reform and Oversight Committee by a unanimous
voice vote.
g. H.R. 3864, General Accounting Office Management Reform
Act of 1996
a. Report Number and Date.--None.
b. Summary of Measure.--Title I eliminates over 100
existing statutory mandates affecting GAO that do not represent
the most efficient and effective use of GAO's limited
resources. Most of the provisions of title II fall into one of
the following two categories:
Elimination of ``executive'' type functions. These
provisions relieve GAO of statutory functions that do
not further GAO's current mission and are more
appropriate for performance by the executive branch.
Functions that are still relevant to government
operations are transferred to executive branch
agencies. Some of the functions are simply obsolete;
these functions are repealed.
Elimination of auditing and reporting mandates. These
provisions relieve GAO of statutory auditing and
reporting requirements, while preserving GAO's
authority to conduct the audit pursuant to a specific
Congressional request or at its own initiative. Thus,
the provisions give GAO flexibility to apply its
resources where they are most needed.
Title I includes a number of other provisions that will
enhance the efficiency of GAO's operations, and eliminate
paperwork requirements for GAO as well as executive branch
agencies.
Section 211 of the Legislative Branch Appropriations Act,
1996 (Public Law 104-53, 109 Stat. 535) transferred a number of
GAO's ``executive'' type functions to the OMB, effective on
June 30, 1996, and authorized the Director of OMB to delegate
those functions to other Federal agencies. In all but a few
cases, the Director has now delegated the functions.
Title II of the bill makes conforming amendments to the
statutes underlying the functions covered by section 211 of the
1996 Appropriations Act in order to reflect the transfers to
OMB and further delegations by OMB of those functions. For the
most part, the conforming amendments of title II delete
references to the Comptroller General or GAO in these
underlying statutes and substitute references to the officials
or agencies now vested with responsibility for the functions
pursuant to section 211 of the 1996 Appropriations Act. Where
the delegation of a function has not been completed, the
conforming amendment reflects the transfer to OMB and preserves
the OMB Director's authority to delegate further.
c. Legislative History/Status.--Government Reform and
Oversight Committee member, Representative Steve LaTourette (R-
OH), introduced H.R. 3864. The bill was referred to the
Committee on Government Reform and Oversight on July 22, 1996,
and was approved as amended on July 25, 1996. H.R. 3864 passed
the House of Representatives on September 4, 1996, by voice
vote. The bill was passed by unanimous consent of the Senate on
October 3, 1996. It was signed by the President on October 19,
1996 and became Public Law No. 104-316.
d. Hearings and Committee Actions.--On April 30, 1996, the
Subcommittee on Government Management, Information, and
Technology held hearings on the oversight of the General
Accounting Office. Subcommittee Chairman Stephen Horn presided
over the testimony of John A. Koskinen, Deputy Director for
Management, Office of Management and Budget; R. Scott Fosler,
president, National Academy of Public Administration; Thomas V.
Fritz, president and chief of Executive Officer, Private Sector
Council; Cornelius E. Tierney, professor of accountancy,
director, Center for Public Financial Management, School of
Business and Public Management, the George Washington
University; Charles A. Bowsher, Comptroller General of the
United States; and James F. Hinchman, Special Assistant to the
Comptroller General.
h. H.R. 3136, title III, subtitle E, the ``Congressional
Review of Agency Rulemaking,'' (Public Law No. 104-
121, title II, subtitle E)
a. Report Number and Date.--Although there was no committee
report on the ``Small Business Regulatory Enforcement Fairness
Act of 1996'' (title II) or the ``Congressional Review of
Agency Rulemaking'' (subtitle E), the Committees of
Jurisdiction in the House and Senate filed a joint statement in
the Congressional Record in lieu of a statement of managers.
See 142 Cong. Rec. E571, 574-79 (daily ed. April 19,1996)
(statement of March 28, 1996 by Chairman Hyde for the
committees of jurisdiction); 142 Cong. Rec. S3683-87 (daily ed.
April 18, 1996) (statement of Senator Nickles for himself and
for Senators Reid and Stevens).
b. Summary of Measure.--The Congressional Review Act (CRA)
adds a new chapter 8 to the Administrative Procedure Act that
requires executive branch agencies to submit their new rules to
Congress for congressional review. See 5 U.S.C. chapter 8
(Supp. 1996). The CRA allows Congress to review each new rule
and consider a joint resolution of disapproval to overrule it
under expedited House and Senate procedures. Under the
Congressional Review Act, no rule may go into effect until it
is delivered to the House, the Senate, and to GAO. Although the
CRA applies to almost all rules, ``major rules'' are delayed in
their effectiveness for 60 calender days to provide Congress
with a chance to reject problematic rules before they have an
adverse impact. Moreover, the term ``rule'' is defined very
broadly to include all general agency statements that affect
the public, including ``interpretive'' rules, agency ``policy
statements,'' ``guidelines,'' and ``staff manuals.'' In
addition to submitting the rules themselves, agencies will have
to submit a report to Congress on each rule stating whether
they have complied with the Unfunded Mandates Reform Act, the
Regulatory Flexibility Act, and whether they have conducted a
valid cost-benefit analysis, taking analysis, and federalism
assessment as set forth in the Reagan, Bush, and Clinton
Executive orders. If a resolution of disapproval is introduced
to overturn a problematic regulation, Congress may reject the
rule using expedited procedures that eliminate the Senate
filibuster and require only a simple majority in each House for
passage. If Congress does reject a rule, the rule may not be
reissued in substantially the same form without congressional
authorization.
The intent of the CRA is to bring increased accountability
to the rulemaking process. It is also expected that increased
congressional involvement will make the agencies more open and
responsive to comments from regulated entities during the
rulemaking process and during enforcement proceedings. This
will foster a more cooperative, less threatening, regulatory
environment. As a result, it is the committee's hope and
intention that agencies will issue more flexible and less
burdensome rules that achieve the same or superior level of
protection of health, safety, and the environment.
c. Legislative History/Status.--The Senate passed four
different versions of the ``Congressional Review Act'' (CRA)
and the House passed two different versions of it before the
act was incorporated in H.R. 3136 and became part of Public Law
104-121 (title II, subtitle E). Senator Don Nickles introduced
the first version of the CRA, S. 219, as a companion bill to
H.R. 450, the Regulatory Transition Act of 1995, which
originated in the House Subcommittee on National Economic
Growth, Natural Resources, and Regulatory Affairs. The Senate
passed S. 219 by a recorded vote of 100-0 on March 29, 1995. On
November 9, 1995, the House and Senate then passed an identical
version of the CRA as section 3006 of title III of H.R. 2586,
the first debt limit bill. Chairman Bob Walker included section
3006 in his amendment to the debt limit bill at the request of
Chairman William F. Clinger, Jr. and Representative David M.
McIntosh who were the principal House sponsors of the
legislation. The President vetoed H.R. 2586 for reasons
unrelated to section 3006. On March 19, 1996, the Senate passed
a third version of the CRA as part of S. 942, the Small
Business Regulatory Enforcement Fairness Act, by a recorded
vote of 100-0. The language of the final bill was the product
of informal discussions between the House and Senate sponsors
and committees of jurisdiction during March 1996. On March 28,
1996, the House and Senate passed H.R. 3136, the Contract with
America Advancement Act of 1996, which included the CRA. (The
CRA was originally subtitle E of title III, but was
redesignated as subtitle E of title II in Public Law 104-121.)
The President signed the act on March 29, 1996.
d. Hearings and Committee Actions.--None were held.
i. S. 1577, To amend Title 44 United States Code, to
authorize appropriations for the National
Historical Publications and Records Commission.
a. Report Number and Date.--No House report was filed.
b. Summary of Measure.--S. 1577 reauthorizes appropriations
for the National Historical Publications and Records Commission
at $10 million annually for Fiscal Years 1998, 1999, 2000, and
2001.
c. Legislative History/Status.--The Committee on Government
Reform and Oversight reported out H.R. 3625, the identical
companion bill to S. 1577. S. 1577 was reported from the Senate
Governmental Affairs Committee on June 19, 1996 (S. Rept. No.
104-283). S. 1577 passed the Senate on July 25, 1996 and was
received in the House on July 26, 1996 and held at the desk.
Rules were suspended and the measure passed the House on
September 27, 1996, and was signed into law by the President on
October 9, 1996, to become Public Law 104-274.
d. Hearings and Committee Actions.--None were held.
j. H.R. 2326, Health Care Fraud and Abuse Prevention Act of
1995
a. Report Number and Date.--None.
b. Summary of Measure.--The purpose of H.R. 2326 is to
prevent, detect, control and penalize fraud and abuse in the
provision of health care. The bill provides for improved
coordination and data sharing among Federal, State and local
law enforcement agencies and private insurers. It creates a new
source of funds comprised of fines, penalties, damages and
proceeds from forfeitures collected from those in violation of
Federal health care fraud and abuse provisions; such funds to
be used by Federal and State law enforcement agencies to
supplement regularly appropriated funds. The measure
establishes, recognizes and defines health care fraud and abuse
as a Federal crime and prescribes penalties for violation
thereof. Additionally, the legislation details initiatives to
be taken in control of fraud and abuse.
c. Legislative History/Status.--H.R. 2326 was introduced on
September 13, 1995, and referred to Government Reform and
Oversight, Commerce, and Ways and Means. On October 16, 1995,
Title II of H.R. 2326 was offered by Mr. Schiff as an amendment
to H.R. 2425 ``The Medicare Preservation Act of 1995,'' while
Mr. Shays offered Title III as an amendment to that measure.
The Rules Committee found the Schiff Amendment in order and it
was incorporated into H.R. 2425. The Shays amendment was not.
Following mark-up by Commerce, H.R. 2425, which included Title
II of H.R. 2326, was incorporated, as amended, into H.R. 2491,
``The Balanced Budget Act of 1995,'' which passed the House on
November 20, 1995. The bill was then passed by the Senate and
subsequently vetoed by the President.
d. Hearings and Committee Actions.--A hearing was held on
September 28, 1995, before the Subcommittee on Human Resources
and Intergovernmental Relations to consider both H.R. 2326 and
H.R. 1850 introduced by Mr. Towns. Testimony was heard from
Helen Smits, M.D., Deputy Administrator, Health Care Financing
Administration, accompanied by Bill Gould, Special Assistant to
the Administrator; Gerald Stern, Special Counsel for Health
Care Fraud, Department of Justice; Lovola Burgess, past
president, American Association of Retired Persons; William J.
Mahon, executive director, National Health Care Anti-Fraud
Association; and Thomas A. Schatz, president, Citizens Against
Government Waste. Dr. Smits was wholly in favor of the
legislation pointing out the benefits in coordination of law
enforcement. Mr. Stern also spoke in favor of the bill, but
voiced some concerns held by the Department of Justice
specifically regarding the proposed authority of the FBI to
issue administrative subpoenas. Ms. Burgess, Mr. Mahon, and Mr.
Schatz all spoke in support of both bills although the
provisions in H.R. 2326 are more far reaching than H.R. 1850.
The hearing ended with the panel members being encouraged by
the Members to speak to their own Members and urge co-
sponsorship of H.R. 2326.
k. H.R. 3078, Federal Agency Anti-Lobbying Act
a. Report Number and Date.--None.
b. Summary of Measure.--The purpose of the bill is to
prohibit the expenditure of appropriated funds in an attempt by
executive agencies to create public opposition to pending
legislation. Such actions clearly violate the provisions of 18
U.S.C. 1913, however the present and previous administrations
have interpreted this section narrowly in a fashion that limits
all restrictions. As a consequence, this bill expands and
clarifies the limitation on using public money for grassroots
lobbying designed to affect the legislative process.
This important legislation emanates from a series of
investigations conducted by several congressional committees.
The Government Reform and Oversight, Transportation and
Infrastructure, and Commerce Committees have all identified
instances where carefully designed public relations campaigns
have appealed for public support without directing citizens to
contact their Congressional representatives.
c. Legislative History/Status.--H.R. 3078, The Federal
Agency Anti-Lobbying Act was introduced on March 13, 1996 and
referred to the Committee on Government Reform and Oversight.
On May 15, 1996, a full committee hearing was conducted on the
issue.
d. Hearings and Committee Actions.--The Government Reform
and Oversight Committee held a hearing on this legislation on
May 15, 1996. Testimony was heard from Jonathan Cannon, General
Counsel, U.S. Environmental Protection Agency; Joseph B. Dial,
commissioner, Commodity Futures Trading Commission; Robert
Nordhaus, General Counsel, Department of Energy; J. Davitt
McAteer, Acting Solicitor General, Department of Labor; Al
Cors, Jr, director of government relations, National Taxpayers
Union; Robert P. Murphy, General Counsel, U.S. General
Accounting Office; Louis Fisher, Senior Specialist in American
National Government, Congressional Research Service; N. Jerold
Cohen, chairman, Section on Taxation, American Bar Association;
Hon. Senator Ted Stevens of Alaska; and Hon. Congressman W.J.
(Billy) Tauzin of Louisiana.
l. ``Proceedings Against John M. Quinn, David Watkins, and
Matthew Moore (Pursuant to Title 2, United States
Code, Sections 192 and 194,'' House Report 104-598,
May 29, 1996.
a. Summary.--Weeks after the Travel Office firings,
President Clinton staved off a congressional inquiry into the
controversy by committing to then-House Judiciary Committee
Chairman Jack Brooks in a July 13, 1993, letter: ``. . . you
can be assured that the Attorney General will have the
Administration's full cooperation in investigating those
matters which the Department wishes to review.'' In fact, that
cooperation was by no means forthcoming from the White House.
Not only was this established in the committee's October 24,
1995, hearing (see Part Two I.A.3.b. above), it was the
conclusion of the Clinton administration's own Justice
Department. In a September 8, 1994, memo to Acting Criminal
Division Chief Jack Keeney, Justice's Chief of the Public
Integrity Division, Lee Radek, wrote:
At this point we are not confident that the White
House has produced to us all documents in its
possession relating to the Thomason allegations . . .
the White House's incomplete production greatly
concerns us because the integrity of our review is
entirely dependent upon securing all relevant
documents.
In the course of its investigation, the committee came to
share in these concerns. Beginning in the fall of 1995, the
Clinton White House repeatedly assured the committee that it
had produced all documents relevant to the committee's
Travelgate investigation. Despite these assurances, White House
documents critical to the investigation continued to surface
throughout 1996 until August. White House delays, denials and
general obfuscation frustrated the committee's investigative
efforts throughout the 104th Congress.
One such document was an undated 9-page memo written by
David Watkins--likely drafted in the fall of 1993--in which
Watkins cited pressures by First Lady Hillary Rodham Clinton as
a major factor in his decision to fire the Travel Office
employees. Mr. Watkins wrote that this self-styled ``soul
cleansing'' memo represented his ``first attempt to be sure the
record is straight, something I have not done in previous
conversations with investigators--where I have been as vague
and protective as possible.''
The White House released this memo to the committee at 8:30
p.m. on January 3, 1996, after it had been released to the
press. Though it was responsive to subpoenas and document
requests made by several previous investigations, including
those of Independent Counsel Fiske, the General Accounting
Office and the Justice Department, this document was produced
to none of them.
The Watkins memo clearly contradicted repeated assertions
by the White House and First Lady Hillary Rodham Clinton that
the First Lady had had minimal involvement in the Travel Office
firings:
On Monday morning you [then-White House Chief of
Staff McLarty] came to my office and met with me and
Patsy Thomasson. At that meeting, you explained that
this was on the First Lady's ``radar screen.'' I
explained to you that I had decided to terminate the
Travel Office employees and you expressed relief that
we were finally going to take action (to resolve the
situation in conformity with the First Lady's wishes).
We both knew there would be hell to pay if, after our
failure to take swift and decisive action in conformity
with the First Lady's wishes.
Mr. Watkins concluded in this memo:
[Made] clear that the Travel Office incident was
driven by pressures for action originating outside my
Office. If I thought I could have resisted those
pressures, undertaken more considered action, and
remained in the White House, I certainly would have
done so. But after the Secret Service incident, it was
made clear that I must more forcefully and immediately
follow the direction of the First Family. I was
convinced that failure to take immediate action in this
case would have been directly contrary to the wishes of
the First Lady, something that would not have been
tolerated in light of the Secret Service incident
earlier in the year.
The apparent contradictions between Watkins' previous ``vague
and protective'' responses made to investigators looking into
the Travel Office matter and the ``soul cleansing'' memo led to
a criminal referral of the matter to Independent Counsel Starr
in early 1996.
In the wake of this memo's production, the committee issued
several subpoenas to the White House and current and former
White House officials and others to compel the production of
all relevant documents previously withheld. Months of
negotiations followed the failure of three parties in
particular to complete their productions in compliance with
their subpoenas: White House Counsel John M. Quinn, David
Watkins, and Matthew Moore, whom the committee learned had
copies of various drafts of the Watkins memo in his possession.
b. Hearings.--On May 8, 1996, the full committee voted to
hold Messrs. Quinn, Watkins and Moore in contempt for their
refusals to produce all documents responsive to the committee's
subpoenas.
c. Resolution.--The committee, in its May 8, 1996, vote:
Resolved, That pursuant to 2 U.S.C. 192 and 194, the
Speaker of the House certify the report of the
Committee on Government Reform and Oversight, detailing
the refusal of John M. Quinn to produce papers to the
Committee on Government Reform and Oversight, to the
United States Attorney for the District of Columbia,
for him to be proceeded against in the manner and form
provided by law; and be it further
Resolved, That pursuant to 2 U.S.C. 192 and 194, the
Speaker of the House certify the report of the
Committee on Government Reform and Oversight, detailing
the refusal of David Watkins to produce papers to the
Committee on Government Reform and Oversight, to the
United States Attorney for the District of Columbia,
for him to be proceeded against in the manner and form
provided by law; and be it further
Resolved, That pursuant to 2 U.S.C. 192 and 194, the
Speaker of the House certify the report of the
Committee on Government Reform and Oversight, detailing
the refusal of Matthew Moore to produce papers to the
Committee on Government Reform and Oversight, to the
United States Attorney for the District of Columbia,
for him to be proceeded against in the manner and form
provided by law.
d. Follow-up.--Mr. Moore eventually produced the documents
subpoenaed to the committee. Mr. Watkins, by now the subject of
an Independent Counsel investigation, declined to do so. Nor
had White House Counsel Quinn produced the documents required
as the May 30, 1996 date for a House vote on the contempt
resolution approached.
On May 30, 1996, the day on which the committee's contempt
resolution against White House Counsel Quinn was scheduled for
a vote on the floor of the House, the White House delivered
1,000 of the 3,000 pages of documents responsive to the
committee's subpoenas over which it previously had claimed
executive privilege. The White House also provided a privilege
log for documents it continued to withhold. As a result, the
committee postponed the contempt vote in order to review the
materials produced.
A critical document long-withheld from the committee under
unjustified claims of executive privilege was turned over in
the May 30 production. The committee previously had been
unaware of the existence of this document: the White House's
December 1993 request of Billy Dale's confidential FBI
background file--ostensibly made because Dale was being
considered for ``Access (S)''--7 months after Dale was fired
from the Travel Office. This request was made even as the
Justice Department was conducting a criminal investigation of
Dale and its discovery led to revelations that the Clinton
administration wrongly had requested and received hundreds of
confidential FBI background files of former Reagan and Bush
administration officials. (See Part Two I.A.3.c. above.)
After further discussion and correspondence, the White
House and the committee came to an agreement whereby the White
House produced to the committee some 1,400 of the remaining
2,000 pages of documents on August 15, 1996.
B. BUDGET PROCESS
House Rule X(1)(g) (4) and (6) confers upon the Committee
on Government Reform and Oversight jurisdiction over,
``[b]udget and accounting measures, generally,'' and ``[t]he
overall economy, efficiency and management of government
operations and activities.'' As explained in the Statement of
Understanding between the Committee on Government Reform and
Oversight and the Committee on the Budget, the Committee on
Government Reform and Oversight's jurisdiction includes,
``process changes in federal rescission or impoundment
authority; measures relating to Executive agency budgeting,
including the submission of agency performance reports or
plans, or agency regulatory plans, reports or reviews as part
of the budget process; measures relating to Executive agency
financial management; and process changes leading to the
required adoption of a Federal capital budget or joint capital/
operating budget which accounts for the fixed assets of the
United States.'' In addition, the committee enjoys jurisdiction
over ``special funds, accounts or spending set asides created
to reduce the deficit.''
The Committee on Government Reform and Oversight exercised
its budget jurisdiction extensively in the 104th Congress. In
addition to leading the campaign to enact the long-awaited line
item veto, the committee held hearings on performance-based
budgeting, financial and accounting improvements, entitlement
spending reductions, regulatory accountability and cost-benefit
comparisons, and biennial budgeting proposals.
The committee was extensively involved in the development
of the congressional budget resolutions for fiscal years 1996
and 1997, H. Con. Res. 67 and H. Con. Res. 178. Working with
the House and Senate Budget Committees, the Senate Committee on
Governmental Affairs, and the congressional leadership, the
committee developed a plan for mandatory spending reforms
within its jurisdiction totaling savings of more than $10
billion through fiscal year 2002. The committee's entitlement
spending reduction package included: Members and staff
congressional pension reforms to provide parity between the
congressional and civil service retirement systems; a
continuation of existing the 3 month cost of living increase
(COLA) delay for Federal retirees; a 0.5% increase in the
contribution Federal employees make to their own individual
retirement accounts; a 1.51% increase in the employing agency
contribution to the retirement accounts of their Civil Service
Retirement System (CSRS) employees; and a repeal of the
transitional appropriations currently provided to the U.S.
Postal Service. The committee package also included a proposal
to reform the McKinney Homeless Assistance Act to permit
homeless assistance organizations to obtain preferential access
to surplus Federal property. Pursuant to the directions of the
congressional budget resolution, the Government Reform and
Oversight Committee's reconciliation package was included in
H.R. 2491, the Balanced Budget Act of 1995. The bill was vetoed
by the President on December 6, 1995. It is the committee's
firm intent to pursue similar reforms in the 105th Congress.
The committee also considered legislation to require the
President to submit a Congressional Budget Office (CBO) scored
balanced budget for fiscal year 1997. The proposal was included
in H.J. Res. 134, which was signed into law on Jan. 6, 1996.
Public Law 104-94. Further attempts to require the permanent
submission of annual balanced budget plans by the President
were considered in conjunction with H.R. 4278, the Omnibus
Consolidate Appropriations Act of 1997, but were rejected by
the Senate.
Finally, the committee considered proposals to provide for
a deficit reduction ``lock box'' account, to set aside savings
gained through appropriation bill amendments for the purposes
of deficit reduction. The legislation, initially included in
H.R. 2127, the FY 1996 Labor, Health and Human Services, and
Education appropriations bill, was vetoed by the President. The
lockbox proposal was then attached by the House to H.R. 3019,
to provide further Omnibus Continuing Appropriations for 1996.
While the provision was dropped by the Senate, the committee
expects to revisit the measure in the 105th Congress.
C. FEDERAL PROCUREMENT POLICY--AN ERA OF REFORM
Each year the government spends about $200 billion on goods
and services, ranging from weapons systems to computer systems
to everyday commodities. Studies have shown that the current
system has cost too much, involved too much red tape, and ill-
served the taxpayer and industry.
In December 1994, a report prepared for the Secretary of
Defense found that, on average, the government pays an
additional 18 percent on what it buys solely because of
requirements it imposes on its contractors. That confirmed the
average estimate by major contractors surveyed by the General
Accounting Office that the additional costs incurred in selling
to the government are about 19 percent. While some of the
government's unique requirements certainly have been needed, we
clearly are paying an enormous premium for them--billions of
dollars annually.
And that has been only part of the government's inflated
cost of doing business--for it has included only what is paid
to contractors, not the cost of the government's own
administrative system. The government's contracting officials
have been confronted with a daunting array of mandates of their
own, often amounting to step-by-step prescriptions that
increase staff and equipment needs. This rigid, rule-based
process has left little room for the exercise of business
judgement, initiative, and creativity and often has forced the
professional staff to assume the role of box-checking robots.
These requirements have been well-intentioned. From the
time the Second Continental Congress established a Commissary
General in 1775, the procurement system commanded the attention
of both public officials and the American public. Unfortunately
and all too often, the attention has focused on individual
abuses rather than the operations of the system as a whole. In
response, Congress and the executive branch have maintained a
constant effort to correct wrongs or add particular
initiatives. Inevitably, after a while, often-uncoordinated
incremental efforts will tilt any system out of balance, until
the cost of requirements outweigh benefits. And, over the
years, that has become the state of our procurement system--an
unbalanced mass of requirements that lead, simply, to too much
money for too little product. Mr. Philip K. Howard in an
editorial on the government's procurement process in the Wall
Street Journal aptly described the state of the current process
as follows:
The rigid procedures designed to prevent squandering of
public money, as it turns out, function almost
perfectly to guarantee that the money gets squandered.
The committee recognized that it was critical in these
times of declining budgets to bring the government's
procurement system into balance.
The 103d Congress took a significant step toward
establishing a more commercial-like Federal contracting system
with the passage of the Federal Acquisition Streamlining Act of
1994 (FASA) (Public Law 103-355). FASA established a preference
for commercial items and simplified procedures for contracts
under $100,000, as well as addressing a wide spectrum of issues
regarding the administrative burden--on all sides--associated
with the government's specialized requirements. These ranged
from socio-economic laws to the government's oversight tools,
which over the years have resulted in major differences between
the government and commercial marketplaces.
But FASA went only part of the way, and as important as
that effort was, the committee recognized that more needed to
be done, particularly in these times of declining budgets, to
bring the government's procurement system into balance. In
addition to the fundamental legislative reforms made by the
Clinger-Cohen Act of 1996 (see Part Two I.A.4.d.), the
following issues were initiated/completed by the committee to
foster a procurement system which allows industry sellers and
government buyers to offer and acquire, respectively, maximum
value for the taxpayer.
1. Oversight of the Implementation of the Federal Acquisition
Streamlining Act of 1994 (FASA) (Public Law 103-355).
a. Summary.--At the time of its enactment, the Federal
Acquisition Streamlining Act of 1994 (FASA) (see House Report
103-884) was considered the most comprehensive procurement
reform effort in more than a decade. Yet, the committee
recognized that its true impact would not be realized fully
until the regulations were written to implement the new law.
The committee believed that much of the hard work was left to
the executive branch in seeing through the goals and purposes
of FASA. The committee expected that the regulation writers
would not only execute the letter of the law fully and
promptly, but would also carry out the spirit of what Congress
intended. This included not just writing and revising
regulations pursuant to the new law, but looking at and
attacking internal agency regulations and procedures which are
contrary to FASA's letter and spirit.
b. Hearings.--On February 21, 1995, the committee met to
review the Clinton administration's implementation plan for
FASA, begin the process of determining if the regulations will
carry out the spirit of what was intended by Congress, and
allow industry and other interested parties to comment on the
regulatory implementation for the record. The committee
received testimony from administration witnesses, Steven
Kelman, Administrator for Federal Procurement Policy at the
Office of Management and Budget; and Mrs. Colleen Preston, the
Deputy Under Secretary of Defense for Acquisition Reform,
regarding the progress-to-date on the implementation of FASA.
Industry representative submitted written testimony for the
record.
Dr. Kelman noted that the ``message of reform'' was being
heard by the administration and that the follow-on rules to
FASA were being written on an accelerated schedule. He stated
that 4 interim rules had been published, 15 proposed rules were
published, and 6 were expected to be released in the near
future. Mr. Kelman also discussed the establishment of Process
Action Teams, which were created by both he and Mrs. Preston in
order to expedite the regulatory writing process and FASA
implementation.
Mrs. Preston focused on the need for further reform so that
agencies such as the Department of Defense and others could be
``world class customers and suppliers.'' She emphasized the
need for continuing the effort to remove government-unique laws
and regulations from the acquisition of commercial products.
She also stated that the government must move from a risk
adverse system to one which understands and manages risk.
2. Review of the Federal Government's Acquisition Strategy Regarding
the Post Federal Telecommunications System 2000 Program (Post-
FTS2000).
a. Summary.--Currently the Federal Telecommunications
System 2000 (FTS 2000) is the government's long distance
telecommunications service. This multi-billion dollar program
provides telecommunications services to approximately 1.7
million users across the Federal Government. Through the hard
work of the General Services Administration (GSA) and an
interagency group of information resources management and
telecommunications professionals, the current FTS 2000 program
was largely successful in leveraging the emerging competition
in long-distance markets to save billions of dollars over GSA's
prior Federal Telecommunications Service network. The current
FTS 2000 contracts which were awarded in 1988 will expire in
December 1998, affording the government great opportunities and
challenges as it prepares to transition to a Post-FTS2000
environment.
Clearly, the telecommunications industry has changed
significantly since the initial contracts were awarded: the
array of available commercial services is broader; the number
of service providers has increased; and the availability and
nature of the underlying technologies themselves continue to
change. The government's appetite for communications services
has changed as well, with demand for more advanced data and
video services outdistancing growth in basic voice
communications services. Therefore, it is imperative that the
Post-FTS2000 program embrace a sensible acquisition approach
based on commercial practices and maximize the use of
commercially-available services to meet agency needs while
following an appropriate strategy for managing complex
government operations.
Monitoring the development of the next phase procurement
for the Federal Government's telecommunications system ensures
that the Federal Government receives technically-effective and
cost-efficient telecommunications services in a Post FTS2000
environment. It allows the government and the taxpayer to take
maximum advantage of the economies associated with increasing
competition in the new telecommunications environment and reap
the benefits for the best prices and excellent service quality
which helps the executive agencies to do their jobs of serving
the citizens more efficiently and effectively.
While GSA spent much time with the interagency group and a
broad cross-section of industry preparing an acquisition
strategy, initial proposals failed to take full advantage of
telecommunications reform along with today's rapidly changing
landscape of advancing technologies, new services, and emerging
service providers. Through months of working with this
committee, GSA ultimately developed a proposal which addressed
many of the issues raised by this committee and others and
which will enable the government to take full advantage of
rapid changes in the telecommunications services environment.
GSA is proceeding with this Post-FTS2000 acquisition strategy.
b. Hearings.--On March 21, 1995, the Subcommittee on
Government Management, Information, and Technology held a
hearing to solicit comment from the General Accounting Office,
the long distance carriers, system integrators and the Regional
Bell Operating Companies on the initial Post-FTS2000
acquisition strategy developed by the government. The General
Accounting Office raised several areas of concern and testified
that these concerns must be addressed before proceeding to the
next phase of the program. Other witnesses made reference to
the strategy as presented and gave comment according to the
particular segment of the industry.
3. Review of the Department of Defense's Acquisition of the Defense
Information Systems Network (DISN).
The Defense Information Systems Network (DISN) is the
Department of Defense's (DOD) worldwide telecommunications
infrastructure that provides the end-to-end information
transfer network for supporting military operations. DISN must
be transparent to its users, facilitate the management of
information resources, and be responsive to national security
and defense needs under all conditions in the most effective
manner. DOD has described its objective as being able to
provide military personnel with a secure, seamless, network
capable of operating across strategic and tactical
communications boundaries. Global interoperability and
information warfare-protection are two of DISN's key features
to deliver protected voice, video, data, and imagery services.
Since DISN will be the information transport vehicle for
the next century, its acquisition strategy was designed to
introduce new cost-effective technology, including space-based
capabilities, on a global basis over the life of the system.
This strategy will allow DOD to manage DISN services while
maintaining a balance in three areas: exploitation of leading-
edge technology opportunities, consolidation of geographically
disparate network, and operation within fiscal constraints.
Given the importance of consolidating and modernizing
defense telecommunications capabilities to meet the emerging
national security challenges facing the Nation, the committee
along with the Committee on National Security, was active in
urging DOD to move forward without delay on the DISN program.
The committees recognized that a multitude of providers now
compete to offer an increasingly broad array of commercially-
available telecommunications services and that competition
continues to drive the development and deployment of advances
in the underlying technologies used to deliver enhanced
performance and new capabilities. Therefore, in letters and
through a series of meetings, the committees urged DOD to
transition to DISN on schedule in order to ensure the
availability of state-of-the-art telecommunications to meet the
Nation's defense needs.
To date, DOD is proceeding and has awarded the contracts
for global support services (valued at $2 billion) and
switching services for the continental United States (valued at
$400 million). It is expected that in the early part of 1997,
DOD will award the contracts for transmission services for the
continental United States (valued at $5 billion) and global
video services (valued at $125 million).
4. Review of the General Services Administration's (GSA) Management of
the Multiple Award Schedule (MAS) Program.
The Multiple Award Schedule (MAS) Program is the primary
and simplified method to enable Federal agencies purchase
relatively small quantities of commercially-available, common
use, off-the-shelf items and services while securing the
benefits of the Federal Government's aggregate purchasing
volume. The General Services Administration (GSA) awards
contracts to multiple suppliers of similar items. Federal
agencies order products and services through the MAS Program at
prenegotiated prices commensurate with the vendors' commercial
discounts granted for comparable purchase volumes, given terms
and conditions, and pay vendors directly for their purchases.
There are 121 schedules which generate an annual market of $5-7
billion. The MAS program includes 4,000-5,000 contractors, two-
thirds of which are small businesses.
The efficiency and effectiveness of the MAS Program has
been debated since its inception. After many studies by GAO,
reviews by Congress, and input from industry, GSA made many
significant changes to the MAS Program. These changes will
allow the MAS Program to meet a broader range of customer
requirements at a time when agencies are looking for easy to
use, low cost procurement solutions. Among these were:
eliminating the contract-wide price reduction clause, changing
the price reduction clause to enable contractors to offer
reduced prices to Federal agencies on a spot basis; and
removing the ``maximum order limitation'' to permit agencies to
place large-scale orders through the schedule program. The
committee supported and urged changes like these to increase
the use of the MAS program as a governmentwide vehicle for the
acquisition of commercial products and services.
However, GSA also proposed to established some rules which
would permit post-award audits of commercial products under the
MAS program. The committee, along with the Committee on
National Security, concluded that this would be inappropriate
and contrary to the intent of the Clinger-Cohen Act. The
committees believed that, when Congress repealed the authority
of Federal agencies to perform post-award audits of suppliers
of commercial items in the Clinger-Cohen Act, Congress clearly
did not intend Federal agencies to subsequently determine
though agency supplements to the Federal Acquisition Regulation
whether and to what extent post award audit access is
appropriate on commercial item contracts. The committees'
opposition to the proposed rule was communicated to the Office
of Management and Budget through letters and meetings. A final
rule on this issue is pending at GSA.
5. Oversight of Reform of the Acquisition System of the Federal
Aviation Administration (FAA).
As a result of the steady growth in air traffic operations
and the failures of aging equipment in the air traffic control
system, the Federal Aviation Administration's (FAA) timely
acquisition of new equipment became increasingly critical for
aviation safety and efficiency. However, the procurement system
at FAA had many problems which raised questions about the
agency's ability to field new equipment within cost, schedule,
and performance parameters.
Thus, the reform of FAA's procurement system became the
focus of much debate. The FAA claimed it was choking from the
mandated governmentwide procurement laws and argued that its
failures in its procurements of high technology equipment could
be solved if only it could break clear of the Federal
procurement system. Some Members of Congress disagreed and
believed that FAA's failures in the past were due to its own
management problems and were not due to Federal procurement
laws.
Nonetheless, the Department of Transportation
Appropriations Act for Fiscal Year 1996 (Public Law 104-50)
included language which gave FAA the authority to establish a
completely new acquisition management system. The law exempted
the FAA from virtually all Federal procurement laws and
regulations. Prior to putting in place its new system by the
April 1, 1996 effective date, FAA met with the committee and
briefed the committee on its activities. Review of the new
acquisition management system continues.
In addition, H.R. 2276 which established FAA as an
independent agency exempted FAA from the same laws and
regulations as did Public Law 104-50. While H.R. 2276 was
passed by the House on March 12, 1996, it was never considered
by the Senate. However, during consideration of H.R. 2276 in
the House, the committee expressed its support for fundamental
government reforms generally and FAA procurement reform
specifically.
D. GOVERNMENT PERFORMANCE AND RESULTS ACT OF 1993 (GPRA)
On March 6, 1996, the Senate Governmental Affairs Committee
joined the committee in holding an informational hearing on the
purpose and foundation for the Government Performance and
Results Act of 1993 (Public Law 103-62). The purpose of the
hearing was to explore the foundations of the act and draw
parallels between previous experiments with performance
measurement in foreign governments and at the State and
municipal level and its application at the Federal level.
The hearing consisted of two panels. The first witness was
Comptroller General of the General Accounting Office, Charles
Bowsher. Mr. Bowsher gave testimony on the Government
Performance and Results Act, its purpose and provisions. He
also emphasized the importance of continued Congressional
involvement to the long-term success of the act. Noting that
consultation with Congress is mandated by the statute, the
Comptroller General stressed that the act could become a
meaningless management exercise unless the information prepared
by agencies is a decisionmaking tool for members and
committees. Mr. Bowsher took numerous questions from the
Members of the House and Senate.
The second panel began with testimony from Dr. Donald F.
Kettl, senior fellow of the Brookings Institution and professor
of Public Policy and Political Science at the University of
Madison as Wisconsin. Dr. Kettl advised the committees that due
to the current fiscal constraints, government needs to increase
productivity in order to meet current service needs. One
promising way to meet increased demands with reduced, stable on
only slowly increasing resources is through managing for
performance. This technique has a very long time-horizon,
however, and the Federal Government is at least a decade behind
New Zealand, Australia and Great Britain, which have been
experimenting with performance measurement and management.
Reports from overseas indicate that those governments are still
working with great diligence to master this extremely complex
task. Finally the committees heard from the Commonwealth of
Virginia, the city of Phoenix, AZ and the government of
Australia each of which has been measuring government
performance as a means to increase government efficiency and
citizen satisfaction with government services.
The hearing was intended to be the first of three hearings
on GPRA. Two additional hearings were to have reviewed the
status of GPRA pilot projects and departmental progress in
implementing the act. The sequence of events involving the FBI
files scandal preempted the committees' planned follow-on
hearings.
II. Investigations
A. INVESTIGATIONS RESULTING IN FORMAL REPORTS
GOVERNMENT REFORM AND OVERSIGHT COMMITTEE
Hon. William F. Clinger, Jr., Chairman
1. ``A Citizen's Guide on Using the Freedom of Information Act and the
Privacy Act of 1974 To Request Government Records,'' House
Report No. 104-156, June 22, 1995, First Report by the
Committee on Government Reform and Oversight.
a. Summary.--The Freedom of Information Act (FOIA), enacted
in 1966, presumes those records of the executive branch of the
U.S. Government are accessible to the public. The Privacy Act
of 1974 is a companion to FOIA and regulates Government agency
recordkeeping and disclosure practices. The Freedom of
Information Act provides that citizens have access to Federal
Government files with certain restrictions. The Privacy Act
provides certain safeguards for individuals against an invasion
of privacy by Federal agencies and permits them to see most
records pertaining to them maintained by the Federal
Government.
A Citizen's Guide on Using the Freedom of Information Act
and Privacy Act of 1974 To Request Government Records, House
Report 104-156, dated June 22, 1995, and issued by the House
Committee on Government Reform and Oversight, explains how to
use the two laws and serves as a guide to obtaining information
from Federal agencies. The complete texts of the Freedom of
Information Act, as amended (5 U.S.C. 552), and the Privacy
Act, as amended (5 U.S.C. 552a), are reprinted in the committee
report.
b. Benefits.--Federal agencies use the Citizen's Guide in
training programs for government employees who are responsible
for administering the Freedom of Information Act and the
Privacy Act of 1974. The Guide enables those who are unfamiliar
with the laws to understand the process and to make requests.
In addition, the complete text of each law is included in an
appendix. The Government Printing Office and Federal agencies
subject to the Freedom of Information Act and the Privacy Act
of 1974, distribute this report widely. The availability of
these acts to all Americans allows executive branch information
to be widely available.
c. Hearings.--None.
2. ``Creating a 21st Century Government,'' House Report No. 104-434,
December 21, 1994, Second Report by the Committee on Government
Reform and Oversight, Together With Additional Views.
a. Summary.--The purpose of the Government Reform and
Oversight Committee field hearings on ``Creating a 21st Century
Government'' was to learn from the American public, State and
local government officials and the private sector their
suggestions and experiences on creating innovative,
streamlined, and cost effective organizations. The committee
intends that Congress learns from and adopt some of these
successful strategies in an effort to restructure the executive
branch and better meet the needs of Americans today and in the
21st century.
In its effort to hear from people outside Washington, DC,
the committee invited witnesses from State and local
government, the private sector, and the American public to
testify or participate in an open forum in which members could
hear their experiences and ideas with regard to organizational
downsizing. Members of the committee traveled to Parma Heights,
OH; Upper Montclair, NJ; Federal Way, WA; Long Beach, CA;
Albuquerque, NM; and Charlotte, NC. Each one of these cities
has recently challenged inefficient government by revitalizing
its main functions in order to survive, compete, prosper and
provide for the needs of its citizens. Identifying what has
worked, what has hindered their reorganization efforts and how
best to implement a plan will aid congressional initiatives to
revitalize government at the Federal level.
State and local government witnesses, business
representatives, and the public all advocate looking at each
Federal department and agency to determine which of the
functions it provides are vital to the service delivery needs
of Americans and which can be better carried out by State or
local governments or the private sector. The widely shared view
was that the Federal Government is not meeting the needs of it
customers, the American public, and is less effective, less
efficient and more costly than it should be. It must be fixed.
b. Benefits.--As a result of the nationwide field hearing
series and consultation with experts in the private and public
sectors, the committee was successful in identifying strategies
and principles used by corporate, State and local government
organizations in restructuring their entities, and learning how
their most successful and creative ideas might be applied to
the Federal Government. We now have a better understanding of
what States and local governments expect from the Federal
Government, what private business expects from the Federal
Government, and most importantly the American public's thoughts
and ideas for a more responsive Federal Government designed to
meet their needs.
Six fundamental points, or practices, were raised at all
six field hearings, each to promote the efficiency,
effectiveness, high quality and low cost of service delivery.
The first three of these common reorganization principles in
particular affect the culture of an organization, while the
other three are more practical in application. The committee
found--
(1) Clear missions and a solid organization mission
statement are necessary for establishing priorities and
goals and maintaining focus on established objectives.
(2) Open and honest communication with employees
about each step of the reorganization process is vital
to maintaining employee morale, as is affording
employees an opportunity to convey their views on
downsizing and reorganization.
(3) Innovative management techniques are enabling
States, localities and businesses to empower employees
and to strip layers of bureaucratic management in favor
of more streamlined structures. The result has been
more efficient, more responsive organizations with high
morale and greater productivity.
(4) Privatization is clearly one of the most
advocated means of taking government out of functions
which are not inherently governmental and which can be
performed more efficiently and cost-effectively by the
private sector.
(5) Competitive bidding will improve service while
saving money. The government should be forced to
compete with private business for effective, efficient
service delivery.
(6) The Federal Government must replace old and
outdated computer systems with advanced technology that
allows for open communication both internally and with
the public. Using such technology will facilitate
``one-stop shopping'' and other innovations in service
delivery.
The committee made the following recommendations as a
result of its oversight findings:
(1) Establish a citizens commission on 21st century
government.
(2) Identify and remove statutory and regulatory
barriers to reorganization and innovation.
(3) Increase privatization and competitive bidding.
(4) Enlist the aid of the private sector in
reorganization and innovation efforts.
(5) Restore responsibilities to the States and local
governments without imposing unfunded mandates.
(6) Establish, communicate and adhere to a clear
mission for Federal agencies.
(7) Maintain open lines of communication with agency
employees.
(8) Promote innovation by managers and employees.
(9) Use technology to improve service and increase
efficiency.
The committee intends that Congress learn from and adopt
some of these successful strategies and recommendations in an
effort to restructure the executive branch to better meet the
needs of Americans today and in the 21st century.
c. Hearings.--Members of the committee began the ``Creating
a 21st Century Government'' field hearing series on July 14,
1995, in Parma Heights, OH, and continued the series in Upper
Montclair, NJ, on September 9, 1995. The committee's following
three hearings were held over Columbus Day weekend traveling to
Federal Way, WA, on October 6, 1995; Long Beach, CA, on October
7, 1995; and Albuquerque, NM; on October 9, 1995. The final
hearing in the series was held on October 20, 1995, in
Charlotte, NC.
3. ``Laws Related to Federal Financial Management as Amended Through
December 31, 1995,'' House Report No. 104-745, August 2, 1996,
Ninth Report by the Committee on Government Reform and
Oversight.
a. Summary.--This report outlines the laws and procedure
related to Federal financial management. Included in the report
are sections related to money and finance (Title 31, U.S.C.);
general provisions (Title 1, U.S.C.); the Congress (Title 2,
U.S.C.); government organization and employees (Title 5,
U.S.C.); commerce and trade (Title 15, U.S.C.); Postal Service
(Title 39, U.S.C.); public buildings, property, and works
(Title 40, U.S.C.); public contracts (Title 41, U.S.C.); and
public printing and documents (Title 44, U.S.C.). Also included
in the report are the Debt Collection and Improvement Act of
1996, the Single Audit Act amendments of 1996 and other major
laws on financial management.
b. Benefits.--The Committee on Government Reform and
Oversight believes that effective financial management is
critically important in making worthwhile decisions on the use
of public resources in support of the well-being and security
of the American taxpayer. This report helps fulfill the
committee's oversight responsibility and serves as a valuable
reference guide in assisting Congress, Federal entities, and
all others interested in good stewardship of Federal resources.
c. Hearings.--None were held on this measure.
4. ``Sampling and Statistical Adjustment in the Decennial Census:
Fundamental Flaws,'' House Report No. 104-821, September 24,
1996, Fourteenth Report by the Committee on Government Reform
and Oversight, Together with Additional and Dissenting Views.
a. Summary.--Since 1994, the Subcommittee on National
Security, International Affairs, and Criminal Justice and the
full committee have been conducting an investigation into the
planning and preparation for the 2000 Decennial Census. Based
on this study and one subcommittee hearing and two full
committee hearings, the committee adopted its fourteenth report
to the 104th Congress on September 24, 1996.
The Decennial Census is mandated by the Constitution in
order to apportion the Congress. Census data are used by every
State for congressional and State redistricting. They are also
used to enforce the Voting Rights Act. Numerous Federal and
State programs, distributing billions of dollars each year, use
Decennial Census data, or the intercensal estimates derived
therefrom, for their implementation.
In 1995, the committee learned that the Census Bureau was
seriously considering dramatic changes to its approach in
taking the Decennial Census of the population. On February 28,
1996, the U.S. Department of Commerce and the Bureau of the
Census publicly announced their formal plans for a ``re-
engineered 2000 Census.'' The plans call for the use of
statistical methods in two separate instances: (1) to sample
and estimate the final 10 percent of the population failing to
respond in the actual enumeration (``sampling''), and (2) to
use a separate sample of houses to estimate those persons
missed in the actual enumeration and the sample for non-
response and revise it accordingly (``adjustment'').
Statistical techniques have been used by the Census Bureau
to assess the accuracy of census counts since 1950, but have
never been used to ``complete'' and/or ``correct'' the original
number for use in apportioning Congress.
After the Secretary of Commerce decided in July 1991 not to
make a statistical adjustment to the 1990 Census, over 50
lawsuits erupted, culminating in the 1995 case considered by
the Supreme Court, United States v. City of New York. The
Court's decision, handed down in March 1996, upheld the
Secretary's decision not to adjust the 1990 census.
The report finds that the problems that surrounded the
issue of statistical adjustment in the 1990 Census also plague
the plans for the 2000 Census. This is compounded by the plans
to incorporate sampling to complete the actual enumeration.
Specific findings include:
1. Sampling/statistical adjustment are inherently
problematic given the subjectivity in the various
decisions comprising the methodology.
2. The legal provisions that concern the use of
sampling for apportionment purposes, both in the
Constitution and in Federal law, are variously
interpreted.
3. The inherent uncertainties of sampling/statistical
adjustment may undermine public confidence in the
Decennial Census and reduce public participation.
4. The sampling method for nonresponse follow-up
introduces additional error into the process and may
compromise the accuracy of small-area data which are
important for congressional and State legislative
redistricting.
5. The complexity of the two different sampling
techniques being planned for the 2000 Census adds a
great deal of risk to the operational feasibility of
the Bureau's current approach.
Based on the committee's findings, the committee made the
following recommendations:
1. Congress should work to clarify existing Federal
statutes with regard to the use of sampling to make
statistical adjustments to the census for apportionment
purposes.
2. The Bureau should not use sampling methods to
complete or adjust the actual enumeration of the 2000
Census which is constitutionally mandated for purposes
of apportionment.
3. The Department of Commerce and the Bureau of the
Census should prioritize the constitutional mandate of
the Decennial Census--apportionment of the House of
Representatives.
4. The Bureau should emphasize and strengthen its
cooperative relationships with State and local elected
officials, as well as members of local organizations,
who are vital in helping increase response rates to the
Decennial Census.
5. The Bureau should strengthen its plans for a
thorough quality check of the 2000 Census and maintain
open access to all processes for internal and external
review and analysis.
b. Benefits.--The report sets aside political
considerations regarding the winners and losers in an
adjustment situation and addresses the problems with sampling
and adjustment on their technical merits. In laying important
groundwork regarding the technical problems with sampling and
statistical adjustment in the Decennial Census, the report
could provide the necessary basis and justification for taking
legislative action in future Congresses. The report also
represents an important marker in Federal legislative history
regarding the issues of sampling and statistical adjustment.
c. Hearings.--On October 25, 1995, Congressman William H.
Zeliff, Jr., chairman of the Subcommittee on National Security,
International Affairs, and Criminal Justice, held an oversight
hearing entitled, ``Oversight of the Census Bureau: Preparation
for the 2000 Census'' to examine testimony from Census Bureau
officials regarding their plans for conducting the 2000
Decennial Census. Witnesses included Dr. Martha Riche
(Director, Bureau of the Census, U.S. Department of Commerce),
Francis DeGeorge (Inspector General, U.S. Department of
Commerce), and Nye Stevens (Director of Federal Management and
Workforce Issues, U.S. General Accounting Office). At the
hearing, the Bureau announced a number of new initiatives,
including the use of statistical sampling to complete the
actual enumeration.
On February 29, 1996, the Committee on Government Reform
and Oversight held a hearing ``Census 2000: Putting Our Money
Where It Counts'' to gather testimony from Members of Congress
and outside experts regarding the Bureau's new methodology.
Witnesses included Senator Herb Kohl (D-WI), Congressman Thomas
Sawyer (D-OH), Congressman Thomas Petri (R-WI), Bruce Chapman
(president, Discovery Institute, Seattle, WA), Dr. Barbara
Bailar (vice president, Survey Research, National Opinion
Research Center), Dr. Steve Murdock (director, Department of
Rural Sociology, Texas A&M University), Dr. Kenneth Wachter
(professor of statistics and demography, University of
California at Berkeley), Dr. Charles Schultze (senior fellow,
the Brookings Institution, and Dr. James Trussell (director,
Office of Population Research, Princeton University).
On June 6, 1996, the Committee on Government Reform and
Oversight held another hearing, ``Census 2000: The Challenge of
the Count'' to air questions and concerns about statistical
methods planned for the Census 2000. The witnesses were Dr.
Everett Ehrlich (Undersecretary of Commerce for Economic
Affairs, U.S. Department of Commerce), and Dr. Martha Riche
(Director, Bureau of the Census, U.S. Department of Commerce).
Congressman Thomas Petri delivered a brief statement on his
bill, H.R. 3589, to prohibit the use of sampling in the 2000
Census. However, he did not receive questioning by members of
the committee.
5. ``Investigation of the White House Travel Office Firings and Related
Matters,'' House Report No. 104-849, September 26, 1996,
Fifteenth Report by the Committee on Government Reform and
Oversight, Together with Minority and Additional Views.
a. Summary.--On May 19, 1993, the Clinton administration
fired seven long-time employees of the White House Travel
Office and ordered them to depart the White House premises in 2
hours. Then-White House press secretary Dee Dee Myers
simultaneously--and inappropriately--announced a criminal
investigation of the Travel Office by the FBI. The Clinton
administration replaced the Travel Office employees with
employees of World Wide Travel, the Clinton/Gore '92 campaign
travel agency. World Wide Travel departed the White House
Travel Office within 2 days as a firestorm of press and public
criticism over the firings engulfed the White House. World Wide
was replaced by a combination of government workers and
American Express personnel.
Various aspects of the Travel Office matter were
investigated by the White House, the Justice Department Office
of Professional Responsibility and Public Integrity Division,
the FBI, the General Accounting Office and the Internal Revenue
Service. Individually and collectively, the resulting reports
raised more questions than they answered. For example, in an
October 7, 1994, letter to then-Chairman Conyers of the
Government Operations Committee, Ranking Minority Member
William F. Clinger, Jr., and 16 other House Members requested
hearings into the Travel Office matter. This request was
accompanied by a 71-page minority analysis of contradictions
arising from or issues unaddressed by any of the previous
reports. In response to this report, then-Chairman Conyers
wrote then-Ranking Minority Member Clinger, ``You have raised
serious questions about GAO's report to Congress'' and asked
that GAO provide ``a detailed response'' to those issues.
When Independent Counsel Fiske concluded in July 1994 that
the Travel Office matter had been a major factor in the late
Vince Foster's suicidal depression, it became all the more
important to have a full understanding of what transpired at
the White House Travel Office. Prior to Mr. Fiske's report,
little was known of Foster's role in the Travel Office firings.
In fact, the committee later learned that the White House had
withheld Foster's Travel Office notebook from previous Travel
Office investigations.
Soon after becoming chairman of the reconstituted
Government Reform and Oversight Committee, Mr. Clinger
announced that the committee would investigate the Travel
Office matter.
b. Benefits.--The committee resolved upon the following
findings and recommendations.
Findings
1.) Plans to fire the White House Travel Office employees
and replace them with campaign personnel were in place from the
earliest days of the Clinton administration;
2.) Harry Thomason, who had a financial stake in the travel
business, instigated the firings. Mr. Thomason's personal and
financial interests in the Travel Office made it clearly
inappropriate for him to have any involvement in the matter;
3.) President Clinton approved Harry Thomason's ``Image
Project'' at the White House, giving Thomason an ``Official
Status'' which facilitated Thomason's efforts to obtain
lucrative government contracts;
4.) Harry Thomason abused his official status and White
House access at a time when he had a financial stake in the
travel business. Mr. Thomason's activities at the White House
made him a special government employee to whom conflict of
interest laws applied;
5.) The White House Communications Office, in conjunction
with the White House Counsel's Office, publicly accused the
Travel Office employees of criminal conduct and misused and
manipulated the FBI to further their political agenda;
6.) President Clinton inappropriately allowed his cousin
Catherine Cornelius to remain in a position where she had a
clear conflict of interest. Cornelius pursued an investigation
of employees of an office in which she coveted the top job and
for which she planned a reorganization;
7.) Mrs. Clinton, acting on Harry Thomason's baseless
allegations of wrongdoing against the Travel Office employees,
exerted pressure on senior White House staff to fire the Travel
Office employees;
8.) Associate White House Counsel Bill Kennedy misused the
FBI by repeatedly invoking concerns at the ``Highest Levels''
of the White House in meetings with the FBI;
9.) White House officials covered-up the real reasons for
the Travel Office firings. The firings were not based on the
Peat Marwick review but rather were decided before Peat Marwick
examiners ever set foot inside the White House;
10.) The White House misrepresented the Peat Marwick
review. It was neither an audit nor independent and was
directed by a White House which did not want an audit to be
conducted;
11.) The FBI allowed the White House to control its
investigation;
12.) The FBI mishandled the Travel Office investigation
from the beginning, allowing the White House to control the
investigation. The FBI did not adequately secure Travel Office
records in a timely fashion;
13.) The White House engaged in a conspiracy of silence of
the true story behind the firings from the very beginning for
damage control purposes;
14.) President Clinton established a cover-up situation
when he inappropriately placed Mack McLarty, the person who had
approved the Travel Office firings, in charge of the White
House Management Review. McLarty withheld information during
the course of the investigation. It is inappropriate for the
White House to investigate itself in conflict-of-interest
matters;
15.) The internal White House Management Review was a
catalog of ``mistakes and deception'' which omitted
incriminating information about the President, Mrs. Clinton and
Harry Thomason. The White House chose to cover-up incriminating
information for political expediency;
16.) The White House Management Review reprimanded people
who were only following orders of the real instigators of the
Travel Office firings;
17.) The White House's obstruction of the review of Vince
Foster's documents was due in part to concerns about Travelgate
documents in Foster's custody;
18.) Mrs. Clinton instructed White House staff on the
handling of Foster documents and the Foster note found on July
26, 1993, and senior White House staff covered up this
information and withheld it from investigators;
19.) The Justice Department deferred to the White House
during its investigations of the White House Travel Office and
Harry Thomason. The Justice Department ignored the obstructive
behavior exhibited by the Counsel's Office;
20.) White House officials engaged in a pattern of delay,
deceit and obstruction over the course of 3 years of
investigations into the Travel Office and matters related to
Vince Foster's death;
21.) David Watkins' ``soul cleansing'' memo account of the
Travel Office is substantially corroborated by numerous records
and witness testimony; and
22.) President Clinton has engaged in an unprecedented
misuse of the executive power, abuse of executive privilege and
obstruction of numerous investigations into the Travel Office.
Recommendations
The committee recommends that:
1.) The ``special government employee'' provisions of the
United States Code should be reformed to prevent its
requirements from being ignored;
2.) The Executive Office of the President should establish
financial and internal review controls consistent with the
requirements of the Chief Financial Officers Act and the
Inspector General Act, including the development of annual,
audited financial statements of all business activities and the
establishment of an internal review system;
3.) The Presidential Records Act and the Federal Records
Act should be amended to provide for jurisdiction of Federal
courts to ensure that Government records are not unlawfully
destroyed, but are managed and preserved as required by law;
4.) The Office of Counsel to the President should return to
its traditional mission of providing traditional legal counsel
to the President and his immediate staff;
5.) Congress should consider the feasibility of prohibiting
the Executive Office of the President from procuring goods and
services through its own procurement operations and requiring
the Executive Office of the President, where possible, to
procure using existing contracts of other agencies, such as the
General Service Administration's Federal Supply Schedules; and
6.) Only individuals of the highest quality and ethics
should be employed by and volunteer services to the Government.
c. Hearings.--The committee held three hearings on the
White House Travel Office matter:
1.) October 24, 1995. Testifying before the committee were
representatives of the organizations which had prepared various
White House Travel Office reports: Mr. John Podesta (White
House Management Review); Ms. Nancy Kingsbury (GAO's White
House Travel Office Operations); Mr. Michael Shaheen
(Department of Justice Office of Professional Responsibility
Report); Inspector Ivian C. Smith (FBI Report) and Chief
Inspector Gary Bell (IRS Report). The committee learned in the
course of this hearing that the scopes of all five
investigations were limited and that the White House Management
Review, GAO and OPR Reports in particular were denied access to
witnesses and even knowledge of critical documents subsequently
obtained by the committee. As a result, none of the previous
investigations could claim to have fully accounted for the
actions leading up to and following the White House Travel
Office firings.
2.) January 17, 1996. Testifying before the committee was
former White House Director of Management and Administration
David Watkins. Mr. Watkins testified about his own undated
``soul cleansing'' memo, first released by the White House to
the committee in early January 1996. In this memo, which had
not been made available to any of the previous Travel Office
investigations, Watkins wrote that he had fired the Travel
Office employees in the wake of pressure by First Lady Hillary
Rodham Clinton. Mr. Watkins stood by that characterization
during his testimony before the committee. This appeared to
contradict Watkins' previous statements to GAO and other
investigators as well as Mrs. Clinton's own assertions that she
played no role in the firings. Subsequently, these
contradictions led to a criminal referral of Watkins to
Independent Counsel Starr.
3.) January 24, 1996. Testifying before the committee were:
former White House Travel Office Director Billy Dale and Deputy
Director Gary Wright, as well as Travel Office staffers Barney
Brasseux, John Dreylinger, Ralph Maughan, John McSweeney and
Bob Van Eimeren. The fired Travel Office employees addressed
such issues as their work in the Travel Office and management
of it, and the circumstances surrounding their firings and
subsequent investigations and audits--or threats of same--by
the FBI and IRS. Mr. Dale in particular addressed his 30-month
investigation by the Department of Justice, his indictment and
trial on two charges, and his acquittal by a jury of his peers
in only 2 hours. Mr. Dale also strongly challenged allegations
of mismanagement in the White House Travel Office and testified
to the disappearance of records which he claimed would have
exonerated him. Those records disappeared during the period
immediately preceding the firings when Clinton administration
staffer Catherine Cornelius was removing documents from the
office and taking them home. The FBI did not make any effort to
secure the Travel Office records until 3 weeks after the
firings and 3 weeks after its criminal investigation of the
Travel Office had begun.
In the wake of these three hearings and the continued
withholding of documents by the White House, it became clear
that the Travel Office investigation could not proceed without
the ability to depose witnesses under oath. As a result, on
March 7, 1996, the House of Representatives approved H. Res.
369, providing special authority to the Committee on Government
Reform and Oversight to obtain testimony for purposes of
investigation and study of the White House Travel Office
matter. The Resolution was limited to provide deposition
authority to the Committee on Government Reform and Oversight
only for its investigation of the Travel Office matter.
Committee investigative staff deposed more than 70 witnesses
under this authority in the course of the Travel Office and
related FBI background files investigations.
6. ``Federal Government Management: Examining Government Performance As
We Near the Next Century,'' House Report No. 104-861, September
28, 1996, Eighteenth Report by the Committee on Government
Reform and Oversight, Together with Additional and Minority
Views.
a. Summary.--In mid-1996 the committee undertook to prepare
a report that would update information available on the status
of overall government management, both in terms of cross-
cutting and governmentwide areas of management and in specific
programs. The report dispassionately examined mismanagement,
waste, fraud and abuse in Federal departments and programs.
What we found was truly alarming. The report focussed on actual
management and accomplishments, or lack thereof, rather than on
policy. By no means, however, should it be considered
comprehensive. Serious management deficiencies of the executive
branch of Government are too numerous to inventory in a single
report. Only some of the more obvious problems facing the
cabinet departments and several independent agencies were
reviewed.
Some of the problems reviewed were unique to their
departments, such as the failure of the Department of Labor to
focus sufficient management resources on eliminating organized
crime in labor unions, or the rising delinquency rates in
agricultural loans managed by the U.S. Department of
Agriculture. Other problems, such as mismanagement of
contracts, abuses of the personnel system and failure to
collect debts owed the Federal Government can be found in
almost all departments and agencies.
The report was initiated to raise the visibility of weak
management practices, the lack of oversight and inconsistency
in evaluating the effects of agency actions in the Federal
Government. It briefly reviewed the administration's highly
publicized National Performance Review (NPR), which was
developed to make government ``work better, and cost less.''
The NPR is clearly a laudable initiative, but to date, has
produced few concrete results.
On the positive side, the 104th Congress enacted
legislation that, if implemented effectively, should make
specific improvements in problem areas of the Federal sector.
For example, comprehensive procurement reform, the Unfunded
Mandates Reform Act, and the Line Item Veto are a but a few of
the refreshing management improvements enacted during the past
2 years.
The report concluded that public perceptions of pervasive
waste, fraud and mismanagement in the Federal Government are,
unfortunately, accurate. Other alarming developments in the
Federal Government which demonstrate the need for greater
accountability include the expansion of the General Accounting
Office's (GAO's) ``High Risk'' list of Federal program areas.
That catalog of government hot spots grew from 14 in 1990 to 20
today--a net increase of six areas.
Of the ``Twelve Worst Examples of Government Waste''
outlined for priority attention for this administration by a
1992 House Committee on Government Operations majority report,
11 are the same or worse now. Some, like the failure of the
Internal Revenue Service and the Department of Justice to
collect outstanding debt and the growth of health care fraud
and abuse are much worse now. Taken individually, these items
are cause for concern; taken in the aggregate, they are cause
for alarm and an indication that leadership, both at the
various agencies and at the helm of Government is lacking. With
some exceptions, key appointees apparently do not understand or
care to learn about effective management of their programs.
Bureaucrats cannot operate programs in the absence of strong
guidance and oversight at the highest levels of their
organizations.
Poor financial management, wasteful procurement and
inventory practices, sloppy contract management, personnel
abuses and manipulation of personnel rules, silly or even
harmful regulations are among the consequences of bad
management. Acts such as the Chief Financial Officers Act and
the Government Performance and Results Act were passed by
Congress in frustration over managerial anarchy and program
disaggregation. These acts are being implemented, and Congress
is overseeing their implementation, in an effort to counter the
tendency of management and budget to separate at the Federal
level, and of management to receive less and less attention
over time. As this report amply demonstrated, the Office of
Management and Budget exacerbated that problem by merging its
management and budget functions. Budget Officers at OMB have
now also been made responsible for management oversight.
The report's quick review of fraud, abuse and mismanagement
uncovered $350 billion in easy savings that could be achieved
if greater resources were devoted to good management practices.
Hundreds of billions more will be wasted in the near term on
cost over runs, programs delays, delinquent payments, loans,
grants and unfulfilled contracts. Additional costs for the
Department of Energy's nuclear waste cleanup alone is estimated
to cost as much as $350 billion.
Although the report is critical of the executive branch of
Government, it is not intended as an indictment of dedicated
career civil servants, including managers, who are functioning
in an increasingly complex and sometimes inflexible
environment. The committee recognized that Federal employees
are operating under greater, rather than fewer, constraints. It
was and is the committee's intent that the report serve as a
stimulus to discussion, an inducement to action and result in
positive reforms in Federal management, efficiency and
productivity.
b. Benefits.--The rules of the House of Representatives
give jurisdiction over general government management and
efficiency to the Committee on Government Reform and Oversight.
In accordance with that responsibility, the predecessor to this
committee produced an overview of government management in
1992. This report, entitled ``Federal Government Management:
Examining Government Performance As We Near the Next Century,''
continued the committee's tradition in reporting on
comprehensive government program efficiency and cost-
effectiveness. It is essentially a report card on the
management practices of the first Clinton administration and
also reviews the Vice President's National Performance Review
(NPR), which was intended to improve government efficiency and
morale.
c. Hearings.--None were held.
7. ``Investigation into the White House and Department of Justice on
Security of FBI Background Investigation Files,'' [Interim
Report], House Report No. 104-862, September 28, 1996,
Nineteenth Report by the Committee on Government Reform and
Oversight, Together with Additional Views.
a. Summary.--On May 30, 1996, in the course of its Travel
Office investigation, the committee discovered a December 20,
1993, White House request of Billy Dale's confidential FBI
background file from the FBI Liaison Office. Even though it was
dated 7 months after Dale's firing, the form indicated that the
White House was requesting Dale's confidential FBI file because
it was considering him for ``Access (S).'' The Dale FBI
background file request was found in a production of 1,000
pages of documents over which the White House previously had
claimed executive privilege. Chairman Clinger immediately
called on the White House and the FBI to explain why the Dale
file had been requested by and provided to the White House at a
time when the Justice Department was undertaking a criminal
investigation of Mr. Dale.
On June 5, 1996, the White House claimed the Dale request
was made mistakenly by an unnamed file clerk. On June 6, it
claimed that the General Accounting Office had requested the
Dale FBI background file. The GAO denied this immediately. By
June 7, 1996, the White House acknowledged obtaining some 338
FBI files of former White House employees, but alleged that
they never were read. Then Anthony Marceca, a former detailee
hand-picked by White House Office of Personnel Security
Director Craig Livingstone, contradicted the White House when
he told Livingstone's attorney that he in fact read all the
files and passed derogatory information on to Livingstone.
The White House admitted obtaining an additional 71
improperly sought FBI background files by June 14, 1996, as FBI
Director Louis J. Freeh released an FBI report indicating that
408 files were provided to the White House ``without
justification'' and were ``egregious violations of privacy.''
Director Freeh added, ``The prior system of providing files to
the White House relied on good faith and honor. Unfortunately,
the FBI and I were victimized. I promise the American people
that it will not happen again on my watch.''
Also on June 14, 1996, Livingstone admitted to problems of
his own background in a sworn deposition before the committee.
These included problems with his employment history and the use
of illegal drugs and gave added impetus to the still-unanswered
question, ``Who hired Craig Livingstone?'' On June 15, 1996,
the White House delivered a document production to the
committee which included letters from former Associate White
House Counsel William H. Kennedy, III, to then-Defense
Secretary Les Aspin and others seeking the assignment of Army
investigator Anthony Marceca to a White House detail in the
Office of Personnel Security.
b. Benefits.--The committee resolved upon the following
findings and recommendations.
Findings
1.) FBI background files often include the most sensitive
and confidential personal and financial information about the
individual being reviewed;
2.) The White House improperly requested hundreds of
confidential FBI background files without any justification.
This violated the constitutional rights and privacy of many
former Republican officials whose files improperly were
requisitioned and reviewed by Clinton White House employees;
3.) The White House Office of Personnel Security and the
FBI maintained a system which allowed low level staff to access
any file without question by the FBI. The Clinton
administration has, on a number of occasions, failed to
implement safeguards that would have prevented lapses in
security at the White House and in fact exploited the FBI's
longstanding policy of relying on the honor of White House
employees in turning over such files;
4.) FBI General Counsel Howard Shapiro provided
confidential FBI law enforcement information about Mrs.
Clinton's role in bringing Craig Livingstone into the White
House. When Shapiro realized that the information contained in
Livingstone's FBI background file could damage former White
House Counsel Bernard Nussbaum and Mrs. Clinton, he immediately
contacted the Office of White House Counsel and read verbatim
the incriminating contents of Livingstone's file;
5.) Once White House Special Counsel Jane Sherburne learned
that the information contained in Livingstone's file could
damage Nussbaum and Mrs. Clinton, Sherburne contacted Mrs.
Clinton regarding the information;
6.) Ms. Sherburne may have violated ethical standards by
informing private attorneys for Nussbaum and Livingstone about
confidential FBI law enforcement information. On the day before
reports of his testimony before a grand jury, lawyers for
Nussbaum were informed of evidence uncovered in a search of
Livingstone's file that contradicted Nussbaum's testimony
before the Committee on Government Reform and Oversight. Mr.
Livingstone's attorneys received the same information;
7.) White House Office of Personnel Security staff failed
to properly secure confidential FBI law enforcement files. The
committee was provided with testimony and evidence that staff
and interns without the necessary clearances had access to the
highly sensitive material in the FBI background files including
that of more than 400 Bush and Reagan administration officials;
8.) The FBI continued to involve itself in the
investigation of the FBI files matter even after receiving
notice from the Attorney General that a conflict of interest
existed between the FBI and the White House concerning this
matter. Mr. Shapiro notified the White House about the
incriminating contents of Livingstone's background file before
the committee was allowed to review it. Mr. Shapiro assisted
the White House in preparing correspondence for the FBI
regarding the FBI files matter and the committee's
investigation of it;
9.) Army detailee Anthony Marceca was given unfettered
access to confidential FBI law enforcement files and allowed to
remove confidential information from the White House despite
his own inability to receive White House clearance. Marceca's
removal of information in those files from the White House was
inappropriate;
10.) Without any valid basis for doing so, FBI General
Counsel Shapiro provided the White House Counsel a pre-
publication copy of Gary Aldrich's book which the former agent
had provided to the FBI under an employment agreement. There
was no apparent reason for providing the manuscript to the
White House; and
11.) The White House asserted executive privilege over
documents over which it had no basis for claiming privilege.
Thousands of pages of these documents contained routine
administrative information or communications, as opposed to
issues of national security or others for which a claim might
be appropriate.
Recommendations
Having undertaken a preliminary investigation, the
committee is not satisfied that the public has been provided
the answers to many of the concerns raised by the FBI
background files matter. This makes it imprudent to make
recommendations at this time. The committee feels those
individuals whose files were improperly obtained by the White
House deserve a complete explanation of the following
questions:
1.) Who hired Craig Livingstone?
2.) What list was used by the White House in requesting the
improperly-obtained FBI background files?
3.) Who reviewed the contents of the FBI background files
of former Reagan and Bush administration officials?
4.) Were the contents of the FBI background files ever
transmitted electronically to any computer data base within or
outside the White House complex?
5.) What effect have the new procedures implemented by the
Clinton administration had on the White House pass process and
FBI background checks?
6.) What standard procedures are in place to ensure that
those without proper clearances do not have access to materials
protected by the Privacy Act which are stored in the White
House?
7.) What policies should be implemented to ensure that FBI
officials do not interfere with ongoing investigations outside
the FBI's jurisdiction?
c. Hearings.--The committee held four hearings on the FBI
background files matter:
1.) June 19, 1996. Testifying before the committee were
former White House Counsels or Deputy Counsels A.B. Culvahouse
and Richard Houser (Reagan administration), C. Boyden Gray
(Bush administration), and former Office of Personnel Security
Director Jane Dannenhauer and her deputy, Ms. Nancy Gemmell.
Both Ms. Dannenhauer and Ms. Gemmell had served in the Reagan
and Bush administrations and briefly in the Clinton
administration. At this hearing, the care and discretion with
which FBI background investigation files were handled in the
Carter, Reagan and Bush administrations was established. For
example, access to these files was strictly limited to Ms.
Dannenhauer and one or two members of the White House Counsel's
Office. Those with access to these files themselves had been
cleared for such access after undergoing background
investigations of their own. By contrast, White House interns
were assigned to the White House Office of Personnel Security
for the first time during the Clinton administration. These
interns, aged 18 to 20 years old and without security
clearances or background investigations, nonetheless had access
to confidential FBI background files in the Clinton White
House.
2.) June 26, 1996. Testifying before the committee were:
former Clinton administration Director of Personnel Security D.
Craig Livingstone; former Clinton administration detailee
Anthony Marceca; former Office of Personnel Security staffer
Lisa Wetzl; former White House Counsel Bernard W. Nussbaum, and
former Associate White House Counsel William H. Kennedy, III.
At this hearing, Mr. Livingstone formally announced his
resignation from his position, from which he had been on leave
since the FBI files scandal broke. Witnesses also testified
that hundreds of FBI background files had been requested due to
faulty Secret Service lists. No one, including Mr. Livingstone,
could answer the question, ``Who hired Craig Livingstone?''
although Messrs. Nussbaum and Kennedy testified that the First
Lady had no role in Livingstone's hiring. Apparent
contradictions between Nussbaum's testimony and previous
statements he had made to an FBI agent in the course of an
interview subsequently led to a criminal referral of these
matters to Independent Counsel Starr.
3.) July 17, 1996. Testifying before the committee were
Secret Service Agents John Libonati, Jeffrey Undercoffer and
Arnold Cole. The Secret Service agents established in their
testimony that the Secret Service's own records properly
recorded as ``inactive'' passholders all but a handful of the
individuals whose FBI files were requested and that it thus
would have been difficult for the White House to mistakenly
request hundreds of FBI background investigation files of
former ``inactive'' Republican officials. Special Agent Cole
also testified that, when the FBI files matter first was
reported in the press, Livingstone told him he knew that the
Secret Service lists were indeed accurate and that his office
had used the wrong lists. The agents also testified at this
hearing about the incidence of recent drug usage among White
House staffers, 21 of whom were forced by recent extensive drug
usage to be tested twice a year in a special, individualized
random drug testing program.
4.) August 1, 1996. Testifying before the committee were:
Howard M. Shapiro, FBI General Counsel; Thomas Kelley, FBI
Deputy General Counsel; Vernon Thornton, retired former FBI
Unit Chief of Executive Agencies Dissemination and Personnel
Unit; and Peggy J. Larson, FBI Supervisory Research Analyst.
At this hearing, General Counsel Shapiro testified
concerning his ``heads-up'' warning to the White House
concerning materials in D. Craig Livingstone's FBI background
file. Mr. Shapiro acknowledged it was ``a horrific blunder''
warning the White House of the existence of an FBI report
stating the First Lady ``highly recommended'' Livingstone for
his White House position. In his opening statement and, later
while responding to questions, Shapiro acknowledged that the
substance of this ``heads-up'' in turn was widely disseminated
throughout the White House and beyond. (Former White House
Counsel Bernard Nussbaum, who reportedly told the FBI of the
First Lady's recommendation of Livingstone, was informed in
advance of an appearance before a grand jury.) Mr. Shapiro also
testified about his July 16, 1996, decision to send FBI agents
out to the home of the agent whose interview summary report
related the First Lady's recommendation. He testified that the
interview of the FBI agent was not intended to intimidate, as
some majority Members suspected. Mr. Shapiro also testified
about his delivery to White House Counsel Jack Quinn of retired
FBI agent Gary Aldrich's manuscript of a proposed book which
discussed activities at the White House. The other three
witnesses testified more generally on the handling of FBI
files.
GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY SUBCOMMITTEE
Hon. Stephen Horn, Chairman
1. ``Making Government Work: Fulfilling the Mandate for Change,'' House
Report No. 104-435, December 21, 1995, Third Report by the
Committee on Government Reform and Oversight, Together With
Additional Views.
a. Summary.--On December 14, 1995, the Committee on
Government Reform and Oversight approved and adopted a report
entitled, ``Making Government Work: Fulfilling the Mandate for
Change.'' The committee's report is based on a series of
hearings conducted by the Subcommittee on Government
Management, Information, and Technology. The subcommittee
convened eight oversight hearings on various aspects of
government management to solicit advice and recommendations
for: (a) changing what the Federal Government does; (b)
improving the overall economy, efficiency, and management of
its operations and activities; and (c) effectively planning,
measuring, and reporting the results to the American public.
The inquiry reflected public expectation that provided a
mandate to the Congress to consider with care the various
Government functions, and to determine whether they should
continue to be performed, and, if retained, how they can be
made more effective.
The experience of American industry also influenced the
committee. In the past decade, corporations and other entities
have reexamined their roles and redefined their institutional
objectives and purposes. Many corporate changes have been
facilitated by technology that speeds information to
decisionmakers and thereby reduces the need for traditional
hierarchies. While such changes have been at times wrenching to
the people in these institutions, the result has been to make
American industry far more productive and competitive. The
Federal Government has yet to implement a similar
transformation on any appreciable scale. While the committee
recognizes fundamental differences between the purposes and the
cultures of business and Federal Government organizations, it
remains receptive to the suggestion that ``rethinking'' and
``re-engineering'' methods successfully used in the private
sector can be and should be adapted for use in the Federal
Government.
Because of the administration's management responsibilities
for the Federal Government, the point of reference for all
material reviewed was the National Performance Review, Phases I
and II.
Findings
Based upon the investigation and oversight hearings
conducted by the subcommittee, the committee found the
following:
1. The Management of the Federal Government Needs Improvement.
(a) The capacity of the President as the Chief Executive
Officer of the Federal Government and its principal manager has
been diminished over several administrations. The Executive
Office of the President has abrogated its responsibility to
oversee and improve the Government's management structure.
(b) The capacity available to the President in the Office
of Management and Budget [OMB] to reform or improve management
has steadily declined and now barely exists, despite a
competent Director of OMB and a Deputy Director of Management,
whose talents in this area are underutilized. Federal
management organization, oversight authority, and general
influence have been consistently overridden by recurring budget
crises and budget cycle demands, despite conscientious
intention to give ``Budget'' and ``Management'' equal voice
within OMB.
(c) The NPR, in its ad-hoc and episodic approach to
management issues, reveals the weakened state of management
capacity of the Executive Office of the President.
(d) The NPR-inspired announcement of a reduction of over a
quarter-million Federal jobs may have been warranted; however,
without first having a solid empirical rationale for doing so
and not knowing where or how, it reflected a lack of strategic
vision as to the Federal Government's role, and as such it
seriously eroded Federal workers' morale, productivity, and
planning for the future.
(e) The capacity of the Office of Personnel Management to
provide leadership to a revitalized career service has been
seriously impaired.
(f) Short-term political appointees have layered and
``thickened'' the Federal Government's upper echelons of
organization to a point where productivity, management, and
continuity of operation have become seriously affected.
(g) Some potential candidates for political appointment
believe that service on Federal organizations will hinder their
careers, imposing a protracted and intrusive nomination process
as well as numerous restrictions on financial and employment
activities during and following Federal Government assignments.
As a result, the pool of available talent qualified for
appointment and willing to serve has been diminished.
(h) Qualified people considering careers in public
administration are discouraged from Federal career employment
by layers of political appointees of uneven quality which
preclude advancement to positions of senior responsibility.
(i) Career Federal public administrators have a long record
of faithfully executing clearly established policy and
rendering effective political leadership. However, political
appointees as a group have tended to display more loyalty to
individual political sponsors and special interests than to the
President, who is elected by and ultimately accountable to the
people.
(j) Employee-buyout programs in Federal organizations have
not worked as well as intended, resulting in the loss of
employees with the most marketable skills, leaving in the
workplace many of the poorer performers.
(k) Programs for Federal-employee professional education,
training, and development are vital to a smaller workforce
adopting modern management methods and achieving desired
productivity improvements.
(l) The Federal Government must follow the best practices
of private and public organizations for exploiting information
technology in reforming management, reducing size, and raising
productivity and market competitiveness. A recent General
Accounting Office report provides valuable insights on how the
Federal Government can lower costs, improve productivity, and
provide better services to its citizens.
2. The Federal Intergovernmental Roles Are Poorly Defined.
(a) The Federal role has evolved in a patchwork manner. The
Federal Government lacks a clear and comprehensive statement of
its proper role. The result is similar redundant programs
throughout disparate departments and agencies.
(b) Many citizens view the Federal Government as having
overreached its proper role, by ``meddling'' in affairs such as
elementary and secondary education (better left to States and
communities), marketing and distribution of energy resources
(better left to market forces) and applied research and
development (better left to private investment and
competition).
(c) Many State governments are willing to risk accepting
large Federal block grants, with fewer dollars, in return for
greater flexibility and fewer restrictions. There is some
concern that any residual reporting burdens and controls from
Washington may interfere with States' roles and as such
constitute an ``unfunded mandate,'' contrary to a law sponsored
by this committee.
(d) In the current environment, many agencies and States
are trying to develop program partnerships. Federal-State
program partnership agreements reached a high point during the
Johnson and early Nixon administrations. State and Federal
leaders need to be aware that those intergovernmental
agreements later deteriorated because roles and
responsibilities were not clearly defined and accepted by all
interested parties. Another cause was that the Federal
Government seized a decisionmaking role disproportionate to the
resources it provided.
3. Organization of Federal Functions Is Uneven and Duplicative.
(a) No Cabinet-level department has been eliminated
outright in our Nation's history, although many have been
reorganized, renamed, combined, or split.
(b) Today's Federal Government is even more enmeshed in red
tape, replicated functions and controls than it was in 1971,
when President Nixon tried unsuccessfully to reorganize and
streamline Cabinet departments.
(c) The proposed ``Department of Commerce Dismantling Act
of 1995'' contains a model for dismantling any high-level
Federal organization using a traditional organization within
the Office of Management and Budget.
(d) Approximately a million Federal employees work in some
30,000 field offices outside of Washington, DC. Although some
field offices only have five or fewer staff, closing them has
consistently proven to be a difficult, almost intractable
political problem. The committee notes progress by the U.S.
Department of Agriculture in addressing the problem.
4. Public Accountability Is Weak.
(a) The National Performance Review [NPR] contributed to
identifying the need to improve the Federal Government and
lower its operating costs.
(b) By not establishing first what activities the Federal
Government should be performing, the NPR was flawed from the
outset and did not achieve enough progress.
(c) NPR neglected to place sufficient emphasis on fiscal
accountability by failing to address the Federal Government's
responsibility for stewardship of public resources.
(d) The ad-hoc, even disjointed, nature of NPR is a telling
sign of the disconnect between policy and management, evidence
of atrophy of the tools of management, and an admission that
the President has no organized capacity to manage the executive
branch.
(e) The NPR recommended a doubling of the existing 1-to-7
supervisory span of control to a 1-to-14 or 1-to-15 supervisor
to subordinate ration. This recommendation was without
appropriate foundation and ignored the Government's widely
varying missions, and threatens public accountability.
(f) With more Federal work being done under contract, with
private vendors, effective contract administration is
critically important in ensuring efficiency, effectiveness, and
accountability.
(g) The growth of ``contract government'' is a direct by-
product of the emphasis on personnel reduction. As successive
administrations have sought to limit or reduce the number of
Federal employees, more and more activities have been
contracted out.
(h) The experiences of other foreign and Federal, State and
local governments in carrying out significant management and
accountability reforms are valuable to Federal agency managers
as they implement the Government Performance and Results Act of
1993 [GPRA].
(i) Government corporations and other Government-sponsored
enterprises have assumed roles and responsibilities very
different from those for which the Government Corporation
Control Act of 1945 was intended. Today, a conceptual framework
is needed for setting up these kinds of enterprises and
centralized oversight of their management operations.
(j) Executive branch accountability is made more difficult
by the complex congressional budget process and by additional
legislative branch restrictions and controls placed on
Government agencies, such as prohibitions on closing outdated
Federal field offices.
Recommendations
Based on the foregoing findings, the committee recommends
as follows:
1. Strengthen the President's Role as Chief Executive Officer of the
Executive Branch.
(a) Management of the Federal Government should be a
Presidential priority. Among the President's many roles is the
responsibility to serve as Chief Executive Officer or general
manager of the Federal Government. Many broad initiatives
intended to make the Federal Government work better depend on
the commitment by the President and his staff in the Executive
Office of the President. By approaching the Federal Government
almost exclusively from a budget or policy perspective,
Presidents limit their capacity to reform management in the
Federal Government.
(b) The President, acting jointly with Congress through a
Federal management office, should establish intergovernmental
partnerships, with clearly defined Federal and State roles and
responsibilities, and allow local Federal managers the
authority and flexibility needed to assist State and local
officials in managing devolved programs, functions, and
resources.
(c) To make the President's executive office more
accountable to the public, Congress should establish an Office
of Inspector General in the Executive Office of the President.
2. Establish an Office of Management.
(a) To enhance the President's management capability
throughout the executive branch, Congress should establish, in
the Executive Office of the President, a top-level management
and organizational oversight office headed by an administrator
who has direct access to the President. Sustained attention to
management issues beyond recurring budget crises is vital to
ensure effectiveness. The new Federal management office would
combine the management functions of the OMB, the residual
policy and oversight functions of the Office of Personnel
Management, and the policy functions from the General Services
Administration into an entity separate from but equal in
stature to the remaining Office of the Budget.
(b) The executive branch is in serious need of an office
with responsibility for departmental reorganizations such as
the proposed dismantling of the Department of Commerce. The
current legislative initiative in that regard will be a model
for managing large-scale reductions in the Federal Government's
organizational structure and scope of work.
(c) An Office of Management could encourage the
implementation of the strategic information management and
technology practices increasingly common in high quality
private and public organizations. It could stress the need to
focus management attention on technology improvements that
attain goals; and assert senior management control over
technology investment decisions.
(d) Executive agencies should exploit, publicize, and
replicate successful private sector ventures in making Federal
Government organizations work more effectively by drawing upon
past successes.
3. Convene a Commission on Federal Reorganization.
(a) Congress should establish a blue-ribbon inquiry
commission of experts from the business, academic, and
nonprofit sectors and Federal, State and local government to
recommend to the President and Congress in early 1997: (i) ways
to organize more efficiently the functions that the Federal
Government performs; and (ii) changes in law that would reduce,
transfer or eliminate Federal functions. If resources permit,
such a commission should produce a reorganization plan.
(b) Such a commission should apply the guideline criteria
for agency elevation to Cabinet department status which were
developed in 1988 by the National Academy of Public
Administration [NAPA]. Such a review ought to result in a new
alignment and grouping of the tasks and functions of the
Federal role by major purpose.
(c) Congress should concurrently provide the President
broad authority, including optional fast-track authority, to
restructure executive branch departments and agencies, similar
to past (and now expired) Reorganization Acts.
(d) Congress should be fully involved in the consolidation
of the many Federal programs it enacts and funds; the proposed
commission should look for additional opportunities to
consolidate or combine Federal programs, and make
recommendations accordingly.
(e) Once changes have been made in the structure of the
executive branch, Congress should conform its own committee
organization and jurisdictions to parallel the executive branch
changes.
4. Reshape the Federal Civil Service.
(a) Congress should proceed with legislation that would
reduce the allowable number of political appointees to an
initial level of 2,000--aimed principally at Schedule C (not
subject to Senate confirmation) positions--and set lower
targets for future years as additional executive branch
organizations are consolidated or abolished.
(b) Congress should appropriate the professional education,
training, and development funds for executive agencies, not as
separate line items, but as an integral part of total personnel
costs. That would afford managers the flexibility to choose
between training and hiring to upgrade collective
organizational skills.
(c) Any future Federal employee ``buyout'' legislation
should be limited to serving the needs of the downsized Federal
Government by focusing agency buyouts on those with less-needed
skills, functions, and capabilities.
5. Strengthen Public Accountability.
(a) Both the President and Congress should complete the
work to implement the Government Performance and Results Act,
in order to make the executive branch both performance-driven
and accountable. The act's performance measurement provisions
ought to be used in all steps of the budget and management
process.
(b) To make public accountability in the executive branch
less cumbersome and counterproductive, Congress should simplify
the present complex structure of 13 separate appropriations
bills by combining them into a lesser number, possibly
comparable to the internal budget review structure in the
Office of Management and Budget. Congress should adjust its own
internal authorizing and appropriating committee structure
correspondingly.
(c) Congress should amend the Government Corporation
Control Act of 1945 to raise the efficiency and effectiveness
of the Federal Government's business-type operations and
organizations and to set standards consistent with today's
marketplace conditions.
(d) In its quest to attain the objective of balancing the
Federal budget by fiscal year 2002, Congress must recognize
three critical needs: (i) to preserve the Federal Government's
accountability to the governed throughout the transformation
process; (ii) to foster that objective by making investments in
human and technological development during that process; and
(iii) to accept the hard lessons learned by industry that
workforce strength is to be cut only after--not before or
while--the Federal roles have been determined and
organizational structures have been reduced or eliminated.
b. Benefits.--Implementing the recommendations in this
report will result in a Federal Government that is less
expensive, more efficient, and more accountable to the
taxpayer. Federal customers and partners in all program areas
will benefit from sharper definition of the roles and
relationships between levels of government, as well as between
the government and the private sector, elimination of
duplicative Federal organizations and activities, and
performance measures that facilitate public discussion and
decision about the ongoing value of government activities. A
strengthened career civil service, well trained and well tooled
in the best management practices of both the public and private
sector, and empowered to employ them, is vital to making these
benefits a reality.
c. Hearings.--The series of eight hearings began on May 2,
1995, with an overview of the NPR process. Testimony was
received from Alice M. Rivlin, Director, and John A. Koskinen,
Deputy Director for Management, Office of Management and Budget
(OMB); Charles A. Bowsher, Comptroller General of the United
States, General Accounting Office (GAO); Tony Dale, Budget
Manager of the New Zealand Treasury (in his capacity as
Harkness Fellow, 1994-5), the Commonwealth Fund of New York;
Duncan Wyse, executive director, Oregon Benchmarking Project;
Dwight A. Ink, president emeritus, Institute of Public
Administration and former Assistant Director for Management,
Bureau of the Budget and OMB; R. Scott Fosler, president,
National Academy of Public Administration; Donald F. Kettl,
nonresident senior fellow, Center for Public Management, The
Brookings Institution, and professor at the University of
Wisconsin, Madison; and Herbert N. Jasper, senior associate,
McManis Associates.
The subcommittee focused next, on May 9, on the appropriate
role of Federal executive leadership in strengthening the
management of Cabinet level departments, hearing testimony from
Thomas P. Glynn, Deputy Secretary of Labor; George Munoz,
Assistant Secretary for Management and Chief Financial Officer,
Department of the Treasury; Assistant Comptroller General
Johnny C. Finch, General Government Programs, and Gene L.
Dodaro, Accounting and Information Management Division, GAO;
Alan L. Dean, former Assistant Secretary of Transportation for
Management and coordinator of President Nixon's plan for
departmental reorganization; William D. Hansen, former
Assistant Secretary of Education for Management and Chief
Financial Officer under President Bush; and Roger L. Sperry,
director of management studies, National Academy of Public
Administration.
The third hearing, on May 16, turned to consolidating and
restructuring the executive branch, assessing alternative ideas
for rearranging or reducing several departments and agencies.
Witnesses were Representative Robert S. Walker of Pennsylvania,
chairman of the Committee on Science; Representative Sam
Brownback of Kansas; Representative Dick Chrysler of Michigan;
Representative Todd Tiahrt of Kansas; Robert A. Mosbacher,
Secretary of Commerce in the Bush administration; Scott A.
Hodge, Grover M. Hermann Fellow in Federal Budgetary Affairs,
the Heritage Foundation; Jerry Taylor, director, Natural
Resources Studies, Cato Institute; and Herbert N. Jasper,
senior associate, McManis Associates.
In its fourth session, on May 16 and 23, the subcommittee
examined the consolidation of a large number of Federal
programs and organizations. The subcommittee heard testimony
from Secretary of Energy Hazel R. O'Leary, Donald P. Hodel,
former Secretary of Energy under President Reagan; Admiral
James D. Watkins, U.S.N. (ret.) former Secretary of Energy
under President Bush; John S. Herrington, former Secretary of
Energy in the Reagan administration; Shelby T. Brewer, former
Under Secretary of Energy during the Reagan administration;
Donna R. Fitzpatrick, former Under Secretary of Energy during
the Bush administration; Marshall S. Smith, Under Secretary of
Education; Donald Wurtz, Chief Financial Officer, Department of
Education; Chester E. Finn, Jr., John Olin Fellow, the Hudson
Institute and former Assistant Secretary of Education during
the Reagan administration; William D. Hansen, executive
director of the nonprofit Education Finance Council and
Assistant Secretary of Education for Management in the Bush
administration; George Munoz, Assistant Secretary for
Management and Chief Financial Officer, Department of the
Treasury; and Paul Posner, Director, Budget Issues, Accounting
and Information Management Division, GAO.
Attention turned in June to the Federal Government's field
establishment. After reviewing several types of possible
corporate structures for Federal aviation, electric power, and
transportation on June 6, the subcommittee heard testimony from
several regional administrators on June 13 to understand their
roles and hear their suggestions, then returned to Chicago on
June 19 for a firsthand look at the Federal Government's
operations from the field perspective. Witnesses at the June 6
hearing were Donald H. Rumsfeld, former Secretary of Defense
under President Ford and chief executive officer of General
Instruments Corp.; Roger W. Johnson, Administrator of General
Services; Jack Robertson, Deputy Administrator and Paul Majkut,
general counsel, Bonneville Power Administration; Daniel V.
Flanagan, Jr., president, Flanagan Consulting Group; Harold
Seidman, senior fellow, National Academy of Public
Administration; Jack Johnson, president, Professional Airways
Systems Specialists; and Barry Krasner, president, National Air
Traffic Controllers Association. Witnesses at the hearing on
June 13 and 19 were Dwight A. Ink, president emeritus,
Institute of Public Administration; Alan L. Dean, senior
fellow, National Academy of Public Administration; Charles F.
Bingham, visiting professor of public administration, the
George Washington University; Wardell C. Townsend, Jr.,
Assistant Secretary of Agriculture for Administration; Shirley
Sears Chater, acting Commissioner, Social Security
Administration; Mary Barrett Chatel, president, National
Council of Social Security Management Associations; D. Lynn
Gordon, Miami District Director, U.S. Customs Service,
Department of the Treasury and George Rodriguez, Houston Area
Coordinator, Department of Housing and Urban Development;
William Burke, Great Lakes Regional Administrator, General
Services Administration and chair, Chicago Federal Executive
Board; Gretchen Schuster, Chicago Regional Director, Passport
Agency, Department of State and Federal Executive Board member;
Joseph A. Morris, former General Counsel, Office of Personnel
Management; Michael P. Huerta, Associate Deputy Secretary of
Transportation and Director, Office of Intermodalism,
Department of Transportation; Kenneth A. Perret, Garrome
Franklin, and Donald Gismondi, Federal Regional Administrators
in Chicago for highways (FHA), aviation (FAA), and transit
(FTA) respectively; and Colonel Richard Craig, North Central
Division Engineer, U.S. Army Corps of Engineers.
The seventh hearing, on June 20, in Washington, emphasized
improving government results through performance measurement,
benchmarking, and re-engineering, as many private corporations
have done. Witnesses providing testimony were Donald F. Kettl,
Center for Public Management, the Brookings Institution, and
professor at the University of Wisconsin, Madison; Harry P.
Hatry, Director of State and Local Government Research
Programs, the Urban Institute; Herbert N. Jasper, senior
associate, McManis Associates, Johnny C. Finch, Assistant
Comptroller General, General Government Programs, GAO; Linda
Kohl, director of Minnesota State Planning; Sheron K. Morgan,
North Carolina Office of State Planning; Joseph G. Kehoe,
Managing Partner for Government Services, Coopers and Lybrand,
LLP; and Laura Longmire, National Director, Benchmarking, KPMG
Peat Marwick LLP.
The series of hearings ended on June 27, 1995, focused on
agencies' preparation for compliance with the Government
Performance and Results Act of 1993 (GPRA).
Testifying at the final hearing were OMB Deputy Director
for Management John. A. Koskinen; Johnny C. Finch, Assistant
Comptroller General for General Government Programs, GAO; Paul
C. Light, director, Public Policy Programs, the Pew Charitable
Trusts; R. Scott Fosler, president, National Academy of Public
Administration; Anthony A. Williams, Chief Financial Officer,
Department of Agriculture; Vice Admiral A.E. (Gene) Henn, Vice
Commandant, U.S. Coast Guard, Department of Transportation;
Joseph Thompson, New York Regional Director, Department of
Veterans Affairs; and Colonel F. Edward Ward, Jr., Director,
Field Offices, Department of Defense Finance and Accounting
Service, formerly with the Air Force Air Combat Command.
2. ``Year 2000 Computer Software Conversion: Summary of Oversight
Findings and Recommendations,'' House Report No. 104-857,
September 27, 1996, Sixteenth Report by the Committee on
Government Reform and Oversight.
a. Summary.--After midnight, December 31, 1999, computer
systems throughout the world are at risk of failing by
confusing the year 2000 with the year 1900 on January 1, 2000,
and going backward in time instead of forward with the new
century. Congress has learned that if businesses and
governments continue to ignore this issue, disruption of
routine business operations and the inability of the Federal
Government to deliver services to the American public could
result.
According to an April 12, 1996, Congressional Research
Service (CRS) memorandum, ``Many people initially doubted the
seriousness of this problem, assuming that a technical fix will
be developed. Others suspect that the software services
industry may be attempting to overstate the problem to sell
their products and services. Most agencies and businesses,
however, have come to believe that the problem is real, that it
will cost billions of dollars to fix, and that it must be fixed
by January 1, 2000 to avoid a flood of erroneous automatic
transactions.''
On April 16, 1996, subcommittee Chairman Stephen Horn
convened a hearing of the Subcommittee on Government
Management, Information, and Technology to determine what steps
Federal agencies are taking to prevent a possible computer
disaster. Among the questions raised were whether agencies are
taking appropriate steps to identify the problem and mobilizing
the necessary human and capital resources to it.
As noted by Representative Tom Davis, ``think for a moment
how dates play a part in each one of our lives and how the
failure of a computer system or computer scanner to recognize
and understand a date can affect us. Our driver's license may
prematurely expire and the Social Security Administration may
recognize 25-year-olds as 75-year-olds, without conversion that
is needed for the year 2000.''
Examples of what could occur if industry and government
ignore this issue ranged from unexpected expiration of drivers'
licenses to erroneous dates for final mortgage payments if two-
digit date fields remain unable to recognize the year 2000.
Given that this information technology project has a fixed date
for completion, January 1, 2000, subcommittee Chairman Horn
asked hearing witness, Kevin Schick, research director, Gartner
Group, to estimate the cost of a solution. Mr. Schick estimated
$600 billion worldwide, including $300 billion in the United
States and $30 billion for the Federal Government. Subcommittee
Chairman Horn then asked Schick what the administration's and,
in particular, the Office of Management and Budget's was doing
to convey the urgency of the problem. Mr. Schick responded
``there is no sense of urgency . . . if [Federal agencies] are
not already well into this project by October of 1997, [the
Federal Government] will be doing a disservice to the very
constituents that depend on [it] to prevent something like this
from happening to them . . .''
On September 10, 1996, a joint hearing with the Committee
on Science was held to review the Year 2000 impact on personal
computers, States and the Federal Government. Larry Olson,
Pennsylvania's Deputy Secretary for Information, presented
Pennsylvania's plan and noted that the key to success of any
plan is senior level support. Mr. Olson testified that in his
first year as Governor, Tom Ridge recognized the implications
of the Year 2000 date field problem and acted to ensure
Pennsylvania businesses and governments will be prepared before
January 1, 2000.
Also at the hearing Harris Miller, the president of the
Information Technology Association of America, outlined three
problem areas for personal computer users in homes and
businesses nationwide: 1) the machines' BIOs--basic input/
output systems--chips; 2) their operating systems; and 3) their
commercial software. Most equipment manufacturers have modified
their products in the past 18 months. Operating system software
remains an issue but most operating systems can be fixed by a
simple procedure using the computer's mouse. Commercial
software may or may not be Year 2000 compliant. Another serious
concern is their increasing interconnectedness with other
systems. To ensure that computer systems are operational in
2000, most systems will need modification.
Miller also testified that personal computer users and
mainframe information technology managers need to be aware of
this issue and take appropriate corrective steps.
In her testimony, OMB's Office of Information and
Regulatory Affairs Administrator Sally Katzen outlined the
Clinton administration's strategy to resolve the problem: 1)
raise the awareness of the most senior managers in Federal
agencies to the problem; 2) promote the sharing of management
and technical expertise; and 3) remove barriers impeding
technicians fixing systems.
b. Benefits.--The subcommittee found the following:
1. The Year 2000 Problem Results From the Unanticipated Consequences of
Decisions Made Decades Ago.
Computer systems use the two-digit-year date field to
perform such functions as calculating the age of U.S. citizens,
sorting information by date, and comparing multiple dates.
Twenty years ago, disk storage was so expensive that a four-
digit-year date format was rejected. In addition to the cost
factor, many programmers assumed that the programs then using
two-digit-year date fields would be obsolete by the year 2000,
if not within 10 years. In fact, systems now in place nearly 30
years continuously were enhanced by technological developments
while remaining programmed for the 20th century. Given these
developments, many experts in the public and private sectors
were confident further advances would provide ``silver bullet''
solutions to such issues as this one. Others believed the
software services industry was overstating the problem to sell
products. While correcting the date field is technically
simple, the process of inventorying, correcting, testing and
integrating software and hardware among all interactive systems
(among industry and government) is very complex.
2. Senior Management Involvement Is Required To Address the Year 2000
Problem.
Various witnesses appearing before the subcommittee
emphasized the value of senior level support to fix the
systems. Many experts, aware of this issue for up to a decade,
were unable to take corrective action because the problem was
considered irrelevant to agencies' missions.
In the Federal Government, an ``Interagency Committee on
the Year 2000,'' established to raise awareness of the task
facing Federal information technology managers, has required
that vendor software in future procurement schedules be Year-
2000 compliant, among other things.
3. The Year 2000 Deadline Cannot Be Extended.
According to Mr. Schick, the crisis revolves around time,
cost and risk. Businesses, Federal agencies, and State and
local governments must understand that this information
technology project cannot be allowed to slip: Saturday, January
1, 2000 cannot be postponed. Mr. Schick added that all parties
may be required to shift resources from other projects to
complete this one.
4. Addressing The Year 2000 Problem Will Be Costly.
Estimates as high as $600 billion for systems worldwide,
$300 billion in the United States and $30 billion for the
Federal Government alone reflect the costs of: inventorying
current programs; analyzing the percentage of code affected;
implementing a fix, and testing to ensure the changes are
correct. All must be completed while current information
technology remain in use.
Only six agencies furnished any cost estimates for
resolving the problem in response to the April 29, 1996
oversight letter: the Departments of Agriculture, Education,
Health and Human Services and State, as well as the Office of
Personnel Management, and the Small Business Administration. In
fact, Agriculture and Health and Human Services only provided
partial estimates.
5. There Is a High Risk of System Failure if the Year 2000 Computer
Problem Is Not Corrected.
If, as suggested by CRS, it is too late to correct every
system nationwide before January 1, 2000, businesses need to
know how to minimize disruptions in their operations. Federal,
State and local governments must prioritize mission critical
systems and immediately correct systems with the greatest human
impact.
Federal, State and local governments, must ensure that
Americans are not at risk of losing government services.
Additionally, the Department of Defense, Federal Aviation
Administration and similar agencies must ensure that their
computers do not go haywire on January 1, 2000, causing severe
disruptions of a strategic nature.
On June 7, 1996, the CRS provided the House and Senate with
a memorandum discussing various issues complicating the Year
2000 project and potential consequences resulting from a
failure to address this problem at the Federal level,
including:
Social Security Administration miscalculation
of the ages of citizens, causing payments to be sent to
ineligible persons and/or denying payments to the
eligible;
IRS miscalculations of standard deductions on
income tax returns for persons over 65, causing
incorrect records of revenues and payments due;
Malfunctioning Department of Defense weapon
systems;
Erroneous flight schedules generated by the
FAA's air traffic controllers;
State and local systems being corrupted by
false records, resulting in errors in income and
property tax records, payroll, retirement systems,
motor vehicle registrations, and more;
Erroneous records by securities firms and
insurance companies; and
False billing by telephone or similar
companies resulting in billing errors or lapses in
service.
6. Potential Liability Issues Arise If the Year 2000 Computer Date
Conversion Is Not Completed.
Businesses--in particular banks, securities firms and
insurance companies, among others--face potential liability for
failing to provide Year 2000 compliant products or services and
must ensure that their data bases are not corrupted by bad data
from external sources. Governments and businesses also must
protect themselves from purchasing noncompliant software and
services through use of commercial market warranties.
c. Hearings.--The Subcommittee on Government Management,
Information, and Technology held a hearing on April 16, 1996,
entitled, ``Is January 1, 2000, the Date for Computer
Disaster?'' and on September 10, 1996, a joint hearing was held
with the Committee on Science, entitled, ``Solving the Year
2000 Computer Problems.''
3. ``Crude Oil Undervaluation: The Ineffective Response of the Minerals
Management Service,'' House Report No. 104-858, September 27,
1996, Seventeenth Report by the Committee on Government Reform
and Oversight.
a. Summary.--Between 1978 and 1993, oil companies underpaid
royalties on crude oil drilled on Federal lands by as much as
$2 billion nationwide. The Department of the Interior's
Minerals Management Service (MMS) has failed to seriously
address this problem.
California is our fourth largest oil-producing State with
1994 crude-oil production of 345 million barrels, a large
amount of which is produced on Federal lands. In 1975, the
State of California and the city of Long Beach sued seven major
oil companies operating in California alleging they had
conspired to keep posted oil prices low, thereby reducing
royalties to the litigants. Similarly, insofar as the posted
price was kept below fair market value, the Federal Government
lost royalties due it for oil production on Federal lands.
In 1986, MMS contacted California officials to assess the
appropriateness of posted prices as the royalty value basis.
MMS' conclusion that posted prices fairly represented market
value reflected the failure of California and Long Beach to
prove their antitrust claims in court. The Department of
Justice looked into the issue but declined to investigate.
In 1991, six companies (ARCO, Shell, Chevron, Mobil,
Texaco, and Unocal) settled with California and Long Beach for
some $345 million. Exxon, the seventh defendant, went to trial
and was exonerated of antitrust charges relating to State oil
leases. Exxon also won an appeal in January 1995. A separate
appeal covering a different time period is pending.
In the wake of the 1991 settlement, MMS attempted to
estimate royalty underpayments for oil produced on Federal
lands. However, since MMS lacked such crucial information as
internal oil company records, California urged it to begin a
more formal investigation. In 1994, MMS responded by creating
an interagency task force consisting of representatives from
MMS and the Departments of Interior, Commerce, Energy and
Justice.
The State of California assisted the Federal team in
obtaining court records which proved instrumental in
demonstrating the undervaluation of crude oil to the Federal
interagency team. In May 1996, the interagency team released a
report concluding that companies often received gross proceeds
higher than their posted prices.
The bulk of crude oil produced in California was not sold
in competitive markets but rather through intra-company
transfers; straight exchanges (where a company trades oil at
one location with another having oil at a second location,
thereby reducing transportation costs) and buy/sell contracts
including such costs as transportation in the cost of the oil.
It is difficult to determine a proxy for the market value of
oil when oil companies hide its true value via complex
contracts.
The interagency report estimated underpayments of Federal
oil royalties on California leases alone to be as high as $856
million from 1978 through 1993. It recommended:
That MMS focus collection efforts on some 10
companies producing 90 percent of Federal crude oil in
California;
That for the period beginning March 1, 1988,
Federal royalties be based on the premium paid on
competitive arm's length contracts for oil produced
from the same field or area;
The Assistant Secretary of the Interior issue
a royalty payor letter ordering targeted oil companies
to submit all relevant arm's length records to minimize
audit expenses;
That the Federal Government submit a bill for
1989 and 1993 to Texaco, since MMS audited those
records, and found royalty underpayments and/or crude
oil undervaluations;
That MMS's oil royalty valuation regulations
be revised to consider alternatives to reliance on
posted prices and improve clarity; and
That a method be chosen to determine royalties
owed.
MMS announced it would accept part of the task force's
recommendations and attempt to collect approximately $440
million. The $856 million figure was reduced due to global
settlements between Interior and the oil companies, payments-
in-kind, and other factors. These figures do not include
underpayments outside of California.
In August 1996, the subcommittee obtained a November 1995,
draft report by the Interior Department Inspector General from
various press sources. The report criticized Interior for
improper procedures during oil company negotiations which
reduced the estimated value of items being negotiated by more
than $350 million without documentation. A year after it was
written, the report has yet to be released.
FINDINGS
The subcommittee found:
1. The Minerals Management Service Has Delayed Collecting Royalty
Undervaluations.
In the June 17, 1996, subcommittee hearing, members
expressed concern that MMS delayed the release of the
interagency report: in a 1994 e-mail to his supervisor, task
force leader David Hubbard stated he had ``stalled long
enough.''
When it announced it would attempt to collect $440 million,
MMS set no timetable for the task. MMS will not simply bill the
oil companies based on Alaska North Slope crude prices but will
audit every contract. With scarce audit resources, this could
take many years. Nor does MMS' audit division appear committed
to collect: unpublished Interior notes quote the head of the
MMS audit division dismissing the interagency task force report
in November 1995 as ``a piece of [expletive deleted].'' Giving
control of the audit process to staff who disparage its results
appears unwise.
MMS also declined to outline interim steps to be taken. The
interagency task force audited Shell's California contracts for
1984 and Texaco's for 1989 and 1993 and recommended billing
those companies immediately for those periods. At the June 17
hearing, however, Interior's Assistant Secretary for Land and
Minerals Management stated that bills would be sent out within
4 to 6 weeks.
2. Global Settlements May Have Harmed U.S. Interests.
MMS' global settlements covering multiple of issues and
claims allowed two oil companies with large underpayments to
avoid payment despite full knowledge of substantial problems
with California underpayments. These agreements may have
extinguished the Federal Government's claim to amounts owed.
The Inspector General draft report concluded the royalty
settlements were not conducted in accordance with ``Minerals
Management Service Settlement Negotiation Procedures'' and
faulted MMS for including ``no documentation for the estimated
values of the issues concerning the underpayment of royalties
to be negotiated. . . .''
Prior to negotiations, an MMS Royalty Management Program
division estimated the value of a particular issue to be
negotiated in a global settlement as $439 million. A
negotiation team listing valued the same issue at $78.2
million. No documentation explained the $360.4 million
discrepancy.
3. The California Undervaluation Problem Exists In Other States.
During the June 17, 1996, subcommittee hearing, Robert
Berman, an economist in Interior's Office of Policy Analysis,
testified that the amount of the undervaluation of oil
extracted from Federal lands ranges from 3 to 10 percent
outside California or as much as $1.3 billion.
4. Royalty-In-Kind Transactions May Have Jeopardized U.S. Interests.
The May 1996 interagency task force report acknowledged it
had not ``investigated recoupment of additional revenues on
royalty-in-kind crude oil that might have been undervalued''
and recommended Interior, ``should consider the effects of RIK
[royalty-in-kind] volumes in its decisionmaking, including
potential collections where these volumes were undervalued.''
In theory, Interior sells RIK oil directly to a refiner. In
practice, it allows the Federal leaseholder and refiner-
purchaser to arrange the terms of sale and transfer. RIK
purchasers may in fact pay, through excessive transportation
charges, more for this oil than the government receives.
5. Pipelines Which Cross Federal Lands Harm Federal Interest By
Depressing Royalty Revenues and Preventing an Efficient Oil
Market.
The task force recognized the problem of proprietary
pipelines:
The market restrictions imposed by proprietary
pipelines operated by the major oil refiners had two
critical effects. First, it greatly restricted open-
market trading in California crude oil. Second, it
segregated the crude oil markets of the San Joaquin
Valley and Ventura Basin from the refining centers in
San Francisco and Los Angeles. The reports [of two
consultants employed by the task force] concluded that
the pipeline situation contributed to postings
substantially understating California crude oil values.
The Department of Energy also recognized this problem and
indicated that the administration's Domestic Natural Gas and
Oil Initiative included a pipeline reform plank. Energy
requested that Interior require pipelines crossing Federal
lands operate as common carriers. Interior has taken no action.
RECOMMENDATIONS
The subcommittee recommends:
1. The Minerals Management Service Should Establish a Timetable For
Collections.
The MMS and Interior should develop a timetable to collect
unpaid royalties. This would assist Congress in providing
oversight and commit the administration to taking action.
2. Audit Staff Must Advance the Management Agenda.
If the audit staff is unwilling to support program goals
determined by the administration, then MMS should contract out
the project. California took this approach and received a $345
million settlement. California now contracts with a certified
public accounting firm to manage its oil sales.
3. The Department of Justice Should Review Global Settlements.
Interior should ask Justice to prepare an opinion
concerning royalties negotiated away by MMS. Interior also
should review its compromise procedures, which are more
sweeping than almost any other Federal agency. Agencies are
limited in their authority to compromise debts under Federal
law. Interior, along with Justice and OMB, should examine
whether the persistent mismanagement of global settlements by
MMS warrants review by Justice.
4. The MMS Should Collect Underpayments in All States Where it is Owed.
Interior should develop a strategy to address this and
advise the committee of its plan.
5. The Department of the Interior Should Review Competition on Common
Carrier Pipelines.
Interior should alter its policy to comply with the
administration's recommendations regarding the Domestic Natural
Gas and Oil Initiative. It also should advise California
officials of problems arising from proprietary pipelines, and
the harm which unregulated pipelines can bring to consumers,
producers and royalty owners.
b. Benefits.--The report addresses a problem which is
costing the Federal Government up to $2 billion in lost
revenue. MMS has delayed the collection of oil royalties due.
c. Hearings.--On June 17, 1996, testimony was received
from: Hon. Ken Calvert, Member of Congress; Cynthia Quarterman,
Director, Minerals Management Service, Department of the
Interior; Robert Berman, Economist, Office of Policy Analysis,
Department of the Interior; Abraham Haspel, Acting Principal
Deputy Assistant Secretary for Policy and International
Affairs, Office of Policy and International Affairs, Department
of Energy; Robert Speir, Economist, Office of Oil and Natural
Gas Policy, Department of Energy; Hon. Robert Armstrong, the
Assistant Secretary of the Interior for Land and Minerals
Management, Department of the Interior; M. Brian McMahon,
attorney for the city of Long Beach, Trustee for the State of
California; Robert Shannon, assistant city attorney, city of
Long Beach; and James McCabe, deputy city attorney, city of
Long Beach.
HUMAN RESOURCES AND INTERGOVERNMENTAL RELATIONS SUBCOMMITTEE
Hon. Christopher Shays, Chairman
1. ``The FDA Food Additive Review Process: Backlog and Failure To
Observe Statutory Deadline,'' House Report No. 104-436,
December 21, 1995, Fourth Report by the Committee on Government
Reform and Oversight, Together With Additional Views.
a. Summary.--Since April 1995, the Human Resources and
Intergovernmental Relations Subcommittee has been conducting an
oversight investigation into the delays in the Food and Drug
Administration's (FDA) review and decisionmaking on food
additive petitions. This is the first comprehensive oversight
investigation into the FDA's management of the food additives
program since the food additive amendments were passed in 1958.
Based on this study and two subcommittee oversight hearings,
the committee adopted its fourth report to the 104th Congress
on December 14, 1995.
The Federal Food, Drug, and Cosmetic Act (FFDCA) of 1938
gave the FDA authority over food and food ingredients. The Food
Additive Amendments to the FFDCA were passed by Congress in
1958 to require FDA's pre-market approval for the use of an
additive prior to its inclusion in food. This authority is now
found in section 409 of the FFDCA. (21 U.S.C. 348) An
``additive'' is ``any substance the intended use of which
results or may reasonably be expected to result, directly or
indirectly, in its becoming a component or otherwise affecting
the characteristics of any food.'' This definition covers any
substance used in the production, processing, treatment,
packaging, transportation or storage of food such as colors,
packaging materials, artificial sweeteners and fat substitutes.
Food additives are commonly used to impart or maintain desired
consistency, improve or maintain nutritive value, maintain
palatability and wholesomeness, produce texture, control
acidity/alkalinity and enhance flavor or impart color.
Food additive petitions must be reviewed and acted upon by
the FDA ``not more than 180 days after the date of filing of
the petition.'' (21 U.S.C. 348(c)(2)). The regulatory scheme in
the United States for food additive review is dysfunctional,
and as a result, the American consumer and patient are deprived
of technologies that could increase the variety and nutritional
benefits of foods, improve diet and advance public health. The
statutory deadline is not being met. Statutory changes are
needed to establish more realistic and binding timeframes for
petition reviews.
On June 22 and June 29, 1995, the subcommittee held
oversight hearings to address these issues. At these hearings,
testimony was received from FDA officials with primary
responsibility for food safety and operation of the food
additive petition process, academicians, food manufacturers,
trade associations, food scientists, and consumer groups.
The committee report contained nine major oversight
findings:
1. FDA does not meet the 180 day statutory deadline
to review and make a decision on food additive
petitions.
2. As of June 1995, there were 295 pending food
additive petitions, some of which were filed in the
1970's.
3. The lack of fixed deadlines and the increased
scientific ability to detect and measure potential
hazards have resulted in a review process that is risk-
averse.
4. FDA is reluctant to decline incomplete or
inadequate petitions, and consequently, allows
incomplete and inadequate petitions to remain under
review at FDA for more than 180 days.
5. FDA has committed insufficient resources to its
food additive review responsibilities.
6. FDA does not set food additive petition review
priorities appropriately.
7. FDA's failure to expeditiously review food
additive petitions has stifled innovation and the
introduction of new ingredients by the food industry.
8. A petition review process with no fixed deadlines
can be manipulated for anti-competitive purposes.
9. FDA does not make sufficient use of independent
scientific resources for food additive petition review.
Based upon this investigation, the report made the
following detailed recommendations:
1. Congress should amend the Federal Food, Drug, and
Cosmetic Act review period for food additive petitions
from 180 days to 360 days for the most scientifically
complex reviews, and the deadline should be strictly
observed by FDA.
2. The FDA should recognize that the approval of
useful and safe new products can be as important to the
public health as preventing the marketing of harmful or
ineffective products.
3. The FDA should eliminate the backlog of pending
food additive petitions within 1 year by reallocating
the necessary agency resources.
4. The FDA should utilize outside expertise in its
evaluation of food additive petitions but retain
authority for petition approval.
5. The relevance of the ``Delaney clause'' should be
studied in view of modern scientific standards so that
better distinctions can be made between nominal hazards
and actual risks. The Delaney clause stipulates that no
food additive can be deemed safe if it has been found
to induce cancer when ingested by man or animal. The
FDA should establish a level of acceptable risk for
food additives, below which there is no hazard to
humans through consumption under normal or intended
use.
6. The FDA should amend the review process to
prohibit anonymous submissions of data or comments.
b. Benefits.--The investigation into delays in the food
additive petition review process allowed FDA officials, food
industry representatives, and others involved in the process of
approving or requesting the approval of food additive petitions
the opportunity to articulate their views of flaws in the
regulatory system. When fixed, FDA's food additive petition
review process could benefit the American public by providing a
vast new array of useful and safe products which could add to
or replace less effective products.
c. Hearings.--The subcommittee convened two hearings on
this subject, both entitled ``Delays in the FDA's Food Additive
Petition Process and GRAS Affirmation Process.'' These hearings
provided subcommittee members the opportunity to say directly
to those involved in FDA's food additive petition process that
Congress was not receptive to the agency's failure to meet its
statutory deadlines, but would consider amendments to FDA's
food additive petition review process to give the agency and
petitioners a more reasonable timeframe within which to work.
On Thursday, June 22, 1995, the subcommittee received
testimony from: Linda Suydam, Acting Deputy Commissioner for
Operations of the FDA; Dr. Fred Shank, Director of the Center
for Food Safety & Applied Nutrition of the FDA; Dr. Alan Rulis,
Acting Director of the Office of Premarket Review of the FDA;
Dr. Sanford Miller of the University of Texas Health Sciences
Center; Dr. Richard Hall, chairman of the Food Forum of the
National Academy of Sciences; Al Clausi of the Institute of
Food Technologists; Dr. Stephen Ziller of the Grocery
Manufacturers of America; Dr. Rhona Applebaum of the National
Food Processors Association; Robert Gelardi of the Calorie
Control Council; Dr. Stephen Saunders of Frito-Lay; Dr. C.
Wayne Callaway of the George Washington University School of
Medicine; and Dr. Michael Davidson of the Chicago Center for
Clinical Research, the Rush-Presbyterian-St. Luke's Medical
Center.
On Thursday, June 29, 1995, the subcommittee's second FDA
oversight hearing, testimony was received from: Dr. Kenneth
Fisher of the Federation of American Societies for Experimental
Biology; Jerome Heckman of the Society of the Plastics
Industry; Stuart Pape of the National Soft Drink Association;
Donald Farley of Pfizer, Inc.; and Dr. Michael Jacobson of the
Center for Science in the Public Interest.
2. ``The Federal Takeover of the Chicago Housing Authority--HUD Needs
to Determine Long-Term Implications,'' House Report No. 104-
437, December 21, 1995, Fifth Report by the Committee on
Government Reform and Oversight, Together With Additional
Views.
a. Summary.--On May 30, 1995, the U.S. Department of
Housing and Urban Development (HUD) assumed control over the
day to day operations of the ``troubled'' Chicago Housing
Authority (CHA). A declared breach of contract between CHA and
HUD signed by HUD Secretary Henry Cisneros on June 2, 1995,
made the takeover legally effective. Executed in the wake of
the resignation of CHA's Board of Commissioners on May 26,
1995, the takeover was an unprecedented HUD action.
Although HUD has authority to intervene in troubled housing
agency operations at any time, HUD has never before assumed
responsibility for the day-to-day operations of a housing
agency the size of CHA. CHA is the Nation's third largest
public housing authority and is surpassed in size only by those
of Puerto Rico and New York City. The CHA, created in 1937 by a
resolution of the city of Chicago pursuant to the Housing
Authorities Act of the State of Illinois, administers over
55,000 public and assisted housing units and serves over
150,000 residents.
On June 1, 1995, Congresswoman Cardiss Collins (D-IL),
ranking member of the Government Reform and Oversight
Committee, submitted a request to Committee Chairman William F.
Clinger, Jr. (R-PA) that hearings be conducted in Chicago on
the role of the U.S. Department of Housing and Urban
Development (HUD) in the operation of the Chicago Housing
Authority (CHA). Subsequent to this letter, the subcommittee
began an investigation into the Federal takeover at CHA.
The subcommittee submitted an initial inquiry and document
request to HUD on July 11, 1995, regarding HUD's role in the
takeover of the CHA. The July 11 letter requested information
concerning CHA's demolition and redevelopment initiatives,
HUD's previous efforts to reform CHA administration and the CHA
budget reconciliation for fiscal year 95.
HUD responded to the inquiry on August 1, 1995.
Additionally, Assistant Secretary Joseph Shuldiner and HUD
staff met with the subcommittee and Member staff on August 21,
1995, to address other issues raised regarding the takeover. On
August 28, 1995, the subcommittee directed another document
request and inquiry to HUD's Office of General Counsel. The
Office of General Counsel staff met with the subcommittee staff
the next day to provide a response and to answer staff
questions.
The subcommittee staff also conducted numerous interviews
with members of the Chicago community including: former CHA
Executive Director Vince Lane, Mayor Richard Daley, CHA
residents, former CHA staff and local housing and community
development experts. Further, on August 25, 1995, majority and
minority staff conducted onsite investigations and interviews
in the city of Chicago.
On September 5, 1995, the subcommittee held an oversight
hearing in Chicago to investigate the Federal takeover of the
Chicago Housing Authority. The hearing focused on HUD's
progress at CHA since the May 30 takeover, the agency's short
and long term strategies for reforming CHA and its plans for
installing new leadership and management at the CHA. At the
hearing, testimony was received from top level HUD officials,
including Henry Cisneros, HUD Secretary; the U.S. General
Accounting Office (GAO); panels of tenants; public housing
management experts; and representatives from the city of
Chicago and the private sector.
Based on the investigation and the oversight hearing, the
committee adopted its fifth report to the 104th Congress on
December 14, 1995.
The report contained seven major oversight findings:
1. HUD's takeover of CHA was a necessary response to
the resignation of the CHA Board of Commissioners.
2. HUD implemented a 120 day-plan to stabilize CHA
finances, management, security and physical inventory.
3. Three months following the takeover, HUD lacked a
long term strategy for reforming CHA, and extricating
itself from CHA management.
4. HUD's presence at CHA will be required beyond
January 1, 1996.
5. HUD lacks clear statutory or regulatory standards
to trigger intervention at troubled housing agencies.
6. HUD does not have the staff resources necessary to
run several troubled housing agencies at once.
7. The Resident Management Corp. at 1230 North
Burling, Cabrini Green in Chicago has improved living
conditions and economic opportunities for public
housing residents.
Based upon its investigation, the committee report made the
following detailed recommendations:
1. HUD should promptly secure strong, long term
leadership at CHA.
2. HUD and new CHA management should develop a long
term strategy for the recovery of CHA.
3. HUD should maintain a clear distinction between
its actions as a Federal agency and its actions as CHA
manager.
4. HUD's takeover of CHA should be evaluated as a
pilot program to determine the effectiveness of direct
HUD intervention at other troubled housing agencies.
5. Clear statutory or regulatory standards should be
established for HUD intervention at troubled housing
agencies.
6. HUD should do more to support viable Resident
Management Corp.'s, particularly those operating in
troubled public housing developments.
The report includes additional views by Mrs. Collins and
Mr. Towns expresssing general support for the report, and
noting that a briefing by HUD on December 5, 1995, provided
additional information, not reflected in the report, that some
of the subcommittee's recommendations have already been
adopoted by HUD. The additional views include references to
facts that can be found in the hearing record that provide a
more complete picture of the status of the intervention effort,
the rationale for the takeover, and the capacity of HUD to
intervene in other troubled housing authorities.
Mrs. Collins and Mr. Towns noted that HUD had acted on the
subcommittee's recommendation regarding hiring of CHA staff and
regarding formulation of a long range plan for the CHA. The
additional views also pointed out that HUD offered information
to support the conclusion that the Department does have the
capability to intervene in other troubled housing authorities.
Finally, the ranking members expressed the view that budget
constraints must be acknowledged in any evaluation of the HUD
intervention at CHA.
Mr. Shays' additional views concurred with those of Mrs.
Collins and Mr. Towns regarding HUD's action on the
subcommittee's recommendation.
b. Benefits.--The investigation found that HUD's takeover
of the day-to-day operations of the Chicago Housing Authority
(CHA) was necessary given the magnitude and severity of the
problems faced by the housing authority and its residents.
Significant investment of Federal funds are at risk as a result
of the mismanagement of the CHA. Taxpayers and residents will
benefit from this intervention by HUD. Moreover, the
subcommittee's continued oversight with respect to this matter
may spare the Chicago Housing Authority future years of
deferred maintenance, administrative waste and further
deterioration.
c. Hearings.--On Tuesday, September 5, 1995, the
subcommittee convened an oversight hearing entitled ``HUD's
Takeover of Chicago Housing Authority,'' to receive testimony
from: Hon. Henry Cisneros, Secretary of the Department of
Housing and Urban Development (HUD); Joseph Shuldiner,
Assistant Secretary for Public and Indian Housing at HUD; Kevin
Marchman, Deputy Assistant Secretary for Distressed and
Troubled Housing at HUD; Artensia Randolph, president of the
Central Advisory Committee; Hattie Calvin, president of the
Cabrini Green Leadership Advisory Council; Cora Moore, 1230
North Burling, Cabrini Green, Resident Management Corp.;
Jeffrey Lines, a Kansas City receiver and president of TAG
Associates; Judy England-Joseph, Director of Housing and
Community Development Issues for the U.S. General Accounting
Office (GAO); Rosanna Marquez, director of programs for the
city of Chicago; George Murray, chief of the CHA Police
Department; and William Wallace, managing director of the
Housing Technology Corp.
3. ``Fraud and Abuse in Medicare and Medicaid: Stronger Enforcement and
Better Management Could Save Billions,'' House Report No. 104-
641, June 27, 1996, Eighth Report by the Committee on
Government Reform and Oversight, Together with Additional
Views.
a. Summary.--Fraud and abuse are serious drains on Medicare
and Medicaid programs. The General Accounting Office (GAO)
estimates that as much as 10 percent of annual Government
outlays in Federal health care programs are lost to fraudulent
and wasteful provider claims. If that estimate is correct, it
would mean almost $32 billion was lost in FY 95. Given that
Medicare and Medicaid together account for $269.16 billion in
Federal health care spending in FY 1995, Federal losses to
these programs associated with fraudulent and abusive practices
approached $27 billion. Finding new ways to curb these losses
has been a major bi-partisan concern in recent years.
Both the Medicare and Medicaid programs are vulnerable to
fraud and abuse. There are strong incentives to over provide
services; weak fraud and abuse controls to detect questionable
billing practices; few limits on those who can bill; and
ineffective enforcement tools. The Medicare program is
particularly vulnerable because the Department of Health and
Human Service's (HHS) Health Care Finance Administration (HCFA)
continues to pay higher than market rates for certain services
and supplies. This makes the program an attractive target for
increasingly sophisticated, multi-state or national fraud
schemes.
Medicare is also vulnerable because perpetrators know there
is little chance of being caught. Federal enforcement
activities have been uncoordinated and ineffectively carried
out, and HCFA's anti-fraud-and-abuse controls fail to
systematically prevent the unquestioned payment of claims.
Screening of claims for medical necessity and other criteria is
inconsistently applied. Vendors sanctioned for fraud or abuse
are not effectively barred from continued participation in
Federal health programs because the exclusion sanction is under
utilized. This points to insufficient coordination between
those charged with enforcing existing anti-fraud statutes.
HCFA, the HHS-OIG, and DOJ have outlined initiatives for
curtailing fraudulent and abusive practices in Medicare and
Medicaid programs. However, the extent to which these
initiatives will result in improvements to the Federal
Government's health care anti-fraud capabilities is uncertain.
HCFA has under development the Medicare Transaction System
(MTS) to centralize claims review and processing functions now
handled by 72 contractors.
The GAO characterized MTS a system ``at risk'' in terms of
cost and scheduling. Meanwhile, near-term opportunities for
more effective anti-fraud programs may be missed while HCFA
places most of its hopes on the far-off prospect of the MTS.
Waste, fraud and abuse in Medicare and Medicaid will never
be completely eliminated. However, billions could be saved by
stronger enforcement and better management--actions which would
not place excessive demands on available budgets.
The report contained the following findings:
1. There is insufficient coordination among
government agencies combating waste, fraud and abuse in
the Medicare and Medicaid programs.
2. HCFA does not require Medicare Part B contractors
to use software capable of screening out claims for
inappropriate medical services.
3. HCFA is reluctant to exercise its statutory
``inherent reasonableness'' authority to adjust
reimbursement rates for durable medical equipment and
supplies because the process is costly and cumbersome.
This makes Medicare an attractive target for fraud and
abuse. As a result, the Government too often pays more
than the market price for certain equipment and
supplies costing taxpayers billions of dollars.
4. HCFA's Medicare Transaction System (MTS) project
is vulnerable to cost overruns and schedule delays due
to the agency's lack of a disciplined management
process.
Based on these findings, the report contained the following
recommendations:
1. Congress should require HCFA, HHS IG, DOJ, State
Medicaid Fraud Control Units and other appropriate law
enforcement entities establish a joint program to
coordinate fraud detection and prevention activities,
and to apply the exclusion sanction against vendors
more effectively.
2. HCFA should require its contractors to use
autoadjudication prepayment screens to ensure that
Medicare does not continue to pay claims for medically
unnecessary services.
3. Congress should revise HCFA's ``inherent
reasonableness authority'' to require a price
adjustment for a Medicare item or service within 1 year
of initiating a review of that item or service through
the issuance of an interim final regulation.
4. HCFA should develop a comprehensive management
plan to address the cost and scheduling challenges
associated with the Medicare Transaction System (MTS).
Until that plan is developed, HCFA should focus greater
resources on effective, near-term anti-fraud efforts.
b. Benefits.--This report's detailed findings and
recommendations strengthened the bi-partisan consensus in
support of improved anti-fraud efforts in Federal health care
programs. Federal program administrators generally concur with,
and will be guided by, the recommendations to reduce
vulnerability to fraud, waste and abuse while increasing
preventive enforcement activities in order to limit the
unproductive ``pay and chase'' cycle of current enforcement
efforts.
c. Hearings.--A hearing entitled ``Waste in Human Service
Programs: Other Perspectives'' was held on May 23, 1995. A
hearing entitled, ``Keeping Fraudulent Providers Out of
Medicare and Medicaid'' was held on June 15, 1995. A hearing
entitled, ``Screening Medicare Claims for Medical Necessity''
was held on February 8, 1996. A hearing entitled, ``Excluding
Fraudulent Providers from Medicaid'' was held on September 5,
1996.
4. ``Health Care Fraud: All Public and Private Payers Need Federal
Criminal Anti-fraud Protections,'' House Report No. 104-747,
August 2, 1996, Eleventh Report by the Committee on Government
Reform and Oversight.
a. Summary.--Health care fraud, by some estimates a $100
billion problem, does not stay within the jurisdictional
boundaries that divide Federal, State and local health care
finance and law enforcement. Sophisticated patterns of fraud
and abuse have been detected operating simultaneously against
private insurers as well as Federal and State health programs.
These scams victimize patients and payers across multiple
States, even nationally.
Faced with increasing health care costs, and the growing
price of health care fraud, Congress and Federal policymakers
are aware of the need for a more coordinated, unified approach
to anti-fraud enforcement. One essential element of that
approach is the availability of Federal criminal health care
offenses to prosecute frauds against any and all payers
victimized by the same scheme.
Current Federal enforcement tools are inefficient and
inadequate against increasingly sophisticated patterns of fraud
and abuse. Health care fraud cases, prosecuted mainly under
mail and wire fraud statutes, money laundering and false claims
laws, are complex, costly and time-consuming.
Scarce enforcement resources are wasted when Federal
enforcement efforts to protect Medicare and Medicaid only
result in ``fraud shifting'' to private payers. In that event,
the general public continues to pay the price for health care
fraud in the form of higher insurance premiums and higher costs
for Government health programs.
Support for creation of Federal health care fraud crimes is
both longstanding and bi-partisan. The previous and current
administration endorsed making health care fraud a Federal
crime. Legislation in both the 103d and 104th Congress has
enjoyed bi-partisan sponsorship and support.
Based upon the product of investigative inquiries and
hearing testimony, the committee reported the following
findings:
1. Health care fraud schemes steal billions of
dollars from public and private payers each year.
2. The Department of Justice (DOJ) needs stronger and
more direct statutory authority to deter fraud and
abuse against public and private health care plans.
3. Scarce enforcement resources are wasted in pursuit
of the same fraudulent scheme against public and
private health care plans in multiple jurisdictions.
The report contains one recommendation: Congress should
enact legislation to make health care frauds against all public
and private payers Federal criminal offenses.
b. Benefits.--This report put a bi-partisan focus on the
need for new Federal criminal health care fraud offenses. It
provided Members of Congress and the administration with a
useful historical perspective and current policy rationale to
guide efforts to strengthen enforcement efforts, particularly
when frauds are committed against both public and private
health care payers. Federal ``all payer'' offenses were
included in the Health Care Portability and Accountability Act,
Public Law 104-191.
c. Hearings.--A joint hearing entitled H.R. 1850: Health
Fraud and Abuse Act of 1995, H.R. 2480: Inspector General for
Medicare and Medicaid Act of 1995, and H.R. 3224: The Health
Care Fraud and Abuse Prevention Act of 1996 (Joint Hearing) was
held on May 2, 1996.
5. ``Protecting the Nation's Blood Supply from Infectious Agents: The
Need for New Standards to Meet New Threats,'' House Report No.
104-746, August 2, 1996, Tenth Report by the Committee on
Government Reform and Oversight, Together with Additional
Views.
a. Summary.--In the early 1980's, 10,000 hemophiliacs and
12,000 other patients were infected with the human
immunodeficiency virus (HIV) through blood and blood products.
Approximately 300,000 people were infected with the Hepatitis C
virus (HCV), many of whom have never been told of their
exposure to infection.
The lessons of these tragedies compel greater vigilance and
higher regulatory standards to protect the Nation's blood
supply from emerging infectious agents and blood borne
pathogens. Threats to blood safety are both natural and man-
made, as aggressive new infectious agents emerge and blood
safety practices evolve. As a result, substantial improvements
are needed in coordination between the Public Health Service
(PHS) agencies within the Department of Health and Human
Services (HHS), particularly the Food and Drug Administration
(FDA), the Centers for Disease Control and Prevention (CDC) and
the National Institutes of Health (NIH).
At the first of two subcommittee hearings on blood safety
issues, HHS Secretary Donna Shalala announced that the
Department's focus on blood safety issues will be expanded and
elevated, with the Assistant Secretary for Health charged to
improve the coordination and effectiveness of blood safety
policy.
Current FDA and CDC regulatory systems are not adequate to
meet the aggressive nature of emerging threats to blood safety.
Product recalls and notification regarding possible exposure to
blood borne pathogens are not well communicated to physicians,
pharmacists, patients or the public. Regulation of blood
collection, testing and the production of blood-derived
therapeutics is not well coordinated or consistently managed to
minimize known risks.
The public is not well served if patients are permitted to
believe there is no risk in blood transfusions or in the use of
blood derived therapies. While such risks are extremely small,
and the U.S. blood supply is as safe as it has ever been,
greater efforts should be made to convey known risks to
consumers who may wish to minimize even those risks through the
use of alternative procedures or therapies.
After a year-long investigation of blood safety issues, the
Committee on Government Reform and Oversight issued House
Report 104-746 ``Protecting The Nation's Blood Supply From
Infectious Agents: The Need For New Standards To Meet New
Threats;'' which addressed the need for reform in the
regulation of blood products. The report's findings included:
1. The blood supply is safer than it has ever been.
2. The blood supply continues to face new infectious
disease challenges.
3. In response to the recommendations of the
Institute of Medicine (IOM), HHS has begun to implement
higher regulatory standards to protect the Nation's
blood supply from emerging infectious diseases and
blood borne pathogens.
4. The public is provided insufficient information on
the risks of blood and blood products.
5. The FDA has not effectively managed regulatory
review of blood issues, particularly its advisory
committee on blood safety issues, the Blood Products
Advisory Committee (BPAC).
6. Despite a BPAC recommendation to the contrary, the
FDA took the first step toward closing the ``window
period'' of possible HIV transmission by licensing the
p24 antigen test for screening of donated blood.
7. Fifteen years after the AIDS virus emerged as a
threat to the blood supply, FDA still has not developed
an effective system for communicating blood product
recalls to pharmacists, doctors or patients.
8. The size of plasma pools for fractionated products
can increase the risk of infectious disease
transmission.
The report recommended:
1. Congress should establish the Blood Safety Council
and the Advisory Committee on Blood Safety and
Availability in statute.
2. Congress should consider establishing an
indemnification system for individuals who suffer
adverse consequences from the use of blood and blood
products.
3. HHS should take steps to ensure that the estimated
300,000 living recipients of blood and blood products
who were infected with Hepatitis C virus before 1990
are notified of their potential infection so that they
might seek diagnosis and treatment.
4. HHS should disseminate more clinically useful
information to providers of care and to the public
regarding blood safety issues.
5. FDA should immediately develop an effective system
of recall notification for blood and plasma products.
6. FDA should immediately cease its practice of
providing advance notice of safety and compliance
inspections to some plasma fractionators.
7. Plasma fractionators should limit the size of
plasma pools, with pool sizes determined as much by
public health risk factors as by production economies
of scale.
During the 1980's, 10,000 hemophiliacs and 12,000 others
were infected with the Human Immunodeficiency Virus (HIV),
which causes Acquired Immune Deficiency Syndrome (AIDS),
through the use of blood and blood-derived therapies. The
report found that current scientific and regulatory standards
to detect and remove emerging blood borne pathogens lack both
consistency and vigor. The report recommended greater
cooperation and coordination between Federal public health
agencies, more effective communication of the risks of blood
products to consumers, and more effective recall of
contaminated blood and blood products.
b. Benefits.--The subcommittee's investigation and hearing
allowed FDA officials, patients, physicians, blood collection
industry representatives and plasma product manufacturers the
opportunity to articulate their concerns and solutions
regarding threats to the safety of the blood supply presented
by emerging pathogens, complacency and regulatory
mismanagement. The lessons of HIV and Hepatitis-C infections
compel greater vigilance and higher regulatory standards to
protect the Nation's blood supply from emerging infectious
agents and blood borne pathogens. This report provides an
outline of existing problems in the blood regulatory system as
well as recommendations for resolution of these issues.
c. Hearings.--Hearings entitled ``Protecting the Nation's
Blood Supply from Infectious Agents: The Need for New Standards
to Meet New Threats'' were held October 12 and November 2,
1995.
NATIONAL SECURITY, INTERNATIONAL AFFAIRS AND CRIMINAL JUSTICE
SUBCOMMITTEE
Hon. William H. Zeliff, Jr., Chairman
1. ``National Drug Policy: A Review of the Status of the Drug War,''
House Report No. 104-486, March 19, 1996, Seventh Report by the
Committee on Government Reform and Oversight, Together with
Additional Views.
a. Summary.--Pursuant to the National Narcotics Leadership
Act of 1988 (21 U.S.C. 1501 et seq.), the Director of the
Office of National Drug Control Policy (ONDCP) developed a
strategy and budget for anti-narcotics efforts, including both
supply and demand reduction. In order to evaluate the strategy
and find ways to both improve and supplement in the public and
private sector, the Subcommittee on National Security,
International Affairs, and Criminal Justice held five hearings
and conducted a fact-finding trip to the Caribbean drug transit
zone. The findings and recommendations of these activities are
detailed in the March 19, 1996 committee report.
The National Narcotics Leadership Acts requires that the
strategy: ``(A) include comprehensive, research based, long-
range goals for reducing drug abuse in the United States; (B)
include short-term measurable objectives which the Director
determines may be realistically achieved in the 2 year period
beginning on the date of the submission of the strategy; (C)
describe the balance between resources devoted to supply
reduction and demand reduction; and (D) review state and local
drug control activities to ensure the United States pursues
well-coordinated and effective drug control at all levels of
government.'' The subcommittee held five hearings in order to
determine whether the current strategy and its execution
continues to meet these statutory obligations.
The threats posed by illegal drug use, especially among the
Nation's youth, have continued to grow since the subcommittee
investigation began in January 1995. All national studies show
a rise in drug use among teenagers. Both minority and majority
members of the subcommittee have demonstrated a commitment to
enhancing the drug control strategy by their active
participation in these hearings.
b. Benefits.--As a result of its investigation into the use
of illegal drugs in America and the Nations fight against
drugs, the subcommittee confirmed the following facts:
(1) Casual teenage drug use trends have suffered a
marked reversal over the past 4 years, and are
dramatically up in virtually every age group and for
every illicit drug, including heroin, crack, cocaine
hydrochloride, LSD, non-LSD hallucinogens,
methamphetamine, inhalants, stimulants, and marijuana.
(2) Rising casual teenage drug use is closely
correlated with rising juvenile violent crime.
(3) If rising teenage drug use and the close
correlation with violent juvenile crime continue to
rise on their current path, the Nation will experience
a doubling of violent crime by 2010.\15\
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\15\ See Juvenile Offenders and Victims: A National Report, OJJDP,
Department of Justice, September 1995.
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(4) The nature of casual teenage drug use is
changing. Annual or infrequent teenage experimentation
with illegal drugs is being replaced by regular,
monthly or addictive teenage drug use.\16\
---------------------------------------------------------------------------
\16\ See 1995 surveys conducted by PRIDE, The National Household
Survey, and The University of Michigan's Monitoring the Future Survey.
---------------------------------------------------------------------------
(5) The nationwide street price for most illicit
drugs is lower than at any time in recent years, and
the potency of those same drugs, particularly heroin
and crack, is substantially higher.
(6) Nationwide, drug related emergencies have
steadily climbed and have now reached an all time high.
(7) The 1994, 1995, and 1996 White House ONDCP
strategies consciously shift resources away from
priorities set in the late 1980's, namely from
prevention and interdiction to treatment of ``hardcore
addicts'' and source country programs.
(8) During 1993, 1994 and most of 1995, the President
put little emphasis on, and manifested little interest
in, either the demand side war against illegal drug use
or the supply side war against international narcotics
traffickers. An objective look at the President's
public addresses and his actions including dramatic
cuts in ONDCP staffing, interactions with Congress, and
discussions with foreign leaders reveals that attention
to the rising tide of illegal drug use is a low
Presidential priority.
(9) The President's actual attention to this problem,
measured by other than the paucity of speeches and
proposed budget cuts, has been uniformly low. In
addition to the absence of direct Presidential
involvement in the drug war, the President produced no
1993 Annual Strategy, despite a statutory duty to do so
under the 1988 Antidrug Abuse Act; delayed appointment
of a White House Drug Czar, or ONDCP Director, until
half way through 1993; and produced only a terse
``interim'' 1993 Strategy.
(10) The Drug War appears also to have been expressly
reduced to a low national security priority early in
the administration, and not to have been formally
elevated at any time since.\17\
---------------------------------------------------------------------------
\17\ Reportedly, the drug war's national security priority during
the first 3 years of the Clinton administration was number 29 out of
29.
---------------------------------------------------------------------------
(11) While the position is contested by the
administration's ONDCP Director, a wide cross section
of drug policy experts inside and outside of the
administration concur that the absence of direct
Presidential involvement in foreign and domestic
counter narcotics efforts is one reason for the recent
reversal in youth drug use trends, reduced street
prices for most narcotics, and increased potency of
most illicit drugs.
(12) Prevention programs that teach a right-wrong
distinction in drug use, or ``no use,'' such as
D.A.R.E., G.R.E.A.T., the Nancy Reagan After School
Program, community-based efforts run by groups such as
C.A.D.C.A., PRIDE, the National Parents Foundation, and
Texans War on Drugs, as well as other local school and
workplace programs, have proven both successful and
popular where they have been well-managed and
accountable--despite the 1995 White House ONDCP
Strategy statement that ``[a]ntidrug messages are
losing their potency among the Nation's youth.''
(13) Federal drug prevention programs, such as Safe
and Drug Free Schools, while supporting successful
prevention programs in many parts of the country, have
also been subject to misapplication, waste and abuse.
(14) The Nation's law enforcement community needs
greater flexibility and support from the Federal
Government in addressing the rise in juvenile and drug
related crime. While certain developments are
promising, such as the $25 million increase in Byrne
Grant funding in fiscal 1996, a law enforcement block
grant to supersede the COPS program, and increased
reliance on joint interagency task forces, valuable
time has been lost in addressing this need. Renewed
attention to strengthening Local, County, State and
Federal law enforcement's counter narcotics efforts is
required.
(15) The Nation's interdiction effort has been
dramatically curtailed over the past 3 years, due to
lack of White House support for interdiction needs,
reduced funding, a tiny staff at the U.S. Interdiction
Coordinator's Office, the absence of an ONDCP Deputy
for Supply Reduction, reduced support for National
Guard container search days, the elimination of certain
cost effective assets in the Eastern Caribbean,
reassignment or absence of key intelligence gathering
assets, reluctance by the Department of State to
elevate counter narcotics to a top priority in certain
source and transit countries, unnecessary interagency
quarreling over asset management and personnel issues,
and the apparent inability or unwillingness of the
White House Drug Czar to bring essential interdiction
community concerns to the attention of the President or
to aid the President's Interdiction Coordinator in
doing so; and
(16) There has been poor management and interagency
coordination in source country counter-drug activities.
c. Hearings.--In 1995, the subcommittee held five days of
hearings in conjunction with its investigation of ONDCP. Those
hearings include the following: ``Effectiveness of the National
Drug Control Strategy and the Status of the Drug War'' on March
9 and April 6, 1995; ``Illicit Drug Availability: Are
Interdiction Efforts Hampered by a Lack of Agency Resources?''
on June 27 and 28, 1995; and ``The Drug Problem in New
Hampshire: A Microcosm of America,'' September 25, 1995.
On March 9, 1995, the subcommittee investigation resulted
in its first hearing entitled, ``Effectiveness of the National
Drug Control Strategy and the Status of the Drug War.'' The
purpose of this hearing was to examine President Clinton's 1995
National Drug Control Strategy, and to begin an assessment of
how effectively the Nation is fighting illegal drug abuse,
domestically and internationally. Acknowledged components of
the Drug War under review include prevention, treatment,
interdiction, law enforcement, and source country programs.
At this hearing, testimony was received from four panels.
The subcommittee heard first from former First Lady of the
United States, Nancy Reagan. The second panel included William
J. Bennett, former Director of the Office of National Drug
Control Policy (ONDCP); Robert C. Bonner, former Administrator
of the Drug Enforcement Administration; and John Walters,
former Acting Director of ONDCP. The subcommittee also heard
testimony from Dr. Lee Brown, Director of ONDCP. Finally, the
subcommittee heard from Admiral Paul A. Yost, Jr., former Coast
Guard Commandant; and several nationally recognized drug abuse
prevention experts, including Thomas Hedrick, Jr., senior
representative of the Partnership for a Drug-Free America; G.
Bridget Ryan, executive director of California's BEST
Foundation; James Copple, national director of the Community
Antidrug Coalitions of America (CADCA); and Charles Robert
Heard, III, director of program services for Texans' War on
Drugs.
With varying degrees of emphasis, all panels acknowledged
that current Federal efforts are under strain from reduced
emphasis on certain components of the Drug War, budgetary
pressure, and in some cases accountability.
The panels also acknowledged that, over the past several
years, there has been a marked reversal in several important
national trends including most notably a rise in casual drug
use by juveniles, but also reaching to perceived drug
availability (up), perceived risk of use (down), average street
price (down), drug related medical emergencies (up), drug
related violent juvenile crime (up), total Federal drug
prosecutions (down), and parental attention to the drug issue
(down).\18\
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\18\ Press release, the University of Michigan, ``Drug Use Rises
Again in 1995 Among American Teens:'' December 15, 1995; press release,
PRIDE, ``Teen Drug Use Rises for Fourth Straight Year,'' November 2,
1995; preliminary estimates from the Drug Abuse Warning Network, U.S.
Department of Health and Human Services, September 1995; James E.
Burke, ``Presentation: An Overview of Illegal Drugs in America,''
Partnership for a Drug-Free America, fall 1995. The subcommittee found
that these reversals have continued through the period 1993 to 1995,
although certain trend lines, including a shift from falling to rising
casual use, typically among juveniles, began in 1992. In addition, a
shift of certain interdiction resources, which were earlier a part of
the counter narcotics force structure, began in late 1991 with the
advent of the Persian Gulf War.
---------------------------------------------------------------------------
All panels agreed that renewed national leadership,
including both Presidential and congressional leadership, will
be necessary to combat these recent trend reversals, especially
the rise in juvenile drug abuse and drug related violent
juvenile crime.
The subcommittee continued its investigation into the
Nation's drug control strategy with a second hearing on April
6, 1995, which was a follow-up to the March 9 hearing.
Testimony was received only from Dr. Lee P. Brown, Director of
ONDCP, who continued testimony he gave the subcommittee on
March 9, 1995. Dr. Brown testified on a range of topics,
including treatment, prevention, law enforcement, interdiction
and source country programs.
On June 27 and June 28, 1995, the subcommittee held
hearings entitled, ``Illicit Drug Availability: Are
Interdiction Efforts Hampered by a Lack of Agency Resources?''
to examine efforts to limit supply and availability by
interdicting drugs before they cross our borders. On June 27,
the subcommittee received testimony from a number of witnesses,
beginning with a technology and K-9 demonstration,\19\ and
proceeding through testimony from high school students. The
hearing continued with testimony from the Administrator of the
Drug Enforcement Administration and three investigators from
the General Accounting Office (GAO), who evaluated the
effectiveness of the Clinton administration's source country
programs.
---------------------------------------------------------------------------
\19\ The U.S. Customs Service Canine Training Center provided a
demonstration on the utilization of drug sniffing dogs in illicit
narcotic interdiction. Also, a representative from the U.S. Coast
Guard's Miami Law Enforcement Division demonstrated how an Ionscan and
the Compact Integrated Narcotic Detection Instrument (CINDI) operate to
detect and locate illicit narcotics.
---------------------------------------------------------------------------
The subcommittee first heard from four students affected by
drugs in their schools, including Michael Taylor of Browne
Junior High School, Natasha Surles of Roper Junior High School,
Willie Brown of McFarland Middle School, and Lan Bui of Bell
Multicultural School.
Subsequently, the subcommittee heard testimony by Thomas A.
Constantine, Administrator of the Drug Enforcement
Administration, and expert witnesses Joseph Kelley, Allan
Fleener and Ron Noyes of the General Accounting Office. Mr.
Kelley is Director-In-Charge of the International Affairs
Section and Mr. Fleener and Mr. Noyes are investigators who
principally assisted in producing a June 1995 GAO report on
source country anti-narcotics programs.
Finally, the subcommittee heard testimony from Jane E.
Becker, Acting Assistant Secretary of State for International
Narcotics and Law Enforcement Affairs, U.S. Department of
State; and Brian Sheridan, Deputy Assistant Secretary for Drug
Enforcement Policy and Support at the Department of Defense.
During this hearing, the subcommittee examined the current
drug interdiction efforts of the major Federal agencies engaged
in the national drug control strategy, namely DEA, the U.S.
Coast Guard, U.S. Customs, and the Departments of Defense and
State.
Collectively, the expert witnesses confirmed that on
November 3, 1993, President Clinton signed a Presidential
Decision Directive for Counter narcotics (PDD-14), which
instructed Federal agencies to shift the emphasis in U.S.
international antidrug programs from the transit zones such as
Mexico, Central America and the Caribbean to the source
countries such as Colombia, Peru, and Bolivia. PDD-14 provided
that the Director of the Office of National Drug Control Policy
(ONDCP) should appoint a Coordinator for Drug Interdiction ``to
ensure that assets dedicated by the Federal drug program
agencies for interdiction are sufficient and that their use is
properly integrated and optimized.'' [PDD-14, November 3,
1993.]
The aim of this hearing was to offer the administration's
principals on interdiction, those whose mission was affected by
PDD-14, an opportunity to assess their own efforts and explain
the impact on their agencies of PDD-14 and its concomitant
``controlled shift'' of resources.
Continuing these hearings on June 28, 1995, the
subcommittee received testimony on interdiction policy from
additional administration witnesses, including Admiral Robert
E. Kramek, Commandant of U.S. Coast Guard and U.S. Interdiction
Coordinator, and George Weise, Commissioner of the U.S. Customs
Service.
Admiral Robert E. Kramek, U.S. Interdiction Coordinator and
Commandant of the U.S. Coast Guard, serves a dual role in the
Nation's interdiction efforts. He testified before the
subcommittee in both capacities. He explained that the U.S.
Coast Guard serves as the lead agency for maritime interdiction
and as co-lead with Customs for air interdiction, adding that
drug interdiction takes only 9 percent of the Coast Guard
budget and emphasizing the important role intelligence plays in
drug interdiction. On this topic, he testified that 70 percent
of our operations are based on intelligence.
Admiral Kramek took particular note of the importance of
national leadership on this issue. Offering implicit criticism
of a reduced interdiction effort in the Clinton administration,
he testified that, when the smugglers see our foreign policy
priorities change and make drug interdiction much lower on the
priority list than other things, they're quick to take
advantage of that.
George Weise, Commissioner, U.S. Customs, testified
regarding efforts to interdict drugs at our Nation's borders.
Mr. Weise reiterated the importance of knocking out smuggling
by private plane into this country, and attributes the
increased shift to ground smuggling along the Southwest border
to the efforts against air transport. He believes that the
2,000 miles of the Nation's Southwest border has now emerged as
the primary entry point for cocaine, although he did not
contradict Admiral Kramek's assessment that Puerto Rico has
recently taken on new significance as a port of entry into the
United States.
The subcommittee's investigation also included an
examination of the fight against drugs on the streets of
America's cities. At the subcommittee's September 25, 1995
hearing on the drug problem in New Hampshire entitled ``The
Drug Problem in New Hampshire: A Microcosm of America,''
members received testimony from a number of witnesses fighting
on the front lines at the local levels.
The purpose of the field hearing was to continue an
examination of national drug control policy, focusing on the
successful drug fighting efforts of Manchester, NH, which had
recently participated in a joint interagency task force called
``Operation Streetsweeper.''
Collectively, the expert testimony confirmed the following
facts: Early in 1995, statistics showed that the overall crime
rate in Manchester, which is New Hampshire's largest city, had
declined. However, these statistics also showed that arrests
for drug offenses had increased dramatically, as they had for
other drug related crimes. After a number of murders were
linked to drug distribution and usage, the community came
together to rid their city of this scourge.
Manchester Police Chief Peter Favreau received a $100,000
grant to help pay for State Police Officers to patrol city
streets with city police, and a short time later Manchester
Police were joined by the Sheriff's Department, the State
Attorney General's Drug Task Force, the State Police Special
Investigations Unit, the Drug Enforcement Administration, the
Bureau of Alcohol, Tobacco and Firearms (ATF), and the
Immigration and Naturalization Service (INS). This Federal-
State-Local interagency task force put jurisdictional issues
aside and singularly pursued the aim of getting drug dealers
off the streets of Manchester.
As various panelists and community representatives
testified, the change on the streets of Manchester could be
felt immediately. As Chief Favreau testified, ``With as much
coverage as we have out there, I honestly feel [the criminals]
are going elsewhere. It's almost impossible not to have that
happen.''
In an effort to understand how the interagency task force
worked and what made it so effective, the principals in this
successful antidrug effort testified before the subcommittee.
Since illegal drugs and associated violent crime plague
virtually every city in America, the accounts these witnesses
told offer valuable insights into how best to tackle drugs and
violent crime in other cities around this country.
Witnesses included: Jeff Howard, attorney general for the
State of New Hampshire; Geraldine Sylvester, the director of
New Hampshire's Office of Alcohol and Drug Abuse Prevention;
Paul Brodeur, commissioner of New Hampshire Department of
Corrections; Neal Scott, assistant unit commander of the
Narcotics Investigation Unit with the New Hampshire State
Police; Billy Yout, Special Agent in Charge of Drug Enforcement
Administration; Ray Wieczorek, the mayor of Manchester; Peter
Favreau, chief of the Manchester Police Department (MPD); Paul
Gagnon, U.S. attorney for New Hampshire; Alice Sutphen, a
representative from the citizen's group Take Back Our
Neighborhoods; Dana Mitchell, captain, Dover Police; Michael
Plourde, executive director of the Nashua Youth Council; John
Ahman, regional program director for Marathon House, and; Dick
Tracy, sergeant, Crime Prevention Division, Manchester Police
Department.
d. Fact-finding Trip.--The subcommittee's investigation
included one fact finding trip to the Drug War's front line.
Subcommittee members, the United States Coast Guard and staff,
traveled to the Seventh Coast Guard District in the Caribbean
transit zone between June 16 and June 19, 1995. In the transit
zone, subcommittee members and staff attended briefings at
Seventh District Headquarters in Miami, Coast Guard
interdiction initiatives at sea, DEA activities in the Greater
Antilles, high level interagency briefings in Puerto Rico by
the FBI, DEA, Customs, Border Patrol, and local authorities,
and received in depth briefings by Admiral Granuzo and others
at Joint Interagency Task Force East (JIATF East) in Key West,
dedicated to drug interdiction in the transit zone.
This interdiction trip was arranged in coordination with
the U.S. Coast Guard, and invitations were extended to minority
and majority members.
In briefings, a number of interdiction facts became more
clear. Agents participating in OBAT (Operation Bahamas, Turks
and Caicos), a multi-agency, international operation based in
Nassau, Bahamas, made clear that they have lost major assets
over the past 2 years.
At the Greater Antilles Section Coast Guard Base (GANTSAC)
in Puerto Rico, which covers 1.3 million square miles, multi-
agency briefers expressed the view that, if 70 percent of the
cocaine coming into the United States comes over the Southwest
border, the rest comes through Puerto Rico, which has seen as
much as $40 million in money laundering in recent years. In
attendance at the briefing were representatives of the FBI,
DEA, Border Patrol, Coast Guard, INS, Customs, Department of
Defense and Puerto Rico.
Summarizing the briefing, the assets most needed are: more
radars (including a suggested radar in Belize); more Jayhawk
helicopters; more 378-foot Coast Guard Cutters; ion scanners
and CINDI's; air rights agreements with more Caribbean nations
(perhaps Cuba); and more senior level staff. The Coast Guard
also indicated that they have recently lost 4 of 10 HU-25
intercepter aircraft by re-deployment or demobilization.
At JIATF East, briefers included Rear Admiral Andrew A.
Granuzo, who admitted that the central obstacle to waging a
more effective drug war, particularly in interdiction, is that
``there is no one in charge.'' This assessment mirrored the
testimony of Admiral Yost, Bill Bennett, John Walters, and
Robert Bonner.
JIATF East was created by Presidential Decision Directive
14 (PDD 14), which ordered a review of the Nation's counter
narcotics command and control intelligence centers. Creation of
three joint interagency task forces and a domestic air
interdiction center was authorized by the White House Drug Czar
in April 1994. Accordingly, JIATF East is joined in its
interdiction mission by JIATF West in Alameda, CA; JIATF South
in Panama; the DAICC at March Air Force Base, CA; and JTF-6 in
El Paso, TX.
JIATF East is dedicated to supporting all counterdrug
activities in the transit zone. The command integrates
intelligence with operations, and coordinates the employment of
the U.S. Navy and U.S. Coast Guard ships and aircraft, U.S. Air
Force aircraft, and aircraft and ships from allied nations,
such as Great Britain and the Netherlands. The command's
mission boils down to maximizing the disruption of drug
transhipment, collecting, integrating and disseminating
intelligence, and guiding detection and monitoring forces for
tactical action.
Just as importantly, JIATF East integrates law enforcement
personnel, primarily from Customs, into the international
interdiction effort. For that reason, the command includes FBI,
DEA and State Department, in addition to the Department of
Defense.
2. ``A Two-Year Review of the White House Communications Agency Reveals
Major Mismanagement, Lack of Accountability, and Significant
Mission Creep,'' House Report No. 104-748, August 2, 1996,
Twelfth Report by the Committee on Government Reform and
Oversight, Together with Dissenting Views.
a. Summary.--In March 1994, alarmed by allegations of
waste, fraud and abuse within the White House Communications
Agency (WHCA), Chairman William F. Clinger, Jr., and
subcommittee Chairman William H. Zeliff, Jr., requested the
General Accounting Office to conduct a comprehensive audit of
the mission, functions and operations of that agency. WHCA, a
military unit within the Department of Defense (DOD), is
responsible for providing communications support to the White
House.
The committee's request was met with strong and consistent
opposition from the Clinton administration which argued that
any inspection of WHCA would create an extreme national
security risk and endanger the personal safety of the
President. Nevertheless, after blocking the investigation for
nearly a year, and as a result of continued pressure by
Chairmen Clinger and Zeliff, the administration agreed to
permit the DOD Inspector General (IG) to conduct the requested
review.
The IG audit resulted in a two-part report which confirmed
that WHCA was suffering from severe mission creep, internal
mismanagement, and a lack of oversight and accountability. The
IG concluded that WHCA had significantly expanded its original
mission of providing secure communications to the President,
and that the agency was now providing extensive unrelated
services to the President, First Lady, Vice-President, and to
White House staffers in general. The IG further concluded that
these extraneous services, which were provided and paid for by
DOD, should have been funded by the White House. Although the
IG did not provide a total dollar figure for inappropriate DOD-
WHCA spending, they identified specific services amounting to
more than $16 million in fiscal years 1994 and 1995 which were
improperly paid from DOD's budget.
The reports concluded that WHCA's mission creep had been
fostered primarily by vague and ambiguous mission statements
and the gradual transfer of operational control of WHCA from
DOD to the White House.
While WHCA and its predecessor agencies were initially
devoted solely to military, strategic and national security
support for the President, a broader mission statement was
adopted by DOD in 1962 and subsequently refined in the 1970's
and 1980's to, ``provide telecommunications and other related
support to the President of the United States and to other
elements related to the President. . . . Elements related to
the President are his staff, the First Family, the Vice
President, the U.S. Secret Service Protective Forces, and
others as directed.'' In other words, the DOD had allowed the
agency's mission to be broadened to include almost any task to
support almost any member of the President's family or staff.
The second factor contributing to WHCA's mission creep was
the transfer of operational control of WHCA from the Department
of Defense to the White House. Although WHCA exists as a DOD
agency under the command of the Defense Information Systems
Agency (DISA), DISA does not in fact direct the operations of
WHCA. Rather, WHCA receives its day-to-day orders and
directions from the White House Military Office (WHMO), which
is staffed by political appointees and is part of the Executive
Office of the President. The Director of WHMO--a civilian,
political appointee who holds the position of Deputy Assistant
to the President--directs the activities of WHCA and writes the
annual Officer Evaluation Report which determines the future
career prospects of the WHCA Commander. This Officer Evaluation
Report is reviewed, supplemented and signed by the White House
Chief of Staff.
Thus, although WHCA is technically a sub-command of DISA,
and is theoretically under the supervision of DISA, in practice
the power relationship is exactly reversed. Because of WHCA's
proximity and direct responsibility to the President, DISA has
generally taken a deferential and subservient attitude toward
WHCA, and has focused on ministering to the requirements of
WHCA rather than exercising effective supervision. In light of
that fact, WHCA was willing to expand its mission to
accommodate successive Presidents, even though many of the new
missions should have been funded and performed by other
agencies. This unique role reversal was fundamental to WHCA's
profound mission creep, as well as its parent agency's lack of
program oversight or operational control.
In addition to mission creep and a lack of effective
oversight, the subcommittee's investigation found significant
failings in the areas of procurement, disbursements, property
and inventory management, and obligation controls.
The IG audit revealed that WHCA has routinely avoided
statutorily required competitive bidding procedures for the
purchase of goods and services, relying instead on ``best
guesses'' in assessing the reasonableness of prices quoted. The
agency has frequently ignored fundamental contract law, using
unwritten oral agreements in lieu of clearly negotiated,
verifiable contracts. As a consequence, the agency has often
been held liable for questionable contracts with suspect terms.
WHCA has also habitually bypassed required independent DOD
review of major purchases. These contracting failures have
resulted in millions of dollars of wasted taxpayers' money.
Specific examples of procurement waste cited in the IG
reports included the $4.9 million purchase of two air-
transportable mobile communications systems that did not meet
WHCA's operational needs, and the agency's failed acquisition
of replacement satellite terminals. While WHCA had planned and
justified the purchase of 12 units at a cost of $269,000 each,
the belated discovery that the terminals cost more than twice
that amount, or $618,000 each, forced WHCA to reduce its
purchase by half, thus failing to achieve the needed upgrade.
Additional management difficulties uncovered by the
subcommittee included a lack of control over disbursements
leading to untold numbers of duplicate vendor payments, the
routine late payment of bills and invoices resulting interest
and penalty charges, and the agency's inability to determine
the validity of over $14.5 million in unliquidated payment
obligations.
In the area of property management, the IG audit unearthed
serious problems with WHCA's inventory controls. The reports
disclosed $555,000 worth of computers and $22,000 worth of
photographic equipment which was never recorded in the agency's
property book. In testimony before the subcommittee, the IG
conjectured that the total value of non-recorded property may
have been as high as $738,000. In addition, the auditors noted
that the lack of accountability often made it difficult for
WHCA managers to determine whether non-expendable property
which had been ordered and paid for had actually been received.
The subcommittee's investigation further disclosed that
WHCA failed to follow DOD regulations requiring the regular
inventory and re-validation of major equipment needs. As a
result, the agency was paying over $117,000 a year to lease
telecommunications circuits which were no longer required.
Upon completing its audit and in testimony before the
subcommittee, the IG stated that ``the Assistant Secretary of
Defense (Command, Control, Communications and Intelligence)
management control program needs improvement because a material
weakness exists in that administrative, financial and
operational oversight was not provided to the White House
Communication Agency.'' The IG identified the Assistant
Secretary of Defense for Command, Control, Communications and
Intelligence (the ASD/C3I) as the responsible entity because
the ASD/C3I is in charge of DISA, WHCA's commanding unit.
b. Benefits.--DOD's management response to the IG audit was
provided by Hon. Emmett Paige, Jr., the ASD/C3I, who submitted
joint comments on his own behalf and on behalf of the Director
of DISA and the Commander of WHCA. In response to the IG's
findings of mission creep, the ASD/C3I denied the existence of
any problem. However, the ASD/C3I did concur with almost all of
the IG's findings and recommendations regarding WHCA's lack of
accountability and internal controls. The ASD/C3I acknowledged
not only that each individual accountability problem needed to
be corrected, but also that the scope and nature of WHCA's
accountability problems, taken as a whole, demanded an over-
arching, systemic solution. To that end, the ASD/C3I entered
into negotiations with White House administrators to resolve
questions of WHCA's accountability. As a result of those
meetings, a Memorandum of Agreement (MOA) was executed between
the ASD/C3I and the White House to establish the terms and
conditions governing WHCA's future operations and DISA's
oversight responsibilities.
To address unresolved concerns over mission creep and
further define DISA's oversight responsibilities, the committee
issued a report, House Rept. 104-748, which recommended the
adoption of legislation to statutorily limit WHCA's mission to
providing national security-related telecommunications services
required by the President. The subcommittee recommended that
all other functions presently performed by WHCA either be
transferred to the Executive Office of the President (EOP) or
require EOP reimbursement. This recommendation was
substantially adopted as an amendment to the 1996 Department of
Defense Authorization Act.
The subcommittee further recommended that the WHCA
Commander be given annual performance evaluations by the
Director of DISA.
Finally, the subcommittee recommended the adoption of a 5
year period of annual reporting to monitor the agency's
progress in resolving the problems identified by the DOD IG and
by the subcommittee. This recommendation was also included in
the 1996 Defense Authorization Act.
c. Hearings.--On May 16, 1996, the subcommittee convened a
hearing to receive testimony from Hon. Emmett Paige, Jr., ASD/
C3I; Colonel Joseph J. Simmons, IV, the Commander of WHCA; Mr.
Robert J. Lieberman, Assistant Inspector General for Auditing
for the DOD IG; and Mr. Henry L. Hinton, Jr., Assistant
Comptroller General for the GAO's National Security and
International Affairs Division.
While testimony was received from Messrs. Hinton and
Lieberman, concerns over the submission of two differing sets
of testimony on behalf of Colonel Simmons caused subcommittee
Chairman Zeliff to adjourn the hearing to reconvene at a later
date. When the subcommittee reconvened on Jule 13, 1996,
testimony was received from Secretary Paige and Colonel
Simmons.
3. ``Investigation Into the Activities of Federal Law Enforcement
Agencies Toward the Branch Davidians,'' House Report No. 104-
749, August 2, 1996, Thirteenth Report by the Committee on
Government Reform and Oversight, Prepared in Conjunction with
the Committee on the Judiciary, Together with Additional and
Dissenting Views.
a. Summary.--The conduct of three executive branch
departments and subsidiary agencies came under intense scrutiny
following the raid and standoff at the Branch Davidian
residence in West Texas in 1993. Accordingly, the subcommittee
conducted a 5-month prehearing investigation into executive
branch conduct of these departments and agencies and accepted
testimony by 97 witnesses during 10 days of hearings in 1995.
In June 1992, the Austin, TX Office of the Bureau of
Alcohol, Tobacco and Firearms (ATF) opened a formal
investigation into allegations that members of a Waco, TX
religious group, the Branch Davidians, and in particular their
leader, Vernon Howell (a.k.a. David Koresh), possessed illegal
firearms and explosive devices. A Federal judge issued a
warrant for the search of the Branch Davidian residence and a
warrant for the arrest of David Koresh.
On February 28, 1993, a force of 76 ATF agents stormed the
Davidian residence to serve the arrest and search warrants.
Prior to the commencement of the raid, however, the Davidians
had learned of the ATF's plans. As the agents arrived at the
Davidians' residence, the Davidians engaged the ATF agents in a
gun battle which continued for almost 90 minutes. Four ATF
agents were killed in the battle and more than 20 agents
wounded. Two Davidians were killed by ATF agents and several
others, including Koresh, were wounded. After a cease-fire was
arranged, the Federal Bureau of Investigation dispatched
members of its Hostage Rescue Team to Waco to take control of
the situation at the request of the ATF. At 6 a.m. the next
morning, the FBI formally took control of the situation and a
51-day standoff with the Davidians ensued.
In addition to continual negotiations with the Davidians,
FBI officials took other steps to induce the Davidians to
surrender. These tactics included tightening the perimeter
around the Davidian residence, cutting off electricity to the
residence, and at one point, shining bright lights at the
residence and playing loud music and irritating sounds over
loudspeakers.
During the week of April 12, senior Justice Department
officials began considering a plan developed by the FBI to end
the standoff. Attorney General Janet Reno, other senior Justice
Department officials, and FBI officials held several meetings
concerning the plan. The proposed plan centered around the
injection of a chemical riot control agent through the walls of
the Davidian residence in order to induce the residents to
leave the structure. The plan provided for the methodical
insertion of the riot control agent into different parts of the
building over a 48 hour period. The plan also contained a
contingency clause which called for the insertion of the riot
control agent into all portions of the residence
simultaneously, if the Davidians failed to obey orders or
responded violently.
At approximately 6 a.m., on April 19, 1992, FBI agents
using unarmed military vehicles with mounted booms began to
insert the riot control agent into the compound by ramming
holes into the sides of the building and then spraying the riot
control agent into the holes in the walls. Almost immediately
the Davidians began to fire on the vehicles used by the FBI to
insert the agent. Shortly thereafter, the commander of the
Hostage Rescue Team ordered that the contingency provision of
the operations plan be implemented and that the riot control
agent be inserted in all portions of the residence at once.
At approximately 12:07 p.m., a fire was observed in one
portion of the residence. Within 2 minutes, two other fires
developed. Soon the three fires engulfed the entire structure,
destroying it completely. Nine persons escaped from the
structure during the course of the fire, but more than 70 other
residents remained inside and all of these persons died.
Pursuant to its oversight jurisdiction over the Federal law
enforcement community, the committee's National Security,
International Affairs, and Criminal Justice Subcommittee,
jointly with the Crime Subcommittee of the House Committee on
the Judiciary, conducted an investigation into the initial
raid, ensuing standoff, and eventual fire at the Branch
Davidian Compound near Waco, TX.
b. Benefits.--Throughout the investigation and the
hearings, the subcommittee had difficulty obtaining information
from certain agencies and offices under investigation.
Correspondence files attest to a constant battle for documents
and evidence relating to the situation at Waco. Nonetheless,
the investigation and the hearings brought to light a great
deal of new information, educated the public on a matter that
remained unsettling, and put to rest many errant theories about
the incident.
The central purpose of this investigation was to initiate
internal reforms that would prevent any such tragedy from
occurring again. As a result of this investigation, agencies
have begun to change their policies such that they will
approach future investigations and operations with less
likelihood of tragedy and greater opportunity for success.
Specifically, ATF has experienced an entire change of
leadership. Moreover, the FBI now has 30 Senior Agents
specially trained as ``crisis managers,'' who can be called on
at any time to assist in any similar crisis. The FBI's Hostage
Rescue Team (HRT) has increased personnel and equipment, as
well as the size and training of its negotiating team. Today,
there are nine FBI SWAT teams around the country to assist the
HRT in any similar emergency. The FBI has also established a
working relationship with the crisis resolution centers at
Michigan State University and George Mason University, and now
keeps a resource list of experts on marginal eclectic or
unusual religious groups. In addition, FBI Director Louis Freeh
has implemented a new policy regarding the use of force in
crisis situations that reinforces the FBI's standing policy in
favor of a negotiated solution, and has disposed of the prior
FBI policy permitting a barrage of unseemly noisemaking in
hostage or barricade situation.
Perhaps the most beneficial aspect of the investigation of
Waco was refutation of various conspiracy theories and
accusations of malfeasance on the part of particular government
agencies. The subcommittee made some of the following findings
and recommendations:
FINDINGS
1. But for the criminal conduct and aberrational behavior
of David Koresh and other Branch Davidians, the tragedies that
occurred in Waco would not have occurred. The ultimate
responsibility for the deaths of the Davidians and the four
Federal law enforcement agents lies with Koresh.
2. While not dispositive, the evidence presented to the
subcommittees indicates that some of the Davidians
intentionally set the fires inside the Davidian residence.
3. The gunshot wounds which were the cause of death of 19
of the Davidians on April 19 were either self-inflicted,
inflicted by other Davidians, or the result of the remote
possibility of accidental discharge from rounds exploding in
the fire.
4. Treasury Secretary Lloyd Bentsen and Deputy Secretary
Roger Altman acted highly irresponsibly and were derelict in
their duties in failing to even meet with the Director of the
ATF in the month or so they were in office prior to the
February 28 raid on the Davidians residence, in failing to
request any briefing on ATF operations during this time, and in
wholly failing to involve themselves with the activities of the
ATF.
5. Senior Treasury Department officials routinely failed in
their duty to monitor the actions of ATF officials, and as a
result were uninvolved in the planning of the February 28 raid.
This failure eliminated a layer of scrutiny of the plan during
which flaws in it might have been uncovered and corrected.
6. The ATF's investigation of the Branch Davidians was
grossly incompetent. It lacked the minimum professionalism
expected of a major Federal law enforcement agency.
7. David Koresh could have been arrested outside the
Davidian compound. The ATF chose not to arrest Koresh outside
the Davidian residence and instead were determined to use a
dynamic entry approach. In making this decision ATF agents
exercised extremely poor judgment, made erroneous assumptions,
and ignored the foreseeable perils of their course of action.
8. ATF agents misrepresented to Defense Department
officials that the Branch Davidians were involved in illegal
drug manufacturing. As a result of this deception, the ATF was
able to obtain some training from forces which would not have
otherwise provided it, and likely obtained other training
within a shorter period of time than might otherwise have been
available. Because of its deception, the ATF was able to obtain
the training without having to reimburse the Defense
Department, as otherwise would have been required had no drug
nexus been alleged.
9. The ATF's raid plan for February 28 was significantly
flawed. The plan was poorly conceived, utilized a high risk
tactical approach when other tactics could have been
successfully used, was drafted and commanded by ATF agents who
were less qualified than other available agents, and used
agents who were not sufficiently trained for the operation.
Additionally, ATF commanders did not take precautions to ensure
that the plan would not be discovered.
10. There was no justification for the rehiring of the two
senior ATF raid commanders after they were fired. The fact that
senior Clinton administration officials approved their rehiring
indicates a lack of sound judgment on their part.
11. The decision by Attorney General Janet Reno to approve
the FBI's plan to end the standoff on April 19 was premature,
wrong, and highly irresponsible. In authorizing the assault to
proceed Attorney General Reno was seriously negligent. The
Attorney General knew or should have known that the plan to end
the stand-off would endanger the lives of the Davidians inside
the residence, including the children. The Attorney General
knew or should have known that there was little risk to the FBI
agents, society as a whole, or to the Davidians from continuing
this standoff and that the possibility of a peaceful resolution
continued to exist.
12. The CS riot control agent insertion and assault plan
was fatally flawed. The Attorney General believed that it was
highly likely that the Davidians would open fire, and she knew
or should have known that the rapid insertion contingency would
be activated, that the Davidians would not react in the manner
suggested by the FBI, and that there was a possibility that a
violent and perhaps suicidal reaction would occur within the
residence. The Attorney General should have rejected the plan
and demanded the preparation of an alternative.
13. Following the FBI's April 19 assault on the Branch
Davidian compound, Attorney General Reno offered her
resignation. In light of her ultimate responsibility for the
disastrous assault and its resulting deaths the President
should have accepted it.
14. The FBI should have sought and accepted more expert
advice on the Branch Davidians and their religious views and
been more open-minded to the advice of the FBI's own experts.
15. While it cannot be concluded with certainty, it is
unlikely that the CS riot control agent, in the quantities used
by the FBI, reached lethal toxic levels. However, the presented
evidence does indicate that CS insertion into the enclosed
bunker, at a time when women and children were assembled inside
that enclosed space, could have been a proximate cause of or
directly resulted in some or all of the deaths attributed to
asphyxiation in the autopsy reports.
16. There is no evidence that the FBI intentionally or
inadvertently set the fires on April 19.
17. The activities of active duty military personnel in
training the ATF and in supporting the FBI's activities during
the standoff did not violate the Posse Comitatus Act because
their actions did not constitute direct participation in the
government's law enforcement activities.
RECOMMENDATIONS
1. Federal law enforcement agencies should verify the
credibility and the timeliness of the information on which it
relies in obtaining warrants to arrest or search the property
of an American citizen.
2. The ATF should revise its National Response Plan to
ensure that its best qualified agents are placed in command and
control positions in all operations.
3. Senior officials at ATF headquarters should assert
greater command and control over significant operations. The
ATF's most senior officials should be directly involved in the
planning and oversight of every significant operation.
4. The ATF should be constrained from independently
investigating drug-related crimes.
5. Congress should consider applying the Posse Comitatus
Act to the National Guard with respect to situations where a
Federal law enforcement entity serves as the lead agency.
6. The Department of Defense should streamline the approval
process for military support so that Posse Comitatus Act
conflicts and drug nexus controversies are avoided in the
future.
7. Federal law enforcement agencies should redesign their
negotiation policies and training to avoid the influence of
physical and emotional fatigue on the course of future
negotiations.
8. The government should further study and analyze the
effects of CS riot control agent on children, persons with
respiratory problems, pregnant women, and the elderly.
c. Hearings.--Oversight hearings on Federal Law Enforcement
Actions in Relation to the Branch Davidian Compound in Waco,
TX, July 19, 20, 21, 24, 25, 26, 27 28, 31, and August 1, 1995.
Witnesses testified regarding the involvement of different
agencies on ``agency days.'' Since several agencies were
investigated, the evidence collected at these hearings is
grouped under agency headings.
(i) The Bureau of Alcohol, Tobacco and Firearms.--The
initial investigation of Vernon Howell was conducted by ATF.
ATF's investigation began in late May 1992. A Federal judge
issued warrants based on evidence uncovered in that
investigation. The attempt to serve that warrant on February
28, 1993 went badly awry, resulting in an armed confrontation
which cost the lives of four Federal agents and several Branch
Davidians. Based on those facts, the subcommittee initiated an
investigation into ATF's actions leading to the raid. The
subcommittee submitted document requests to the Department of
the Treasury for all documents in its possession pertaining to
the initial investigation of Vernon Howell. The subcommittee
carefully analyzed the documents relating to the investigation
and interviewed numerous individuals involved in the
investigation and the raid. ATF agents, supervisors and
legislative affairs personnel briefed subcommittee staff on
events surrounding the investigation of Vernon Howell and
preparations for the initial raid on the Mt. Carmel complex.
Surviving Branch Davidians instructed the subcommittee about
conditions at Mt. Carmel and events surrounding the initial
raid. In addition to the defense attorneys for certain Branch
Davidians, representatives of the National Association of
Criminal Defense Lawyers gave their interpretation of the
sufficiency of the warrant that the ATF attempted to serve on
Vernon Howell.
July 19 marked the first day of hearings. On that day, the
subcommittee heard testimony from Dick Reavis, author of
``Ashes of Waco;'' Stuart Wright, contributor and editor of
``Armageddon in Waco;'' Ray Jahn, assistant U.S. attorney;
Gerald Goldstein, president of the National Association of
Criminal Defense Lawyers; Robert L. Descamps, president of the
National District Attorneys' Association; Henry McMahon,
firearms dealer; David Thibodeau, resident at Mt. Carmel; Kiri
Jewell, resident at Mt. Carmel; David Jewell, father of Kiri
Jewell; Lewis Gene Barber, former lieutenant with the McLennan
County Sheriff's Office; Bill Johnson, assistant U.S. attorney;
Davy Aguilera, ATF Special Agent; Chuck Sarabyn, former ATF
ASAC in Houston; Earl Dunagan, former ATF acting SAC in Austin;
Dan Hartnett, former ATF Deputy Director for Enforcement; Ed
Owens, ATF Firearms Expert; H. Geoffrey Moulton, Jr., Project
Director of Treasury Department Review Team; and Dr. Bruce
Perry, Associate Professor of Psychiatry and Behavioral
Sciences at Baylor College of Medicine.
During the first day of hearings, former ATF Special Agent
Davy Aguilera testified publicly for the first time in detail
the fact that ATF agents knew the Branch Davidians were
expecting the raid on Mt. Carmel. Aguilera testified about his
desperate attempts to inform ATF Supervisory Special Agents not
to go ahead with the raid, and tearfully recalled the results
of not being able to turn back the raid.
Chuck Sarabyn, former ATF Assistant Special-Agent-in-Charge
in Austin, testified before the subcommittee about his decision
to allow the raid to proceed in light of the fact that the
Branch Davidians knew the ATF was planning to raid Mt. Carmel.
Sarabyn defended his decision to go ahead with the raid and
maintained that the ATF was afraid of mass suicide among the
Branch Davidians.
This second day of testimony concentrated on the
investigation of Howell's collection of weapons and the alleged
or initially asserted existence of a methamphetamine laboratory
on the premises of Mt. Carmel. George Morrisson, of the Los
Angeles Police Department, testified that ATF should have
employed better investigative techniques and more organized
methods for case management. He told the subcommittee that
newspaper articles surfacing soon before the raid on Mt. Carmel
could have assisted ATF in gathering information. Wade
Ishomoto, of Sandia National Laboratories, told the
subcommittee that the team assembled in Waco to serve the
arrest warrant on Howell was inexperienced and that the raid
plan lacked the sophisticated procedures necessary for such an
operation. Several witnesses testified to the danger of
explosive devices in the presence of chemicals necessary for
the production of methamphetamine.
On this day the hearing consisted of testimony regarding
the actions of ATF and the subcommittee heard testimony from
former Secretary of Treasury Lloyd Bentsen. Secretary Bentsen
testified about the actions he took in response to ATF actions
at Waco. He told the subcommittee that, upon hearing of the
failure of the raid, he established an in-house review
commission that investigated the incident for 5 months and
compiled a report based on a number of interviews. Bentsen
listed those agencies involved in the Treasury investigation:
Secret Service, Customs, the IRS, and the Financial Crimes
Enforcement Network. Bentsen was unable to explain why a
warning from Mr. Altman, his aide at the time, was not viewed
with seriousness or passed on to the FBI; the Altman warning
indicated the possibility of ``tragedy'' if the Davidian
Compound was, as occurred on April 19, 1993, confronted with
what Davidians might perceive as an assault.
Secretary Bentsen also mentioned corrective actions taken
by ATF and Treasury in the wake of the incident at Waco.
According to Bentsen, ATF leadership was replaced, the
intelligence chief was demoted, and the two raid commanders
were relieved of their law enforcement duties. In addition,
Bentsen told the subcommittee that Treasury has enhanced the
formal and informal communication between the Office of
Enforcement and the bureaus within the department.
The final day of hearings regarding the actions of ATF were
held on July 24, 1995. The most compelling testimony this day
was delivered by Robert Rodriguez. Rodriguez recounted how he
warned Mr. Sarabyn and Mr. Chojnacki on the morning of the raid
that the Davidians had been tipped off about the assault.
Chojnacki and Sarabyn testified that Koresh often declared to
followers that the government was coming. ``We didn't know if
he meant in the physical sense or the metaphysical sense,''
Chojnacki said. ``These two men know what I told them,''
Rodriguez countered. ``They knew exactly what I meant . . .
They lied to the public, and in doing so destroyed a great
agency.'' Sarabyn and Chojnacki denied that they lied to the
public. They insisted that Rodriguez did not provide a clear
warning that Koresh knew the raid was imminent. Rodriguez's
version of the events was supported by Lewis Merletti.
(ii) The Federal Bureau of Investigation.--Almost
immediately after the raid on Mt. Carmel, the FBI was called in
to take over the operation of the standoff. The FBI Hostage
Rescue team was in place and FBI negotiators were on the phone
with Davidians almost continuously for the succeeding 51 days.
Jeffrey Jamar, FBI Special Agent-in-Charge in San Antonio,
commanded the FBI team and was charged with deciding which
tactics to employ. The subcommittee investigation produced
audiotapes and transcripts of these negotiations, as well as
contemporaneous memoranda from both inside and outside experts
attempting to explain the actions of Vernon Howell and the
Branch Davidians. After 51 days of standoff, the siege ended
tragically. The Branch Davidian compound burned to the ground
and resulted in the death of 22 children and more than 60
adults.
Regarding the investigation into the role of the Department
of Justice and the Federal Bureau of Investigation, the
hearings continued with testimony from Jack Zimmerman and Dick
DeGuerin, attorneys for Steve Schneider and Vernon Howell,
testified before the subcommittee about their dealings with the
Branch Davidians and explained in detail their attempts to
assist in negotiating a surrender. DeGuerin testified about
difficulties he personally encountered in brokering a potential
surrender. DeGuerin told the subcommittee about his trips into
Mt. Carmel and the breakthrough he had achieved upon receiving
Howell's final promise to surrender. DeGuerin obtained a letter
from Howell in which Howell promised to complete his
interpretation of the ``Seven Seals,'' contained in the Bible,
and then surrender with all the Branch Davidians.
Also testifying on that day were several of the local Texas
Rangers. The Texas Rangers were charged with investigating the
deaths of the four ATF agents killed on the day of the initial
raid. Captain Byrnes testified that the Texas Rangers had many
disagreements with FBI's Jamar and generally felt excluded.
Byrnes testified that, in addition to problems with destruction
of the crime scene by FBI tactical personnel, the Rangers were
disappointed about a lack of communication between FBI
personnel and local officials.
The sixth day of hearings, provided in greater detail, the
facts surrounding the Department of Justice and FBI involvement
in Waco. James Cavanaugh, although an ATF Special Agent,
testified before the subcommittee regarding negotiations with
the Branch Davidians and the transition from ATF control of the
operation to FBI control. Cavanaugh was the first person to
engage in serious negotiations with the Branch Davidians. He
recounted the planning of the initial raid, the ensuing
negotiations for a cease fire, the first surrender offer of the
Branch Davidians and the lengthy negotiations for a surrender.
Cavanaugh described the tension between negotiators and
tactical personnel. He expressed the view that negotiators
prefer to wait for a peaceful solution to a crisis and tactical
personnel generally prefer to intercede with tactical measures.
Peter Smerick was the Criminal Investigative Analyst the
FBI used to profile Howell for the FBI negotiators and the
FBI's Hostage Rescue Team. Smerick testified that his first
four memoranda urged the FBI to ``wait Koresh out'' and advised
against increasing the pressure from outside. Smerick told the
subcommittee that he changed his final memorandum based on his
knowledge that the FBI was not pleased with the tone of his
memoranda and that, although he felt no overt pressure to
change the approach of his memoranda, he knew that FBI agents
on the ground in Waco wanted a view that supported a more
clearly tactical approach.
Jeffrey Jamar, the FBI Special Agent-in-Charge in San
Antonio at the time, was the on-site commander of all forces in
Waco. Jamar testified before the subcommittee that he was
hopeful of a surrender based on Koresh's promise to come out of
Mt. Carmel, when he completed his interpretation of the Seven
Seals. In response to questions regarding the possibility of
the withdrawal of the FBI from Mt. Carmel, Jamar explained that
the danger of gun fire from the building, the risk to children
inside, and the sanitary conditions in Mt. Carmel made
withdrawal untenable. Jamar also testified regarding the
decision to implement the CS gas plan. Jamar said, ``I would
have waited a year if we had something to work with, if there
was just something there we could attach something to. We did
it from February 28 until a decision was made in late March
that we thought we were going nowhere.'' Jamar told the
subcommittee he was certain that Koresh would end the standoff
``his way.'' Jamar also testified that he knew with ``99
percent'' certainty that the Davidians would open fire on the
FBI's Bradley vehicles inserting CS gas, an eventuality that he
also knew would mean acceleration of the CS gas, under the
FBI's CS gas insertion plan.
The subcommittee heard compelling testimony from many
decisionmakers and received testimony of Webster Hubbell,
former Associate U.S. Attorney General; Mark Richard, Deputy
Assistant Attorney General; William Sessions, former Director
of the FBI; Floyd Clarke, former Deputy Director of the FBI;
Larry Potts, former Assistant Director of the FBI, Criminal
Investigations; Harry Salem, Ph.D., Defense Department
Toxicologist; Rick Sherrow, fire expert; Paul Gray, Houston
Fire Department and leader of the Fire Review Team; James
Quintere, arson expert, University of Maryland; and Clive
Doyle, former Branch Davidian.
Webster Hubbell testified on the decisionmaking process
that led to the implementation of the CS gas insertion plan.
According to Hubbell, the decision to implement the CS gas
insertion plan was based essentially on two facts: (1) a lack
of progress in negotiations; and (2) military personnel
assuring him that the inhabitants would exit the building upon
insertion of CS gas. Hubbell testified that President Clinton
wanted to be advised of any change in strategy from one of
negotiation to one of tactical maneuvers. Hubbell testified
before the subcommittee that he was told that Howell was
manipulating the attorneys. Howell's statement that he would
come out upon having interpreted the ``Seven Seals,'' according
to Hubbell, was a ruse. Hubbell told the members of the
subcommittee that Howell was responsible for the deaths of
those inside Mt. Carmel.
The assistant Director of the FBI at the time of the Waco
standoff was Larry Potts. Potts testified before the
subcommittee regarding the FBI's strategy for resolving the
standoff. Potts stated that the strategy was: ``(1) to verbally
negotiate a peaceful surrender of Koresh and his followers;
and, (2) to gradually increase the pressure on those inside the
compound by tightening the perimeter around the compound and
denying the Davidians certain comforts.'' Potts recounted how
this strategy was perceived as a failure, and he outlined the
roles that the FBI and the Department of Justice played in the
development of the CS gas insertion plan.
Potts testified that the FBI, in response to questions
about its conduct of the standoff at Waco, had improved three
aspects of FBI crisis management. ``Jurisdictional issues are
being clarified, crisis response operations have been
reorganized and expanded, including the availability and use of
outside experts; and research efforts have been enhanced,'' he
stated. Potts displayed a diagram of the crisis management
changes implemented as a result of the standoff at Waco.
On the final day of hearings, the subcommittee heard from
Attorney General Janet Reno. On August 1, 1995, Attorney
General Reno gave her reasons for what she termed her decision
to implement the plan to insert CS gas into Mt. Carmel. The
Attorney General described the 51-day standoff, the efforts to
negotiate a surrender, and the reasons that Howell was not
trusted by FBI negotiators. Reno stressed changes the FBI had
implemented since Waco. According to her testimony, the FBI now
has 30 Senior Agents specially trained as ``crisis managers''
to be called on at any time to assist in a crisis the magnitude
of Waco. These managers form an element of the Critical
Incident Response Group, a group formed to deal with crisis
situations. Reno told the subcommittee that the Hostage Rescue
Team will increase its personnel, equipment, and the size and
training of the negotiating team. Today, there are nine FBI
SWAT teams around the country to assist the Hostage Rescue Team
in an emergency. To assist the FBI in dealing with complex,
psychological hostage takers in the future, Reno testified that
the FBI will establish a working relationship with the crisis
resolution centers at Michigan State University and George
Mason University, and will keep a resource list of experts on
marginal religious groups.
Much of Reno's testimony involved her decision to implement
the CS Gas Insertion Plan. The Attorney General told the
subcommittee she thought she had all the information she needed
to make her decision. She indicated however, that someone
informed her of ongoing abuse in the compound; at no time could
she recall who that individual was. She believed that briefings
on CS gas were proper and complete. She did confirm that she
had not read all pre-fire briefing material and was not in the
command center when the tragedy occurred. In her statement to
the subcommittee, Reno assured the members that the FBI was
continuing its research into non-lethal technologies as
alternatives to deadly force.
(iii) The Department of Defense.--The subcommittee
investigated the participation of the Department of Defense
personnel in the events at Waco. Testimony was heard from
Ambassador H. Allen Holmes, Assistant Secretary of Defense for
Solic; Maj. Gen. John M. Pickler, U.S. Army, Commander Joint
Task Force 6; Brig. Gen. Walter B. Huffman, U.S. Army,
Assistant Judge Advocate General for Civil Law; Chris Crain,
Special Forces Group; Lt. Col. Philip Lindley, U.S. Army,
former Deputy Staff Judge Advocate for U.S. Army, Special
Forces Command; Maj. Mark Petree, U.S. Army, formerly of 3/3D
Special Forces Group; Staff Sgt. Steve Fitts, U.S. Army,
formerly of 3/3D Special Forces Group; Staff Sgt. Robert W.
Moreland, U.S. Army, formerly of 3/3D Special Forces Group; and
Sgt. Chris Dunn, U.S. Army, formerly of 3/3D Special Forces
Group.
Ambassador Holmes testified on the role of the military in
domestic law enforcement actions and about military
participation before Waco. Holmes told the subcommittee that,
in his opinion, the process developed to monitor military
involvement in domestic law enforcement was a sound process.
The Ambassador testified that, in his view, there were no
violations of the law regarding military assistance at Waco and
that the process regarding requests for military assistance had
worked effectively.
Staff Sgt. Steve Fitts testified regarding the military
preparations for involvement in methamphetamine laboratories.
He told the subcommittee that he conducted extensive research
on the dangers and precautions required to ``take-down''
methamphetamine laboratories. According to Staff Sergeant
Fitts, he wrote the paper at the instruction of Maj. Mark
Petree. Staff Sergeant Fitts testified that Major Petree then
presented the paper to ATF agents in Houston. According to
Staff Sergeant Fitts, it was clear to him from the reaction of
the ATF agents that these agents anticipated no actual
methamphetamine laboratory at Mt. Carmel. Indeed, based on the
lack of interest shown by ATF agents in the procedures
necessary to dismantle a methamphetamine laboratory, it was
Fitts' belief that ATF agents knew that no methamphetamine
laboratory existed at Mt. Carmel.
POSTAL SERVICE SUBCOMMITTEE
Hon. John M. McHugh, Chairman
1. ``Voices for Change,'' House Report No. 104-438, December 21, 1995,
Sixth Report by the Committee on Government Reform and
Oversight.
a. Summary.--``Voices for Change'' analyzes 10 hearings
held by the Subcommittee on the Postal Service during the first
session of the 104th Congress. Nearly 40 witnesses testified
regarding the problems and challenges facing the current postal
system. Witnesses urged members to consider fundamental reform
of the quarter-century old Postal Reorganization Act because of
the challenges confronting the Postal Service in a changing
communications environment. Four key reform issues emerged in
the hearings, including mail monopoly, labor-management
relations, ratemaking and new postal products. Although
witnesses raised a variety of issues and suggested a broad
range of proposals for improving mail delivery, no unanimity
appeared for any specific approach. However, the report notes
that ``maintenance of universal service and a need to either
strengthen or modify the postal ratesetting process were the
legislative-related issues consistently discussed by a large
majority of witnesses.''
b. Benefits.--The report provides Congress a concise record
of the testimony received by the subcommittee regarding the
operations of the Postal Service and its capacity to perform
its constitutional and statutory mandates. The eight general
oversight hearings highlighted by the report indicate the need
for Congress to review, systematically, the statutory structure
under which the Postal Service operates. An efficient and
fiscally sound Postal Service benefits the American people by
providing a cost-effective and reliable communications system.
In addition, the constitutional undergirding of the Postal
Service requires additional congressional attention in order to
preserve and ensure the future viability of the institution.
c. Hearings.--On February 23, 1995, testimony was received
from Marvin T. Runyon, U.S. Postmaster General, and Michael E.
Motley, General Accounting Office. On March 2, 1995, testimony
was received from the Postal Rate Commission: Edward J.
Gleiman; W.H. LeBlanc; George W. Haley; Edward Quick, Jr.; and
Wayne A. Schley. On March 8, 1995, the subcommittee heard
testimony from Postal Service Governors: Sam Winters, LeGree S.
Daniels, Einar V. Dyhrkopp, Susan E. Alvardo, Bert H. Mackie,
and Norma Pace. On May 23, 1995, the subcommittee received
testimony from Art Sackler, Mailers Council; Ian D. Volner,
Advertising Mail Marketing Association; Richard Barton, Direct
Marketing Association; David Todd, Mail Order Association of
America; Timothy May, Parcel Shippers Association; Tonda Rush,
National Newspaper Association; Cathleen P. Black, Newspaper
Association of America; George Gross, Magazine Publishers of
America; Steve Bair, Association of American Publisher; Alan
Kline, Alliance of Nonprofit Mailers; and Lee Cassidy, National
Federation of Nonprofits. The June 7, 1995, hearing testimony
was received from Moe Biller, American Postal Workers Union;
Vincent Sombrotto, National Association of Letter Carriers;
Scottie Hicks, National Rural Letter Carriers Association;
William Quinn, National Postal Mail Handlers Union; W. David
Games, National Association of Postmasters; Bill Brennen,
National League of Postmasters; and Vincent Palladino, National
Association of Postal Supervisors. On June 14, 1995, the
subcommittee received testimony from John V. Maraney, Nation
Star Route Mail Contractors Association; Randall Holleschau,
National Association of Presort Mailers; Don Harle, Mail
Advertising Service Association; Robert Muma, Envelope
Manufacturers Association of America; Anthony W. Desio, Mail
Boxes, Etc.; Kathleen Synnott, Pitney-Bowes; Neal Mahlstedt,
Ascom Hasler; George W. Gelfer, Postalia; James Rogers, United
Parcel Service; James Campbell, Federal Express; Peter N.
Hiebert, DHL Worldwide; and Harry Geller, Air Courier
Conference of America. On June 28, 1995, Postmaster General,
Marvin Runyon and Deputy Postmaster General, Michael Coughlin
testified before the subcommittee. On July 25, 1995, hearing
testimony was received from Kenneth J. Hunter, Inspector
General.
B. OTHER INVESTIGATIONS
CIVIL SERVICE SUBCOMMITTEE
1. Restructuring of the Office of Personnel Management.
a. Summary.--Vice President Gore's National Performance
Review of 1993 (NPR) ``challenged'' the Office of Personnel
Management (OPM) to become an agent for change. OPM, which
oversees 2.1 million people in the Federal Civil Service
System, announced it would meet this challenge by ``leading the
initiative to reinvent Federal human resource management by
working with all agencies to assess their needs in accepting
more responsibility in this area.'' Since the release of the
administration's NPR, OPM has focused on decentralizing many of
its functions.
OPM intends to concentrate on certain core functions and
devolve other activities. Accordingly, the agency has already
RIFed a large number of training staff and reduced its Federal
investigative program in anticipation of privatization. The
agency intends to cease all governmentwide training activities
before the end of the fiscal year and to divest itself of the
investigations function by the beginning of fiscal year 96.
OPM also intends to delegate all recruitment and staffing
responsibilities to Federal agencies. The functions the agency
will retain include retirement and health benefit programs,
compensation programs, testing and evaluation on a reimbursable
basis, and some policy and oversight responsibilities.
With deep reductions in its workforce, as well as the vast
changes that will occur from the decentralization initiatives,
concerns have been raised over what substantive role OPM will
retain in the future. Of particular concern was OPM's continued
ability to provide adequate oversight over and protection of
the Merit System.
b. Benefits.--The subcommittee will continue to monitor
OPM's restructuring process, and how this downsizing and
decentralization will effect its client agencies. Subcommittee
Chairman Mica voiced his commitment to instituting whatever
remedies necessary to unburden Federal employees from
unnecessary rules and regulation, while ensuring that the
process produces meaningful results that do not interfere with
OPM's ability to carry out core functions and responsibilities.
c. Hearings.--A hearing entitled, ``Restructuring Office of
Personnel Management'' was held on February 7, 1995.
2. Federal Workforce Restructuring Statistics.
a. Summary.--The Federal Workforce Restructuring Act of
1994 established personnel ceilings for fiscal years 1994
through 1996, while targeting 272,900 full-time-equivalent
positions for elimination by the end of 1999. To accomplish
this, without relying entirely on reductions-in-force (RIF's),
the act established temporary financial retirement incentive
programs to encourage voluntary separations from certain
Federal agencies. However, the act does not specify where the
cuts should occur, and preliminary figures indicate the
Department of Defense is bearing the brunt of the reductions.
All executive branch agencies were provided with detailed
guidance by OMB, including steps to be taken to flatten
hierarchies, reduce headquarters staff, and pare down
management control structures. However, nearly three-fourths of
the fiscal year 94 reductions were among civilian employees in
the Department of Defense, and DOD is expected to experience an
even larger share of the reductions in 1995--reportedly up to
98 percent. From 1993 through the middle of fiscal year 95 over
90 percent of total reductions can be attributed to defense
base closures and downsizing activities at the Department of
Defense. The chairman expressed concern over the
disproportionate distribution of workforce reductions and
raised questions about whether the administration's reinventing
government initiatives will result in meaningful government
restructuring or prove to be simply a reduction of the
Department of Defense civilian workforce.
b. Benefits.--This oversight review provided an early
examination of restructuring activities in the executive branch
and highlighted the disproportionate downsizing of the
Department of Defense. The planning and out placement programs
of the Department of Defense should serve as useful models for
workforce reductions in other government agencies.
c. Hearings.--A hearing entitled, ``Federal Workforce
Restructuring Statistics'' was held on March 2, 1995.
3. Examining the Federal Retirement System.
a. Summary.--The Federal pension system consists of two
programs: the Civil Service Retirement System (CSRS) covers
Federal employees hired prior to 1984, and the Federal
Employees Retirement System (FERS) covers those employees hired
after 1984. A total of 2.8 million active employees are
covered, with 1.5 million in CSRS and 1.3 million in FERS.
Currently, 2.3 million participants receive annuities. CSRS has
2.2 million retirees and survivors, FERS has 37,800.
Acccording to OPM's 1993 Annual Report on the Civil Service
Retirement and Disability Fund (CSRDF) in 1996, the outlay for
monthly payments for retirees of the Federal Government is
estimated to be $39.2 billion. The CSRDF is projected to take
in approximately $10 billion in cash receipts and payments from
employee payroll deductions and from cash contributions from
the U.S. Postal Service. Transfers from the General Treasury
will make up the difference between receipts and payments--
nearly $30 billion. The annuities are projected to grow, while
the cash receipts will stay relatively the same. In 2025, cash
coming in will total $3.6 billion, while outlays will total
$166.2 billion. And by 2035, cash receipts are estimated to be
$5.6 billion, while outlays will top $218.5 billion. This
increasing burden on the taxpayer and the overall financial
stability of the Federal retirement system is of utmost
importance to the chairman of the subcommittee.
The subcommittee is involved in an ongoing analysis
examining a host of various proposals concerning Federal
pension reform.
The subcommittee reviewed the retirement benefits available
for Members of Congress, congressional staff, and executive
branch employees under current law. In the 104th Congress a
number of Members pension reform bills have been introduced and
were reviewed by the subcommittee. Under current law, Members
and staff under CSRS accrue benefits at 2.5 percent of
preretirement pay for each year of service. Executive branch
employees with 10 or more years of CSRS service accrue benefits
at 2.0 percent per year. Members and staff under FERS accrue
benefits at 1.7 percent per year of service up to 20 years, and
1.0 percent per year over 20. Executive branch FERS employees
benefits accrue at 1.0 percent per year, or 1.1 percent if the
individual retires at age 62 or over. Members and staff
contribute a greater portion of payroll in exchange for the
greater benefit.
b. Benefits.--The investigation exposed growing reliance of
the Federal retirement system on general tax revenues. To
stabilize the Federal retirement system the subcommittee will
consider the creation of a new retirement system which would be
fully funded outside of the Federal budget and would be subject
to the same standards and requirements as private sector
pension plans. Such a system would assure Federal retirees full
payment of benefits without having to rely on the Treasury to
subsidize their annuities. This is a responsible approach to
financing the government's commitments to its employees and it
allows for the permanent elimination of one entitlement program
from the Federal budget.
The retirement reform of Members and congressional staff
was included in the Balanced Budget Act of 1995. Under this
reform Members and staff retirement benefits and payroll
contributions will conform to that available to executive
branch employees.
c. Hearings.--Hearings entitled ``Federal Retirement
Systems: Overview,'' ``Federal Retirement: Congressional
Pensions'' and ``Funding Civil Service Retirement'' were held
on March 7, 1995, March 10, 1995, and June 28, 1995.
4. Contracting Out.
a. Summary.--Federal policy, adopted during the Eisenhower
administration and endorsed on a bipartisan basis by all
subsequent Presidents, affirms that Federal agencies should not
be performing commercial activities in competition with private
sector businesses. Although Federal agencies contract for more
than $200 billion in goods and services each year, the Office
of Management and Budget estimated in a 1987 Report to the
President's Commission on Privatization that more than 900,000
civilian Federal employees were performing commercial
functions. In spite of this substantial commercial activity by
Federal agencies, previous hearings alleged that Federal
agencies were involved in ``arbitrary and perhaps ill-conceived
contracting out.''
OMB Circular A-76 provides administrative guidance to
agencies for conducting cost comparisons to evaluate the
efficiency of proposed contracts. In spite of the established
mechanism, few cost comparisons of commercial functions are
completed, in part because Federal agencies consider the
process itself costly and a disruption to the workforce, and in
part because Congress has included numerous provisions of law
that restrict agencies from conducting the studies and/or from
contracting after the studies are completed. In a June 16,
1995, release, the National Performance Review reported that 25
such obstacles to privatization remain in law.
Subcommittee Chairman Mica has routinely asserted his
belief that it could and should be possible to contract out
more than 50 percent of the services and activities of the
Federal Government as we know it today. If the widespread
contracting successes being achieved by State and local
governments do not move the Federal Government in the direction
of greater contracting for commercial services, inevitably
budget constraints will.
OMB's Circular A-76 maintains that the government should
use competition to reduce the costs of goods and services so
that it would pay no more than necessary for the quality
services that it needs. The subcommittee's analysis has shown
that the absence of competition results in excessive costs,
with the salaries and benefits of government employees
comprising approximately 60 percent of the cost of government
operations. Wendell Cox of the American Legislative Exchange
Council testified that between 1980 and 1991, Federal
employees' wages increased approximately $4.56 for each dollar
that private sector compensation increased. As a result,
average Federal employees make 45 percent more than private
sector employees and 30 percent more than State Government
employees. Over the course of a 40-year career, the expected
lifetime earnings of a Federal employee have been estimated to
be $600,000 greater than that of a comparable private sector
employee. Surveys of government managers have demonstrated
savings in 98 percent of the cases where functions have been
converted to contract, and that the mere fact of competition
has the effect of restraining cost increases. Although
government must retain full policy control of all its
operations, contracting could be used much more extensively to
minimize the costs of providing public services and performing
government activities.
b. Benefits.--The investigation highlighted the need to
update OMB Circular A-76, and OMB reissued the circular in
March 1996.
c. Hearings.--Hearings entitled ``Contracting Out: Summary
and Overview'' and ``Contracting Out: Current Issues'' were
held on March 29, 1995, and April 5, 1995.
5. Examination and Review of the Federal Workforce Restructuring Act of
1994.
a. Summary.--The Federal Workforce Restructuring Act of
1994 authorized Federal agencies to provide voluntary
separation incentives (``buyouts'') to Federal employees as one
means of reducing Federal employment by 272,900 by fiscal year
1999. Civilian agencies were authorized to offer buyout
incentives not to exceed $25,000 each during a period which
expired March 31, 1995, and the Department of Defense was
allowed to continue offering buyout opportunities through
September 30, 1999. By the end of fiscal year 1995, OPM
reported that more than 112,500 former Federal employees had
been paid buyouts and left their agencies, with more than
68,000 of them leaving the Department of Defense. An additional
50,000 are anticipated to accept Department of Defense offers
during the coming 4 years. Total costs to the government of
these incentive payments are expected to exceed $2.4 billion.
Former Federal employees who accept the buyouts may not
return to Federal employment for a 5-year period or are
required to repay the full amount of the incentive. By
encouraging voluntary separation, buyouts are intended to
reduce reliance on reduction in force (RIF) procedures and
enable agencies to retain relatively younger workers while
senior employees (those eligible or nearly eligible for
retirement) accept payments to leave. Separation rates,
however, are severely affected by rumors that a buyout might be
offered, as evidenced by the reduction in the number of
voluntary retirements from Federal agencies while the buyout
program was being authorized in legislation.
The General Accounting Office (GAO) has reported that 38
percent of buyout payments reported to date went to people in
the overhead/administrative positions that were targeted by the
National Performance Review. Nearly 70 percent went to
employees at or above the GS-11 level, and 62.9 percent went to
men. Minority members received 24 percent of the buyouts. The
average age of people accepting buyouts was 60--about 1 year
younger than regular retirement. Fifty-two percent of the
buyout payments reported so far went to employees who were
eligible for retirement. The GAO testified that there appears
to have been some use of contract personnel to replace departed
employees, but the absence, so far, of cost comparison studies
required by Section 5(g) of the Workforce Restructuring Act
makes difficult the tracking and analysis of buyout effects.
b. Benefits.--Buyout authority may be a beneficial tool in
downsizing and restructuring the Federal workforce, provided
certain procedures are followed: agencies must engage in long
range planning and know how they want the organization to look
at the end of the restructuring; buyout window should be short
to avoid generating rumors and behavior changes based upon
expectation of buyouts; buyouts should not be done in
successive waves; and buyouts should be effective early in the
fiscal year to maximize savings. Additionally, buyouts should
be targeted and never offered across the board to avoid
additional funds being used to hire and train people with
skills identical to those benefiting from buyouts. Downsizing
and reorganization are most successful when the importance of
directing restructuring efforts to a revised organizational
goal is recognized, and detailed planning strategies are
employed to achieve it. As a result, the committee has not
recommended extending executive branch buyout authority at this
time.
c. Hearings.--A hearing entitled ``Buyouts: Boon or
Boondoggle'' was held on May 17, 1995.
6. Review of the Ramspeck Act.
a. Summary.--The Ramspeck Act is a 1940 law that enables
members of congressional staffs who have served at least 3
years to gain noncompetitive appointment to the career civil
service if they lose their congressional positions through no
fault of their own; often as a result of the defeat of a Member
or a Member's choosing not to run again. GAO reported that more
than 80 percent of recent Ramspeck appointments have been in
offices of congressional affairs, public affairs, or policy and
strategic planning.
Congressman Porter Goss introduced legislation to repeal
the Ramspeck Act, H.R. 913, which was referred to the Civil
Service Subcommittee. Representative Goss recommended repeal of
the Ramspeck authority, arguing that constituents view this law
as merely another special privilege that Members of Congress
arrange for their staffs. Ramspeck procedures give former
congressional employees privileges that are not available to
other citizens, who must compete for positions in the Federal
service. He believes that Ramspeck authority is inconsistent
with the Congressional Accountability Act, adopted early in
this session, which holds Congress subject to the same laws
that affect other citizens.
b. Benefits.--Conditions have changed since the Ramspeck
law was enacted, and it is no longer difficult to attract
quality applicants to congressional staff positions. The
committee was concerned that continued use of Ramspeck
appointments creates situations where policies repudiated by
the electorate in recent elections may gain continuity in the
career civil service through non-competitive transfers of
staff.
Congress repealed the Ramspeck Act authority as part of the
Lobbying Disclosure Act (H.R. 1564). The repeal, which becomes
effective 2 years after the President signed the law, will
eliminate this end run around the merit system.
c. Hearings.--A hearing entitled ``Ramspeck: Repeal, Reform
or Retentions'' was held on May 24, 1995.
7. Review of the Combined Federal Campaign.
a. Summary.--The Combined Federal Campaign (CFC) is an
annual, taxpayer-subsidized solicitation drive in the Federal
workplace that began as an effort to aid genuine charities
while minimizing workforce disruption. However, many political
and ideological advocacy groups and others, who do not directly
provide or support human health and welfare, litigated and
lobbied their way into the CFC.
On February 23, 1995, subcommittee Chairman Mica wrote to
James B. King, the Director of the Office of Personnel
Management (OPM), asking for his support and cooperation in
restoring the Combined Federal Campaign to its rightful role of
aiding genuine human health and welfare charities. While the
chairman fully endorses and encourages supporting genuine
charities, the presence of advocacy groups raises questions
about requiring taxpayers to subsidize organizations with which
they disagree. A 1988 Task Force on the CFC established by OPM
estimated that the CFC costs taxpayers between $55-60 million a
year. (OPM's current leadership estimates the cost of the CFC
as $22.1 million.)
b. Benefits.--Examination of this issue revealed the extent
to which taxpayers are forced to subsidize numerous advocacy
groups and other organizations with political agendas that
participate in the CFC.
c. Hearings.--A hearing entitled ``Combined Federal
Campaign: Lawyers & Lobbyists v. People in Need?'' was held on
June 7, 1995.
8. Contracting Federal Investigations--Policy and Oversight.
a. Summary.--Since the Atomic Energy Act of 1954,
background investigations have been an important factor in
deciding the suitability, security, and public trust
qualifications of Federal employees. President Eisenhower
extended background investigation requirements through
Executive Order 10450, but such investigation centered
primarily around employee susceptibility to threats from
foreign governments. Some critics believe that several Supreme
Court decisions, the Freedom of Information Act, and the
Privacy Act combine to make it difficult to gather the
information essential to a meaningful adjudication of these
areas. As part of the administration's initiatives to reinvent
government, OPM abolished chapters of the Federal Personnel
Manual establishing criteria for security, suitability, and
public trust determinations required to oversee a diverse range
of agency requirements in a unified civil service.
The administration considers the transition of
investigations to the private sector an important component of
its effort to reinvent government. This reflects a
reorientation of the agency from providing services to
conducting policy direction and oversight. OPM proposed an
employee stock ownership program (ESOP) as the privatization
vehicle chosen for this transition. A sole source contract to
the ESOP is an essential ingredient to successful
implementation of this plan. Oversight of the investigation
function would remain a Federal responsibility under the
purview of OPM, but the bulk of the current workforce is
expected to shift to the ESOP. Data bases essential to the
system would remain government-owned but reside on contractor-
operated equipment. OMB testified that any savings from this
program would be realized only when agencies became able to
acquire investigative services competitively from private
firms, thereby reducing the costs of background investigations.
The ESOP would have to compete on an equal basis as a private
provider.
The committee is concerned that Federal agencies with
legitimate concerns about the security and suitability of
Federal employees have adequate access to investigative
services. Many agencies already obtain background
investigations through private contractors; work that amounts
to more than $20 million each year. Even agencies with
significant national security concerns, such as the Department
of Defense, contract for significant portions of their
background investigations. These agencies rely upon OPM's
Federal Investigations Processing Center at Boyers, PA, for
essential data and information to support their suitability
determinations. In the 6 months between announcement of the
privatization plan and the subcommittee's oversight hearing,
OPM witnesses were unable to describe systematic planning for
conversion, with most of the planning being contracted through
a trustee organization.
b. Benefits.--These hearings documented the deficiencies in
the administration's planning for the transition from a
government function to an ESOP operation. GAO and OPM testified
that the gathering of information for background investigations
is not an inherent function of the Government, the
administration demonstrated less-than-effective planning for
the proposed transition. Cost estimates included in OMB's
budget submissions suggested that these initiatives would save
4 percent per year. OPM awarded a trustee contract to develop a
business plan and negotiate a transition on June 9, 1995, only
a week before the hearing. These planning deficiencies
strengthened the argument to delay implementation from the
December 31, 1995, administration proposal to March 31, 1996,
as approved in the OPM appropriation for fiscal year 1996.
c. Hearings.--Hearings entitled ``Oversight of Federal
Investigations Policy'' and ``Outsourcing of OPM's
Investigations Program'' were held on June 14, 1995, and June
15, 1995.
9. Administration's AIDS Training Program.
a. Summary.--Title 5 authorizes training in the scientific,
professional, technical, mechanical, trade, clerical, fiscal,
administrative or other appropriate fields. Section 4101
requires workplace training to be a ``planned, prepared, and
coordinated program . . . which will improve individual and
organizational performance and assist in achieving the agency's
mission and performance goals.''
Department heads are required, at least once every 3 years,
to review training and other developmental needs essential to
meeting mission and performance requirements. This review is an
integral part of agency planning, the purpose of which is to
ensure that public funds used to develop an organization's
human resources have a direct relevance to (1) improving
productivity; (2) fulfilling the organizational mission; and
(3) providing quality products and services to the public.
On September 30th, 1993, President Clinton delivered a
memorandum to the heads of executive departments and agencies
directing full implementation of comprehensive HIV/AIDS
workplace policies and employee education and prevention
programs by World AIDS Day, 1994. The Office of the National
AIDS Policy Coordinator was authorized to implement the
directive, and in a follow-up memo, then-Director Kristine
Gebbie required mandatory employee attendance at HIV/AIDS
education and prevention training.
The HIV/AIDS mandatory training sessions received much
adverse attention, due to reports that inappropriate and
questionable materials were presented. The committee received
numerous letters and calls from Federal employees objecting to
being subjected to graphic talk about uncomfortable subjects in
the midst of fellow workers. These recent reports raised
questions as to whether the Federal HIV/AIDS education training
is designed to meet the statutory requirements designated in
Title 5: to improve individual and organizational performance,
and assist in achieving the agency's mission and performance
goals.
b. Benefits.--Witnesses testified that many aspects of the
administration's training program were not fit for the Federal
workplace, either in content or method of presentation. They
argued that Federal employees should not have to suffer
training programs that assail their fundamental religious and
moral principles on pain of losing their jobs, as was the case
with the administration's mandatory AIDS training program.
According to OPM's figures, Federal agencies spend more than $1
billion on training. In light of the controversy generated by
the administration's AIDS training, it is clear that closer
oversight of employee training is necessary in order to assure
that training is appropriate for the Federal workplace, both in
content and method of presentation. Legislation has been
proposed to protect Federal employees from improper training
and to ensure that taxpayers' dollars are used only for
appropriate workplace training.
c. Hearings.--A hearing entitled ``Administration AIDS
Training Program'' was held on June 22, 1995.
10. Privatization of OPM Training Responsibilities.
a. Summary.--On May 16, 1995, the Office of Personnel
Management and the U.S. Department of Agriculture Graduate
School signed a memorandum of understanding (MOU) transferring
OPM's Workforce Training Services, along with its office space,
training obligations, and student lists, to the Graduate
School, effective July 1, 1995. OPM separated 220 individuals
from the agency, 134 of whom were extended offers of employment
by the Graduate School. This transfer of functions moved a
service from OPM's revolving fund to a ``non-appropriated fund
instrumentality,'' a move that OPM Director James B. King
described as a ``seamless transition'' enabling many former
employees of the Workforce Training Services to retain
employment while continuing arrangements through which Federal
agencies could obtain training services without the burden of
Federal procurement regulations.
This initiative has been described among the
``privatization'' initiatives advanced through the National
Performance Review. Yet, by retaining authority to work through
interagency agreements, this transition strategy reduced the
exposure of the training services to competition--a critical
factor in improving quality and reducing prices. Witnesses
testified that full privatization--including the possibility of
a sale of assets to interested private bidders--might have
resulted in greater funds for the Treasury while increasing
competitive pressures for quality. Moreover, OPM retains
responsibility for oversight of training, even though the
transition does not provide explicit description of that role.
b. Benefits.--More direct privatization of training
activities could have resulted in substantial cost-savings to
the government. However, concerns have been raised that OPM is
choosing to compete unfairly with the private sector and
closing off an area that would thrive if full competition were
the result. Instead, the USDA Graduate School became eligible
to receive annually more than $72 million of noncompetitive
work funded by taxpayers, despite the fact that these training
activities are commercial services readily available from
private competitors.
c. Hearings.--A hearing entitled ``OPM Privatization
Initiatives Training'' was held on July 26, 1995.
11. Review of Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS).
a. Summary.--Beneficiaries of the military health care
system are eligible to receive medical care at military
facilities. However, depending upon the level of demand and
ready access to facilities, this care is not always assured. In
1995, 6.6 million non-active duty people are eligible for care
through the military health care system. The deficiencies of
the overall military health system, of which the Civilian
Health and Medical Program of the Uniformed Services (CHAMPUS)
is a part, are identified by a July 1995 Congressional Budget
Office (CBO) study. In that study, CBO reported that a major
complaint among beneficiaries is that their access to health
care at military medical facilities is poor, and that CHAMPUS
is not a satisfactory alternative because of its high out-of-
pocket costs.
CHAMPUS costs grew dramatically after the program's
inception in 1966. Costs almost tripled from $1.2 billion in
fiscal year 1984 to $3.18 billion in fiscal year 1990. Many of
these costs were unanticipated and required supplemental
appropriations or transfer authority. In 1983, in an attempt to
put an end to the increasing costs of its health care system,
and uneven access to health care services, the Department of
Defense (DOD) began a managed care program, called TRICARE.
TRICARE offers beneficiaries an alternative to the current
CHAMPUS program. Beneficiaries are assigned a primary care
physician to manage their care. In administering TRICARE, DOD
has reorganized the military delivery system into 12 regions.
TRICARE is scheduled to be implemented nationwide by May 1997.
Four regional contracts have been awarded, all to the same
civilian health care company, and all bid awards have been
protested. However, while TRICARE is still in the early stages,
some have suggested that it is unlikely to result in giving
eligible military beneficiaries access to stable, high quality
health care benefits, nor will it improve the efficiency of the
military health care system.
The Federal Employees Health Benefit Plan (FEHBP) provides
voluntary health insurance coverage for over 9 million Federal
Government employees, annuitants, and their dependents, and has
long been considered the foremost health care plan in the
country. The Federal Government and enrollees jointly pay for
the cost, or premiums, of the FEHBP plans, according to a
statutory formula. The Government's portion of each enrollee's
premium is a fixed dollar amount equal to 60 percent of the
average of the high option premiums for what are commonly known
as the Big Six plans. The average premium contribution for both
nonpostal and USPS employees and all annuitants was 72 percent
in 1994, with the employees paying the remaining 28 percent.
Federal employees and annuitants enroll voluntarily in
FEHBP and may terminate their enrollment at any time. Employees
are allowed to enroll in FEHBP or change from one plan to
another during designated ``open season'' periods. In 1995,
over 9 million individuals were covered: 2.3 million active
employees, 1.8 million annuitants, and over 5 million
dependents. Approximately 5 percent of enrollees change plans
each year.
b. Benefits.--The government could benefit from an overall
reduction in the cost of medical services provided to military
families and access to services could be greatly improved by
moving to an FEHB type of program. However, the cost of
transition to such an alternative delivery system could be high
and disruptive of readiness requirements. Further study of this
issue is required.
c. Hearings.--A hearing entitled ``FEHB/CHAMPUS: Improving
Access to Health Benefits for Military Families'' was held on
September 12, 1995.
12. Review of Current Civil Service Reform Initiatives.
a. Summary.--The Civil Service Reform Act of 1978
reorganized the Civil Service Commission by creating the Office
of Personnel Management to perform policy, oversight, and
service functions; adding the Merit Systems Protection Board to
adjudicate personnel disputes; and formed an Office of Special
Counsel to investigate personnel management issues. In
addition, the 1978 law enacted measures intended to make
government more performance-oriented and to achieve greater
accountability.
Vice President Gore's National Performance Review (NPR) of
1993 promised a Civil Service Reform program package that would
be developed in conjunction with the President's Management
Council. However, initiatives of NPR could rescind many of the
Civil Service Reform Act's provisions. The administration's
package considered a comprehensive range of changes, from
hiring procedures through each phase of recruitment, retention,
management, labor-management relations, dispute resolution
procedures, termination, and Office of Personnel Management
operations.
Although this National Performance Review product was
initially presented as a comprehensive package for civil
service reform. The modifications included in the NPR package
were never formally submitted as legislation, and generated
limited support among five panels of witnesses. The committee
continues to analyze such civil service reform proposals.
b. Benefits.--Former OPM officials encouraged the
subcommittee to approach civil service reform issues
deliberatively, because the long-term effects of apparently
sound proposals only surface after extensive experience. The
normal constituencies share interests, especially increasing
pay and benefits, in ways that do not easily surface in complex
reviews of classification systems, performance evaluation
systems, appeals procedures, and other details.
c. Hearings.--A hearing entitled ``Civil Service Reform I:
NPR and the Case for Reform'' was held on October 12, 1995.
13. Continuation of Civil Service Reform Review: Performance and
Accountability.
a. Summary.--Federal agencies experience difficulties
linking the activities of their employees to results intended
when laws are enacted and policies implemented. The Civil
Service Reform Act of 1978 included provisions to improve
Federal personnel management, among them the creation of the
Senior Executive Service, the GM-13-15 management grades, and
greater incentives to better improved performance of agency
managers. Oversight agencies reported that these incentives
faced sustained resistance among the managers, who contended
that the system limited the number of bonuses available and
exacerbated the morale problems associated with performance
ratings.
Abundant evidence points to the failure of performance
management systems in Federal agencies. Most agencies use a
five-step scale where managers are asked to rate subordinates
as ``outstanding,'' ``exceeds fully successful,'' ``fully
successful,'' ``minimally successful,'' and ``unsuccessful.''
The Office of Personnel Management's report of fiscal year 1993
ratings shows that 99.6 percent of Federal employees who
received a rating were evaluated at least ``fully successful,''
and more than 73 percent were rated ``exceeds fully
successful'' or ``outstanding.'' OPM recently issued
regulations enabling agencies to replace these multi-step
evaluations with ``pass-fail'' rating systems.
Human resource professionals contend that performance
management systems which focus on results or ratings
concentrate attention on an end process and divert attention
from earlier stages in the employee management process. Private
sector consulting firms and corporations have testified before
the subcommittee asserting a more comprehensive approach to
personnel management can reduce the need for unsatisfactory
ratings and/or firings to strengthen performance. The Hay
Group, for example, encourages its clients to evaluate
potential employees not only in terms of ``knowledge, skills,
and abilities'' (factors identified on all Federal vacancy
announcements), but also ``values, attitudes, and motives,''
factors that are seldom (if ever) incorporated in Federal
hiring decisions.
The 103d Congress repealed the Performance Management and
Recognition System. With improved performance measures required
by both the Chief Financial Officers Act of 1990 and the
Government Performance and Results Act of 1993, Congress
reaffirmed its commitment to pursue improved performance by
attempting to shift attention to results rather than
procedures.
b. Benefits.--The Merit Systems Protection Board surveyed
Federal managers and learned that although 78 percent reported
managing a ``poor performer,'' only 23 percent of them
initiated demotion or removal actions to address the problems.
The hearing demonstrated that the challenges facing the Federal
managers are identical to those in the private sector. The
evaluation and management of poor performers must be linked to
recruitment, hiring, promotion, and development activities if
it is to be effective. This hearing provided additional
material for deliberation related to civil service reform
proposals.
c. Hearings.--A hearing entitled ``Civil Service Reform II:
NPR & the Case for Reform--Continuation'' was held on October
26, 1995.
14. Review of Federal Employee Appeals Procedures.
a. Summary.--Federal employees have at their disposal many
avenues through which they can appeal a variety of personnel
actions. The U.S. Merit Systems Protection Board (MSPB), the
independent quasi-judicial agency in the executive branch which
has a statutory mandate to adjudicate appeals of personnel
actions for the government and its employees, decided
approximately 8,500 cases in fiscal year 1994. Other agencies
involved in the Federal employment complaints process, include:
the Federal Labor Relations Authority (FLRA), the Office of
Special Counsel (OSC), and the Equal Employment Opportunity
Commission (EEOC). In addition, there are multiple levels of
reviews of actions within employing agencies, internal agency
grievance procedures, and negotiated grievance procedures in
collective bargaining agreements, as well as special agency
procedures for resolving discrimination claims.
The complicated, lengthy means of appeals available to
Federal employees led witnesses to testify that the maze of
multi-layer, multi-agency appeals processes deters managers
from disciplining poor performers or initiating action in
conduct cases. Due to the extraordinary amount of time and
unknown expense involved in a lengthy appeal, both GAO and the
National Academy of Public Administration have expressed the
need for consolidating the appeals process and adjudicatory
agencies. A recent Issue Paper published by the MSPB emphasized
that ``[t]he wide choice of review paths available to employees
serves to exacerbate'' the hesitancy of Federal managers to
take appropriate action against poor performers. That Issue
Paper concluded that the ``current multi-level, multi-agency
process should be reexamined,'' observing that the Federal
Government needs ``a system that ensures fairness, not one that
deters appropriate actions from being taken.''
b. Benefits.--The committee heard extensive testimony that
creating a simpler, more straightforward, less duplicative
mechanism for resolving disputes in the Federal workplace could
improve performance management in the executive branch. Some
components of the current system, most notably the
unnecessarily complex ``mixed case'' procedure, are simply
inefficient and needlessly burden American taxpayers with
unnecessary costs. Testimony before the subcommittee clearly
demonstrated that there are several attractive alternatives for
simplifying and consolidating the appeals process. Witnesses
also recommended greater use of alternative dispute resolution
methods, which will be the subject of a future subcommittee
hearing.
c. Hearings.--A hearing entitled ``Civil Service Reform IV:
Streamlining Appeals Procedures'' was held on November 29,
1995.
15. Shutdowns of Federal Agencies Due to Lapses in Appropriations.
a. Summary.--President Clinton vetoed a continuing
appropriations resolution on November 13, 1996, resulting in
the 10th shutdown of government due to a lapse in
appropriations since 1981. The first shutdown lasted from
November 14 to November 21, 1995. Subsequent vetoes resulted in
another shutdown of agencies covered by six appropriations
bills that had not been enacted, with the second shutdown
extending from December 16, 1995, to January 6, 1996.
The Office of Management and Budget documented that the
administration had been coordinating planning for a potential
shutdown beginning in August. Although all agencies were
required to submit shutdown plans to OMB, committee staff found
that the plans revealed little consistency in planning and an
absence of standards in assessing agency plans. Although the
initial reason for the shutdown was a lapse of appropriations
and fear of violating the Antideficiency Act, the President
proposed to modify shutdown guidelines after only a few days,
arguing that the shutdown had fostered conditions that would
meet the legal exception for ``emergency'' recall of selected
Federal employees. After hearing testimony from nine senior
agency officials, several committee members expressed concern
that many of the employees whose work could qualify as
``emergency'' in only a few days, probably should not have been
furloughed in the first place. The subcommittee also received
testimony from 14 members who were proposing a variety of
legislation to address disruptions caused by the shutdowns.
b. Benefits.--The subcommittee's first hearing on the
shutdown enabled members to identify functions that should not
have been interrupted during the first shutdown. Those views
were communicated to the President, and the designated
functions remained open during the second shutdown, even though
some of them still lacked appropriations.
c. Hearings.--Hearings entitled ``Government Shutdown:
What's Essential?'' and ``Government Shutdown II'' were held on
December 6, 1995, and December 14, 1995.
16. Employee Benefits in the Context of Total Compensation.
a. Summary.--Economic constraint is the primary factor that
guides the level and design of compensation and benefit
packages throughout the private sector. Some employment-based
benefits, such as pensions, life insurance, and health
insurance are provided voluntarily by employers. Employers and
employees often jointly make payments to fund these voluntary
employee benefit programs. Other benefits, including Social
Security, Medicare, workers' compensation and unemployment
insurance, are mandated by government. These mandatory programs
are jointly funded by employers and employees, and provide
retirement income and health care coverage for elderly and
disabled workers and their dependents. Whether mandatory or
voluntary, each of these programs is employment based and
financed primarily through employer and employee payroll
deductions. The government also promotes the granting of
additional benefits through favorable treatment under the tax
code.
Compensation packages can be tailored to achieve the
workforce goals of the employer while simultaneously
accommodating the needs and preferences of workers. The
integration of benefit policy, with both short and long range
personnel planning, is essential in the private sector.
Flexible benefits plans are growing in popularity in response
to the changing demographics of the American population, and
the dual income family. Within such arrangements, employees are
permitted choices among benefits and/or benefit levels.
Employees thus may exchange benefits that they consider less
valuable for others better suited to their needs. The level of
benefit provided can vary greatly, and tends to be directly
related to the size of the business. According to the Employee
Benefits Research Institute's Data Book on Employee Benefits,
less than half of all small employers provide a retirement
benefit for their workers.
b. Benefits.--The Federal Government could benefit from a
review of its compensation strategies to keep abreast of
changing workforce demographics. As the population ages, as
corporations face increasing competition in the global
marketplace, and as the needs of their employees change, the
private sector is adapting its human resource management
strategies. As Congress seeks to better allocate available
resources within realistic budget constraints, it makes sense
to reevaluate our Federal personnel management strategies.
c. Hearings.--A hearing entitled ``Civil Service Reform
III: Private Sector Compensation Practices'' was held on
October 31, 1995.
17. Medical Savings Accounts (MSA's) in the Federal Employees Health
Benefits Plan.
a. Summary.--A number of proposals have been introduced
during the 104th Congress to allow individuals and families to
establish tax-favored Medical Savings Accounts (MSA's) for
uninsured medical expenses. An MSA can be viewed as a savings
account for uninsured medical expenses. MSA's are primarily
designed to encourage workers to be more cost conscious in how
they spend their money on routine health care, and are also
aimed at controlling employer costs. An MSA allows the employer
to put aside a fixed amount of money into an account for each
employee to pay for his or her own health expenses. In lieu of
giving the employee first-dollar or low-deductible coverage,
the employer puts cash into a medical savings account and
insures or covers the employees' health care costs in full
above the amount in the MSA--often referred to as catastrophic
coverage. Whatever funds are not spent on health care can be
withdrawn at the end of the year and used for any other
purpose, or saved for future use.
MSA's make economic sense for the employee because out-of-
pocket spending can be substantially less with an MSA than
under the traditional health plans, and employees can keep any
money left in their account at the end of the year while still
retaining major medical coverage. In effect, MSA's permit
people to manage the spending of their own funds for non-
catastrophic health care.
b. Benefits.--In examining the utilization of MSA's in the
private sector and at the local government level, witnesses
testified that MSA's are an extremely attractive health care
option for all ages, and that they have not experienced the
``adverse selection'' attributed to MSA's testimony also
indicated that MSA's provided greater flexibility and freedom
to choose doctors and services than do current plans. Witnesses
also testified that with an MSA, an employee is less likely to
neglect necessary or preventive care than with a traditional
fee-for-service health care plan. Under conventional insurance,
individuals receive no reimbursement until they have met the
deductible. That places all the out-of-pocket spending on the
first expenditures; expenditures that are most likely to cover
preventive care. MSA's would actually provide a pool of money
that could be used to pay for preventive care.
c. Hearings.--A hearing entitled ``FEHB/MSA: Adding Medical
Savings Accounts--Broadening Employee Options'' was held on
December 13, 1995.
18. Veterans' Preference.
a. Summary.--In general, veterans' preference laws give
certain veterans preference in appointment to civilian
employment with the Federal Government based upon their
military service. The first such law was enacted in 1865. Until
1919, the hiring preference extended only to honorably
discharged disabled veterans. In 1919, the preference was
extended to nondisabled veterans, widows of veterans, and
spouses of injured veterans.
The statutory basis for today's veterans preference is the
Veterans Preference Act of 1944, as subsequently amended. Under
that act, veterans were to be given ``augmented scores'' of 5
or 10 points, (depending upon their status) in examinations for
employment, and retention preference in the event of a
reduction in force. The act also prohibited adverse actions
against veterans without ``cause'' and required certain due
process protection, such as notice and an opportunity to be
heard, as well as appeals.
The purpose of veterans preference has always been, as its
name implies, to give veterans a legal leg up in acquiring and
retaining civilian employment with the Federal Government.
Federal employment statistics, however, draw into question
whether this preference is having its intended effect.
As recently as 1984, veterans representation in the Federal
work force was nearly 38 percent. That number is now down to 28
percent. Veterans have borne a disproportionate brunt of the
government's downsizing. The number of veterans in the work
force declined at nearly seven times the rate of the overall
work force. In part, this reflects the concentration of
veterans in the very defense-related agencies that account for
the vast majority of the recent downsizing. OPM's figures show
that in September 1994, 47 percent of all veterans were
employed in one of the three military departments. It may also
reflect the greater average age of veterans, who have accounted
for over 50 percent of all retirements from Federal civil
service in the last 5 years. These figures also suggest that
veterans are under represented in many Federal agencies and
support the claims that we need to create additional
opportunities for veterans.
b. Benefits.--The subcommittee's investigation disclosed a
number of problems with the current application of veterans'
preference and laid the groundwork for the legislative remedies
proposed in H.R. 3586.
c. Hearings.--A hearing entitled ``Veterans' Preference: A
New Endangered Species?'' was held on April 30, 1996.
The subcommittee held a hearing to examine whether the
employment preferences accorded veterans by law are being
faithfully applied by the Federal Government and ways in which
opportunities can be improved.
The first panel consisted of Hon. Stephen E. Buyer,
chairman of the Subcommittee on Education, Training,
Employment, and Housing of the Committee on Veterans' Affairs,
and Hon. Jon D. Fox. Among other issues, Chairman Buyer
addressed the need to strengthen veterans' preference
protections during reductions in force and to provide veterans
with an effective redress system. In particular, he pointed to
the escalating use of single-position competitive levels in
RIFs as a threat to veterans' preference. He noted that it
allowed managers to ``effectively dictate who will retain
employment,'' and pointed to recent RIFs at the U.S. Geological
Survey, GAO, and the Army's Audit Agency as examples. Chairman
Buyer also stated that, ``There is simply no effective means by
which a veteran may air a preference grievance, especially if
the veteran is not hired.'' Establishing a redress system that
provides a reasonable remedy for veterans is, he testified, a
``primary concern.''
Congressman Fox testified in support of H.R. 2510, his bill
to extend veterans' preference to those who served in
connection with Operations Desert Shield and Desert Storm. In
his testimony, Congressman Fox pointed out that many reservists
and National Guard members were ordered to active duty during
the Persian Gulf War. Some were deployed to the theater of
operations. Others were ordered to serve outside the theater.
Those who served in the theater now qualify for veterans'
preference. But those who served elsewhere do not, even though
their contributions were also essential to the ultimate success
of our military operations in the Persian Gulf.
On the second panel were James Daub, John Davis, and John
Fales. Mr. Daub, a reservist who was called to active duty to
support Operations Desert Shield and Desert Storm. He pointed
out that his unit was split into two groups, one of which was
sent to the Desert and his group was sent to Rhein Mein Air
Force Base in Germany. The group in Germany performed aircraft
maintenance that could not be performed in the theater. This
was a task that was critical to the success of our combat
operations and a task they performed proudly and to the utmost
of their abilities. Those who served in Southwest Asia are now
entitled to veterans preference, whereas those such as Mr. Daub
who were uprooted from their families and their Federal jobs
enjoy no more job protections than ``the non-veteran who was
home with his family watching the war on CNN.'' This is a
matter of great concern to these veterans in this era of
government downsizing, particularly those employed at the
Department of Defense.
Mr. Davis, a Vietnam veteran who was awarded the
Distinguished Flying Cross, the Bronze Star, and multiple
awards of the Air Medal, described his experience during a RIF
at the Army Corps of Engineers. He testified that in March
1993, the Corps headquarters announced that it would conduct a
50-person RIF. Mr. Davis was placed in a single-position
competitive level. Consequently, Mr. Davis was the only
employee covered by the RIF who was actually downgraded. (None
were separated as a result of the RIF.) Moreover, Mr. Davis was
not permitted assignment rights to positions for which he
appeared capable of performing, including one job almost
identical to the position he held before the RIF. In contrast,
however, Mr. Davis testified that prior to the RIF, management
went to great lengths to place other individuals whose jobs
were to be abolished into positions at their current grade
levels. In some cases, the agency actually created positions
for these other employees that did not exist prior to the RIF.
Nevertheless, both the Merit Systems Protection Board and the
United States Court of Appeals for the Federal Circuit upheld
the agency's action.
Mr. Fales is a decorated blinded Vietnam veteran who is a
full-time Federal employee and president of the Blinded
American Veterans Foundation. In his testimony, Mr. Fales
emphasized the importance of recognizing the important service
of the hundreds of thousands of American troops supporting
America's military missions around the world. He pointed out
that in the past 5 years the military has released 800,000 men
and women from the armed forces, many of whom were not eligible
for veterans' preference, which made their transition and
pursuit of a Federal job much more difficult. Mr. Fales also
testified that there are many in the Federal bureaucracy who
actively seek to circumvent veterans' preference, and
emphasized the need for improved remedies to deter future
violations.
The subcommittee also heard testimony from Ronald W. Drach,
the national employment director for the Disabled Veterans of
America, and Emil Naschinski, assistant director, National
Economics Commission, of the American Legion. Both testified
that the lack of an effective redress system is the key defect
in current veterans' preference law. Mr. Drach stated that
``there has never been a meaningful appeal/ redress system
available to an individual or a veterans service organization .
. . if either thought veterans' preferences were being
violated,'' and he contended that the Office of Personnel
Management's ``less than aggressive enforcement of veterans'
preference'' persuaded agencies they were free to ignore
veterans' preference. Mr. Naschinski emphasized that, ``If
Congress is serious about improving veterans' preference, it
must provide a clear, independent and user friendly redress
mechanism that can be utilized by veterans who believe their
veterans' preference rights have been violated.'' Both
witnesses also testified to the importance of strengthening
protections for veterans during RIFs and warned of the
potential erosion of veterans' preference through the
proliferation of alternative personnel systems.
19. Soft Landings To Enhance Federal Downsizing?
a. Summary.--Under the Federal Workforce Restructuring Act
of 1994 and the Clinton administration's efforts to
``reinvent'' government, Federal agencies initiated efforts to
reduce the Federal workforce by 272,900 positions by 1999. The
Federal Workforce Restructuring Act authorized agencies to pay
``voluntary separation incentive payments,'' (buyouts) as a
means of increasing attrition through voluntary separations
rather than reductions-in-force. This buyout authority expired
for nondefense agencies on March 31, 1995. The subcommittee
conducted hearings on the buyout program on May 17, 1995, after
which subcommittee Chairman Mica communicated four criteria for
any future buyouts to Government Reform and Oversight Committee
Chairman William F. Clinger, Jr. These criteria reflected a
consensus of the General Accounting Office, the Congressional
Budget Office, and two private consulting firms with extensive
experience analyzing and managing corporate downsizing. They
included a requirement that any future buyouts be implemented
consistent with a strategic plan that describes the agency's
operation after downsizing, that buyouts be done early in the
fiscal year, that they be accomplished swiftly, and that they
be a one-time event wherever they are used.
Several agencies appear to have used previous buyout
authority in ways that are inconsistent with workforce
reduction objectives. The Environmental Protection Agency
bought out 485 employees while reducing 97 positions. The
Department of Education bought out 484 employees while reducing
only 146 positions. The Department of Justice reported 835
buyouts while increasing staff by 7,536 employees. Several
other agencies approached the subcommittee about renewed buyout
authority, but few of them had done the planning necessary to
prepare for their effective use. In light of the likelihood of
additional workforce reduction, and in the absence of effective
planning on the part of agencies, this hearing opened a series
that would assess the future of the Federal workforce and
review legislation proposed to ease the impact of reductions on
Federal employees who would be affected by them.
b. Benefits.--This investigation enabled the subcommittee
to review proposed legislation to ease the process of workforce
reductions for Federal agencies. It identified several measures
that were subsequently incorporated into H.R. 3841, the Omnibus
Civil Service Reform Act of 1996.
c. Hearings.--The subcommittee conducted a hearing on
proposed legislation, ``Downsizing/Soft-Landings, and Related
Legislation,'' on May 8, 1996.
Mr. Burton reaffirmed his commitment to reducing the size
of government while recognizing Congress' obligation to ease
the transition of current employees to positions in the private
sector. He noted the difficulties imposed on such transitions
by the lack of portability in current pension systems.
Mr. Moran lamented the lack of planning with which both
Federal agencies and Federal employees approached recent
workforce reductions. Although buyouts were available,
employees often took them without adequate preparation for
retirement or a different occupation, and agencies often
awarded them without adequate planning for future operations.
Mr. Wolf emphasized the he and his cosponsors of H.R. 2751
had placed a priority on the avoidance of RIFs as Federal
agencies reduce their workforces to implement either policy
changes or budget reductions. He claimed that RIFs are
disruptive, and asserted that Congress has a responsibility to
make sure that reductions are achieved with as little
disruption as possible. He sponsored the Federal Employee
Separation Incentive and Reemployment Act to assist agencies in
reducing workforces through attrition rather than RIFs. He
observed that, regardless of congressional action, the
legislation would have to be complemented with activities such
as job fairs to assist Federal employees facing workforce
reductions in finding new positions. He agreed with Mr. Mica
that buyouts should be used only to avoid RIFs and save the
government money, and observed that Federal agencies should be
on notice that the Congress will follow their use of buyout
authority closely.
Mrs. Morella endorsed Mr. Wolf's bill and testified in
support of complementary companion legislation that she
introduced. H.R. 2826, the Early Retirement Incentive Act,
would phase out the 2 percent per year reduction in annuities
that Federal employees face if they retire before the age of
55. Under her bill, this reduction would be adjusted annually
so that full pensions would be restored incrementally at age
55. She also recommended H.R. 2825, the Strategic Reemployment
Training Act, for the subcommittee's consideration. This
measure would foster partnerships with the private sector to
facilitate placement of Federal employees who could no longer
expect opportunities in other Federal agencies. The bill would
allow Federal agencies to retrain their employees in ways that
develop skills for private sector employment, a practice that
is beyond the authority of Title 5.
Mr. Hoyer claimed that Federal employees no longer face the
long-term employment security experienced in previous years. He
observed that the administration has beefed up priority
placement programs, but was uncertain whether these programs
would be adequate to serve the employees affected by
reductions. He supported Mr. Wolf's initiatives in training and
job fairs, and endorsed both of Mrs. Morella's bills. Although
he acknowledged the cost of buyouts, he commented that ``a
$25,000 payment up front may well be the cheapest incentive
that the government can adopt.'' He conceded that he had not
analyzed the fiscal note on any of the bills that he endorsed
in this testimony. In response to questions, he commented that
planning would be important to effective use of buyouts, but
noted that abolished agencies such as the Bureau of Mines and
the Interstate Commerce Commission were terminated through
relatively quick appropriations actions. All Members supported
provisions that would enable separated employees to extend
their life and health insurance coverage.
All Members also recognized that the workforce reduction
targets are often arbitrary, and that the 5,500 nondefense
workforce reductions proposed in the President's FY-1997 budget
should be achievable through normal attrition. Mr. Moran
observed that the workforce reductions to date have been done
exactly the reverse of the way that they should have been done,
by creating an arbitrary dollar reduction number and backing it
into personnel conclusions. Mr. Moran also expressed his
interest in developing a method of easing the transition to
retirement.
Mr. Shaw testified that the Senior Executives Association
had ardently supported H.R. 2751. He noted that current
reductions in the Federal workforce are targeted at middle and
upper layers of agencies, and these are difficult cuts to
achieve. He noted that public employees often face post-
employment restrictions that impede their ability to use their
professional skills in the private sector. He argued that the
most effective means of placing Federal employees during agency
reductions is to place the employees in other agencies. He
reported that, rather than accept separated Bureau of Mines
employees, other components of the Department of the Interior
canceled vacancy announcements. Such actions would vitiate
priority placement programs.
Ms. Chandler reported that the National Federation of
Federal Employees believes that voluntary separation incentives
are important to assist Federal agencies in downsizing.
Attrition rates are lower than any recent years, and she
believes that RIFs would be necessary without the buyouts.
Mr. Gable agreed with the criteria for new buyout authority
outlined by the chairman at the start of the hearing. He
contended that the phased reduction of the buyout amount
authorized by Mr. Wolf's bill might accelerate voluntary
separations, and ease requirements for subsequent reductions.
The Federal Managers Association recommends that buyout
authority in nondefense agencies be extended to the 1999
deadline for the Department of Defense. The testimony supported
every benefit increase proposed in legislation under
consideration by the subcommittee.
20. Workforce Reductions: RIFs v. Buyouts: A Cost-Benefit Comparison.
a. Summary.--The subcommittee continued to monitor the
administration's implementation of the buyout program
authorized by the Federal Workforce Restructuring Act of 1994
and to assess the need for renewal of buyout authority, in
light of recommendations from Members who had sponsored H.R.
2751. Although the administration was well on its way to
meeting the 272,900 FTE workforce reduction required by the
act, most reductions to date had come from downsizing at the
Department of Defense rather than from efforts to ``Reinvent
Government.'' The administration's FY-1997 budget recommended
further Department of Defense downsizing--cutting 54,300 DOD
positions--and eliminating a total of only 5,500 positions from
nondefense agencies. This reduction in nondefense agencies is
well within the scope of normal attrition, so these positions
could be eliminated simply by exercising buyouts that were
deferred from 1995. The President's budget showed that while
downsizing discussions continued, the Departments of Justice,
Labor, Health and Human Services, and Treasury planned staff
increases during fiscal year 1997. Buyouts had cost the
government $2.8 billion, and half of these expenditures went to
employees eligible for full retirement benefits. GAO reported
that better management of normal attrition could have enabled
more cost-effective method of achieving workforce reductions.
In addition to extensive use of buyouts, several agencies had
used their authority to conduct ``reductions-in-force,'' (RIFs)
in ways that caused concern about fair and equitable treatment
of employees. As a result of provisions of the Legislative
Branch Appropriations Act of 1995, GAO had secured authority to
revise their RIF regulations, but the revisions that were
promulgated provided no substantial changes from RIF rules
governing other Federal agencies.
b. Benefits.--This investigation revealed that the
administration had allowed some agencies to use buyouts beyond
the authority granted under the Federal Workforce Restructuring
Act of 1994. It also demonstrated that, where an agency was
granted extensive authority to revise RIF rules, those
revisions were relatively minor, and did not jeopardize any of
the protections that are often deemed burdensome in
administering RIFs. The extensive use of single-person
competitive levels used by the U.S. Geological Survey in
conducting its RIF influenced the subcommittee's decision to
include additional protection for veterans in the Veterans
Employment Opportunities Act of 1996.
c. Hearings.--The subcommittee conducted a hearing,
``Reinventing Downsizing or Downsizing the Reinvention,'' on
May 23, 1996.
Mrs. Morella recognized that previous buyouts did not
necessarily achieve their intended results, and added that we
must ``avoid another situation whereby agencies pay the same
employees both separation incentives and retention,
recruitment, or relocation bonuses.''
Mr. Bowling reported that, as of September 30, 1995,
Federal agencies had paid buyouts to more than 112,000
employees, enabling the agencies to exceed the workforce
reduction targets required by law. Buyouts accounted for 48
percent of those reductions, with RIFs accounting for an
additional 6 percent. The balance was achieved through normal
attrition--retirements, resignations, and other terminations.
He observed, however, that these reductions have not
consistently targeted the management positions identified in
the National Performance Review. Instead, these positions have
actually increased as a portion of the Federal workforce in
some agencies, and the portion of supervisory personnel
diminished only slightly, even though the administration had
relied on questionable techniques, such as renaming supervisors
as ``team leaders'' without actually altering responsibilities,
to achieve these numbers. Although he saw no need for
governmentwide buyout authority, he admitted that some agencies
might have to reduce their workforces disproportionately and,
in such cases, targeted authority might be appropriate.
Mr. Koskinen contended that management of attrition through
hiring freezes or similar measures might not provide agency
managers the flexibility that they need to redesign their
agencies during further workforce reductions. The
administration submitted a proposed Federal Employment
Reduction Assistance Act of 1996 that would authorize
downsizing agencies to extend buyouts to employees at
decreasing payment rates over a 4-year period. He expressed
concern that, if distinct buyout legislation is approved for
different agencies, differences between programs would result,
and that some of these could be considered inequitable. He
endorsed other ``soft landing'' measures, such as extending
health and life insurance benefits for separated employees, but
reported that the administration opposed measures, such as the
so-called ``2 percent solution,'' that would exacerbate the
financial problems of Federal retirement funds.
Mr. King testified that buyouts had played an important
role in enabling Federal agencies to reduce positions with
minimal use of RIFs. He claimed that RIFs are much more
disruptive of the morale and productivity of the workforce than
voluntary reductions. He observed that future reduction
requirements might result from budget reductions, and that
renewed buyout authority could facilitate meeting future
requirements. Mr. King denied that OPM had promoted radical
changes in RIF policy during recent actions, and claimed that
the portion of veterans among new hires had increased during
the past 3 years.
Mr. Koskinen conceded that the President's budget
submission contains actual workforce levels from previous
years, but only projections for future years, and added that
the projections contained in the FY-1997 submission are at
least 30,000 persons higher than actual employment levels will
turn out to be. Mr. Bowling admitted that Federal personnel
data are unreliable at times, in part because of difficulties
in OPM's Central Personnel Data File. Mr. Bowling agreed that
normal attrition should be sufficient to manage planned
downsizing, but added that unanticipated budget reductions
might justify some targeted buyouts at affected agencies.
Mr. Mica questioned Mr. Koskinen about a Department of
Energy legal opinion that was used to rationalize ``renewed''
buyout offers after the March 31, 1995, deadline enacted in the
Federal Workforce Restructuring Act. Mr. Koskinen observed that
the OMB General Counsel had reviewed the Department of Energy
opinion, but had not issued its own opinion on the topic
because OMB concluded that the DoE opinion was appropriate. Mr.
Koskinen claimed that this authority was limited, and only
agencies that had previously offered deferred buyouts could
``recycle'' those buyouts if they were not used. Mr. Moran
emphasized that the Congress had never intended to give
employees a second chance at buyouts, and chastised OMB because
no effort had been made to contact the Congress before allowing
the Department of Energy to ``reoffer unused buyouts.'' Mr.
Moran observed that when information about such actions first
surfaces in unofficial channels, it establishes expectations
among Federal employees, with adverse consequences for normal
attrition rates. He requested GAO to provide a legal opinion
assessing the Department of Energy's views on the authority to
extend buyouts after the March 31, 1995, statutory deadline.
Mr. Koskinen argued that conditions had changed since his
testimony a year ago that buyouts would not be necessary. The
Workforce Restructuring Act reductions are being attained, but
some agencies are facing constraints on their spending, and
that is a different factor than previous conditions. He noted,
for examples, that OPM, GSA, and NASA had absorbed reductions
proportionately greater than the Department of Defense's 12
percent downsizing. Mr. Koskinen claimed that neither OMB nor
the subcommittee would want to go through a period of guerilla
warfare deciding on buyouts on an agency-by-agency basis
through the appropriations process.
Mr. King conceded that RIFs can be cheaper than buyouts
where units are eliminated, but claimed that the buyout offers
a ``more humane'' method of reducing the workforce. He claimed
that, with ``bump and retreat'' rights, an average RIF affects
2.5 other employees.
Mr. Luke reported that GAO experienced a 25 percent budget
reduction, with 15 percent in FY-1996 and 10 percent in FY-
1997. To reduce these expenditures while continuing to meet its
responsibilities, the agency had to reduce personnel beyond
rates that could be achieved through attrition. GAO offered
buyouts that were accepted by 393 employees, and closed
regional offices, which eliminated another 170 positions. A
hiring freeze first imposed in 1992 remains in effect. GAO
secured legislative authority to issue RIF regulations that
differed from executive branch agencies, but included no major
revisions in them. They did allow employees to volunteer for
RIF, but retained the tenure, veterans' preference,
performance, and length of service factors in conducting RIFs.
Veterans' employment at GAO reduced slightly, a change that Mr.
Luke attributed to more veterans taking advantage of buyouts.
Mr. Leahy recounted the extensive deliberations planning
for the RIF at the U.S. Geological Survey's Geologic Division.
He attributed the necessity of a RIF to a decade-long trend
during which payroll required an increasing portion of agency
appropriations. This high portion of the annual budget
allocated to salaries was increasingly constraining the
agency's ability to conduct quality scientific research. He
claimed that the planning was based on programmatic needs, and
submitted copies of extensive materials distributed to keep
agency personnel informed of this planning. The Survey began
briefing employees about RIF planning at its three regional
centers in March 1995. He testified that the Survey's old RIF
plans did not conform to either current OPM guidelines or the
Merit System Protection Board's standards, so revision of RIF
procedures was a necessary element of this RIF planning. Along
with this RIF, the Geologic Division engaged in a major
reorganization to adapt its mission to current statutory
authorities and to achieve savings by reducing managerial
layers. Mr. Leahy testified that the 250 people managerial
staff was cut nearly in half in the new organization. He
reported that only 9 veterans were separated of the 292
veterans on the Division's 2,192-member staff.
Under questioning, neither Mr. Luke nor Mr. Leahy thought
that their agencies needed additional buyout authority at this
time. They also did not have any recommendations for statutory
changes related to workforce downsizing. Under questioning from
Mrs. Morella, Mr. Leahy reported that the RIF had generated 123
appeals to the Merit Systems Protection Board, and that the
Office of Special Counsel was reviewing the actions. Mr. Leahy
noted that Representatives Davis and Wolf had sponsored a job
fair for affected employees in northern Virginia. USGS also
placed 110 of its employees in other divisions or within the
Department of the Interior.
21. Illegal Use of Buyouts.
a. Summary.--As a result of evidence presented at its May
23, 1996 hearing, the Subcommittee on Civil Service requested
the General Accounting Office to review a Department of Energy
legal opinion that the administration had used to support the
extension of buyout authority to several other agencies after
the Federal Workforce Restructuring Act of 1994's deadline had
expired. Although the Federal Workforce Restructuring Act
provided authority to offer employees buyouts to ease the
transition from the public sector, the administration had
continued to offer buyouts after the March 31, 1995, deadline
set by law. Documents submitted by OMB demonstrated that OMB
Deputy Director for Management John A. Koskinen had approved
the Department of Energy's plan to ``reoffer unused buyouts''
on October 4, 1995, even though the administration made no
effort to inform the Congress of the decision until after it
was publicized in a May 2, 1996, newspaper column. The
Department of Commerce had offered a new--1 day--round of
buyouts to some of its employees on the very day that the
subcommittee had conducted its previous hearing.
b. Benefits.--As a result of this oversight, the Office of
Management and Budget directed Federal agencies to discontinue
any further offers of buyouts to nondefense employees. These
hearings also resulted in the development of legislative
language to prevent repetition of the abuses revealed during
these hearings. Buyout authority granted under the Omnibus
Continuing Appropriations Act of 1996 prohibits employees from
receiving buyouts if they have received a relocation bonus
within the past 2 years, or if they received a retention bonus
within the last year. The new buyout authority omitted any
provision that might have allowed for deferred separation of
employees who accept voluntary separation incentive payments.
c. Hearings.--The subcommittee conducted a hearing,
``Reinventing Downsizing or Downsizing the Reinvention,'' on
June 11, 1996.
Mr. Mica commented, ``[The GAO opinion] means . . . that at
midnight on March 31, 1995, the Federal buyout window closed
for nondefense agencies. . . . That GAO opinion means that
neither OMB nor anyone else in the executive branch has the
authority to create an additional application window.'' The
subcommittee chairman concluded, ``I will entertain no further
discussion of new laws until the Clinton administration
demonstrates its compliance with the old law.''
Mr. Moran observed that the issue is important because it
sets a precedent in terms of the Federal workforce's
expectations and the question of who writes the laws. He
rejected the idea that this was an issue of conflicting legal
opinion, because the language in the Workforce Restructuring
Act is not even remotely ambiguous.
Mr. Wray reported that the General Accounting Office had
issued a legal opinion to the subcommittee on June 6, 1996,
which concluded that the Department of Energy policy is
inconsistent with the Federal Workforce Restructuring Act of
1994. GAO concluded that the clear language of the act and the
fundamental logic and context of the statute lead to the
conclusion that agencies could lawfully approve buyouts only
until March 31, 1995. The Secretary of Energy's decision to
extend buyout offers after that date was inconsistent with the
statute.
Mr. Koskinen admitted that, in spite of the
administration's claims about reinvention, ``No one has tracked
FTE declines for each of these [eliminated] activities, and
there is no efficient way to obtain that information at this
time.'' He reiterated that reductions in spending, rather than
any reinvention effort, is the driving factor behind any
further workforce reductions. In spite of the GAO opinion, he
denied that any member of the administration was operating
deliberately in contravention of the law.
Mrs. Morella concurred with the General Accounting Office's
legal opinion that the law restricted buyouts to end on March
31, 1995, and observed that this experience erects barriers to
enacting soft-landing measures for other employees.
Mr. Wray noted that the only practical corrective for the
Congress would be to pass additional legislation. Mr. Mica
explored options such as holding disbursing officers
accountable for funds expended in violation of the law, but Mr.
Wray did not view this remedy as effective. Mr. Moran argued
that the consequence of the deficient legal opinion was to
continue bad management practices, and Federal employees were
subject to recurring rumors about new buyout opportunities. The
fluctuations jeopardized the chance to bring stability to the
workforce.
Mr. Koskinen reported that OMB was in communication with
agencies that have offered renewed buyouts, and had requested
them to review their actions in light of the GAO opinion. Mr.
Mica and Mr. Moran emphasized that the subcommittee had
bipartisan agreement with the GAO opinion, a factor that OMB
should consider in requesting further review by the agencies.
Mr. King observed that OPM's recommendations had
consistently supported the GAO opinion.
22. Civil Service Reform Proposals.
a. Summary.--This oversight provided an opportunity to
review issues related to preparation of the Omnibus Civil
Service Reform Act of 1996 (H.R. 3841). This legislation drew
from topics covered in hearings conducted by the subcommittee
during October and November 1995 and legislation proposing soft
landings for Federal employees which were the focus of a May 8,
1996, hearing by the subcommittee. The legislation incorporated
provisions that reflected concerns widely shared among Members
and addressed pressing needs of a public service oriented
toward workforce reductions rather than expansion of agencies'
responsibilities and workforces.
b. Benefits.--This hearing provided an opportunity for
extensive discussion of issues related to H.R. 3841, and
assisted in the modification of provisions necessary to secure
House passage.
c. Hearings.--The subcommittee conducted a hearing on the
Omnibus Civil Service Reform Act of 1996 on July 16, 1996.
Mr. Mica observed, ``Just as the private sector has
adjusted to accommodate people changing career patterns, the
Federal workplace must adapt to accommodate new technologies,
changing agency missions, and eliminate old functions and
assume new roles that are so necessary in our dynamic and fluid
Federal workplace.'' Mr. Mica added, ``Throughout the past
year, I have been struck by the challenges that Federal
agencies face relating to managing poor performers. . . . We
have heard from many witnesses that the current Federal service
provides very limited incentives to our best employees while
erecting enormous hurdles when it comes to improving or
removing problem employees.'' The draft legislation included
provisions to strengthen performance management, to streamline
the Federal appeals processes, to expand benefits available
through the Federal Retirement Board's Thrift Savings Plan, to
provide soft-landings for Federal employees facing workforce
reductions and to provide agencies flexibility in reorganizing,
and several miscellaneous provisions to address technical and
administrative problems in administering the Federal civil
service.
Mr. Bowling reaffirmed testimony presented by GAO during
November 1995. That testimony described the appeals processes
available to Federal employees as ``inefficient, expensive, and
time consuming.'' He urged congressional action that would
reduce the inefficiencies in the system, shorten the time
involved, and save money. He contended that reforms needed to
sustain two fundamental principles: fair treatment for Federal
employees and efficient management of Federal agencies. He
recommended measures to eliminate the mixed cases (where
employees can appeal prohibited personnel practices to more
than one agency), movement toward a private sector model for
addressing employees' discrimination complaints, and increased
use of alternative dispute resolution (ADR). He reported that,
in FY-1994, agencies spent almost $34 million investigating
discrimination complaints, and awarded more than $7 million in
complainants' legal fees and discrimination settlements.
Bowling noted, ``The redress system's protracted processes and
requirements can divert Federal managers from more productive
activities and inhibit some of them from taking legitimate
actions in response to performance or conduct problems.'' He
noted that Federal employees file six times the per capita rate
of complaints as private sector employees, and that only 18
percent of Federal filings are related to terminations, where
47 percent of private sector discrimination complaints result
from terminations. Bowling reported that the Merit Systems
Protection Board and the Equal Employment Opportunity
Commission rarely differ in their findings, but employees have
little to lose by having both agencies review the issue.
Eliminating mixed cases would eliminate both the jurisdictional
overlap and the inefficiency that accompanies it. He cautioned,
however, that the modification of procedures would require the
EEOC to learn new approaches to its work.
Mr. Heuerman thanked the subcommittee for incorporating
several of the administration's recommendations in the
consensus package. He welcomed expanded authority for
demonstration projects, but the administration opposed allowing
demonstration projects to modify leave and benefit programs.
Although he welcomed the bill's inclusion of alternative
dispute resolution provisions, he recommended thorough
assessment of provisions consolidating appeals processes. The
administration recognized the bill's interest in strengthening
performance credit in developing RIF retention registers, but
argued that this objective could be accomplished through
regulation rather than statute.
Mr. Mehle observed that the bill would make important
improvements to the Thrift Savings Plan provisions of the
Federal Employees Retirement System Act (FERSA). FERSA
authorized the creation of three investment funds, and allowed
Congress to authorize additional investment vehicles. This bill
would create two additional funds: one a small capitalization
fund and the other an international stock index fund. The Board
had previously recommended both to the Congress, and could
implement them within 2 years. The Board also supported
allowing new Federal employees to begin contributing to their
accounts immediately and the elimination of restrictions on
withdrawals and borrowing from employees' accounts.
Mr. Moyer thanked the subcommittee for the provisions that
he saw as beneficial to members, especially expansion of the
Thrift Savings Plan, provisions to assist agencies in
reorganization, and soft landings for employees affected by
workforce reductions. FMA supported provisions to extend
liability insurance coverage to Federal employees acting in the
line of duty. He advocated limiting demonstration projects to
10 percent of the Federal workforce. Rather than retain EEOC
jurisdiction, FMA supports consolidating Federal appeals
through the MSPB, with appeal to the Federal Circuit. He
opposed linking performance management and RIF retention
criteria.
Ms. Olsen welcomed the expansion of agencies' transition
programs for Federal employees affected by downsizing. She
opposed, however, giving employees additional credit in RIF
processes for outstanding service. She also appreciated the
liability insurance protection afforded to Federal managers
under this bill, and supported to strengthened monitoring and
reporting requirements directed toward Federal training.
Mr. Sanders testified that the bill represents an important
step in the right direction, and expressed strong support for
swift passage. He commented that the bill addresses many of the
critical needs for reform--especially of the appeals
procedures--but questioned the benefits that might be derived
from additional demonstration projects. Rather than a single
solution to civil service problems, he argued that more
particularized, tailored answers to limited questions are the
most likely vehicle of future progress in managing Federal
employees. He recommended consideration of reforms instituted
in Australia and New Zealand, and also mentioned the private
sector's cafeteria compensation plans as an appropriate model
for future comparison. He strongly supported the bill's 90-day
alternative dispute resolution provisions.
Mr. Divine thanked the subcommittee for including the soft
landing provisions that would benefit employees separated
during agency workforce reductions. He would limit
demonstration projects, however, to agencies with partnership
agreements. Federal unions, in general, favored a 10 percent
cap on the number of employees who could be involved in a
demonstration project. They also opposed increasing the credit
given performance during a RIF, contending that employees could
be adversely affected by being under different rating systems.
Mr. Donnellan expressed strong reservations about
demonstration projects developed without the participation of
employees' unions, and argued for retention of current appeals
processes.
Mr. Tobias expressed general support of the bill, but
expressed reservations about the breadth of potential
demonstration projects.
Mr. Roth commented that several provisions in the bill do
not have the support of employees represented by Federal
employees' unions. He expressed concerns about waiver
provisions related to demonstration projects. He asserted that
Federal employee unions favor removing employees who do not
perform their jobs, and contended that a ``two-tiered'' system
(pass/fail) would enable agencies to remove those who fail. He
also objected to including the increased rewards for
outstanding performance in statute.
23. Review of the Federal Employees Health Benefit (FEHB) Program.
a. Summary.--The FEHB program is the largest employer-
sponsored health insurance system in the country. In 1996, the
$16 billion FEHB program will insure more than 9 million
Federal employees, retirees, and their dependents. Partial
portability, no preexisting conditions limitation, and an
annual open enrollment period are facets of the FEHB program
that make it an extremely attractive health care system. The
program is administered by only 134 employees, and it serves
more than 9 million enrollees.
Over the past 2 years, a number of FEHB-related issues have
arisen. Some effect the coverage and benefits provided to
Federal employees, others affect the costs borne by employees
and the government.
In January 1, 1996, Blue Cross & Blue Shield (BCBS) changed
their prescription drug benefit setting off a round of
intensive lobbying by the National Association of Retail
Druggists (NARD), the National Association of Chain Store
Druggists (NACSD), the American Pharmaceutical Association
(APHA), and by individual druggists and large chain stores.
BCBS for 1996 stopped waiving the 20 percent co-pay on
prescriptions purchased at preferred (network) pharmacies for
those retirees who also have Medicare Part B coverage. All
other BCBS standard contract holders have always been
responsible for paying the 20 percent co-pay and, accordingly,
are not affected by the 1996 benefit change. The benefit change
is expected to save $200 million in 1996. OPM has stated that
without the benefit change all 1996 monthly premiums for BCBS
Standard Option enrollees would have increased by $5.42/month
for self enrollments and $12.03/month for family enrollments.
The pharmacists maintain that the benefit change is unfair,
because the co-pay is still waived for prescriptions obtained
through the mail order program. They see the benefit design as
unfairly steering customers away from the community drug
stores. Since the FEHB program is a government health care
program, the pharmacists have sought to have Congress overturn
this benefit decision by BCBS. Many stores posted signs telling
all retirees that there is a new co-pay requirement and asking
them to sign petitions to Congress and OPM.
The controversy is really about the economic consequences
of retail store versus mail order prescription drug sales. The
pharmacists apparently hope to achieve a result similar to what
happened in Maryland when the State rescinded a prescription
drug contract in the wake of organized protests from Maryland
druggists. (The Federal Trade Commission and the Maryland
Attorney General are now investigating the possibility that the
organized campaign constitutes an antitrust violation).
Senators Pryor and Cohen, and Representatives Moran and
Gilman, requested a GAO review of the prescription drug
program. That request was narrowly drawn and could have
elicited a skewed response. Subcommittee Chairman Mica
requested the GAO conduct a more comprehensive and objective
analysis of the prescription drug program in the FEHB and
provide some external comparison with private sector programs.
The external review will provide a better base of information
to make a more informed judgement on the issue.
During the 104th Congress, a number of bills have been
introduced either mandating that health insurance carriers
provide coverage for certain benefits or that they provide
direct reimbursement for certain health care providers.
H.R. 1057, introduced by Representative Ben Gilman
(R-NY), would provide for hearing care services by
audiologists to Federal civilian employees.
H.R. 2009, introduced by Representative Lynn Woolsey
(D-CA), would include medical foods as a specific item
for which coverage may be provided under the FEHB
program; and
H.R. 3292, introduced by Representative Maurice
Hinchey (D-NY), would provide for coverage of qualified
acupuncturists services under the FEHB program.
b. Benefits.--The FEHB program is often cited as a model of
efficiency and effectiveness that other public and private
groups should seek to replicate. The free-enterprise-based FEHB
program has effectively contained costs through private sector
companies, with limited governmental intervention. The
investigation reinforced the importance of the private sector
competition that exists in the FEHB program, and that
legislative efforts to mandate benefit levels would undermine
the ability of health benefit carriers to contain costs. Any
additional benefit mandates serve to increase the overall costs
of the FEHB program, both to the government and the individual
employee.
c. Hearings.--A hearing entitled, ``FEHB Program Review and
Oversight'' was held on September 5, 1996.
The first panel was dedicated to examining the controversy
involving the prescription drug benefit for FEHB Blue Cross and
Blue Shield enrollees who also have Medicare. The panel
consisted of GAO, Blue Cross and Blue Shield Association,
Merck-Medco, and the National Association of Chain Drug Stores
and the National Association of Retail Druggists.
GAO testified that BCBS made the benefit change to try to
control an average annual 21-percent increase in its Federal
health plan's drug costs. In early 1996, the volume of
prescription the mail order pharmacy received was much greater
and occurred more quickly than anticipated. As a result, Medco
could not meet its customer-service performance measure for
prompt dispensing and delivery of prescriptions to enrollees
for several weeks during the benefit change's implementation.
NACDS and other critics of the benefit change are concerned
about its economic impact on retail pharmacies.
The second panel consisted of advocates for mandating that
health insurance carriers provide coverage for certain benefits
or that they provide direct reimbursement for certain health
care providers. The American Academy of Audiology, the
International Hearing Society, and the American Academy of
Otolaryngology--Head and Neck Surgery, commented on legislation
introduced by Representative Ben Gilman (R-NY) to mandate that
audiologists be given reimbursement by FEHB carriers. The
audiologists support the legislation, while both the Hearing
Society and the Otolaryngologists were strenuously opposed. A
professor from Florida International University testified on
behalf of legislation that would add medical foods as an item
for which coverage may be provided. The American Association of
Pastoral Counselors testified regarding the possible direct
reimbursement of their members by carriers. The issue of mental
health parity was discussed by the American Psychiatric
Association. The National Acupuncture Foundation testified on
legislation proposing to mandate coverage of qualified
acupuncture services.
An OPM official testified for the Clinton administration
that the FEHB program is flexible enough to address coverage
for those services and supplies and that mandating them ``is
contrary to the program's guiding philosophy of allowing
flexibility for plans to respond to changing health care
practices and individual enrollee needs.'' Regarding the
prescription drug issue, OPM said that high percentages of
enrollees in fee-for-service plans are satisfied with the mail-
order drug program.
24. Taxpayer Subsidy of Federal Unions.
a. Summary.--According to OPM data, as of September 1995,
approximately 54 percent of the Federal workforce was
unionized, encompassing some 1,0157,017 employees. Although
most Federal employees are ostensibly represented by a union,
it is widely acknowledged that union membership among Federal
employees is quite low. Data from 1994 show that 19.3 percent
of Federal employees belong to a union. (Hirsch and McPherson,
Union Membership and Earnings Data Book 1994.)
The subcommittee has been investigating the extent to which
taxpayers are forced to subsidize the activities of Federal
employee unions. Federal employee unions receive substantial
taxpayer subsidies. These come in the form of ``official
time,'' i.e., time on the payroll, for performing union
representational work and even lobbying Congress and the
executive branch. In addition, unions benefit from taxpayer
funds in other ways as well. Agencies often furnish the unions
that represent their employees with office space, office
equipment, meeting rooms, and the use of such agency facilities
as e-mail and other communication tools.
In addition, the Clinton administration has decided as a
matter of policy to release the home addresses of employees in
bargaining units to the unions representing those units. This
has been a long-sought goal of Federal employee unions.
Although ostensibly sought for the purposes of assisting
unions' in discharging their duties as exclusive
representatives, possession of these home addresses provides
unions with invaluable mailing lists they can use for
organizing and political activity.
b. Benefits.--The subcommittee's investigation has revealed
that substantial sums of taxpayer moneys are consumed to
finance the activities of Federal unions. However, further
investigation is necessary to adequately quantify the amount of
the subsidy Federal unions receive from taxpayers.
c. Hearings.--A hearing entitled ``Taxpayer Subsidies of
Federal Unions'' was held on September 11, 1996
In connection with its investigation, the subcommittee held
a hearing and has requested a GAO study of the use of official
time.
The first panel at the hearing consisted of Sally Katzen,
Administrator of the Office of Information and Regulatory
Affairs of OMB, and Hon. Lorraine Green, Deputy Director of
OPM. These witnesses focused primarily on the administration's
decision to release home addresses to Federal unions. Both
witnesses contended the decision to release home addresses was
made after President Clinton shut much of the Government down
as a result of his disagreement with congressional budget
proposals and was justified by the ``confusion'' those
shutdowns engendered among Government employees. However, they
also conceded that OMB began examining options for complying
with union requests for these addresses, at the request of Vice
President Gore months before the first shutdown. They also
conceded that despite these months of planning, there were no
written safeguards to protect employees from further invasions
of their privacy as a result of secondary disclosures.
The second panel consisted of Timothy Bowling of the
General Accounting Office (GAO), Michael P. Dolan, Deputy
Commissioner of the Internal Revenue Service (IRS), and Robert
Tobias, national president of the National Treasury Employees
Union. Based upon GAO's analysis of the use of official time at
the Social Security Administration and three other entities
(the Postal Service, Department of Veterans Affairs, the IRS),
Mr. Bowling testified there is insufficient data to estimate
the amount or cost of official time government wide. He
testified that these agencies either had no system for
accounting for the use of official time or their systems had
substantial limitations. Nevertheless, it is clear that these
expenditures are substantial. GAO estimated that in calendar
year 1995, the Social Security Administration alone spent about
$11.4 million on an estimated 413,000 hours of official time.
Both Deputy Commissioner Dolan and Mr. Tobias generally
testified that the use of official time contributes to
efficiency in the workplace and effective union-management
relations. In addition, Deputy Commissioner Dolan also
testified that the IRS has been required by the Federal Labor
Relations Authority to release home addresses to the union
since September 1995.
25. Review of Federal Firefighters Pay and Benefits.
a. Summary.--The Federal Government employs approximately
10,000 Federal structural firefighters. Structural firefighters
fight fires in buildings, on airfields, and 94 percent are
employed by the Department of Defense. Structural firefighters
are also employed by the Veterans Administration, Coast Guard,
Department of Interior, National Institutes of Health, and
National Aeronautics and Space Administration. Wildland
firefighters fight grass and forest fires and are employed by
the Department of Interior and the Department of Agriculture.
The subcommittee's investigation examined only the compensation
package for Federal structural firefighters.
The agency head establishes the work schedule or regular
tour of duty for firefighters. The most common work schedule or
tours of duty for these firefighters are 40 hours, 56 hours,
and 72 hours per week. For the most part the 40 and 56 hour
tours of duty are for supervisory positions. Generally, 8 hours
of actual work, 8 hours of standby duty, and 8 hours of sleep
time comprise each 24 hours of the 72-hour work schedule. Three
shifts are worked on a weekly basis for a total of 72 hours.
Six shifts are worked on a biweekly basis for a total of 144
hours.
Pay for firefighters consists of base General Schedule pay,
including locality-based comparability payments, premium pay
for standby duty, and the Fair Labor Standards Act (FLSA)
overtime. Standby duty premium pay is in lieu of Title 5
overtime pay for regularly scheduled overtime. The regular tour
of duty determines the amount of standby duty premium pay a
firefighter receives. Firefighters who work a 72-hour tour of
duty receive 25 percent standby duty premium pay. Firefighters
on these shifts receive 125 percent of base pay not to exceed
125 percent of GS-10, step 1. Firefighters who work a 56-hour
tour of duty receive 15 percent premium pay for standby duty.
Firefighters on these shifts receive 115 percent of base pay
not to exceed 115 percent of GS-10, step 1. Firefighters who
work a 40-hour tour of duty do not receive this premium pay.
Firefighters on a 72-hour tour of duty receive an
additional pay adjustment for 19 hours of ``overtime.'' The
``overtime'' rate is computed according to the formula:
(basic pay + 25% premium)
Overtime Rate = --------------------------------------------------------- x 0.5
72 hours
Firefighters on a 56-hour tour of duty receive a pay
adjustment for three hours of ``overtime.'' The ``overtime''
rate is calculated as follows:
(basic pay + 25% premium)
Overtime Rate = --------------------------------------------------------- x 0.5
56 hours
For overtime hours beyond the regular work schedule (72 or
56), the ``overtime'' rate is computed as follows:
(basic pay + 25% premium)
Overtime Rate = --------------------------------------------------------- x 1.5
(72 or 56 hours)
Overtime rates are capped at GS-10, step 1.
Nearly 80 percent of firefighters are in grades GS-5
through GS-7 of the General Schedule. A fire chief's grade may
range from GS-7 through GS-13 depending on the duties and
responsibilities of the position.
Firefighters, like law enforcement officers, have special
retirement provisions in the Federal retirement system.
Firefighters may retire voluntarily at an early age with a
special annuity computation if they are at least age 50 at the
time of retirement and have 20 years of service. Firefighters
are subject to mandatory separation at age 55. Firefighters pay
an extra one-half percent of salary into the retirement system
and in return they receive a higher accrual rate than other
employees of the executive branch. The ``normal cost'' of
retirement is the cost of the retirement benefit expressed as a
percentage of payroll. The ``normal cost'' is 40 percent for
firefighters, compared to the average 25.14 percent for all
employees of the Federal Government enrolled in the Civil
Service Retirement System (CSRS). The ``normal cost'' for
firefighters enrolled in the Federal Employees Retirement
System (FERS) is 25.6 percent, as opposed to the average 12.3
percent for all employees in FERS.
Under current law, DOD is prohibited from contracting out
the Federal firefighter function. Funds appropriated to the
Department of Defense may not be obligated or expended for the
purpose of entering into a contract for the performance of
firefighting or security guard functions at any military
installation or facility.
Federal structural firefighters and their unions have been
critical of the firefighter pay system for more than 20 years.
Legislation has been introduced to reform the pay system for
firefighters since the 86th Congress in 1959. While three
hearings were held on the issue over the years, only in 1978
did any legislation move through the House and Senate. In 1978,
President Jimmy Carter vetoed legislation to ``substantially
reduce the workweek of Federal firefighters while maintaining
their pay at nearly the present rate.'' In his veto measure,
President Carter outlined three principal objections to the
bill. First, the bill would reduce firefighters' workweek
without reducing the premium pay which was designed for a
longer standby schedule.
Second, the bill would impair the ability of agency heads
to manage the work force and regulate the workweek. Third, the
bill would require DOD alone to hire 4,600 additional
employees, at an annual cost of $46.7 million just to maintain
existing fire protection.
In the 104th Congress one proposal was introduced in the
House of Representatives to amend the pay system for Federal
structural firefighters. Representative Steny Hoyer (D-MD)
introduced H.R. 858, the Firefighters Pay Fairness Act of 1995.
The bill would pay firefighters the full General Schedule
hourly rate for all non-overtime duty hours, including standby
and sleep time. In addition, the FLSA overtime rate would be
1\1/2\ times the hourly rate of basic pay.
Under the bill firefighters annual base pay would be
calculated on up to 106 hours of work biweekly and overtime
would be paid at the rate of 1.5 times the hourly rate of pay
for hours above 106. The bill would cap the overtime at the GS-
10, step 1 hourly rate. The new hourly and overtime rates of
pay would be phased in.
A draft document from the Department of Defense indicated
that the legislation would provide a minimum of 44 percent pay
increase for a firefighter working a 72-hour schedule. The
Congressional Budget Office prepared a preliminary cost
estimate and projected that the bill would cost more than $61
million in the first year, and more than $723 million over 5
years.
b. Benefits.--The investigation revealed that the current
pay system for Federal firefighters is complex and somewhat
confusing. Nevertheless, it attempts to compensate for some of
the demands and hardships of the occupation. It is fair to say
that complex systems sometimes produce inequities. An
examination of pay for Federal and municipal firefighters shows
that in certain localities total compensation for Federal
firefighters may be higher than their municipal counterparts.
Employing agencies have refuted the claim that a recruitment
and retention problem for Federal firefighters exists. It may
be necessary to simplify the pay structure, while
simultaneously addressing concerns over the current 72-hour
tour of duty, of Federal firefighters. Enactment of H.R. 858 is
opposed by the government's central personnel agency OPM, and
the individual agencies employing firefighters. The bill is
prohibitively expensive and may have a number of unintended
consequences. The investigation found a legitimate need for pay
simplification. However, justification for an across-the-board
pay increase, similar to that contained in H.R. 858, does not
exist. The subcommittee chairman has asked OPM and DOD, in
cooperation with the unions representing Federal firefighters,
to present a thoughtful, cost effective, comprehensive pay
simplification proposal.
c. Hearings.--A hearing entitled, ``Firefighter Pay and
Benefits'' was held on September 17, 1996.
The first panel consisted of two officials of the
International Association of Fire Fighters; one from the
National office and one from a local in San Francisco.
Representatives from the OPM and the DOD made up the second
panel. The hearing revealed disagreement between the National
office of the IAFF and the OPM and DOD with regard to the pay
gap between Federal firefighters and other Federal employees
and the recruitment and retention issue. Brook Beesley,
representative of IAFF's Local F-15 and F-259, said that the
entry level pay gap for Federal firefighters in Northern
California measured 67 percent in 1995.
The IAFF National office testified that ``the pay rate of
other Federal workers currently is 44 percent higher than the
pay of a Federal firefighter at the exact same grade and
step.'' The IAFF testified that ``. . . municipal fire fighters
earn an astounding 86 percent more per hour than their Federal
counterparts.'' Regarding recruitment and retention the IAFF
testified that ``Turnover rates have been as high as 33 percent
in recent years, with agencies finding it nearly impossible to
retain entry-level firefighters. Reliable data show that the
Federal fire service has a turnover rate twelve times higher
than the industry norm.'' At the request of the subcommittee
the Congressional Research Service examined the testimony
presented at the hearing to resolve several inconsistent
statistics cited by witnesses. The IAFF National office did not
respond to the CRS request for documentation of its
calculations. Data presented by CRS and hearing witnesses
refuted the turnover claims and the claims of significant
underpayment of Federal firefighters.
26. Drug Testing Policies in the White House.
a. Summary.--In 1986, President Ronald Reagan issued
Executive Order 12564 directing Federal agencies to institute
drug free workplace policies. Congress enacted legislation that
slowed the implementation of this Executive order in the course
of providing a statutory foundation for these drug free
workplace programs in all Federal agencies. All Federal
employees are subject to pre-employment screening for use of
illegal drugs, and employees in national security, safety-
related, or otherwise sensitive positions (commonly called
``testing-designated positions'' or TDPs) are also subject to
periodic random drug testing programs administered by their
agencies. Nearly 40 percent of the Federal workforce is
included in such TDPs.
In spite of the White House's reassurances that it treated
national security concerns related to the use of illegal drugs
seriously, the General Accounting Office had reported extensive
delays in the submission of the forms needed to initiate
background investigations of new employees at the start of the
Clinton administration. Previous Senate hearings, as well as
hearings and Government Reform and Oversight Committee
depositions related to the firing of White House Travel Office
personnel had revealed not only that the White House operated a
``special drug testing'' program for employees whom the Secret
Service considered potential threats to the President, the Vice
President, and the White House complex, but that the White
House's Director of Personnel Security was one of the employees
who had admitted previous use of illegal drugs during his own
background investigation. The placement of a person with a
history of previous drug use in such a sensitive position
occasioned concern about the adequacy of the White House's drug
free workplace program.
b. Benefits.--This investigation provided an opportunity to
assess whether the institution of a ``special testing'' program
for the Executive Office of the President resulted in any
compromise of the personnel or physical security of the White
House, and allowed the subcommittee to assess the adequacy of
current testing standards and monitoring procedures. It also
enabled a comparison between the hiring and testing practices
of key agencies--the Department of Defense, the Secret Service,
and the Federal Bureau of Investigation--and the looser
procedures in place at the White House.
c. Hearings.--A hearing entitled, ``Drug Testing Policy:
White House Standards,'' was conducted on September 20, 1996.
Subcommittee Chairman Mica convened the hearing to reassure
the American people that abuses identified in previous hearings
did not compromise our country's national security interests,
to confirm that the White House has instituted effective
corrective measures, and to assess whether legislation might be
necessary to correct any of these problems. Mr. Mica noted that
the reports of illegal drug use by White House employees
included recent use, and more serious hallucinogens than would
be included in the experimental use of marijuana during college
years. In a letter to Senator Richard Shelby, former White
House Director of Administration Patsy Thomasson acknowledged
that as many as 21 White House employees had participated in
the ``special testing program.'' Mr. Mica denounced the Clinton
administration's partisan efforts to divert attention from
these concerns, and expressed his hope that the White House
would assist efforts to resolve these concerns.
Mr. Kanjorski reported that two White House employees had
tested positive in random drug tests, and that both were career
employees who were terminated as a result of these tests. He
asserted that White House personnel during the Clinton
administration have remained drug free, and he saw no reason to
believe that this would change.
Mr. Burton noted that much of the American people's concern
on this topic is derived from the example established by the
White House. The President's flippant perspective on his ``I
didn't inhale'' remarks and the loose handling of FBI
background checks for senior employees caused legitimate
concern that this administration was setting a poor example
that was resulting in a more relaxed approach to matters of
serious concern.
Mr. Nelson reported that the Security Policy Board was
working under the National Security Council and the Department
of Defense to implement President Clinton's Executive Order
12968, which had directed the development of common
adjudication guidelines for determining eligibility for access
to classified information. These new guidelines were not
completed, but would be submitted after approval.
Ms. Vezeris testified that the Secret Service maintains
strict standards for the selection of applicants for employment
and for ensuring that employees continue drug free during their
careers. The Service can continue employees who come forward
voluntarily and work through an employee assistance program to
resolve drug use problems, but even in such cases, there is no
bar against disciplinary procedures, up to the level of
dismissal. She emphasized under questioning that the Service
can be very selective because they have thousands of applicants
for relatively few positions.
Mr. Reeder described the White House's drug free workplace
program, and claimed that it had been the subject of regular
reports to the Congress. He noted that all White House
employees must pass pre-employment drug tests, that they are in
TDPs throughout their employment, and that no administration
employee has tested positive. Records of these tests are now
maintained by career employees of the Office of
Administration's Human Resource Division. He claimed that the
White House has never overruled the Secret Service on questions
of issuing a White House pass to an employee. He acknowledged
that 11 individuals began in the ``special testing program'' in
the spring of 1994. Under the terms of this program, these
employees are subject to random testing at least twice per
year, and can be included in other tests as well. Twenty-one
employees out of more than 3,000 have been involved in the
``special testing program'' during the administration, at a
cost of $1,500. Current enrollment in the program is eight. Mr.
Reeder, in response to questions, reported that the
modification of security policy under consideration in the
administration would restrict access to classified information
among employees who hold the blue White House passes. These
employees had previously been deemed eligible for access to all
classified information. In response to questions from Chairman
Clinger, Mr. Reeder acknowledged that employees could be in the
White House for up to 180 days without having a background
investigation completed. Similarly, contractors and
consultants, who serve the White House but remain on private
payrolls, are not subject to either the drug testing or the
background investigation requirements that affect full-time
employees. Mr. Reeder reaffirmed that the White House supports
language in the Presidential and Executive Office
Accountability Act that would clarify the status of special
government employees. Chairman Clinger emphasized that the
``special testing program'' was developed to address drug use
that applicants admitted having occurred in the past 1 to 2
years, not experimental use during college. He stressed the
importance of resolving these concerns and implementing
effective policies in these areas.
27. Effects of Privatizing OPM Investigations.
a. Summary.--In April 1996, the Office of Personnel
Management signed a sole source contract with U.S.
Investigations Services, Inc., (USIS) that authorized the new
company to conduct background investigations for Federal
employees. USIS was incorporated in Butler County, PA, as an
employee-owned corporation whose primary stockholders were to
be the personnel who had performed these functions as Federal
employees in OPM's Office of Federal Investigations. The
concept of privatizing Federal functions by coverting them to
employee ownership had been advanced by then-OPM Director
Constance Horner in 1987. Current OPM Director James B. King
embraced the concept when the President proposed to privatize
this function as part of the National Performance Review
initiatives recommended in his FY-1995 budget. The subcommittee
conducted oversight hearings of this proposal in June 1995, and
learned that the administration had not developed an adequate
cost analysis of the proposal. The General Accounting Office
conducted intensive review of the proposal, and had issued
letter reports raising questions about the financial plan of
the new corporation, the adequacy of its protections for
records subject to the Privacy Act, and whether the privatized
employees would have effective access to the Federal, State,
and local law enforcement records needed to complete these
investigations.
b. Benefits.--This oversight was conducted in Butler, PA,
which serves as the corporate headquarters for USIS and is the
site of the OPM records management center. It provided an
opportunity for the community most directly affected by this
transition to learn the plans of both OPM and USIS for
continued operation and development of new business
opportunities. This development would provide substantial
benefits to the community, where the firm is one of the largest
employers in the northern section of Butler County.
c. Hearings.--The subcommittee conducted a field hearing,
``OPM Privatization: Community Impact,'' in Butler, PA, on
October 17, 1996.
Mr. King described the sequence of events leading to OPM's
Office of Federal Investigations receiving RIF notices in early
May, and all of the employees received employment offers from
USIS the next day. On July 5, the employees were separated from
OPM, and 94 percent of them accepted the offers to begin work
with USIS on Monday, July 8. Rather than ease this transition,
some facilities operated by the Department of Energy had
revoked the security clearances of employees who were separated
from OPM. OPM Director King and USIS CEO Harper testified that
these transition problems were close to resolution.
Subcommittee Chairman Mica noted that this transition could
have been smoothed through more effective planning, and
indicated that the GAO monitoring would continue. Mr. Harper
indicated that the company had begun operations with some
success, and already had hired 27 employees in addition to
those inherited from OPM. In response to a petition from the
American Federation of Government Employees, USIS held an
election that allowed the employees to decide whether they
would be represented for collective bargaining purposes. With
94 percent of the employee-owners voting, USIS employees
rejected the union, 65 percent to 35 percent.
DISTRICT OF COLUMBIA SUBCOMMITTEE
1. Closing of Pennsylvania Avenue.
a. Summary.--The purpose of this subcommittee investigation
is to explore issues concerning the closure of Pennsylvania
Avenue. Called ``America's Main Street'', it is a major artery
connecting the Capitol Building and the White House, as well as
a major east-west connector for the city, and is part of the
original L'Enfant Plan for the District of Columbia. Any
closing of this historic street, whether temporary or
permanent, has enormous impact on the orderly flow of city
traffic. Existing law gives both the DC government and Congress
key roles in local street closings.
Subcommittee Chairman Davis convened a hearing on June 30,
1995, to gather information on the legal authority necessary to
make permanent changes to city streets in the District, and to
assess the consequences of taking such actions including lost
revenue, and disrupted traffic patterns. The need for
Presidential security was not questioned.
The subcommittee heard testimony from officials of the
Washington municipal government including the Office of the
City Administrator, the Departments of Public Works and Housing
and Urban Affairs as well as the DC Council. The Municipal
testimony stressed the loss of revenue from parking meters, and
the dislocation caused by disrupted traffic patterns, as well
as the cost of rerouting the transit system. The problem of
jurisdiction between the Municipal and Federal law enforcement
branches was discussed at length, and the matter of
reimbursement of the city by the Federal Government.
The Department of the Treasury was asked to present written
testimony to be included in the record. Following the hearing,
subcommittee Chairman Davis again wrote Secretary Rubin,
seeking additional information and clarification of points made
in the original written testimony. Information was also
requested from the Federal Bureau of Investigation regarding
the parking ban in effect around the perimeter of their
building.
The subcommittee also reviewed the Vulnerability Assessment
of Federal Facilities report dated June 28, 1995, prepared by
the U.S. Marshal Service of the Department of Justice in direct
response to the April 19, 1995, bombing in Oklahoma City.
Subcommittee Chairman Davis convened a second hearing on
June 7, 1996, to ascertain what effects the closing of
Pennsylvania Avenue was having upon the District, businesses,
visitors, and tourists a year after the initial closing.
Testimony was taken from municipal officials, civic and
business representatives, the U.S. Department of the Treasury,
and the United States Secret Service.
b. Benefits.--This investigation furnished critical
information to the Congress necessary to the formation of
public policy regarding both government and commercial
establishments in the effected area. The investigation,
including the hearings, correspondence and several meetings
with Treasury and Transportation officials, heightened the
administration's awareness of the impact the closure of
Pennsylvania Avenue has imposed on the District of Columbia and
increased its willingness to address those impacts. As a result
of the subcommittee investigation, the Federal Highway
Administration has contracted for a ``Transportation Needs
Assessment'' for the District of Columbia. Such a comprehensive
review of the District's transportation systems has not been
conducted in 30 years and is currently beyond the means of the
District to perform for itself. It is expected that the report
will provide useful information to the District, the Financial
Responsibility and Management Assistance Authority (control
board), FHA, the Washington Metropolitan Area Transit Authority
(Metro), and the Metropolitan Transportation Planning
Organization in their important work in transportation and
environmental planning.
c. Hearings.--On June 30, 1995, the subcommittee held an
informational hearing on the closing of Pennsylvania Avenue.
The hearing followed an order signed by Treasury Secretary
Robert E. Rubin on May 19, 1995, prohibiting vehicular traffic
on portions of Pennsylvania Avenue and certain other streets
adjacent to the White House. Secretary Rubin delegated to the
Director of the United States Secret Service ``all necessary
authority to carry out such street closings.'' Those testifying
at the June 30, 1995 hearing were, Michael C. Rogers, D.C. city
administrator; deputy mayor for operations Larry King, director
of Public Works; Hon. Frank Smith, chairman, Committee on
Housing and Urban Affairs, D.C. City Council; Hon. David A.
Clarke, chairman of the Council of D.C.; Gregory W. Fazakerley,
president, D.S. Building Industry Association; Dr. Henry L.
Fernandez, chairman, Advisory Neighborhood Commission 2B;
Millard Seay, director of planning, Washington Metro Area
Transit Authority; Margaret O. Jeffers, Esq., executive vice
president, Apartment and Office Building Association of
Metropolitan Washington; and Ken Hoeffer, executive director,
Washington, DC Area Trucking Association.
On June 7, 1996, the Subcommittee on the District of
Columbia held a second hearing to ascertain what impact the
closing of Pennsylvania Avenue has had on District residents,
commuters, visitors, and the greater Washington Metropolitan
area in general and administration actions or plans to deal
with those impacts. The following witnesses testified: Senator
Rod Gramms; Representative Jim Moran; James Johnson, Assistant
Secretary for Enforcement, U.S. Department of the Treasury;
Eljay Bowron, Director of the United States Secret Service;
John Strauchs, CEO, SYSTECH Group, Inc.; Mayor Marion Barry;
Larry King, director, DC Department of Public Works; Michael
Rogers, DC city administrator; Rodney Slater, Administrator,
Federal Highway Administration; William Lawson, Assistant
Regional Administrator, General Services Administration; Dennis
Galvin, Associate Director for Professional Services, National
Park Service; Timothy Coughlin, president, Riggs National
Corp.; Robert S. Krebs, vice president, Regional Affairs,
Greater Washington Board of Trade; Tom Wilbur, president, DC
Building Industry Association; Lon Anderson, staff director,
AAA Potomac; Christopher Reutershan, District of Columbia
Chamber of Commerce; Emily Vetter, president, Hotel Association
of Washington, DC; William Lecos, president, Restaurant
Association of Metropolitan Washington, and Jon P. Grove,
executive vice president, American Society of Association
Executives.
2. Traffic Disruptions.
a. Summary.--The subcommittee held an oversight hearing
into recent traffic disruptions in the District of Columbia
organized by a local labor organization. The group, ``Justice
for Janitors'' is organized and supported by the Service
Industry Employees Union (SIEU). A concerted effort has been
undertaken to pressure private companies to increase wages and
benfits for service personnel through public demonstrations.
The group repeatedly deliberately blocked major traffic
arteries in the Nation's Capitol and caused massive traffic
disruptions affecting both the public and private sectors. The
subcommittee sought information into the consequences of the
traffic disruption to area business, commuters, and police
procedure.
An incident on September 20, 1995, generated the hearing,
in which morning commuter traffic was brought to a standstill
on Interstate 66, Routes 50 and 110, the Theodore Roosevelt
Memorial Bridge, and the George Washington Memorial Parkway. An
estimated 100,000 motorists were affected. As part of the
disruption, a bus was pulled across the Roosevelt Bridge and
abandoned. Each of the 34 persons arrested was fined $50.
According to news reports, the traffic disruption ``impeded an
ambulance on call'' and caused ``neighboring small businesses
untold losses of normal revenue.''
Testimony at the hearing revealed the problems such
demonstrations cause the law enforcement officers, and traffic
management personnel. Additional testimony was heard that
outlined the difficulties generated by the traffic disruption
including a rise in the number of auto accidents. The impact on
area businesses and medical facilities was discussed at length.
Following a subsequent disruption on December 4, 1995,
which created a huge traffic jam in Northwest Washington in the
area of the DC Financial Control Board offices, the
subcommittee is reviewing legislative options to prevent and
control future non-permitted demonstrations.
b. Benefits.--The investigation provided information
critical to drafting legislation to discourage reoccurrence of
deliberate traffic interruptions in Washington, DC. The refusal
of the union instigating these disruptions to testify or
attempt to justify such behavior strongly indicates that the
objective of these incidents was publicity and maximum public
disruption in an attempt to gain an advantage over private
employers in labor negotiations. The subcommittee was able to
encourage various law enforcement agencies to cooperate and
plan for joint action to minimize the extent of any future
demonstrations of this type. It should be noted that no more
incidents of this nature have occurred since December 1995.
c. Hearings.--The subcommittee held an oversight hearing on
October 6, 1995, concerning the recent traffic disruptions in
the District of Columbia organized by a local labor
organization.
3. District of Columbia Economic Recovery Act.
a. Summary.--In the past 2 years, individuals have
suggested ways to help the District of Columbia improve its
financial status and grow its economy. Most of the proposals
that were brought contained various forms of tax reductions and
incentives. District Delegate Eleanor Holmes Norton introduced
H.R. 3244 to amend the DC Federal tax code to achieve some of
these objectives. The bill was referred the Committee on Ways
and Means. Due to the attention the District of Columbia's
financial condition has generated and the widening national
debate on the concept of the ``flat tax'' and other proposals,
subcommittee Chairman Davis convened a hearing on July 31, 1996
to obtain various points of view on the concepts the bill
sought to address. Joining the subcommittee in ex officio
capacity for the hearing were, Committee Chairman Clinger,
Representatives Morella, Moran, and Wynn.
b. Benefits.--This investigation furnished the
subcommittee, Congress, and interested citizens with
information that will assist them in considering tax and other
remedies that have thus far been advanced. Witnesses presented
statistical evidence in support of the plan and also indicating
that it would have little immediate impact on the District of
Columbia government or its performance. The hearing will give
Congress and other interested parties significant data on the
benefits and incentives of such tax reduction on individuals
and whether such benefits by themselves could overcome concerns
about safety, poor schools, and poor government services which
are causing so many people to leave the city.
c. Hearings.--On July 31, 1996, the subcommittee held an
informational hearing on H.R. 3244. The following witnesses
testified: Jack Kemp, co-director, Empower America; Senator
Joseph I. Lieberman; Speaker Newt Gingrich; Wade Henderson,
executive director, Leadership Conference on Civil Right; James
Prost, Basile Baumann Prost and Associates; Martin A. Sullivan,
tax analyst; Edwin Kee, George Washington University; Steven
Fuller, George Mason University; Thomas B. Ripy, Congressional
Research Service; Kenneth J. Kies, chief of staff, Joint
Committe on Taxation; James R. Atwood, Covington and Burling;
Diane Duff, Greater Washington Board of Trade; H. Hollister
Cantur, Fairfax County Chamber of Commerce; Kwasi Holman,
executive vice president, DC Chamber of Commerce; and Timothy
C. Coughlin, president, Riggs National Corp.
4. Public Law 104-8, District of Columbia Financial Responsibility and
Management Assistance Authority Act of 1995.
a. Summary.--The subcommittee held two oversight hearings
on the implementation of the legislation that established the
District of Columbia Financial Responsibility and Management
Assistance Authority (the control board). At the first hearing,
subcommittee Chairman Davis stressed the importance of the act
and called upon the parties working under it to state their
understanding of their respective roles and to give their view
on the state of the city's financial condition. At the second
hearing, subcommittee Chairman Davis reiterated the importance
of the positions of Chief Financial Officer and Inspector
General as essential parts of the District's government. He
also reviewed their relationship with the control board. The
rest of the hearing was devoted to the findings of an
independent audit by KPMG Peat-Marwick of deficiencies and lack
of controls in the District with regard to vender payments and
information gathering and dissemination. In addition to holding
public hearings on the implementation of Public Law 104-8, the
subcommittee exercised its powers of oversight of the statute
and the District of Columbia Financial Responsibility and
Management Assistance Authority (control board) it created in
several ways.
b. Benefits.--To assist the subcommittee to fulfill its
oversight responsibilities and to bring essential information
before Congress and the public, the subcommittee has initiated
monthly meetings and briefings between staff of the control
board and various congressional committees and subcommittees.
It established ongoing lines of communications with the Chief
Financial Officer and Inspector General, posts established by
the statute. It consulted with control board members and staff
about legislation affecting the District, such as H.R. 3663,
the District of Columbia Water and Sewer Authority Act of 1996
and other measures Congress considered. Subcommittee Chairman
Davis, Ranking Member Norton, and subcommittee staff met
periodically with control board Chairman Brimmer and staff to
ascertain the board's needs, assess its progress in meeting
them, and to assure that the parameters under which the board
operates conform to the letter and spirit of Public Law 104-
108. It will continue in these endeavors throughout the life of
the control board, as specified in the statute.
The benefits of Public Law 104-8 continue to mount as the
control board moves aggressively to improve the performance of
the District government, control its spending, and to improve
revenue collection. The Chief Financial Officer, created by the
legislation, has reformed the operation and personnel of the
entire financial cluster in the District and has implemented
firm control over financial management throughout the
government. The Inspector General, which was substantially
enhanced by the legislation, has initiated a number of
management audits and performance improvements as well
investigations of potential fraud, corruption, and waste.
The control board has disbanded the Lottery Board and
placed operation of the Lottery under the CFO. It has also
removed the Superintendent of the DC school system, replacing
him with a temporary Chief Executive Officer and has created a
Board of Trustees with most of the powers of the Board of
Education to revive and reform the entire operation of the DC
public schools.
Major financial reform has already taken place in the
District government with longer term improvements still being
worked on. The District was able to sell bonds on the private
market in October 1996 at an acceptable interest rate without
credit enhancements or other security instruments.
The benefits to Congress of better information on the
District of Columbia and its government cannot be
overemphasized because of its impact on appropriation
decisions. More and better information is critical to
Congressional efforts to improve and reform the District
government. In addition, placing an autonomous agency between
Congress and the District government has greatly benefited the
residents of the District and its government by providing much
more direct and immediate assistance than would be possible for
Congress as a body to provide while maintaining the home rule
government of the Nation's capital.
c. Hearings.--The subcommittee held hearings on March 19
and 28, 1996. Those who testified were: Dr. Andrew Brimmer,
chairman, District of Columbia Financial Responsibility and
Management Assistance Authority; Stephen D. Harlan, vice
chairman, DCFRMAA; DCFRMAA Members Dr. Joyce A. Ladner,
Constance Berry Newman, and Edward A. Singletary, Mayor Marion
Barry, DC City Council Chairman David Clark; Anthony Williams,
DC Chief Financial Officer, Angela Avant, DC Inspector General;
and John Hummel, KPMG Peat-Marwick, LLP.
GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY SUBCOMMITTEE
1. Capital Budgeting.
a. Summary.--Since the imposition of ever-tightening caps
on discretionary spending in the 1990 Omnibus Budget
Reconciliation Act, committee members have been concerned that
long-term investments in capital have been neglected in favor
of current consumption. Borrowing funds to invest in capital
projects with long-term benefits is an appropriate activity, as
the future generations that enjoy the benefits of the assets
will also pay for them. However, the Federal Government lacks
experience with capital budgeting concepts and techniques.
Therefore, committee members were interested in examining the
practices of State and local jurisdictions, as well as that of
other nations.
The subcommittee examined H.R. 767, the Federal Budget
Structure Act, introduced on February 1, 1995, by Chairman
William Clinger. Two hearings were held to review various
proposals to implement a Federal capital budget and the manner
in which such budgets impacted other government operations. The
hearings examined the workings of capital budgets operated by
Fairfax County, VA, New York, NY, Philadelphia, PA, and the
government of New Zealand, as well as the work of scholars and
private sector financial experts in the area of investment
budgeting.
b. Benefits.--Implementing a Federal capital budget will
help rebuild the Nation's deteriorating capital stock, and will
help improve Federal planning, investment and budgeting
processes.
c. Hearings.--Subcommittee Chairman Horn convened the first
hearing on March 2, 1995, to examine the practices and
experience of local jurisdictions in the area of capital
budgeting. He opened the hearing by noting the importance of
planning capital projects, and that the Federal Government has
failed to adequately plan. Chairman Clinger noted his
endorsement of Federal capital budgeting and that his bill, the
Federal Budget Structure Act of 1995, H.R. 767, had been co-
sponsored by a number of committee members.
Representative Bob Wise also mentioned that he supports the
concept of capital budgeting and has introduced two bills on
the issue. Representative Norman Mineta testified that
borrowing funds to invest in capital projects with long-term
benefits was an appropriate activity, as the future generations
that enjoy the benefits of that asset will also pay for it.
Representative Ray Thornton noted that Arkansas had
successfully operated a capital budget for most of this
century. Representative Thornton also referred to his support
of a capital budget and his introduction of a bill to provide
for a Federal capital budget.
Katherine Hanley, chairwoman of the Fairfax County Board of
Supervisors, accompanied by William J. Leidinger, county
executive, Fairfax County, discussed Fairfax's capital budget.
Mr. Leidinger testified that the county is prohibited from
allowing capital costs to exceed 10 percent of total general
fund disbursements. This is the centerpiece of the county's Ten
Principles of Sound Financial Management, which has allowed
Fairfax to maintain a AAA bond rating, 1 of only 33 local
governments out of 30,000 jurisdictions to claim that honor.
Thomas McMahon, director of Finance Division, New York City
Council, testified on New York City's capital budget. Mr.
McMahon noted that Federal adoption of a capital budget would
help rebuild the Nation's deteriorating capital stock and
testified that New York City has witnessed a decline in the
quality and quantity of the city's capital stock.
Ted Sheridan, the president of Sheridan Management Corp.,
and former CFO of Fairchild, testified on behalf of the
Financial Executives Institute. Mr. Sheridan stressed that
capital budgeting was essential to efficiently plan the Federal
investment program. He proposed a pilot program for capital
budgeting based on three assets: a weapons system, an
information system, and a power generation station.
David Chu, a fellow at the National Academy of Public
Administration (NAPA), served on NAPA's expert panel on capital
budgeting. Dr. Chu believes that capital budgeting has many
strengths, including improving planning, investment and
identifying budget expenditures for investments. Dr. Chu also
mentioned technical problems with capital budgeting, such as
the treatment of capital equipment, and the treatment of tax
expenditures, government-sponsored enterprises.
On June 29, 1995, His Excellency John Wood, Ambassador of
New Zealand, described how government agencies in New Zealand
changed their accounting, budgeting, and management systems
beginning in 1984. These changes affected (1) the way
department heads were chosen; (2) the way in which agencies
define, measure and report performance; (3) delegation of input
control to departments or agencies; and (4) the way government
fiscal performance is measured and reported.
Government departments in New Zealand are assessed a charge
for capital controlled by the department, determined by
multiplying total capital times a market rate of interest. In
addition, agencies may sell surplus assets and use the proceeds
to upgrade computer systems. These features make explicit to
agencies the cost of owning assets.
Edward Rendell, mayor of Philadelphia, noted that capital
budgets are common to local and State governments, are
enforceable by a borrower's bond rating, and force long-range
prioritization and planning for capital projects.
Mr. Paul Posner, Director of Budget Issues, Accounting and
Information Management Division of the U.S. General Accounting
Office, testified that if the Federal budget were balanced, the
long-term boost to Gross Domestic Product would mean that GDP
would be 34 percent larger in the year 2025 than if no action
were taken to reduce the deficit. Similarly, Mr. Posner noted
that within the budget process, care is needed to be taken to
improve selection of investments to improve productivity.
Mr. Posner noted the temptation that lawmakers would face
to classify non-capital expenditures as capital in order to get
more favorable budget treatment for the asset. He also noted
that the Federal Government does not own many of the capital
assets it funds in the budget. Many are owned by States or
local governments and funded by subsidies or grants. In
addition, Mr. Posner noted the need to impose long-term control
over the obligation of public funds. Finally Mr. Posner noted
the importance of recognizing the full cost of a long-term
obligation up front in order to impose discipline on agencies.
2. Integrity of Government Documents.
a. Summary.--On September 30, 1994, former U.S.
Representative Barbara Jordan, as chair of the Commission on
Immigration Reform, released the Commission's first report to
the Congress on the status of the Nation's immigration policy.
The report was required by the Immigration Act of 1990, Public
Law 101-649. The Commission cited widespread counterfeiting of
documents that entitle people to gain public benefits or to be
hired for work as a major factor undermining current
immigration policy. It recommended development of a ``simpler,
more fraud-resistant system for verifying work authorization.''
In the President's Budget for fiscal year 1996, the
administration proposed to reform the Nation's immigration
process, in part through development of a nationally available
employment verification system. In that connection, the
subcommittee met to consider a range of views on the nature,
the role, the need, the cost, and the potential social
consequences of using fraud-resistant personal identification
documents as part of a national employment verification system.
b. Benefits.--The shortcomings with regard to the security
of government documents identified by the hearing will assist
the committee in advising relevant Federal agencies on the need
to develop more secure documents to verify work eligibility and
immigration status.
c. Hearings.--Subcommittee Chairman Horn called the hearing
on March 7, 1995, to examine the situation regarding the
integrity of government documents with testimony from
representatives from the U.S. Commission on Immigration Reform
and the Immigration and Naturalization Service (INS).
Subcommittee Chairman Horn opened the hearing by describing
it as a fact-gathering effort toward fraud-proofing personal
identification documents. Congressman Becerra, the first
witness, cautioned all concerned to remain sensitive to the
considerations of personal privacy, data base accuracy, and
total public cost as major factors bearing on U.S. immigration
policy, ``big-brotherism,'' and perceptions of discrimination.
Mr. Robert C. Hill and Dr. Susan Martin, U.S. Commission on
Immigration Reform, summarized the Immigration Reform
Commission's published recommendation for electronic validation
of the Social Security number as the fairest, fastest, most
reliable, and most efficient way to guard against employment
authorization fraud. They advocated starting slow and small
with one or more alternative ``pilot programs'' prior to
constructing a nationwide employment verification registry, and
letting the Commission monitor preliminary results.
Mr. James A. Puleo, Executive Associate Commissioner for
Programs, INS, explained his agency's telephone verification
system (TVS) for checking identities of Los Angeles area
``green card'' holders (immigrants) applying for work. TVS
methodology is potentially usable in a national employment
verification system. INS data bases on non-citizen U.S.
residents need to be purified, reconciled, and integrated in
order to be usable in a national employment verification
system. The agency has taken some steps toward fraud-proofing
``green cards'' (resident alien registration cards), but the
current re-issuance program will take a year longer than
planned. INS is working with the Social Security Administration
(SSA) on a multi-stage plan that would ultimately lead to a
national employment verification registry.
Dr. Shirley S. Chater, Commissioner, Social Security
Administration, emphasized that Social Security cards have
never been intended to guarantee individual personal identity.
Nonetheless, the current counterfeit-resistant Social Security
card has been issued to 61 percent of active card holders. SSA
has a toll-free telephone number which employers can use to
verify Social Security numbers (SSN's) for payroll purposes,
but it is not used much, and it could not handle a large
nationwide verification workload at present. The agency's
``enumeration at birth'' program has nearly eliminated
fraudulent SSN's for infants and children. SSA's data base,
recently much improved, still needs more work in order to
support employment verification nationwide.
Mr. Richard W. Velde, former head of the Law Enforcement
Assistance Administration (LEAA), suggested that in today's
established electronic data base networks for exchanging health
and vital records, criminal history, and bad motor vehicle
driving records, we may already have a framework for the
proposed national employment registry. In addition,
sophisticated moderate-cost biometric identification technology
is available to produce encoded personal documents that
definitively establish the bearer as either the person
described on the document or as a different person. Several
States use such technology in issuing drivers' licenses. A
nationwide hookup of State motor-vehicle driver registries,
coupled with uniform issuance of biometric State drivers'
licenses, could serve as the functional equivalent of the
Immigration Reform Commission's employment verification
registry.
Mr. Frank W. Reilly, Ms. Hazel E. Edwards, and Mr. John
Chris Martin, Accounting and Information Management Division,
General Accounting Office, commented briefly on INS and SSA
data bases, TVS's, and plans for a two-step process to cross-
check each other's files for discrepant information. They
described a newly implemented statewide system for managing
public benefits eligibility in Connecticut. The system uses
state-of-the-art technology in providing a one-step application
for three Federal benefit programs that links nine separate
supporting data bases. Connecticut's experience could help in
developing the Federal employment verification registry.
Joseph Eaton, professor at the Graduate School of Public
and International Affairs, University of Pittsburgh, praised
the Immigration Reform Commission's work and summarized the
advantages and the ready availability of biometric
identification technology. The protection of publicly stored
private information can be assured and enhanced by (1) feedback
to the individual whenever a privacy-sensitive personal file is
accessed; (2) standards for data base matching; (3) bonding and
licensing of sensitive data bank owners and employees; and (4)
administrative and legal remedies.
Mr. Robert Rasor, Special Agent, United States Secret
Service, mentioned several different kinds of identification-
document fraud that the Secret Service pursues in conjunction
with the INS's Forensic Identification Laboratory. He described
his agency's role of coordinating and assisting the efforts of
State bureaus of health and vital statistics and departments of
motor vehicles to strengthen and standardize identification
media and documents.
Mr. Russell Meltzer, Head of Security, Schlumberger-Malco,
Inc., explained in concept how the credit card industry's
authorization system could be copied and retrofitted to serve
as a national employment registry and verification system. The
Federal Government would function analogously to a bank, an
employer to a retail merchant, and a job applicant to a
consumer. Inquiry terminals at work places would not allow
users (inquirers) to alter anything in the data bank. An
applicant's document would take the form of a ``smart
(computer-chip) card,'' biometrically encoded to match to the
individual bearer. Written testimony was provided by Mr. Lamar
Smith of Visa USA, which described how today's credit card
industry authorization process works.
3. Federal Role in Privatization.
a. Summary.--The Budget of the United States Government,
the President's budget request submitted on February 6, 1995,
contained numerous proposals for privatization of government
functions, assets, and agencies, including the helium program,
the National Weather Service, U.S. Enrichment Corporation, four
of the Power Marketing Administrations, and the Naval Petroleum
Reserve. The committee examined the history of privatization in
other countries and levels of government to determine lessons
to be derived from these sources.
b. Benefits.--This hearing demonstrated the necessity for
additional private sector capital being deployed to meet public
needs. From wastewater treatment to airports, many publicly
owned assets are not receiving sufficient levels of investment.
There are investors willing to provide this capital, and the
experience of other nations proves that such measures can
improve economic performance while increasing investment, and
reducing the role of the Government in the economy.
c. Hearings.--Subcommittee Chairman Horn opened the hearing
by noting the historical increase in the number of
privatizations all over the world, with the exception of the
United States. Representative Klug, who chairs the Speaker's
task force on privatization, listed the types of Federal
agencies and activities which his task force has identified as
possible candidates for privatization. Roy Bernardi, mayor of
Syracuse, NY, testified about his city's plans for
privatization. Chief among the plans is a proposal to privatize
the airport. However, this sale is partially blocked by Federal
rules regarding grant repayment of assets constructed with
Federal dollars.
Andrew Jones, worldwide privatization coordinator at Arthur
Andersen Consulting, testified about privatizations in other
countries and lessons to be learned from those experiences.
Roger Leeds, managing director of Barents PLC, testified
about his experience directing privatization efforts abroad.
Mr. Leeds noted that the likeliest prospects for privatization
in the Federal Government were services (though Leeds did
mention the power marketing administrations).
Louis Albano, president of Civil Service Technical Guild in
New York City, testified about the dangers of contracting out
additional government services. Mr. Albano suggested that
government workers could do the same job cheaper and better
than a private contractor whose motive was profit.
Bert Concklin, president of Professional Services Council,
testified that the Federal Government should contract out more.
Mr. Concklin spoke against the system of cost comparison
whereby costs of private contractors are compared against the
cost of performing work in-house. He also testified that such
cost comparisons were misleading, since Federal costs usually
do not include many overhead items.
Ralph L. Stanley, a senior vice president with United
Infrastructure Corp., testified on the need for private
infrastructure finance initiatives. He proposed an
infrastructure bank which would take several billion Federal
dollars and leverage them with private investment.
Ronald Correll, president and CEO of United Water
Resources, testified about the need for private financing of
water system improvements.
Viggo Butler, president of Lockheed Air Terminal, testified
about the need for relief from the Federal grant repayment
requirement.
4. National Performance Review.
a. Summary.--On May 2, 1995, the subcommittee convened a
hearing to evaluate the accomplishments of the National
Performance Review. The National Performance Review (NPR) was
initiated by Vice President Gore in 1993 and consisted of two
phases. The purpose of the first phase was to make government
work better and cost less; the second phase required agencies
to fundamentally reevaluate their missions, goals, and
objectives.
b. Benefits.--Ongoing review of the National Performance
Review process will help Congress and the public assess what
the NPR has accomplished to date, and what can be expected from
the second phase of the NPR initiative. This effort will help
the Federal Government determine how to better serve the
Nation.
c. Hearings.--Witnesses were asked to give their opinions
on the mission and role of the NPR, whether benchmarks for
evaluating NPR's progress existed, whether NPR as implemented
met their expectations for improving government, and whether
NPR could achieve its stated objectives.
Dr. Alice Rivlin, Director, Office of Management and
Budget, supported NPR's effectiveness in improving executive
branch departments and agencies. She noted that Vice President
Gore, who spearheaded Phase I, encouraged the agencies to adopt
the 1,200 recommendations developed by NPR. In describing Phase
II, Ms. Rivlin stated that the focus switched from ``how''
government operates to ``what'' it should do. She urged
Congress to help NPR with funding.
Charles Bowsher, Comptroller General of the United States,
applauded the concept and aims of the NPR, but saw many
shortcomings. Two examples he cited were failing to address
many critical management problems in the agencies and ignoring
nearly three-fourths of other issues GAO had identified. He
felt that the goals should be stated more clearly, reliable
information should be available, and that the focus should be
on outcome-based management.
Tony Dale, budget manager of the New Zealand Treasury,
describes the public sector reform of New Zealand in the mid-
eighties. The corporatization, privatization, and public sector
reforms are the very reasons that New Zealand now has constant
economic growth, a low inflation, a shrinking percentage in
government expenditures, and instead of a 9 percent deficit,
the country now has a 7 percent surplus. He strongly supports
public sector reform.
Duncan Wyse, executive director, Oregon Benchmarking
Project, made three points: (1) most of the Federal agenda is
delivered by State and local governments, and improvement must
be made by taking this into consideration; (2) the system needs
to be reformed; and (3) Congress as well as the executive
branch needs to be reformed.
Dwight Ink, Institute of Public Administration, thought
that the implementation of NPR concepts has been very
disappointing and he hoped the situation will change in the
future. He pointed to the hiring process, the inconsistency
among NPR agencies, and the inability of leadership as examples
of NPR ineffectiveness. He blames the problems of organization
and execution in the NPR on too much restructuring without
establishing missions and roles.
R. Scott Fosler, National Academy of Public Administration
agreed with the scope and purpose of the NPR. He believed the
move from the ``how'' of government to ``what'' government does
is a positive step; however, NPR has to address key areas if it
wants to sustain its energy. Such key areas are accountability,
a coherent framework, and capacity within the agencies.
Donald Kettl, senior nonresident fellow, the Brookings
Institution, stated that NPR had made substantial progress, and
achieved substantial savings, but the progress of NPR is not
self-sustaining and that there are still many unanswered
questions.
Herbert Jasper, McManis Associates, lauded many of the
accomplishments of the NPR, while expressing some misgivings.
He cited as disappointing NPR's lack of analysis, statutory
promises that are not backed up with resources, the ``command''
or top-down philosophies of some recommendations, and the
``government bashing'' that permeates NPR reports.
5. Strengthening Departmental Management.
a. Summary.--In the past 30 years, there has been a
multiplication in the numbers of management functions, and a
diffusion of their responsibility among numerous centers. These
centers of management authority include Secretary, Chief of
Staff, Inspector General, Chief Financial Officer, Chief
Operating Officer, and Assistant Secretary for Management. The
number of employees in executive levels I through V totaled 249
in 1960 and 1626 in 1992. Similarly, occupants of the Senior
Executive Service (SES) also increased dramatically in number
during the same period. The larger number of management and
control personnel resulted in increased layers of management,
who delayed implementation of management program and distorted
information passing between levels of management.
b. Benefits.--The hearing demonstrated the need for a
government focus on management issues. This was part of the
subcommittee's ongoing interest in and oversight of the
management practices at Federal agencies.
c. Hearings.--On May 9, 1995, the subcommittee convened a
hearing entitled, ``Strengthening Departmental Management.''
Subcommittee Chairman Horn opened the hearing by noting the
framework of general management laws which exists to coordinate
management reform efforts. Chairman Horn described his intent
to bring together private and public sector experience to help
solve the problems of government management.
Tom Glynn, the Deputy Secretary of Labor, testified about
his experience as a Chief Operating Officer at the Department
of Labor. Mr. Glynn described his agency's reinvention efforts,
including reducing the steps it takes to hire a new worker from
120 to 41 steps. Chairman Horn and Glynn exchanged comments
concerning the diffused nature of management responsibilities
within the current organizational structure. The Chief
Operating Officer, the Secretary's Chief of Staff, the
Inspector General, the Assistant Secretary for Management and
the Chief Financial Officer each have large management
responsibilities. The proposed chief information officer would
diffuse management responsibilities further.
George Munoz, Assistant Secretary for Management and Chief
Financial Officer, Department of the Treasury, testified
concerning his agency's recent reinvention efforts. Mr. Munoz
described the principles which have guided Treasury's
management improvements: customer service, strategic planning
and streamlining. Representative Michael Flanagan and Mr. Munoz
gave their views on debt collection.
Johnny Finch, Assistant Comptroller, General Government
Division, and Gene Dodaro, Assistant Comptroller, Accounting
and Information Management Division, GAO, testified on GAO's
reviews of agency management improvement efforts. Mr. Finch
noted that the Government Performance and Results Act, the
Chief Financial Officers Act and the Paperwork Reduction Act
have formed the basis of the agency management improvement
efforts. Mr. Finch noted that agencies need to define their
mission, improve operational effectiveness by using information
technology to re-engineer, strengthen financial management, and
build the capacity to manage the Federal workforce.
Upon questioning, Mr. Dodaro outlined the problem areas in
information technology investment and described weaknesses in
financial management at the Department of Defense. Mr. Finch
detailed differences between the National Performance Review
and successful government reform efforts abroad.
In panel III, Alan Dean, senior fellow of the National
Academy of Public Administration, described recent changes in
the Federal workforce, such as the increasing numbers of non-
career officials. Mr. Dean also discussed reorganization
proposals, including the creation of an Office of Federal
Management and restructuring executive departments. William
Hansen, former Chief Financial Officer at the Department of
Education, outlined the reorganization of the Department in the
1980's, and the restructuring and block-granting of programs
that occurred in 1981-1983. Mr. Dean testified that OMB's
restructuring has denuded the agency of any expertise in
government corporations.
Roger Sperry, director of management studies of the
National Academy of Public Administration, identified the five
key areas to any efforts at government reform: strengthening
Federal leadership, automating, integrating and streamlining
government, focusing on performance, streamlining Federal field
structures and congressional-executive relations. Mr. Sperry
also commented on interagency and intergovernmental
coordination in a region responding to a critical situation.
6. Consolidating Federal Programs and Organizations.
a. Summary.--This is part of the Making Government Work
series described in Section II.A.1.
b. Benefits.--These are described in Section II.A.1.
c. Hearings.--On Tuesday, May 16, 1995, the subcommittee
began its third hearing in its ``Making Government Work''
series. The hearing was held in two parts and considered
proposals for restructuring the programs and functions of the
Departments of Energy and Education. The first part of the
hearing will be held on May 16th; the second session was on May
23rd.
Subcommittee Chairman Horn noted at the opening of the
hearing that a number of proposals recommended terminating the
Departments of Education and Energy. He offered a criterion to
be used when considering whether, if an agency or department
did not already exist, it would make sense to create it.
Ranking subcommittee member Mrs. Maloney noted that the
country had little experience with abolishing Cabinet
departments. She cautioned against not adequately providing for
the continuation of many of the activities of the Energy
Department that she regarded as important.
In her testimony, Secretary O'Leary presented her agency's
own plan to reduce its workforce by 27 percent and its budget
by $14 billion over the next 5 years. She stated that the
Department would still be required to perform its four critical
missions. The Secretary identified these missions as national
security protection and nuclear danger reduction, weapons site
clean up and environmental management, science and technology
management, and energy security enhancement. She concluded that
the Energy Department, smaller in size, was still the best
institutional vehicle to perform these tasks.
In response to questions from the subcommittee, the
Secretary stressed the advantages of maintaining civilian
control over the Nation's nuclear weapons program. She
criticized suggested alternatives to the Energy Department,
such as the proposed Department of Science, as unwieldy and
ill-advised. When asked by subcommittee Chairman Horn about the
opportunities for closer policy coordination that a ``Natural
Resources Department'' offered, as had been proposed by
President Nixon, she responded that regular meetings by
administration Cabinet members in related fields provided for
policy coordination and the resolution of disputes.
The subcommittee reconvened its hearing on ``Consolidating
Federal Programs and Organizations'' on May 23, 1995. Donald
Hodel, former Secretary of Energy told the subcommittee that in
a market economy, the Energy Department had little to do with
producing or generating energy. He concluded that the very
existence of a Department of Energy was undesirable, as ``it
suggests that the U.S. Government is doing or is going to do
something about energy beyond what I believe government should
do.''
Former Energy Secretary Admiral James Watkins indicated
that he appeared before the subcommittee neither as an advocate
nor an opponent of the Department's elimination. Rather the
Admiral stressed his concerns for the appropriate stewardship
of the Nation's nuclear energy program. He called upon Congress
to initiate a careful review, drawing upon outside experts, to
determine which of the Department's functions should be
retained, which ought to be transferred and which could be
privatized.
Former Energy Secretary John Herrington called for the
elimination of the Department. He advocated ending all energy
research and development and energy conservation programs. He
further supported the privatization of government owned
laboratories engaged in research, the five Power Marketing
Administrations and the naval petroleum reserves. He proposed
placing nuclear weapons functions under the jurisdiction of a
newly created Under Secretary of Defense.
Former Under Secretary of Energy Shelby T. Brewer observed
that the Energy Department had strayed from its original
mission of obtaining national energy security. He noted that as
the Nation's energy circumstance had changed, the Department
shifted its mission to become an environmental management
department, a basic science department, and a biological and
medical research department. As a result, according to Mr.
Brewer, energy development and demonstration now accounts for a
little over 10 percent of the total budget. Mr. Brewer also
testified that a substantial contributory factor to the
Department's lack of a clear mission was the multiplicity of
congressional committees, each of which has its own set of
interests, different from the others.
Former Under Secretary of Energy Donna R. Fitzpatrick
joined her former colleagues in calling for the elimination of
the Department, suggesting that it had outlived its usefulness.
She advocated placing weapons related activities into a sub-
cabinet agency independent of the Defense Department.
As the hearing shifted its attention to the Department of
Education, subcommittee Chairman Horn noted that several
proposals would either eliminate the subcommittee and transfer
its activities to the States, or else merge its functions into
another Cabinet subcommittee, such as Labor.
Under Secretary of Education Marshall S. Smith stressed in
his testimony the strong public support for the Department and
its programs. He commented that: Federal involvement in
education supports democracy and our economy. This is not just
a State and local interest; this is a national interest. He
claimed that administrative costs account for only 2 percent of
the budget, with the subcommittee having the smallest ratio of
employees to total budget in the Federal Government.
Accompanying Secretary Marshall was Donald Wurtz, Chief
Financial Officer of the Department. Subcommittee Chairman Horn
and Ranking Member Maloney engaged Wurtz in a discussion of the
Department's efforts to improve its debt collection efforts for
student loans.
Chester Finn, of the Hudson Institute, testified that the
Federal Government had become a meddlesome force in American
education. He advocated eliminating the Department and
transferring its grant programs into either strings-free block
grants to the States, or transferring all the Department's
functions to other Federal agencies.
William Hansen echoed the views of Mr. Finn, adding that
the number of the Department's categorical programs had grown
from 130 in 1981 to over 250. According to Mr. Hansen the
number of Federal employees and the extent of local intrusion
could be reduced by greater use of program consolidation and
block grants. Through program consolidation, he said, the
Department could greatly reduce its staff.
George Munoz, Assistant Secretary of Treasury and the
Department's Chief Financial Officer testified that the
Education Department has undertaken a number of management
reforms. In particular he noted improvements in the
Department's financial management practices.
Paul Posner, Director of Budget Issues in the Accounting
and Information Management Division of the General Accounting
Office, testified on his office's conclusions on duplicative
and overlapping Federal programs. Program consolidation, he
reported, held out promising opportunities for increasing the
efficiency of government operations and improving performance.
He noted that savings were possible when programs with similar
objectives and clients were brought together and conflicting
requirements, duplication and overlap were reduced.
7. Corporate Structures for Government Functions.
a. Summary.--As the Federal Government continues along the
road of structural change, the demand for more efficient
operations will become more evident. This hearing drew lessons
from effective private and public sector managers on how to
downsize institutions effectively. The hearing also probed
recent proposals to create additional Federal entities (such as
the Air Traffic Control Corporation, the Forrestal Corporation,
and the Bonneville Power Corporation).
b. Benefits.--Learning from the best practices in business
will assist lawmakers and Federal managers to downsize and
streamline institutions effectively, with the least detrimental
impact on vital public services.
c. Hearings.--On June 6, 1995, subcommittee Chairman Horn
called the hearing which focused on the use of corporate forms
of organization, examining various forms of government
corporations and determining what advantages each possesses.
Donald H. Rumsfeld, chief executive officer, General
Instrument Corp., testified about the general concept of using
corporate structure for government functions. Mr. Rumsfeld
testified that in a reorganization, it is essential to question
an agency's mission, and restructure based on that review. If
an agency restructures prior to this review, the effort is
wasted. Mr. Rumsfeld also described several of the successful
restructuring of corporations in which he had been involved.
Roger W. Johnson, Administrator, General Services
Administration, testified on the reorganization underway at the
General Services Administration. Mr. Johnson noted that the
National Performance Review needs to make more progress, but
this was blocked by risk aversion and governing by process
rather than results. He also suggested that executives with
profit-loss responsibility could be deployed in certain Federal
jobs involved in operations. Johnson also criticized the
capital planning and budget processes and the lack of
incentives to invest in long-term systems to improve operations
and the annual budget process.
Jack Robertson, Deputy Administrator, Bonneville Power
Administration, testified concerning the Bonneville Power
Administration's proposal to become a government corporation.
Mr. Robertson described the competitive forces driving
Bonneville toward a corporate structure, including increases in
compliance costs associated with the Endangered Species Act and
enhanced competition between local power producers.
Daniel V. Flanagan, the Flanagan Consulting Group, Inc.,
testified about the proposed Forrestal Corporation, which would
funnel private sector investments into Federal energy
improvement required by the 1990 Energy Act.
Harold Seidman, senior fellow, the National Academy of
Public Administration, explained the history of the Government
Corporation Control Act of 1945, and the need to update it to
reflect modern realities. Mr. Seidman outlined a ``Government
Enterprise Standards Act'' which would improve oversight over
government corporations. Mr. Seidman described the uses of a
government corporation and the need to have a central body of
expertise to govern the creation of such entities.
Barry Krasner, president, National Air Traffic Controllers
Association, and Jack Johnson, president, Professional Airways
Systems Specialists, testified concerning the proposals to
create an Air Traffic Control Corporation. Both endorsed the
concept of corporatization, but advocated a government
corporation rather than private ownership of such a
corporation.
8. Streamlining Federal Field Structures.
a. Summary.--These two hearings were part of the Making
Government Work Report, see section II.A.1.
b. Benefits.--See Section II.A.1. referenced above.
c. Hearings.--On Tuesday, June 13, 1995, the subcommittee
held its sixth hearing in its ``Making Government Work''
series. The hearing, entitled ``Streamlining Federal Field
Structures'' considered whether the Federal Government's
existing network of field offices is best suited for the
Government's current responsibilities. The hearing further
inquired into the impediments that hinder making field office
networks more efficient.
Subcommittee Chairman Horn noted at the opening of the
hearing that close to a million Federal employees carry out the
daily work of the Federal Government at some 30,000 filed
offices, of which 12,000 have five or fewer employees. He
observed that overlapping and conflicting agency
responsibilities, programs, jurisdictions, and separate offices
have often made an ordinary citizen's contact with the Federal
Government a frustrating experience.
Ranking subcommittee member Carolyn Maloney commented that
over the past 50 years the number of Federal field offices has
proliferated with the initiation of each new Federal program.
She observed that many were set up when transportation and
communications were quite different. She praised the reform
efforts of the National Performance Review recommendations for
field office service improvement.
Mr. Dwight Ink, president emeritus of the Institute of
Public Administration and a fellow of the National Academy of
Public Administration, noted that field structure reforms ought
to be the product of a comprehensive consideration of overall
agency missions and activities. This review should consider
three interdependent dimensions: structures, systems, and
people. The review should also begin with a careful
consideration of the agency's impact on the public. Mr. Ink
noted that agency personnel ought to be well trained and that
field employee grade levels should be increased relative to
headquarters staff.
Mr. Alan Dean, former chairman of the board of trustees and
currently senior fellow of the National Academy of Public
Administration, commented that no single model for field
structure could be applied to all department and agencies. Each
agency, consequently, should design its field offices at every
level to reflect its mission and impact upon the public. Mr.
Dean also testified that agencies needed to decentralize
management to the lowest practicable level in order to achieve
greater responsiveness and best use of resources.
Professor Charles Bingman, of George Washington University,
decried barriers to reform noting that once a program or
activity had been enacted or implemented, all the relevant
interests tend to resist efforts at change. The Federal
Government, as a result, tended to lack the flexibility to
accomplish reorganizations of operating structures.
Mr. Wardell C. Townsend, Assistant Secretary for
Administration for the Department of Agriculture Department,
testified both on the President's Management Council Federal
Field Office Study and the Agriculture Department's own
progress in field office restructuring. He proposed four
general guidelines for field office restructuring. First, where
face-to-face contact is necessary, government presence should
be maintained at the point of service delivery. Second, if
face-to-face contact is unnecessary, communication technology
should be used to upgrade service. Third, back-room operations
should be centralized for efficiency. Fourth, unnecessary
layers of control should be eliminated.
Social Security Commissioner Shirley Chater testified on
her agency's reappraisal of its own field structure. She
reported her intention to reduce the number of its regional
offices from 10 to 5. She also intends to reduce layers of
management and increase the numbers of employees to supervisors
from 1 to 7 to 1 to 15 by 1999. Commissioner Chater said that
the changes were made possible, in part, by a 5-year, $1.1
billion investment in automation.
The Commissioner was followed by Ms. Mary Chatel, the
president of the National Council of Social Security Management
Associations. She presented her organization's plan for
redeploying 30 percent of headquarters and regional office
staff resources into the field. The plan would go farther than
the Social Security Administration's own plan to reduce
management layers.
Lynn Gordon, District Director of the Bureau of Customs in
Miami, FL, and George Rodriguez, Area Coordinator, Department
of Housing and Urban Development presented their National
Performance Review stories. Each were involved in local
initiatives, highlighted by the National Performance Review, to
improve ``customer service'' through enhanced agency
administrative flexibility. Both initiatives also seek to
improve communications with affected individuals and
institutions that are in contact with the agencies.
On June 19, 1995, the subcommittee held the second part of
its ``Streamlining Federal Field Structures'' hearing in
Chicago, IL, at the Chicago Historical Society. Subcommittee
Chairman Stephen Horn, in his opening statement, noted that the
subcommittee had come to Chicago for firsthand answers to four
questions. How should agencies determine their most effective
field structure? How can the management of field offices be
improved? How can closer interagency cooperation in the field
be encouraged? What factors deter agency heads from changing
field structures?
In his opening statement, Representative Michael Flanagan
welcomed the subcommittee to his hometown and his district. He
noted that the hearing would focus on transportation and
infrastructure issues. Representative Flanagan recalled that
the Chicago area had long been a leader in this area, beginning
with its role as a railroad crossroads and extending through
the development of O'Hare as the world's busiest airport.
Mr. William Burke, the Regional Administrator of the
General Services Administration (GSA) for the Great Lakes
Region, reported both on GSA's and the Federal Government's
presence in the area. Mr. Burke also serves as chair of the
Chicago Federal Executive Board. This board coordinates certain
activities of Federal agencies in the region. Among the
initiatives that Mr. Burke described was the ``Cooperative
Administrative Support Unit'' (CASU) program. CASUs are an
effort to hold down administrative costs by sharing overhead
costs among different agencies. He also cited telecommuting
programs as another means to hold down administrative costs.
Gretchen Schuster, Regional Director of the Department of
State's Passport Agency testified on her involvement with the
Chicago Federal Executive Board. She described the board's
efforts in coordinating the work of 154 member agencies in the
Chicago area.
Mr. Joseph Morris, an attorney in private practice in
Chicago, drew upon his prior experience as General Counsel for
the Office of Personnel Management. In addition to recommending
moving more of the Federal Government's work outside
Washington, Mr. Morris advocated better coordination among
field offices through the Federal Executive Boards and more
reliance by the Federal Government on Federal managers in the
field.
A second panel of witnesses, led off by Michael Huerta,
Associate Deputy Secretary of Transportation, covered field
offices involved in transportation and infrastructure programs.
Mr. Huerta explained to the subcommittee his Department's
proposal to reorganize. The plan would combine several
functions into a new Intermodal Transportation Administration,
combining all surface transportation and civilian maritime
functions. In response to questions, he noted that the
Department had yet to determine how the reorganization would
affect regional offices.
Mr. Huerta was joined by Mr. Garrote Franklin, Regional
Administrator of the Federal Aviation Administration, Mr.
Kenneth Perret, acting Regional Administrator, Federal Highway
Administration, and Mr. Donald Gismondi, Deputy Regional
Administrator of the Federal Transit Administration. The
regional officials discussed the cooperation among the various
components of the Transportation Department located in Chicago.
They noted that changes in Federal transportation grant process
resulting from the Intermodal Surface Transportation Act of
1991 had necessitated even more cooperation than had been the
practice in the past.
Col. Richard Craig, Commander and Division Engineer, North
Central Division of the Army Corps of Engineers, described the
current distribution of responsibility within the Corps among
district, division and headquarters offices. The headquarters
is primarily responsible for budget and broad policy issues,
the division offices provide contact with State and local
officials, program management and quality assurance. In
response to questions, Col. Craig discussed the Corps'
coordination with local governments on environmental regulatory
issues.
9. Performance Measurement, Benchmarking, and Re-engineering.
a. Summary.--Performance measurement uses indicators and
measures to assess how well a program or organization is doing
in terms of its mission, goals, and objectives. It focuses on
results and outcomes, not processes or compliance. The
indicators used are inputs, outputs, and outcomes. Inputs are
dollars or time expended, outputs are the quantity and quality
of services delivered, and outcomes are the quality and
quantity of the results the outputs achieved. Measures are
benchmarks to evaluate the indicators, such as a percentage
increase or decrease.
Performance measurement is necessary for benchmarking,
which is the measuring of performance against some actual or
desired standard of achievement, to be successful. Re-
engineering involves examining how a program or organization
works, followed by improving performance by redesigning work
processes.
b. Benefits.--Developing strategic plans that include
performance goals, and measuring and monitoring performance on
an ongoing basis, improves the quality of the activities
performed or services rendered, contributes to greater
efficiency, and can help to offset reductions in funding.
Focusing on results rather than on inputs will lead to
improvement in managing government operations.
c. Hearings.--On June 20, 1995, the subcommittee convened a
hearing on performance measurement, benchmarking, and re-
engineering. It received testimony from witnesses representing
States and think tanks.
Representative Bass opened the hearing by stating that the
subcommittee would examine performance measurement, bench-
marking, and re-engineering and learn how the private sector,
other countries, and State governments are using these
techniques to respond to the needs of their customers, boost
the quality of their products and services and lower costs.
Mr. Donald Kettl, professor of public affairs and political
science, University of Wisconsin, and the LaFolette Institute
of Public Affairs, and nonresident senior fellow, the Brookings
Institute for Public Management, stressed that performance
measurement offers the potential to measure success in terms of
results produced. It requires a long-term view. Performance
measurement is about communication and management, not number
crunching. Citizens can find out how tax dollars are delivering
and Congress can find out how programs are producing. It is
very difficult to measure outcomes, easier to measure outputs.
Mr. Harry P. Hatry, director, State and local government
research programs, the Urban Institute, had three
recommendations for Congress: seek and use information on
program quality and outcomes; coordinate among authorizing,
appropriations and oversight committees to review agency
performance information; and encourage State and local
governments to measure performance in terms of quality and
service to the public.
Mr. Herbert N. Jasper, senior associate, McManis
Associates, Inc., cautioned that performance measurement is not
a panacea, there are pitfalls such as gaming by selecting safe
targets, selecting data because it is readily available, even
if irrelevant, and ignoring the fact that it is labor-
intensive. He indicated that performance budgeting seeks to
make budget decisionmaking more analytical and objective.
However, the budget process is highly political and decisions
will not always be made objectively. He called re-engineering
the systematic application of common sense and described its
basic steps.
Mr. Johnny C. Finch, Assistant Comptroller General, General
Government Division, GAO, reported that GAO studies on reform
efforts show four actions to be critical if performance
measurement is to be used effectively to improve programs:
focus on mission and desired results; involve key stakeholders;
develop performance measurement systems that have certain
characteristics to provide relevant performance information for
program managers, staff, and other decisionmakers; and use
performance information in the selection and use of process
improvement techniques that will further enhance performance.
He emphasized that the number of measures chosen should be
limited to significant ones.
Ms. Linda Kohl, director of Minnesota Planning, described
the comprehensive statewide benchmarking project known as
Minnesota Milestones. It involved three stages. The first asked
Minnesotans to decide on a long-term vision for the State. The
second saw the development of measurable indicators called
``milestones'' which are clear, valid, associated with
available data, accurate, and outcome-based. The third phase
involved soliciting feedback on the indicators. In her opinion,
benchmarking and the Milestones can be a tool to assure
accountability for block grants.
Ms. Sheron Morgan, Office of State Planning, North
Carolina, discussed North Carolina's use of performance
measurement, known as Performance/Program Planning and
Budgeting (P/PPB). It links policy and budgeting and shifts
accountability from efforts to results. She mentioned the need
for evaluation, analysis and agency buy-in for successful
implementation of P/PPB, and for senior management involvement.
Mr. Joseph G. Kehoe, managing partner, government services,
Coopers and Lybrand, LLP, described activity-based costing
(ABC). He explained how ABC can be used to determine how much a
service or activity truly costs and the usefulness of value
analysis in ABC. Significant savings can be found with no
associated reduction in quality when managers focus on
activities and processes and eliminate the ones which do not
add value.
Ms. Laura G. Longmire, national director of benchmarking,
KPMG Peat Marwick, LLP, in discussing benchmarking, performance
measurement, and business process re-engineering, made it clear
that the key issue in adopting these techniques is enhancing
accountability. She said that processes must be measurable to
be improved. In her opinion, all processes can be measured both
in terms of quality and response time. Successful projects
share common themes: long-term scope; management commitment;
investment in technologies and tools; and constant
communication. The culture has to become one focused on results
rather than compliance.
10. Agency Initiatives To Implement the Government Performance and
Results Act of 1993.
a. Summary.--The Government Performance and Results Act of
1993 required agencies to evaluate their missions, goals, and
objectives; develop strategic plans and performance measurement
systems, set goals, and then evaluate results in the context of
those goals. Strategic plans are due by September 1997, annual
performance plans beginning in fiscal year 1997, and annual
performance reports, beginning in the year 2000. The
performance plans must include performance goals for agency
program activities, and performance indicators that will be
used to measure performance. OMB designated a series of pilots
for fiscal years 1994 through 1996 in performance planning and
reporting. A second set of at least five pilots will focus on
managerial flexibility and accountability for fiscal years 1995
and 1996.
b. Benefits.--Using performance measurement will change the
focus of management from process and inputs to results and
outcomes, increase efficiency and reduce costs by eliminating
nonvalue-added activities.
c. Hearings.--Subcommittee Chairman Horn opened the hearing
by summarizing the series of hearings on ``Making Government
Work''. This final hearing in the series focused on the
administration and its success in implementing the GPRA.
Mr. John A. Koskinen, Deputy Director for Management,
Office of Management and Budget, gave an update on the
administration's progress, saying that the pilot project stage
is valuable because it provides time for experimentation. There
are over 70 pilot projects in the first stage, none as yet in
the second. OMB's aim is to integrate GPRA information into the
budget and NPR processes.
Mr. Johnny C. Finch, Assistant Comptroller General, General
Government Division, GAO, suggested that there were five
challenges for agencies preparing to implement the GPRA:
developing and sustaining top management commitment; building
the capacity within the agencies to implement GPRA and use
performance information; creating incentives to implement GPRA
and change the focus of management and accountability;
integrating GPRA into daily operations; and building a more
effective congressional oversight approach. He thought the
hearing was an important first step in communicating to the
agencies the importance to Congress of performance-based
management.
Dr. Paul C. Light, director, public policy program, the Pew
Charitable Trusts, described the three types of accountability
system, compliance based, capacity based, and performance based
and these are not compatible, so changing from the compliance
based system predominant in the administration currently to a
performance based system will be difficult. He also discussed
``thickening'' of government, how it affects results, and how
it can be reversed. He suggested getting rid of one-to-one
spans of control and abolishing regional office layers.
Dr. R. Scott Fosler, president, National Academy of Public
Administration, thought GPRA could be a critical tool in
improving government performance, if properly understood and
effectively implemented. GPRA changes the focus from inputs to
results. Success of GPRA depends on leadership from the
executive branch and support from Congress. He questioned
whether the capacity was there in the agencies for GPRA
implementation and suggested that GPRA implementation may lag
behind schedule.
Mr. Anthony A. Williams, then-Chief Financial Officer of
the U.S. Department of Agriculture, is responsible for
coordinating GPRA implementation and testified on Forest
Service efforts which constitute one of eight USDA pilots. He
described how it had developed a set of 8-10 outcome-oriented
corporate performance measures and the All Resources Reporting
System, an integrated financial and reporting system which
tracks both output- and outcome-related accomplishments.
Performance measurement is achieved through a Management
Attainment Report. He mentioned that good cost accounting
systems are necessary to capture the cost of achieving
outcomes, and that it is important to provide incentives to
build management support for GPRA.
In his testimony, Vice Admiral Arthur E. (Gene) Henn
described the Coast Guard's pilot project which was distilled
from a business plan developed in the Vice Admiral's office. It
is one of four pilots in the Department of Transportation. He
described the process as using a simple formula to get the
desired outcomes, set goals, empower, manage risks, and measure
activities. He emphasized the need to get ``buy-in'' from
everyone involved in the project and encouraged the
subcommittee to review the reports sent to Congress by the
agencies.
Mr. Joseph Thompson, Director, New York Regional Office,
U.S. Department of Veterans Affairs, testified on the status of
the implementation of GPRA in the New York regional office of
the VA, which is also an NPR reinvention lab. Organization was
changed from a hierarchical model to a self-managed team
structure; the step process was reduced from 30 to 20. He
praised the GPRA as a tool for organizational improvement.
Colonel F. Edward Ward, director of field offices, Defense
Finance Accounting Service, reported on the Air Combat Command
(ACC) GPRA pilot. ACC is involved in the performance
measurement pilot now and hopes to take part in the performance
budgeting pilot in 1988. He described how ACC had developed a
cost accounting methodology to track costs per unit of output
and capture cost associated with performance measures, the Job
Order Cost Accounting System II. He stressed the need to link
goals and performance measures, for measures to be quantifiable
so that costs can be linked to the performance indicators, and
to track areas important to the ACC's mission, not just areas
that are easy to measure.
11. The General Services Administration's (GSA) Security Measures at
Federal Office Buildings.
a. Summary.--On April 19, 1995, a bomb destroyed the Murrah
Federal Office Building in Oklahoma City, killing 168 people,
including 19 children, and injuring over 600 people. As a
result of the bombing, security procedures were tightened and a
thorough review conducted of security at Federal office
buildings. In 1988, the Congress passed Public Law 100-440,
which mandated that officer strength of the Federal Protective
Service (FPS) be augmented by not less than 50 officers per
year until a strength of 1,000 was reached. Instead, FPS
personnel were reduced gradually to less than 400.
b. Benefits.--This hearing, part of the subcommittee's
ongoing activities relating to oversight of the GSA, revealed
that GSA had not complied with Public Law 100-440. By
identifying the barriers to improving workplace security,
including low pay, inadequate recruitment, and the extension of
buyouts to security personnel, the subcommittee pointed out
methods for remedying the situation.
c. Hearings.--Subcommittee Chairman Horn called the hearing
on May 3, 1995, to examine GSA's security measures at Federal
office buildings in the aftermath of the terrorist attack on
the Oklahoma City Federal Building.
Mr. Roger Johnson, then-Administrator, General Services
Administration (GSA), testified as to GSA's initial response to
the Oklahoma City bombing, and spoke about follow-up security
measures to protect the Federal worker.
Mr. Kenneth Kimbrough, then-Commissioner, Public Buildings
Services, GSA, noted that Federal Protective Service officers
were understaffed at the time of Oklahoma City with only 409
positions filled. Mr. Kimbrough added that a 1988 law mandates
that the Federal Protective Service shall be not less than
1,000 officers. GSA under the current and previous
administrations were not in compliance with this law.
Mr. Gary Day, Assistant Commissioner for Federal Protective
Services, Public Building Service, GSA, echoed Mr. Kimbrough's
remarks and added that low pay and compensation have hindered
the Federal Protective Service's ability to hire and retain up
to its authorized complement of 1,000 officers.
Ms. Faith Wohl, Director, Family Workplace Institute, GSA,
testified that GSA has taken numerous preventive measures to
deter kidnaping and child abuse in Federal child care
facilities, but that it was not in GSA's experience to expect a
terrorist attack.
Ms. Julia Stasch, Deputy Administrator, GSA, testified as
to the competence of contract security officers. Ms. Stasch
noted that officers were well trained and worked in concert
with local law enforcement forces.
Ms. Emily Hewitt, General Counsel, GSA, was questioned
about whether she had performed a compliance audit to determine
which laws GSA was not complying with. Ms. Hewitt had not
performed such an audit. Subcommittee Chairman Horn recommended
that administration orientation for new agency heads include
such an audit.
12. Controls Over Illegal Immigration--Along the Border and Within the
Interior.
a. Summary.--In 1993 and 1994, Congress voted to increase
funds available to control immigration at the border, and
increase the numbers of Border Patrol officers by 6,000. As
these officers are deployed, the subcommittee remained
interested in determining how they were being used, and how
they were being divided amongst border duty and interior duty.
b. Benefits.--This hearing shed light on the problems faced
by State and local officials as a result of Federal policies on
illegal immigration. Moreover, the lack of intergovernmental
coordination and Federal agency attention to the concerns of
local government brought into relief the frustration of local
officials: They have neither the policy levers to stop
immigration, nor control of the Federal tools to minimize the
impact, but still must bear the cost of criminal justice,
health, and education related to illegal immigration.
c. Hearings.--On June 12, 1995, the subcommittee held a
hearing to explore the resources that should be used to control
illegal immigration at the border and within the interior of
the United States. Witnesses included California State and
county officials and officials from the Immigration and
Naturalization Service (INS). Subcommittee Chairman Horn called
the hearing to examine what resources should be deployed to
control illegal immigration at the border and the interior.
Mr. Daniel E. Lungren, attorney general, State of
California, testified on the impact of illegal immigration on
California's prison population and crime problem. Mr. Lungren
noted that the dramatic costs involved with illegal immigration
drains California tax dollars.
Mr. Bill Jones, secretary of State of California, noted
that the Motor-Voter Act increases the opportunity for a large
number of people to participate in the political system.
However, Mr. Jones voiced concern that a number of illegal
immigrants would also participate unless California is allowed
to take preventive steps.
Mr. Gustavo de la Vina, Director, Western Region, INS,
testified that the INS has developed a comprehensive
immigration enforcement strategy that consists of border
enforcement and management, work site enforcement and
verification, detention and removal of criminal and deportable
aliens, and customer service and assistance to States. Mr.
Richard K. Rogers, Western Region, Los Angeles District, INS,
testified on a new L.A. initiative which will enable employers
to become fraudulent document experts. Mr. Johnny N. Williams,
Chief Patrol Agent, INS Border Patrol Sector Headquarters (San
Diego), testified on the cooperation that his agency has
received from State and local law enforcement agencies. Mr.
Williams noted that the Border Patrol's interdiction rate has
steadily increased.
Mr. Frank Ricchiazzi, assistant director of research,
California Department of Motor Vehicles, testified on
California policy and technological initiatives designed to
improve their ability to provide secure, authentic and durable
driver's licenses and ID cards.
Mr. Timothy J. Staffel, chairman of the board of
supervisors, county of Santa Barbara, noted that local and
county governments bear the brunt of costs associated with
illegal aliens in California. For example, Mr. Staffel asserted
that one in five births in Santa Barbara County were to illegal
alien mothers whose deliveries were funded by Medicaid.
Mr. Jim Thomas, sheriff, county of Santa Barbara, voiced
concerns about the large number of illegal aliens in California
jails, the increase in the illegal criminal element in narcotic
and gang investigations, and the lack of effective illegal
employment investigations.
Mr. Thomas W. Sneddon, Jr., district attorney, county of
Santa Barbara, described the responsibilities of the
Immigration and Naturalization Service, the U.S. attorney's
office and the Social Security Administration and the level of
assistance given by those offices to local government. Mr.
Sneddon faulted the Social Security Administration for not
providing information to local government to assist in crime
control by identifying illegal aliens.
13. Budget and Financial Information--Annual Shareholders Report: How
Does the Citizen Know What Is Going On?
a. Summary.--Under the terms of the Congressional Budget
Act, Congress passes a budget resolution outlining aggregate
levels of discretionary spending and targets for
reconciliation. Lacking from the annual budget process is a
review of the total financial liabilities and assets of the
Federal Government. The hearing examined ways to improve
information to bring liabilities totaling trillions of dollars
under the discipline of an annual budget.
b. Benefits.--Increased public accessibility would enhance
the Federal Government's accountability and demonstrate that it
is fulfilling its stewardship duty to the American public. The
hearing gave attention to the absence of important financial
information in the budget process. It is important to regularly
review this additional financial information and begin
incorporating it into the annual budget process.
c. Hearings.--Subcommittee Chairman Horn called the hearing
on July 11, 1995. The hearing focused on information on the
financial health of the Federal Government available to private
citizens, and options for improving access to that information.
At the hearing, testimony was received from witnesses from the
General Accounting Office, the Office of Management and Budget,
Citizens for Budget Reform, and America Report.
Mr. Gene Dodaro, Assistant Comptroller General, Accounting
and Information Management Division, General Accounting Office
(GAO), noted the importance of having solid budgetary and
financial information when making crucial policy decisions. Mr.
Dodaro noted shortcomings in financial management, but asserted
that progress in improving financial reporting was occurring as
a result of the Chief Financial Officers Act and the creation
of the Federal Accounting Standards Advisory Board (FASAB).
Mr. Don Chapin, Chief Accountant, GAO, updated the
subcommittee on the activities of FASAB. According to Mr.
Chapin, FASAB is developing standards for reporting financial
information which will allow Congress to improve its ability to
provide oversight of Federal operations. Mr. Chapin noted the
possibility that agencies might not be able to make operational
the standards recommended by FASAB.
Mr. G. Edward DeSeve, Controller, Office of Federal
Financial Management, Office of Management and Budget, focused
on three areas: the integration of the budget formulation and
execution process with financial standards; the role of
performance and program integrity in budgeting and financial
management; and streamlining current reporting procedures.
Mr. Harrison Fox, president, Citizens for Budget Reform,
testified on the importance of including non-budgetary
financial information in the annual budget process, to give
greater attention to the deteriorating financial position of
the Federal Government, as measured by the USA Report published
by Citizens for Budget Reform. Mr. Fox advocated adoption of a
financial plan to improve accessibility of information, risk
assessment, and measuring outcomes and results.
Mr. Brecht, publisher, America Report, testified about his
project to make clear to citizens the financial health of the
government in America Report, which is modeled on corporate
annual reports. Mr. Brecht advocated a clearer vision of where
the United States is headed, the role the Federal Government
should play, and clarifying the core values which will guide
these efforts. He also suggests that every agency be required
to communicate its goals to citizens in an understandable
fashion.
14. The Inspector General Act of 1978.
a. Summary.--On Tuesday, August 1, 1995, the subcommittee
held an oversight hearing of the Inspector General Act of 1978.
Inspectors General (IG's) are charged with protecting the
integrity of Federal programs and resources. Through their
audits and investigations, Offices of Inspectors General
(OIG's) seek to determine whether program offices, contractors,
Federal workers, grantees and others are conforming with
regulations and laws.
Since the IG Act first established Inspectors General in
1978, the number of departments and agencies with IG's has
grown to 61. Of these, 29 IG's are Presidentially appointed and
subject to Senate confirmation. Another 32 IG's in smaller
agencies are appointed by their agency heads. Presidentially
appointed IG's have staffs totaling about 10,000 employees,
with budgets adding to $900 million. Last year IG's' findings
led to more than 14,000 successful criminal and civil
prosecutions, $1.9 billion in investigative recoveries, and $24
billion in recommendations that agency funds be better used.
Presidentially appointed IG's sit on the President's Council on
Integrity and Efficiency (PCIE), chaired by the Deputy Director
of the Office of Management and Budget; agency appointed IG's
are on the Executive Council on Integrity and Efficiency
(ECIE).
To assure their independence, the IG Act gives them
latitude in running their offices. They report directly to
agency heads when identifying serious shortcomings, and
directly to Congress in semiannual reports. IG's are
effectively the only executive branch officials reporting
directly to Congress without the need for clearance. They
historically have been vigilant in protecting their autonomy,
and this has led to differences with their bosses on issues of
resources, staffing, and priorities. Critics have argued that
IG autonomy has made them less responsive to management's
legitimate need to use its audit and program evaluation
function for managing agency operations. Also at issue is that
IG's ``compliance'' orientation may lead to adversarial
relationships between them and their agency managers.
The National Performance Review (NPR) has led to a
reappraisal of the IG mission. The NPR advocated that IG's
broaden their focus ``from strict compliance auditing to
evaluating management control systems.'' The NPR further argued
that the IG compliance focus stifled agency innovation. IG's
have answered, in part, with a vision statement that commits
them to greater cooperation with program managers to strengthen
operations.
The PCIE is working on procedures for acting on allegations
of OIG impropriety. The FBI would investigate criminal
complaints, but the process is less clear on how to address
non-criminal complaints, which might allege malfeasance or
equal employment opportunity violations. The Associate FBI
Director for Investigations usually serves as chair of the
PCIE's Integrity Committee.
The Federal Government's reliance on information technology
systems raises several issues for IG's. GAO, for example,
concluded that ``seriously inadequate automated financial
management systems are currently the greatest barrier to timely
and meaningful reporting'' at Federal agencies. Weak automated
systems are more vulnerable to fraud, and they reduce
management's ability to monitor operations.
IG's have a stake in developments affecting Federal
financial management. The Chief Financial Officer Act (CFOA)
requires agencies to have audited financial statements
beginning for fiscal year 1997. OIG's will perform most agency
audits. Under the Government Performance and Results Act (GPRA)
agencies will develop performance measures for agency
management and eventually use the measures for allocating
budgets.
b. Benefits.--The IG's work reduces fraud, waste, and abuse
in the Federal Government and contributes to improvement in
efficiency and effectiveness of agency operations. The
independent status of the IG's renders their opinions more
objective, and therefore of greater value to lawmakers and
other reviewers.
c. Hearings.--Subcommittee Chairman Horn opened the hearing
on August 1, 1995, stating that Inspectors General must be
accountable. They should encourage improvement while not
stifling innovation. He noted that the IG Community is working
on increasing their cooperation with management.
June Gibbs Brown, Inspector General of the Department of
Health and Human Services and Vice Chair of the President's
Council on Integrity and Efficiency, noted that the IG's are in
a unique position to help program managers and the Congress
find ways to achieve a more effective and efficient government.
Hubert Sparks, the vice chair of the executive council on
integrity and efficiency and inspector general of the
Appalachian Regional Commission emphasized the unique role and
relationship between IG's and the rest of their organization.
IG's will always be in a position of balancing actions that
will fulfill the requirements of the IG Act and contribute
positively to improve government operations.
In response to a question from Mr. Bass, Ms. Brown disputed
the conclusion of Vice President Gore contained in a National
Performance Review report, from which Mr. Bass quoted, that
``At virtually every agency he visited, the Vice President
heard Federal employees complain that the IG's basic approach
inhibits innovation and risk-taking. Heavy-handed enforcement
with the IG watchfulness compelling employees to follow every
rule, document every decision, and fill out every form has had
a negative effect in some agencies.'' Ms. Brown stated that
very little of the IG resources are really directed internally
to people filling out forms or doing that last ``i''-dotting.
Ms. Valerie Lau, the chairman of the PCIE audit committee
and the Inspector General of the Department of the Treasury
testified on the ``substantial'' new audit responsibilities
imposed on the Inspectors General as a result of the Chief
Financial Officers Act. She commented on the inherent
difficulty of the audits.
Mr. Frank DeGeorge, Inspector General of the Commerce
Department, reported on his office's experience with
information technology evaluations. He testified that system
acquisitions at Commerce are often disorganized and ad hoc.
Mr. William Esposito, Deputy Assistant Director, Criminal
Investigative Division, Federal Bureau of Investigation and
chairman of the PCIE's integrity committee, reviewed the
process for considering allegations of wrongdoing against
Inspectors General. He noted that revisions to the policy were
currently under consideration.
Mr. Charles Dempsey, former vice-chair of the PCIE and
former Inspector General of the Department of Housing and Urban
Development thought the IG Act was the best piece of public
administration legislation in the last 20 years.
Mr. Sherman Funk, former Inspector General of the
Departments of State and Commerce, also commented on the
balancing act that the Inspectors General perform. He disputed
the contention, which he attributed to his fellow witness Paul
Light, that IG's are too often focused on peripheral issues
rather than concerned with the performance of the activities
for which they were responsible.
Dr. Paul Light, Pew Charitable Trusts, recalled the
observation from his book, Monitoring Government that the
Inspectors General were not sufficiently focused on prevention.
He was of the opinion that the IG's hide behind the Yellow Book
too frequently when it comes time to give meaningful advice to
their departments and agencies on how they might prevent
mistakes before they happen.
Mr. Dwight Ink, president emeritus, Institute of Public
Administration, observing that he testified from the
perspective of his experience as a program manager, urged a
narrower focus for the IG's. He testified that because program
managers are held accountable for program outcomes, they ought
to have their own resources for ensuring the integrity of the
programs for which they are responsible.
15. Implementation of the Chief Financial Officers Act of 1990 and the
Government Management Reform Act of 1994.
a. Summary.--The Chief Financial Officers (CFO) Act of 1990
required agencies to have audits of revolving funds, trust
funds and all funds that resembled commercial enterprises. The
1994 Government Management Reform Act (GMRA) extended the CFO
requirements to cover all agency resources, with agency-wide
audited financial statements due in March 1997, and Federal
Governmentwide audited financial statements due in March 1998.
b. Benefits.--Audited financial statements improve the
quantity and quality of information provided to users of
financial statements, allowing better decisionmaking concerning
the allocation of scarce resources. Requiring agencies to
prepare and have audited their financial statements requires
them to strengthen their internal controls over waste, fraud
and abuse, and enhances the reliability of the information
contained in the financial statements. In all, the result for
the executive branch will be greater efficiency and
effectiveness of agency operations.
c. Hearings.--Subcommittee Chairman Horn opened the hearing
held on July 25, 1995, by stating that audited agency financial
statements will minimize weak management controls, fraud and
waste. The goal of each agency must be to produce a full
statement on time and get an unqualified or ``clean'' opinion
on the statement.
Mrs. Maloney, in her statement, said that quick action was
necessary to ensure compliance with the laws and stressed that
there should be no delay in meeting the deadlines for audited
financial statements.
Mr. Charles A. Bowsher, Comptroller General of the United
States, described the progress made by the 24 agencies of the
executive branch in implementing the CFO Act and the GMRA and
stressed that proper accounting and financial reporting leads
to much better barriers against fraud, waste, and abuse.
Mr. G. Edward De Seve, Controller, Office of Federal
Financial Management (OFFM), Office of Management and Budget
(OMB), discussed the role of the Federal Accounting Standards
Advisory Board in developing Federal accounting standards. He
hopes these will be available in time to be used for the fiscal
year (FY) 1996 agency audited financial statements and the
fiscal year 1997 Governmentwide audited financial statements.
Mr. Gerald R. Riso, fellow of the National Academy of
Public Administration and former Associate Director for
Management and Chief Financial Officer, OMB, provided a
historical perspective of the development of the CFO Act. In
his view, the CFO Act has improved Federal financial management
in many agencies, although the rate of progress in system
improvement has slowed down.
Mr. Edward J. Mazur, vice president for administration and
finance, Virginia State University, and former Controller,
OFFM, OMB, had several recommendations to strengthen the CFO
Act, for instance the Controller of OFFM should report directly
to the OMB Director, and that agencies should establish audit
committees.
Mr. Harold I. Steinberg, former Deputy Controller, OFFM,
OMB, testified on four aspects of the CFO Act: its genesis and
initial funding; agency CFO structures and appointments,
financial management staffing; and the preparation of audited
financial statements. In his opinion, agencies derive the real
benefit from being audited from going through the process of
preparing the financial statements, because they learn about
and can correct weaknesses in their accounting and financial
reporting systems.
Mr. Buel T. Adams, vice president and treasurer, CBI
Industries, representing the Financial Executives Institute,
described the state of fiscal affairs of the Federal Government
as ``woefully inadequate'', especially with respect to
financial management systems. He said that management
accountability must be improved and that taxpayers should hold
Congress accountable for ensuring that their tax dollars are
being spent efficiently.
Mr. Thomas V. Fritz, president and chief executive officer
of the Private Sector Council, listed benefits from audits
required by the CFO Act: savings; knowledge about internal
control and information systems problems; and clearer, more
accurate and useful information about an agency's financial
condition.
Mr. Anthony A. Williams, then-Chief Financial Officer
(CFO), U.S. Department of Agriculture, described USDA's
accomplishments in financial management, including procurement
reform, developing cost management techniques, oversight of the
National Finance Center, and the Financial Vision and Strategy
project.
Mr. Alvin Tucker, Deputy CFO, Department of Defense,
described steps the Department of Defense is taking to try to
ensure that the goals of the CFO Act can be attained.
Mr. Dennis Fischer, CFO, General Services Administration,
described GSA's approach to CFO Act compliance. GSA is one of
only four agencies that routinely receive unqualified opinions
as a result of agency-wide audits. He credited GSA's success on
having implemented the fundamental aspects of good financial
management: CFO organization and responsibility well defined
and strong controllers in place in major program areas such as
the Public Buildings Service, Federal Supply Service, and
Information Technology Service.
Ms. Bonnie Cohen, Assistant Secretary for Administration
and CFO, Department of the Interior, stressed the advantages of
having responsibility for both budget and finance functions,
and predicted that, with increased use of performance
measurement, the link between budget and finance will become
even stronger.
16. Department of Defense's Financial Management Problems.
a. Summary.--The subcommittee has been examining certain
indications, as expressed in news articles and in congressional
hearings, of the Department's lack of ability to control
problem disbursements, specifically negative unliquidated
obligations and unmatched disbursements, as well as contractor
overpayments which the Department of the Navy took years to
recover. Additionally, as part of the ongoing subcommittee
review of the Chief Financial Officers Act of 1990 and the
Government Management Reform Act of 1994, it appears that the
Department of Defense (DOD) will be unable to comply with the
requirements of the GMRA for a considerable number of years,
until they implement modern accounting and financial systems
that currently they lack.
Recent articles in the national press and other hearings on
Capitol Hill have highlighted serious shortcomings in the
Defense Department's financial management systems. The
Washington Post reported that, in the past 10 years the
Department of Defense had spent $15 billion that it could not
account for. Contractors are routinely overpaid millions of
dollars and are sometimes stonewalled when they try to give the
money back. The systems are antiquated and make it difficult
for staff to do their work accurately. The CFO Act of 1990
required the preparation and audit of financial statements for
the Departments of the Army, the Air Force and 22 funds. Out of
24 parts of DOD examined in fiscal year (FY) 1994, only 1, a
minor fund, received an unqualified opinion. Most were either
not audited or received a disclaimer, meaning that the
statements were not auditable, and therefore not in compliance
with the CFO Act.
b. Benefits.--The hearing addressed areas of needed
improvement in financial management at the Department of
Defense. If the millions of dollars that have been reported as
overpayments to contractors had been used for necessary
expenses, the Department would have been able to improve its
readiness at a lesser cost than at present.
c. Hearings.--A hearing was convened on November 14, 1995,
to examine the Department of Defense's compliance with the
Chief Financial Officers (CFO) Act of 1990 and the Government
Management Reform Act of 1994. Subcommittee Chairman Horn
opened the hearing by saying that strong financial management
was needed and that the hearing would focus on what the
Department was doing to strengthen its management control.
Mrs. Maloney echoed Mr. Horn's statements and emphasized
the need to follow generally accepted accounting principles
(GAAP), citing the example of the improvement in the city of
New York's fiscal situation after it adopted GAAP.
Mr. John Hamre, Comptroller, Department of Defense,
responded to the criticisms in the May 14, 1995 Washington Post
article, and asked that the letter he had sent to Hon. Bill
Young, chairman, Subcommittee on National Security, Committee
on Appropriations, dated May 22, 1995, be included in the
record. He gave his perspective on how DOD was doing in reform
and improvement of financial management, and emphasized DOD's
commitment to consolidate its accounting systems, and resolve
the longstanding problem of unmatched disbursements.
Mr. Richard Keevey, director, Defense Finance Accounting
Systems, in answer to a question from subcommittee Chairman
Horn as to how he would rate the DOD, on a scale of 1 to 10,
with 10 being closest to getting clean audit opinions, he rated
the Department as a 3.
Mr. Alvin Tucker, Deputy CFO, DOD, discussed DOD problem
disbursements, specifically the unmatched disbursements problem
and overpayments to contractors. He then described DOD's plans
for financial management reform. He stated that the overarching
problem preventing an unqualified or qualified opinion on the
DOD's financial statements is that the accounting systems which
support the financial statements do not have an integrated
general ledger or produce account-oriented transaction files,
but gave no timetable for implementing a transaction-driven
general ledger system.
Mr. G. Edward DeSeve, Controller, Office of Federal
Management, Office of Management and Budget, testified that OMB
has been helping the Department of Defense move toward meeting
the requirements of the CFO Act as set out in OMB Circular A-
127, Financial Management Systems (the Circular). OMB has
recommended that DOD look outside of its own current financial
management structure for system solutions, rather than building
on the best of the in-house systems, since 76 percent of them
do not meet the Circular's requirement to be consistent with
the U.S. Standard General Ledger.
Mr. Gene Dodaro, Assistant Comptroller General, General
Accounting Office, gave the GAO's perspective on the challenges
facing the DOD in meeting the objectives of the CFO Act. He
stated that CFO Act audits have brought greater clarity to
DOD's financial management problems. Progress is slow.
According to a recent DOD IG report, general fund financial
statements will remain unadaptable until September 1998 and the
DOD IG will not be able to render an audit opinion on any of
the services until the year 2000 at the earliest. He suggested
the establishment of an independent, outside board of experts
to aid in reform efforts.
Ms. Helen T. McCoy, Assistant Secretary of the Army,
described the improvements the Department of the Army has made
in implementing the Chief Financial Officers (CFO) Act. The
Army has prepared agency-wide audited financial statements as a
pilot under the CFO Act since fiscal year (FY) 1991 but the
auditors have been unable to express an opinion on the
reliability of the financial statements because the accounting
systems that provide the information for the statements do not
have an integrated general ledger or produce account-oriented
transaction files. The audit opinions, however, did note
significant progress. The management control process has been
restructured, and there is a new performance assessment process
within Department of the Army headquarters.
Ms. Deborah P. Christie, Assistant Secretary of the Navy,
discussed the plans that the Department of the Navy has for
financial management improvement. She emphasized the role of
selection, upgrading, and deployment of financial systems. Four
key activities in improving Navy financial operations are:
organizing the Department, consolidating finance and accounting
services in DFAS, standardizing and upgrading accounting
systems, and improving the feeder systems and the quality of
the data they contain. The final step will be to ensure the
input of accurate data through modern feeder systems and a
system of internal controls to provide sound financial
information for internal decisionmaking and external reporting.
Mr. Robert F. Hale, Assistant Secretary of the Air Force,
discussed the progress the Department of the Air Force had made
under his leadership. He has set up the Financial Improvement
Policy Council, which works with senior Air Force and DOD
leaders, and with organizations within the DOD such as DFAS and
DBOF, the Financial Management Steering Committee, and the
Senior Financial Management Oversight Council. He has called on
the GAO and the Financial Executive Institute for advice and
guidance on how to improve financial management. As a result,
the Air Force has asked for assistance from Coopers and Lybrand
and Electronic Data Systems in the area of systems
certification and performance indicators. The Air Force is
concentrating its efforts in the critical areas of inventory
management, automated data processing security, internal
controls, and streamlining the financial management process.
Ms. Eleanor Hill, Inspector General, DOD, provided an
assessment of the Department's ability to improve its finance
and accounting operations and to comply with the acts. She also
discussed the audit approach devised by the DOD IG's office.
She stated that the financial statement data for the vast
majority of DOD funds remain essentially not in condition for
audit, because of a general lack of effective internal
management controls. Neither the OIG nor the Service audit
organizations were able to give audit opinions on the financial
statements for the largest DOD funds covered by the CFO Act
requirements for fiscal year 1994, funds totaling $715.5
billion. The most fundamental problem was that accounting
systems do not compile and report reliable audit information.
17. Electronic Reporting Streamlining Act of 1995.
a. Summary.--The Paperwork Reduction Act of 1995 included a
number of reforms designed to reduce the burden of government-
imposed paperwork on businesses and households. The Electronic
Reporting Streamlining Act of 1995 would reduce the burden of
regulatory reporting for business by allowing necessary data to
be reported in an electronic format.
b. Benefits.--This will improve the efficiency of Federal
Government operations by allowing electronic filing of the
necessary documents.
c. Hearings.--Subcommittee Chairman Horn held a hearing on
October 10, 1995, which focused on possibility of streamlining
Federal operations, and easing the burden on private firms of
reporting regulatory information, by adopting a scheme for
electronic reporting.
Mr. Thomas Kelly, Director, Regulatory Management and
Information, Office of Policy, Planning and Evaluation of the
U.S. Environmental Protection Agency (EPA) testified concerning
his agency's use of information technology and the various
initiatives related to electronic reporting and dissemination
of information. Many of these initiatives were associated with
the National Performance Review projects.
Mr. Stephen Hanna, assistant for information technology,
California EPA, explained his agency's pilot project for
reporting regulatory information on hazardous waste manifests
and other data required to be reported by private companies.
Mr. Brad W. Lamont, vice president, Romic Environmental
Technologies Corp., testified about his company's role in the
California pilot. Mr. Lamont noted the large number of pages of
data that Romic was required to submit to Cal-EPA, and that
this volume of data was transferred by modem in 45 seconds.
Upon questioning, Mr. Lamont noted the receptiveness of the
Cal-EPA to new electronic reporting initiatives.
Mr. David Roe, senior attorney, Environmental Defense Fund,
noted the role that increased information about toxic release
can play in improving enforcement and community information.
Rose explained the manner in which electronic data in
California eases the work of his organization in maintaining
oversight of environmental data.
Mr. Richard Ferguson, board member and executive director
of Environment and Safety Data Exchange, is a leading expert on
data exchange and standards issues. Mr. Ferguson explained the
rationale for moving toward increased electronic reporting.
According to Mr. Ferguson, the primary reason is that some will
benefit from a reduced reporting burden, and it is those who
must do the work to achieve the standards required for the plan
to work.
18. Use of Transportation by Senior Executive Branch Officials in
Compliance with Federal Travel Guidelines.
a. Summary.--Continuing its oversight investigation and
pursuant to Rules X and XI of the Rules of the House, the
subcommittee has reviewed more than 40,000 documents relating
to travel by senior executive branch officials. A pattern of
neglect, if not abuse, was discovered on the part of some
Federal agencies.
The Office of Management and Budget (OMB), in Circular A-
126, has developed standards for government aircraft use by
senior executive branch officials. These requirements have been
supplemented by a White House Memorandum (dated February 10,
1993) and by OMB Bulletin 93-11. As President Clinton stated in
the Memorandum: ``The taxpayers should pay no more than is
absolutely necessary to transport government officials. The
public should be asked to fund necessities, not luxuries, for
its public servants.''
In addition to covering the use of government aircraft, the
President's Memorandum contains limitations on the use of
regularly scheduled commercial aircraft. It further requires
that travel documentation ``be disclosed to the public upon
request, unless classified.'' The General Services
Administration (GSA) is charged with compiling a semiannual
``Senior Federal Travel Report,'' based on submissions from
Federal agencies. It is incumbent upon the agency to supply
full and accurate data in compliance with travel protocols and
requirements. However, this has not been the case. OMB Circular
A-126 requires the semi-annual publication of specific data in
the Senior Federal Travel Report, published by the General
Services Administration. Two problems exist in the reporting of
senior official travel. First, agencies are frequently late in
submitting completed reports to GSA. Second, agencies do not
always supply all the needed data (specifically, cost to the
government, reimbursable cost), intermediate destinations on
round trip flights are frequently not reported, and costs are
not pro-rated per individual.
Additionally, the published copies of the Senior Federal
Travel Reports are difficult to read and interpret. The
International Civil Aviation Organization (ICAO) codes as
listed in the text of the reports are not parallel to the ICAO
codes as listed in the index. Important data elements are
omitted from the final reports. There is no audit structure
that enables GSA to enforce compliance.
The subcommittee held two investigative hearings to examine
the travel practices of Cabinet Secretaries and other senior
executive branch officials. The first hearing was held on
December 29, 1995, to examine the abuse of travel by Energy
Secretary Hazel O'Leary, former White House staff official
David Watkins, General Joseph Ashy, and the incomplete
reporting by agencies such as NASA.
The subcommittee received testimony from Representative
Barlett regarding his 2 year involvement in examining the use
of government aircraft by senior Federal officials. He became
interested in the abuse of aircraft after David Watkins, at the
time a White House staffer, used a Presidential ``whitetop''
helicopter for transportation to play golf at a Frederick, MD
golf course.
Mr. David E. Williams, research director, Citizens Against
Government Waste, testified about the Citizens Against
Government Waste's longstanding examination of the travel of
Secretary O'Leary. Williams testified among other things that
Secretary O'Leary retains a staff of 14 to handle her
invitations and travel arrangements.
Mr. Peter B. Zuidema, Director, Aircraft Management
Division, Federal Supply Service, General Services
Administration, testified that Federal aircraft can be used
only for official purposes, and only when commercial airlines
are not reasonably available. A cost comparison must also be
performed.
Mr. Dabis B. Buckley, Special Assistant to the Inspector
General, Department of Defense, testified that as a result of
investigations by the Office of the IG, the Department of
Defense has taken steps to tighten its policy regarding the use
of its aircraft.
A second hearing was held on May 16, 1996, to investigate
practices at three executive branch agencies, the Department of
Interior, the Department of Veterans' Affairs, and the
Department of Labor. Testimony was received from Gregory
Walden, counsel, Mayer, Brown & Platt; Bonnie Cohen, Assistant
Secretary for Policy, Management and Budget/Chief Financial
Officer, the Department of Interior; Harold Gracey, Chief of
Staff, Department of Veterans' Affairs; and Patricia Lattimore,
Deputy Assistant Secretary for Administration and Management,
Department of Labor.
Mr. Walden testified that Government travel is something
that is often abused and overlooked. He reiterated subcommittee
Chairman Horn's point that the issues involved are not only
about Government waste, but rather, Government ethics. Walden
placed all travel violations discussed into an ethical context.
b. Benefits.--Misuse of government aircraft and poor
reporting of trips on government aircraft is a serious problem.
Because of the casual reporting standards on the part of most
Federal agencies it is difficult to determine which flights are
in violation of Federal travel requirements. Subsequently it is
difficult to determine how much money can be saved by
eliminating abuse of the aircraft by senior Federal officials.
With continuing congressional oversight, further hearings will
instil some awareness into Federal agency management practices
and that cost consciousness must be a factor in traveling on
Government aircraft.
c. Hearings.--December 29, 1995 a hearing was held
entitled, ``The Use of Government Aircraft by Senior Federal
Officials.'' May 16, 1996, a hearing was held entitled,
``Senior Executive Branch Officials Compliance with Federal
Travel Guidelines.''
19. The Government's Response to the Northridge Earthquake.
a. Summary.--On January 17, 1994, the Los Angeles area was
struck by one of the most damaging earthquakes in the Nation's
history. The earthquake, referred to as the ``Northridge
Earthquake'' resulted in more than 70 deaths, more than 18,000
injuries and caused 25,000 residents to become homeless
overnight. The General Accounting Office (GAO) estimated more
than 55,000 structures were damaged; 1,600 of these were deemed
uninhabitable. The area's freeway system sustained heavy damage
which resulted in closures in a number of locations. Of the
$25-$30 billion losses sustained, FEMA provided relief in the
amount of $3.4 billion, not counting assistance from 27 other
Federal agencies and the American Red Cross.
On January 19, 1996, the subcommittee held an oversight
hearing on the Federal Government's response to the 1994
Northridge earthquake. The focus of the hearing was to receive
testimony on preventive and cost-effective lessons that could
be learned from the earthquake. Testimony was received from
Hon. James Lee Witt, director, Federal Emergency Management
Agency; Hon. Richard Riordan, mayor, city of Los Angeles, CA;
Richard Andrews, director, Governor's Office of Emergency
Services, State of California; Constance Perett, manager,
Office of Emergency Services, County of Los Angeles; Maj. Gen.
Robert Brandt, Assistant Adjutant General and Commander,
California Army National Guard; Donald Jones, vice president
for disaster services, American Red Cross; James Haigwood, CEO,
American Red Cross, Los Angeles Chapter; Terri Jones, director
of special projects, California Community Foundation; John
Suggs, director of public policy and government affairs, United
Way of Greater Los Angeles; Blenda Wilson, president,
California State University, Northridge; Robert Maxson,
president, California State University, Long Beach; and J.
Richard Williams, dean of engineering, California State
University, Long Beach.
Mr. Witt outlined some of the steps FEMA took in the
aftermath of the earthquake and some of the problems
encountered with the recovery effort which included the
distribution of benefits to eligible recipients, errors of
mistakenly giving relief multiple times to the same people and
to ineligible people such as illegal aliens. He acknowledged
that FEMA needed to enhance its effort to work with State and
local governments to promote mitigation efforts.
Mayor Riordan described the efforts taken by the city of
Los Angeles to provide relief from the earthquake, and
suggested that in the future, the Federal Government could
bypass FEMA and the Small Business Administration (SBA) and
allocate disaster relief funds directly to local governments.
This, he argued, would allow for a ``real-time'' relief
process, expediting recovery efforts for victims. He added that
the relief mechanism was not designed to enable localities to
quickly provide assistance to multifamily apartment dwellings.
He noted that SBA loans did not provide relief for multifamily
apartments which sustained damage above the SBA limit of $1.5
million. In addition, FEMA should make a distinction between
commercial and residential units. He also pointed out that
instead of importing temporary relief workers from out-of-
state, FEMA should make a concerted effort to hire local
residents to provide assistance. In response to questioning,
Mayor Riordan proposed that the SBA consider restructuring
loans to allow for the decrease in value due to earthquake
damage.
b. Benefits.--This hearing enabled members of the
subcommittee to learn first-hand the impact of one of the most
damaging natural disasters to ever confront the United States,
and learn how the agencies designed to respond to such crises
fared in their response. The hearing also allowed members to
learn of the efforts underway or planned which would allow
manmade structures to withstand future disasters of this type.
One of the actions taken was the establishment of a 24-hour
disaster information network called the Recovery Channel which
was broadcast on 125 cable television outlets. Another was the
use of computer technology allowing for almost instantaneous
assessments of relief available to victims of the earthquake.
Donald Jones testified that more than 14,000 Red Cross
volunteers responded to the earthquake. The Red Cross has an
agreement with FEMA to provide emergency support services,
including food, shelter, and clothing and spent more than $38
million providing services to victims of the earthquake.
c. Hearings.--A field hearing entitled, ``The Government
Responses to the Northridge Earthquake,'' was held on January
19, 1996.
20. OMB 2000 Reforms: Where Are They Heading?
a. Summary.--In March 1994, the Office of Management and
Budget (OMB) commenced a reorganization intended to make OMB
more effective in serving the President and also how to achieve
the proper balance between its responsibilities for management
practices within the executive branch and its responsibilities
for budget formulation. This reorganization, dubbed OMB 2000,
fundamentally changed the organizational structure of OMB.
Former budget areas were recreated as resource management
offices (RMOs), and the Office of General Management was
abolished. Since the three statutorily required offices--the
Office of Federal Procurement Policy (OFPP), the Office of
Federal Financial Management (OFFM), and the Office of
Information and Regulatory Affairs (OIRA)--were unable to be
abolished, OMB reduced the staffs of these offices and
reallocated staff to the RMOs. In the case of the OFFM, over
half of the authorized staff positions were transferred out.
The subcommittee convened a hearing to review how a reform
initiative, known as OMB 2000, has impacted upon management
practices within the Office of Management and Budget and where
OMB is headed as a result of this reform initiative. The
subcommittee invited the following witnesses to testify at the
February 7, 1996 hearing: Hon. Alice M. Rivlin, Director, and
Hon. John A. Koskinen, Deputy Director for Management, Office
of Management and Budget; Paul L. Posner, Director, Federal
Budget Issues, General Accounting Office; L. Nye Stevens,
Director, Federal Management Issues, General Accounting Office;
Dwight A. Ink, president emeritus, Institute of Public
Administration and former Assistant Director for Management,
Bureau of the Budget and the Office of Management and Budget
(Nixon administration); and Edwin Harper, former Deputy
Director, Office of Management and Budget (Reagan
administration).
In his opening statement, subcommittee Chairman Horn stated
that some experts say that a proper balance between budget and
management has never been achieved at OMB. These experts
question whether it is feasible to integrate the two functions
in one organization, and suggest a solution is to set up a
separate office within the Executive Office of the President,
devoted entirely to management issues.
Ms. Rivlin testified that the premise of OMB was based upon
the notion that management is about using resources
effectively. She asserted that there is not a way to separate
resource management from other management. Prior to OMB 2000,
OMB used a disjointed approach to dealing with both
governmentwide and agency-specific management issues which was
counterproductive.
Dr. Ink testified that the potential for improvement in the
management function within OMB was low because of: the inherent
competition with the budget process; the budget not being
focussed on crosscutting issues; lack of expertise in OMB to
advise agencies on reorganization; lack of emphasis on long-
term investment; and financial management. Consolidation of
management and budget functions limits the capacity of OMB to
provide leadership for reform, and can hinder actions to
prevent abuse. He supported the idea of establishing an Office
of Federal Management within the Executive Office of the
President, but outside OMB.
Dr. Harper defined good management as the efficient use of
resources in pursuit of specific policy objectives, and said
that it would be impossible to deal with improving management
until we can measure government program outputs related to
policy objectives. He questioned whether the manpower resources
assigned to OMB were adequate and whether the statutorily
mandated offices were necessary. He would also approve of a
separate Office of Management, whose head should have cabinet
rank.
b. Benefits.--The new direction chosen for OMB, under the
OMB 2000 initiative, was to make all OMB activities part of a
comprehensive, integrating budget analysis, management review
and policy development. The resource management offices (RMOs)
were set up to implement this. These RMOs are responsible for
budget formulation, program analysis, implementation of
governmentwide policy as formulated by the three statutory
offices, and program effectiveness and efficiency.
Agencies depend on OMB for guidance on implementing
regulations required by new and existing legislation; it shares
responsibility with the Office of Personnel Management for
making sure that agency personnel are trained to perform new
functions, such as those required under the Government
Performance and Results Act. It should be a resource for the
President in management of the executive branch agencies,
drafting Executive orders as required or acting as a guide or
goad, whichever is necessary, to ensure that agencies follow
the administration's policies.
The intent of OMB 2000 was to increase the attention OMB
staff give to management issues. In the opinion of the
committee, as a result of its oversight activities, this has
not happened, and it seems that more drastic action is needed
to ensure that OMB has the capability to advise the executive
branch concerning the complex problems of management facing it.
c. Hearings.--A hearing entitled, ``OMB 2000 Reforms: Where
Are They Heading?'' was held on February 7, 1996.
21. Using the Best Practices of Information Technology in Government.
a. Summary.--Leading corporations use information systems
to remake their organizations and improve performance. Enhanced
communications let these organizations operate with a greatly
reduced hierarchical structure. Fewer middle managers are now
needed between line workers and senior management as
organizations become ``flatter'' and less bureaucratic.
Corporations are using more direct communications links with
customers, suppliers and transporters to shorten delivery
schedules and reduce expensive inventories. Use of cutting edge
information resources at these organizations is often central
to their core business strategies.
Despite the potential of information systems in
strengthening organizations, the Federal Government has lagged
behind in its successful application. Numerous reports have
identified weaknesses with specific Federal Government
information systems. The General Accounting Office has
previously placed many of the Federal Government's largest
information technology systems on its ``high risk series''
listing of specific programs most vulnerable to waste, fraud
and abuse. These have included the Federal Aviation
Administration's air traffic control modernization, the
Internal Revenue Service's tax systems modernization and the
Department of Defense's corporate information management
initiative. Other similar reports, such as the Office of
Management and Budget's high risk list, have identified
additional troubled information systems developments.
The subcommittee convened a hearing to address the problem
of examining how leading private institutions are using
information technology to improve their organizations and to
capitalize on the opportunities available from information
systems. Witnesses testifying were: Peter Huber, senior fellow,
Manhattan Institute, columnist, and author; Chris Hoenig,
Director, Information Management Policy and Issues, General
Accounting Office; Dr. Renato A. DiPentima, vice president &
chief information officer, SRA Corp.; C. Morgan Kinghorn, Jr.,
director, Coopers & Lybrand; John Kost, chief information
officer, State of Michigan; and David R. Brooks, vice
president, Health Care Technology Sector, Science Applications
International Corp.
b. Benefits.--Despite the expenditure of approximately $25
billion per year and $200 billion over the past decade on
information systems, the Federal Government lags behind the
private sector in the effectiveness of its use of new
technology. The Federal Government needs to draw upon the
experience of other organizations that have successfully
harnessed information technologies to be more efficient,
effective organizations. The recommendations made at the
hearing will improve the oversight activities conducted by the
subcommittee.
c. Hearings.--A hearing on ``Using the Best Practices of
Information Technology in Government'' was held on February 26,
1996.
22. Oversight of IRS Financial Management.
a. Summary.--Pursuing oversight issues designated in Public
Law 103-356, the Government Management Reform Act of 1994 and
Public Law 101-576, the Chief Financial Officers Act of 1990,
the subcommittee convened two oversight hearings regarding the
Internal Revenue Service's financial management. The first
hearing examined several aspects of financial management and
addressed the IRS' ability to produce financial statements, to
have these statements audited, and to obtain verification of
accuracy. Testimony was received from: Gene L. Dodaro,
Assistant Comptroller General, Accounting and Information
Management Division, General Accounting Office; Hon. Margaret
Milner Richardson, Commissioner, Internal Revenue Service;
Donald C. Alexander, former Commissioner of the Internal
Revenue Service from 1973 to 1977; Donald L. Korb, former
Assistant to the Commissioner of the Internal Revenue Service
from 1984 to 1986; and Shannon O'Toole, former Resolution Trust
Corporation Department Head and Section Chief of Real Estate
Disposition.
Subcommittee Chairman Horn emphasized in his opening
statement the importance of Congress receiving accurate
information to properly oversee and evaluate the IRS'
performance. In addition, he addressed concerns regarding the
General Accounting Office's inability to give an opinion on
audited IRS' financial statements, and weaknesses of internal
controls and lack of audit documentation.
When GAO auditors review the IRS statements and underlying
records, they were unable to reconcile these records and, thus,
were unable to give an opinion on the financial statements from
fiscal years 1992 through 1995. The audits have identified five
significant problems within the IRS' financial management,
which if not corrected, will preclude future auditors from
rendering an opinion on the IRS's financial statements. They
include the: (1) inability to verify total revenue of $1.4
trillion and the amount of tax returns; (2) unsubstantiation of
the amount of collection from Social Security, income and
excise tax; (3) reliability of reported estimate for FY 1995 of
$113 billion for valid accounts receivable and of $46 billion
for collectible receivable; (4) verficiation of the $3 billion
for non-payroll expenses that the IRS reports; and (5) amounts
the IRS reported as appropriations available for operating
expenditures which cannot be reconciled with Department of the
Treasury's records.
Commissioner Richardson claimed that the IRS has strong
systems and controls to ensure that the individual accounts are
accurate and that they work. She explained that the IRS has two
separate financial processes to track funds: the administrative
system that handles our appropriated funds, and the revenue
system that tracks tax collections. She stated that the current
system the IRS uses, designed in 1994 (2 years after the IRS
started doing service-wide audits as a pilot under the CFO
Act), is not designed to provide the detailed information that
is required by the CFO Act for financial statement
presentation.
Regarding accounts receivable, she described the
improvement in management of the receivables inventory that has
been undertaken by the IRS. They are also stepping up efforts
to increase collection yields. She provided an update on the
status of the private debt collection pilot project, in which
the IRS is contracting out debt collection activities to a
small number of debt collection agencies.
A follow-up oversight hearing was held on September 19,
1996, to further discuss the state of financial management in
the Internal Revenue Service. The hearing addressed whether
there had been any improvement since the first hearing
regarding the IRS' inability to produce reliable financial
statements and the internal controls or the accuracy of data
input. Witnesses testifying included Gene L. Dodaro, Assistant
Comptroller General, Accounting and Information Management
Division, GAO; Steven App, Deputy Chief Financial Officer,
Department of Treasury; and Anthony Musick, Chief Financial
Officer, Internal Revenue Service.
Gene Dodaro gave the subcommittee a status report about the
progress the IRS is making in addressing its financial
management problems. He explained that the IRS has two sets of
financial statements to account for: statements on its revenue
gathering function under its custodial responsibilities,
running at about $1.3 to $1.4 trillion currently; and
statements reporting on the administrative operations paid for
out of appropriations, running at about $8 billion currently.
The IRS has improved in this area, and the auditors were able
to verify the validity of about $5 billion of their $8 billion
in appropriations. However, two problems remain in the
administrative area: Documentation of receipts and acceptance
of goods and services is inadequate; and the cash accounts with
the Department of the Treasury cannot be properly reconciled.
b. Benefits.--IRS financial management impacts
congressional decisionmaking on many levels. The reliability of
revenue and other information gathered by the IRS is of concern
to Congress since the revenues collected by the IRS represent
more than 90 percent of all revenues available to the Federal
Government. The confidence taxpayers have in the IRS to collect
and account for the taxes they pay directly affects the degree
to which they comply with the tax code which in turn impacts
the taxes collected. The efficiency with which the IRS collects
the taxes and other receivables owing to the Federal Government
affects the cost of other Federal programs to the taxpayer.
Subcommittee Chairman Horn introduced H.R. 2234, which is
designed to improve debt collection efforts in the Federal
Government, to include provisions related to the IRS use of
private debt collection agencies.
c. Hearings.--On March 6, 1996, the subcommittee held an
oversight hearing entitled, ``Oversight of the Internal Revenue
Service Financial Management.'' On September 19, 1996, a
follow-up oversight hearing was held entitled, ``Internal
Revenue Service Financial Management: Has There Been Any
Improvement?''
23. Is January 1, 2000 the Date for Computer Disaster?
a. Summary.--After midnight, December 31, 1999, computer
systems throughout the world are at risk of failing. Computers
may confuse the year 2000 with the year 1900 on January 1,
2000, and go backward in time instead of forward when the new
century begins. The severity of the problem was raised when
Congress was told that if businesses and governments continue
to ignore this issue, disruption of routine business operations
and the inability of the Federal Government to deliver services
to the American people could result. According to a
Congressional Research Service Memorandum dated April 12, 1996,
``Many people initially doubted the seriousness of this
problem, assuming that a technical fix will be developed.
Others suspect that the software services industry may be
attempting to overstate the problem to sell their products and
services. Most agencies and businesses, however, have come to
believe that the problem is real, that it will cost billions of
dollars to fix, and that it must be fixed by January 1, 2000,
to avoid a flood of erroneous transactions.''
On April 16, 1996, the subcommittee convened a hearing to
collect the facts on the steps Federal agencies are taking to
prevent a possible computer disaster. Subcommittee Chairman
Horn raised the question whether agencies are taking the
necessary actions to identify where the problem lies and
whether they are providing the necessary human and capital
resources to correct the problem. In her opening statement,
Ranking Minority Member Maloney noted: ``The cost of failure is
high--systems that deliver services to individuals will not
work, and those services will not be delivered. Checks will not
arrive on time. Planes will be grounded, and ports will be
closed.''
Testimony was received from: Kevin Schick, research
director, the Gartner Group; Louis J. Marcoccia, director of
data administration and logistics, New York City Transit
Authority; Nicholas J. Magri, senior vice president, Securities
Industry Automation Corp.; Michael B. Tiernan, the First Boston
Corp. on behalf of the Securities Industry Association, Data
Management Division; D. Dean Mesterharm, Deputy Commissioner
for Systems, Social Security Administration; Hon. Emmett Paige,
Jr., Assistant Secretary for Defense Command, Control,
Communications and Intelligence, Department of Defense; and
Hon. George Munoz, Assistant Secretary for Management and Chief
Financial Officer, Department of the Treasury. The witnesses
testified to a number of examples of incidences that could
occur if industry and government continue to ignore this issue.
In fact everything from unexpected expiration of drivers'
licenses to erroneous dates for final mortgage payments could
occur if two-digit date fields remain unable to recognize the
year 2000.
On September 10, 1996, the subcommittee convened a joint
hearing with the Subcommittee on Technology of the Committee on
Science to review the impact on personal computers, on State
and local governments, and on Federal agencies. Testimony was
received from: Sally Katzen, Administrator, Office of
Information and Regulatory Affairs, Office of Management and
Budget; Larry Olson, deputy secretary, information technology
for the Commonwealth of Pennsylvania; Harris Miller, president,
Information Technology Association of America; and Daniel
Houlihan, first vice president and president elect, National
Association of State Information Resource Executives.
In her testimony, Sally Katzen provided an outline of the
administration's current strategy for solving the problem: 1)
raise the awareness of the most senior managers in Federal
agencies to the dimensions of the problem; 2) promote the
sharing of both management and technical expertise; and 3)
remove barriers that may slow down or impede technicians fixing
systems.
Larry Olson presented Pennsylvania's plan of action. As
noted by Olson, the key to success of the plan is senior level
support. Mr. Olson pointed out that during his first year as
Governor of Pennsylvania, Tom Ridge quickly recognized the
dramatic implications of the Year 2000 date field problem.
Subsequently the Governor took quick action to ensure that
Pennsylvania businesses and governments will be prepared before
January 1, 2000.
Harris Miller presented an outline of how the Year 2000
situation presents three problems for personal computer users
in homes and businesses across the country: 1) the BIOs chip of
individual machines; 2) the operating system that generally
comes bundled with new computers; and 3) the commercial
software purchased for those machines. Most equipment
manufacturers in the past 18 months have modified their
products. Operating systems in personal computers in most cases
can have their operating systems ``fixed'' through a simple
procedure using the computer's mouse. Commercial software
products may or may not be Year 2000 compliant. An issue of
great concern for personal computer users is the increasing
access with other systems. In order to ensure that computer
systems are operational in the year 2000, most systems will
need modification. Miller also testified further that personal
computer users as well as mainframe information technology
managers need to be aware of this issue and take appropriate
corrective steps.
b. Benefits.--According to Mr. Schick, the crisis revolves
around time, cost and risk. Businesses, Federal agencies, and
State and local governments must understand that this
information technology project cannot be allowed to slip:
Saturday, January 1, 2000 cannot be postponed. Prevention of
widespread disruption of services to citizens, breakdowns in
information processing, and compromising of computer security
controls must be kept to a minimum. The problem, although not
technically complex, is managerially challenging and will be
very time consuming for private and public sector
organizations. It is the Government's responsibility to ensure
that its constituents receive Federal services and that public
safety is available to all citizens. (See section II.A.2.)
c. Hearings.--Hearings entitled, ``Is January 1, 2000 the
Date for Computer Disaster?'' and ``Solving the Year 2000
Computer Problems'' were held on April 16, 1996 and September
10, 1996.
24. Oversight of the General Accounting Office.
a. Summary.--The primary mission of the General Accounting
Office (GAO) is to investigate all matters relating to the
receipt, disbursement, and application of public funds, which
includes the audit requirements under the Chief Financial
Officers Act of 1990. The scope of the GAO's authority has been
extended to include conducting commercial audits of
governmentwide operations; establishes principles and standards
for accounting in executive agencies and audit evaluations of
the adequacy of financial management and control; and to
conduct a governmentwide audit of the executive branch's
agencies in compliance with the Government Management and
Reform Act of 1994.
The subcommittee convened an oversight hearing on April 30,
1996, to review the growing concerns regarding the GAO's
operations and responsibilities; the efficiency of the GAO's
processes; and the prioritization of the functions which the
GAO performs. Testimony was received from Hon. Charles A.
Bowsher, Comptroller General of the United States, U.S. General
Accounting Office; Hon. John A. Koskinen, Deputy Director for
Management, Office of Management and Budget; Dr. R. Scott
Fosler, president, National Academy of Public Administration;
Thomas V. Fritz, president and CEO, the Private Sector Council;
and Dr. Cornelius (Neil) E. Tierney, accounting professor,
George Washington University.
Comptroller General Bowsher stated that since 1983, the GAO
had doubled its productivity. Some of GAO's accomplishment have
led to budget reductions, cost avoidance, appropriation
deferrals, and revenue collections that have provided financial
savings and other benefits in the billions of dollars. In
fiscal year 1995, this amounted to a return of $35 for every $1
appropriated for the GAO.
Dr. Tierney stated that, with respect to the GAO's
government auditing standards, two conditions exist that might
warrant assistance from Congress: the need to actually audit
and have auditors render an opinion on the adequacy of a
government's system of internal controls; and giving increased
emphasis within and possibly requiring the Inspectors General
community to periodically conduct the program performance
audits outlined and contemplated by the GAO in its government
auditing standards.
In addition, Tierney said that the concerns expressed about
certain aspects of the GAO operations, its working
relationships with individual Members of Congress and
committees, and its independence, had been examined over the
years. The GAO is continually concerned over the length of time
taken to issue reports of its reviews and audits. At times,
report preparation and delivery have exceeded a year or more.
Also he stated that the GAO workload includes various studies,
reports, audits, etc., that are legislatively mandated. Much of
what appears to be self-initiated, is, in fact, the result of
mandates in laws by earlier Congresses.
b. Benefits.--In fiscal 1995, the GAO prepared 1,322 audit
and evaluation reports, including 910 reports to Congress and
agency officials, 166 congressional briefings, and 246
congressional testimonies delivered by 72 GAO executives and
serves a valuable asset to the Congress in its oversight of the
executive branch.
Mr. Bowsher also described steps the GAO has taken to
improve its productivity and better serve Congress. It has
streamlined its headquarters and field operations. It has
improved its processes for conducting and reporting the results
of its work. It plans to capitalize on advances in information
resource technology and to enhance its methodological and
technical skills. In addition, the GAO's financial audit
division has successfully undergone an external peer review by
KPMG Peat Marwick.
c. Hearings.--On April 30, 1996, the subcommittee held an
oversight hearing entitled ``Oversight of the United States
General Accounting Office.''
25. Oversight of the General Services Administration.
a. Summary.--The General Services Administration (GSA) was
created to provide an economical and efficient system to supply
goods and services to the Federal Government. It has not been
reauthorized in the nearly 50 years of its existence.
The subcommittee held a hearing on May 10, 1996, to examine
GSA's authority over the Federal motor vehicle fleet, personal
property disposal, and leasing of Federal buildings. The
subcommittee heard testimony from: David Barram, Administrator
of General Services, GSA; G. Martin Wagner, Associate
Administrator, Office of Policy, Planning and Evaluation, GSA;
Frank Pugliese, Commissioner, Federal Supply Service, GSA;
David Bibb, Deputy Commissioner, Public Buildings Service, GSA;
Andrew Jones, senior manager, Arthur Andersen; John Dues,
partner and director, Arthur Andersen; Chris Butterworth,
president, National Association of State Agencies for Surplus
Property; and Bill Wilson, vice president, National Association
of State Agencies for Surplus Property.
Subcommittee Chairman Horn opened the hearing by noting
that GSA had not been reauthorized since 1949, and asserted
that this harmed GSA, since its programs do not have regular
congressional input aside from the $257 million in appropriated
funds. In addition to the lack of clear direction from
Congress, GSA is split between policy and oversight and the
provision of services. Chairman Clinger raised issues relating
to the Federal motor vehicle fleet and if GSA could effectively
operate a large fleet. Mr. Pugliese stated that the Federal
Supply Service would be responsible for operating the GSA
fleet, and the Office of Policy, Planning and Evaluation would
handle the policy aspects. Pugliese noted that 90 percent of
the dollars spent by the GSA fleet program are spent on private
sector contractors--so much of the program is already
privatized.
Mr. Wagner described the purpose of the surplus property
program, which is to put Federal property toward the highest
possible use, in a Federal agency or a State or local
government agency. Wagner agreed that GSA and other agencies
should take a look at the property management function, since
$30 billion in surplus personal property is declared excess
each year by Federal agencies.
Subcommittee Chairman Horn raised the issue of leases and
public buildings, describing how GSA was charging his
predecessor $80,000 for office space he obtained for $30,000,
with an increase in service for constituents. Administrator
Barram noted that GSA was required to locate, where possible,
in downtown city centers, which inflates the cost.
b. Benefits.--Administrator Barram noted that lease
renegotiation and ensuring that tax reductions are passed
through to the Federal Government will reduce office rate
charges over the next few years. David Bibb noted that every 5
years appraisers examine buildings to establish the market
rate. Several private real estate firms have approached GSA
offering to assist GSA in locating savings through
restructuring existing leases, challenging tax assessments, and
performing lease audits for free in exchange for some portion
of the savings. Some private firms say that $1 billion could be
saved annually, whereas Arthur Andersen notes show that GSA
could save $565 million annually.
c. Hearings.--On May 10, 1996, the subcommittee held a
hearing on ``Oversight of the General Services Administration
(GSA).''
26. Federal Information Policy Oversight.
a. Summary.--As part of its oversight responsibility, the
subcommittee has jurisdiction over the following aspects of the
Government's information policy: the Freedom of Information Act
(FOIA); the Privacy Act; Government in the Sunshine Act; and
Federal Advisory Committee Act.
The subcommittee conducted an oversight hearing on June 13,
1996, to receive testimony from witnesses regarding the
execution of these information policy laws. In his opening
statement subcommittee Chairman Horn expressed his frustration
upon learning that the Federal Bureau of Investigation (FBI)
has a 4-year backlog for responding to FOIA requests. In noting
the significance that the committee attaches to the Freedom of
Information Act, he observed that the first report issued by
the House Committee on Government Reform and Oversight was an
updated version of ``A Citizen's Guide on Using the Freedom of
Information and Privacy Act of 1974 to Request Government
Records.''
The subcommittee received testimony from Senator Patrick
Leahy who noted the role that FOIA requests had in uncovering
information about various Government actions. He stated that
the law needed to be updated to reflect the advancing use of
information technology in Government to maintain records,
adding ``access should be the same whether they are on a piece
of paper or a computer hard drive.'' The Senator also
criticized the failure of agencies to comply with the statutory
time limits for responding to requests.
Few agencies actually respond to FOIA requests within the
10-day limit required by law. Such routine failure to comply
with the statutory time limits is bad for morale in the
agencies and breeds contempt by citizens who expect Government
officials to abide by, not routinely break, the law.
Witnesses were Senator Patrick Leahy; J. Kevin O'Brien,
Section Chief of the Freedom of Information/Privacy Acts
Section, FBI; Roslyn Mazer, Deputy Assistant Attorney General,
Office of Policy Development, Department of Justice; Anthony
Passarella, Director, Directorate for Freedom of Information
and Security Review, Office of the Assistant Secretary of
Defense; Eileen Welsome, journalist; Larry Klayman, chairman
and general counsel of Judicial Watch; Jane Kirtley, executive
director, of the Reporter's Committee for Freedom of the Press;
Byron York, reporter for the American Spectator; Marty Wagner,
Associate Administrator, Office of Policy, Planning and
Evaluation, GSA; James L. Dean, Director, Committee Management
Secretariat Staff, GSA; Paul Kamenar, executive director,
Washington Legal Foundation; Randolph May, attorney,
Sutherland, Asbill & Brennan.
b. Benefits.--Access to government information, government
records about individuals, and the protection of personal
records from unwarranted disclosure are each important
protection in a democratic society. Technological developments
have the potential of dramatically enlarging the potential for
disclosure of this information. Legislative and oversight
initiatives are necessary to assure that these new developments
facilitate the release of information intended for disclosure
in a timely manner, while also better shielding those personal
records which the public expects to be kept private.
c. Hearings.--Hearing entitled, ``Federal Information
Policy Oversight,'' was held on June 13, 1996.
27. Oil Royalties.
a. Summary.--The subcommittee has legislative and oversight
jurisdiction with respect to the ``overall economy, efficiency
and management of government operations and activities,
including Federal procurement.'' In addition, the subcommittee
has the oversight responsibility to review and study on a
continuing basis, the operation of government activities at all
levels with a view to determining their economy and efficiency.
Pursuant to this authority, the subcommittee convened an
oversight hearing to examine whether companies under agreements
to extract oil from Federal lands in California undervalued the
oil and as a result, underpaid royalties to the Federal
Government.
In 1975, the State of California and the city of Long Beach
pursued litigation against seven major oil companies operating
in California alleging that these companies conspired to keep
posted oil prices low. The city and State claimed they had been
damaged because their oil revenues depended on posted prices
(posted prices are the announced prices at which crude oil
purchasers, generally major refiners, will buy oil from
producers at the wellhead) and the royalty thereon. If the
posted price is below fair market value, the Federal Government
loses tax and royalty revenue.
In 1986, the Minerals Management Service (MMS) of the
Department of the Interior contacted State officials to assess
the appropriateness of posted prices as the royalty value
basis. MMS concluded that the system of posted prices existing
at the time fairly represented market value. Also weighing
heavily in the MMS decision was the fact that the State and
city had been unsuccessful in their antitrust claims in court.
The Justice Department looked into the issue and chose not to
pursue an investigation.
In the mid-1980's, MMS, the General Accounting Office and
the Internal Revenue Service independently analyzed the issue,
but the information available to them was inconclusive in
proving that Federal oil was undervalued at posted prices. In
1991, six of the companies involved (ARCO, Shell, Chevron,
Mobil, Texaco, and Unocal) reached settlements totaling $345
million to end the court actions by the State and city alleging
undervaluation. A seventh defendant, Exxon, went to trial and
was exonerated. That decision was appealed, and Exxon won the
appeal in January 1995. A separate appeal covering a different
time period is still pending. Given the length and
circumstances of the litigation, it is not certain whether the
companies settled as a practical matter to cut off litigation,
or whether they were concerned about potential legal liability.
In light of the 1991 settlement, MMS performed a scoping
exercise to estimate the size of any potential Federal royalty
underpayment. In 1994, an interagency team consisting of MMS,
the Department of the Interior's Solicitor's Office and the
Departments of Energy, Commerce and Justice, investigated the
allegations. The Justice Department resigned from the team,
citing an inability to prove antitrust violations. The State of
California assisted the Federal team in obtaining court records
from the earlier litigation.
b. Benefits.--The Minerals Management Service has delayed
the collection of oil royalties which are owed. This hearing
was the first congressional hearing on the issue of
undervaluation of crude oil. As such, the hearing benefited the
Federal Government by focusing attention on the problem and
demonstrating that there was bipartisan congressional interest
in pursuing underpayment. (See section II.A.3.)
c. Hearings.--On June 17, 1996, the subcommittee held a
hearing entitled, ``Can the U.S. Increase Oil Royalties.''
28. Field Hearing on the U.S. Border Patrol's Operation Gatekeeper.
a. Summary.--The U.S. Border Patrol is a part of the
Immigration and Naturalization Service, the primary agency in
the Department of Justice responsible for enforcing the
Nation's immigration laws. The Border Patrol is responsible for
securing the international land and water borders between
ports-of-entry with the goal of preventing illegal entry into
the United States, interdicting drug smugglers, and compelling
those persons seeking admission to the country to present
themselves legally at ports-of-entry for inspection.
On October 1, 1994, the Department of Justice initiated
Operation Gatekeeper in an attempt to reduce illegal
immigration across the United States-Mexico border in the San
Diego region. Administered by the Border Patrol, Operation
Gatekeeper has as one of its goals the shifting of illegal
crossing routes to areas that are remote and difficult to
cross--areas where the Border Patrol presumably has a tactical
advantage. The operation has had the effect of moving the flow
of illegal alien traffic eastward, away from San Diego,
Imperial Beach and Chula Vista to Brown Field and beyond
eastern San Diego County.
A key objective of Operation Gatekeeper is providing a
deterrent to illegal aliens crossing the United States-Mexico
border. Accordingly, a measure of the operation's success is
the number of individuals apprehended for illegally crossing
the border. The fewer people caught, it is argued, the more
successful the operation, since its aim is to reduce the number
of illegal aliens arrested in the areas targeted by the
initiative by deterring their crossings. Figures provided by
the Immigration and Naturalization Service show reductions in
the number of apprehensions in the southwest border region.
Arrests in Imperial Beach have fallen to approximately 60,000
for the first 9 months of the current fiscal year versus 84,000
for the same period during the previous year. Arrests in Chula
Vista have dropped from 105,159 to 91,987 during the same
period. Arrests in Brown Field dropped from 109,141 to 94,206
during that time.
The subcommittee investigated allegations made by agents of
the Border Patrol that the reported drop in arrests was due to
falsification of the reports by officials within the Border
Patrol. At a hearing before the California State Assembly
Subcommittee on Border Crime, T.J. Bonner, president of the
National Border Patrol Council testified that the Border Patrol
has: ``[E]ngaged in a comprehensive campaign of deception
regarding the effectiveness of Operation Gatekeeper. In its
zeal to make good on its promise to replicate the reduction in
arrests that occurred in El Paso, the Border Patrol encouraged
and ordered agents to create the appearance that illegal
entries had declined dramatically in the westernmost fourteen
miles of the border.'' Mr. Bonner made a number of specific
allegations about the effectiveness of the operation.
In his opening statement, subcommittee Chairman Horn
questioned the use of the apprehension rate as a gauge to
assess the effectiveness of Operation Gatekeeper. He further
noted the concerns of residents in areas where the traffic flow
of illegal aliens has increased due to the operation. T.J.
Bonner testified that: ``[T]he Border Patrol has engaged in a
comprehensive campaign of deception regarding the effectiveness
of Operation Gatekeeper . . . Encourag[ing] and order[ing]
agents to create the appearance that illegal entries had
declined dramatically . . .'' He stated that Border Patrol
agents were ordered to remain in stationary positions and not
to leave their locations even if illegal aliens crossed on
either side of their stations. They were chastised and
threatened with disciplinary action when they arrested illegal
aliens. Illegal aliens were turned back without arresting them,
and in other instances, the apprehensions were not recorded or
reported. In addition, he testified that the Border Patrol
altered the location for returning illegal aliens to Mexico by
sending them hundreds of miles away from the San Diego area.
This was done, Bonner noted, to ensure that if the illegal
aliens attempted another crossing, the flow would not be felt
in the area covered by Operation Gatekeeper. ``The result of
all of these actions was an artificial decrease in the number
of apprehensions'' stated Bonner.
Mr. Bonner was joined by a Border Patrol agent whose
identity was shielded by the subcommittee from disclosure. This
was done at the agent's request for fear that if his identity
was known to his supervisors at the Border Patrol, reprisals
would occur against him for speaking publicly about allegations
about the operation. His testimony supported the allegations
raised in Mr. Bonner's statement. He added that quotas were set
to limit the number of apprehensions, and noted that he
witnessed the falsification of official reports on the number
of illegal aliens stopped. In response to a question from
subcommittee Chairman Horn, the agent noted that the order to
manipulate data came from Johnny Williams, Chief of the Border
Patrol's San Diego sector.
b. Benefits.--The testimony received during this hearing
enabled members of the subcommittee to hear firsthand the
impact of Operation Gatekeeper. The testimony leads to the
conclusion that Operation Gatekeeper is not a complete success;
it has had limited success in slowing the entry of illegal
aliens in a few miles of the border. The subcommittee will
continue its oversight of this initiative due to the findings
from the hearing.
c. Hearings.--On August 9, 1996, the subcommittee held a
field hearing on ``U.S. Border Patrol Implementation of
Operation Gatekeeper.''
29. Oversight of the Smithsonian Institution.
a. Summary.--The subcommittee convened an oversight hearing
with the Committee on House Oversight to review security and
procurement procedures of the Smithsonian. The subcommittees
heard testimony from I. Michael Heyman, secretary of the
Smithsonian Institution; Tom Blair, Inspector General of the
Smithsonian Institution, and Bill Gadsby, Director of
Governmental Business Operations, General Accounting Office.
The Smithsonian entered into a contract with Hughes
Aircraft Company to develop and build the Smithsonian
Institution Proprietary Security System (SIPPS). It took 12
years to complete from the initial award of the contract. The
SIPPS was handled in two phases. In spite of the facts that
there were significant problems with phase I of the project,
the Smithsonian proceeded with phase II. The SIPPS was a
complete failure, in that it was unable to protect the
collections of the Smithsonian. The procurement and the
performance of SIPPS was reviewed by Inspector General Blair
who recommended changes in the procurement system.
Secretary Heyman was in agreement with Mr. Blair regarding
the procurement practices of the Smithsonian as they relate to
the procurement of SIPPS. However, it was noted, many of the
problems that existed during the initial SIPPS procurement have
since been corrected. In addition, Secretary Heyman testified
that during the 150th anniversary year of the Smithsonian, it
has embarked on a program to enhance public exposure,
accessibility and education. One of the ways in which the
Smithsonian increased accessibility was to bring collections
and collective experts on-line.
b. Benefits.--This oversight hearing was the first in many
years. This was an opportunity for the subcommittee to exercise
its oversight authority over the Smithsonian.
c. Hearings.--The subcommittee held an oversight hearing on
September 25, 1996 on the Smithsonian Institution. The hearing
was held jointly with the House Oversight Committee.
HUMAN RESOURCES AND INTERGOVERNMENTAL RELATIONS SUBCOMMITTEE
1. Efforts To Reorganize and Improve Program Performance and Efficiency
at the U.S. Department of Housing and Urban Development (HUD).
a. Summary.--The Human Resources and Intergovernmental
Relations Subcommittee reviewed budget data, National
Performance Review recommendations, Inspector General audits
and reports, and General Accounting Office studies and
recommendations to identify opportunities for cost savings,
improved efficiency and consolidations in the programs and
operations of the Department of Housing and Urban Development
(HUD).
The subcommittee convened two oversight hearings with
respect to the agency. On February 13, 1995, the subcommittee
invited the HUD Secretary Henry Cisneros to testify about the
agency's core mission, management, plans, programs, and
potential cost savings. The Secretary was also asked to discuss
successes and challenges facing HUD in meeting its core
mission. Secretary Cisneros spoke about HUD's Blueprint for
Reinvention which focuses on the consolidation of several
programs, the Department's efforts to transform the Federal
Housing Administration (FHA) ``from a government bureau to a
government corporation,'' and the agency's sweeping efforts to
transform public housing throughout the country. Subcommittee
Chairman Shays congratulated Secretary Cisneros on the agency's
efforts to reorganize into a ``leaner and more efficient''
agency.
On February 22, 1995, the subcommittee held a second
hearing to receive information from HUD's Inspector General
(IG); the Director of Housing and Community Development Issues
of the U.S. General Accounting Office (GAO); a senior fellow
from the Hudson Institute; a former chairman of the Chicago
Housing Authority and president of American Community Housing
Associates; a private organization; and the founder of the
National Low Income Housing Coalition.
b. Benefits.--American taxpayers and public housing
residents, in particular, benefit from administrative savings,
greater flexibility, and more effective concentration of
limited HUD resources. The hearings demonstrated that there are
opportunities at HUD for cost reduction, improved efficiency
and reform and allowed HUD officials, former HUD officials, and
other Federal and private officials the opportunity to come
together to discuss what HUD is doing right as well as what the
agency might be doing wrong.
c. Hearings.--Hearings entitled ``Oversight Hearing on the
Department of Housing and Urban Development'' were held on
February 13 and 22, 1995.
2. Efforts To Improve Program Performance and Efficiency at the U.S.
Department of Health and Human Services (HHS).
a. Summary.--The subcommittee reviewed budget data,
National Performance Review recommendations, Inspector General
audits and reports, and General Accounting Office studies and
recommendations to identify opportunities for cost savings,
improved efficiency and consolidations in the programs and
operations of the Department of Health and Human Services
(HHS).
On March 1, 1995, the subcommittee convened an oversight
hearing to receive testimony from HHS Secretary Donna E.
Shalala. The Secretary was invited to discuss the agency's core
mission, goals, programs, and plans for cost saving; to
indicate what HHS does well and describe what HHS programs
could possibly be better done by the States and localities; and
to address agency efforts to move Medicare and Medicaid into
managed care systems.
Secretary Shalala testified about HHS efforts to reinvent
the agency, and indicated that she continually asks the
following questions with respect to the duties and
responsibilities of HHS: Are the programs or functions critical
to the agency's mission and based on customer input? Can the
program or the function be done as well or better at the State
or local level? Is there a way to cut cost or improve
performance by introducing competition? Can the program be
improved by putting customers first, cutting red tape, and
empowering employees?
On March 22, 1995, the subcommittee convened a second
oversight hearing to receive testimony from public and private
sector witnesses, as well as testimony from the U.S. General
Accounting Office (GAO), HHS's Office of Inspector General
(OIG), and representatives from the Heritage Foundation and
Project HOPE.
GAO and OIG officials focused on the critical area of
losses due to waste, fraud and abuse in the Medicare and
Medicaid programs. Losses in national health care spending are
estimated by the GAO to be as high as 10 percent of total
spending. If these estimates are correct, losses due to waste,
fraud and abuse in Medicare and Medicaid in fiscal year 95
could be in excess of $24 billion.
b. Benefits.--Every American taxpayer benefits from a
Federal health care and human services delivery system operated
in the least costly manner with the needs of the customer given
great weight in the decisionmaking processes. The subcommittee
will continue to monitor waste, fraud and abuse in Medicare and
Medicaid programs. Recommendations made by the GAO, OIG and
others in the course of this hearing to reduce staggering and
unacceptable losses will be carefully examined and monitored.
c. Hearings.--Hearings entitled ``Oversight Hearing on
Department of Health and Human Services'' were held on March 1
and 22, 1995.
3. Efforts To Reorganize and Improve Program Performance and Efficiency
at the U.S. Department of Labor (DOL).
a. Summary.--The subcommittee reviewed budget data,
National Performance Review recommendations, Inspector General
audits and reports, and General Accounting Office studies and
recommendations to identify opportunities for cost savings,
improved efficiency and consolidations in the programs and
operations of the Department of Labor (DOL).
On March 9, 1995, the subcommittee convened an oversight
hearing, DOL Secretary Robert B. Reich was asked to address
what DOL does well and to describe particular situations that
the agency was finding challenging in the accomplishment of its
core mission, goals, programs, and plans for cost saving.
Secretary Reich was questioned about Representative Steven
Gunderson's (IR-WI) proposal to combine the Departments of
Education and Labor. The Secretary disagreed with the proposal,
claiming that each agency has its own specialized and distinct
function.
Secretary Reich presented charts that showed the decline of
real wages for middle and lower income workers. The Secretary
advocated raising the minimum wage and increasing the level of
job training, which he defined as ``any vocational course of
instruction, directly related to gaining job skills, outside of
a formal degree program.'' The Secretary also testified about
efforts to consolidate job training programs and the agency's
plans regarding downsizing.
On April 4, 1995, the subcommittee convened a second
oversight hearing to identify other opportunities for cost
reduction, increased efficiency and reform in the $33.8 billion
Labor Department budget. Testimony was received from the U.S.
General Accounting Office (GAO), DOL's Office of Inspector
General (OIG), and a representative from the Urban Institute.
The GAO and OIG officials focused on consolidation and
termination of overlapping job training programs. The GAO told
the subcommittee that the Federal Government runs 163 job
training programs administered by 15 agencies. Secretary Reich
of DOL has proposed to consolidate 70 education and training
programs. Urban Institute officials testified about potential
administrative cost savings from Federal program consolidations
and about administrative savings that might be expected from
various program consolidation models.
b. Benefits.--The hearings provided an overview of the
policy issues presented by current DOL programs, particularly
as the issues relate to opportunities for consolidations and
terminations of ineffective and/or duplicative programs.
c. Hearings.--Hearings entitled ``Oversight Hearing on
Department of Labor'' were held on March 9 and April 4, 1995.
4. Efforts To Reorganize and Improve Program Performance and Efficiency
at the U.S. Department of Education (DOED).
a. Summary.--The subcommittee reviewed budget data,
National Performance Review recommendations, Inspector General
audits and reports, and General Accounting Office studies and
recommendations to identify opportunities for cost savings,
improved efficiency and consolidations in the programs and
operations of the Department of Education (DOED).
On March 13, 1995, the subcommittee convened a hearing to
allow DOED Secretary Richard Riley to discuss the agency's core
mission, goals, programs, and plans for cost savings.
Subcommittee Chairman Shays opened the hearing by mentioning
the States' role in education and indicated his wish to
understand the changes taking place in the Department of
Education, especially in light of proposals to merge the
Departments of Labor and Education.
Secretary Richard Riley testified about the new and
controversial direct student loan program, training program
consolidations, and problems the agency had with block
granting. Secretary Riley also indicated that he did not agree
that combining the Departments of Labor and Education would
help to save money since the DOED was already consolidating
programs.
Deputy Secretary of Education Madeleine Kunin testified
that DOED had made significant managerial and attitudinal
changes that she believed would break down agency bureaucracy
and bring the DOED's philosophy in line with budget
constraints.
On April 6, 1995, the subcommittee convened a second
oversight hearing to discuss whether significant cost savings
could be achieved through a consolidation or elimination of
duplicative programs and improved efficiencies in DOED program
administration. Testimony was received from: the public and
private sectors; DOED's Office of Inspector General (OIG); the
U.S. General Accounting Office (GAO); and a former DOED
Assistant Secretary for Management and Budget.
GAO testified that according to Office of Management and
Budget data, fiscal year 95 spending on education is estimated
to be $70 billion. DOED spends less than half, $33.4 billion or
47 percent of the total. The Department of Labor spends $5.5
billion, or 7.9 percent of the total. Other Federal agencies
also manage numerous education-related programs, including the
Department of Health and Human Services with 129 programs, the
National Endowment for the Arts and Humanities with 27, and the
Department of Agriculture with 26. The OIG testified that,
since 1965, the Federal Family Education Loan program has
suffered $57 billion in defaults, with $4.7 billion in 1993
alone.
b. Benefits.--The hearings provided subcommittee oversight
of DOED, its core missions, goals, and efforts to downsize and
consolidate training and other programs. The hearings also
produced information on the potential and the limitations of
program consolidations in education and training.
c. Hearings.--Hearings entitled ``Oversight Hearing on
Department of Education'' were held on March 13 and April 6,
1995.
5. Efforts To Reorganize and Improve Program Performance and Efficiency
at the U.S. Department of Veterans Affairs (VA).
a. Summary.--The subcommittee reviewed budget data,
National Performance Review recommendations, Inspector General
audits and reports, and General Accounting Office studies and
recommendations to identify opportunities for cost savings,
improved efficiency and consolidations in the programs and
operations of the Department of Veterans Affairs (VA).
On March 13, 1995, the subcommittee convened a hearing to
allow VA Secretary Jesse Brown to discuss the agency's core
mission, goals, programs and plans for cost savings. Secretary
Brown was asked to testify about successes and challenges at
the VA and about agency efforts to reform the VA's vast health
care system. The Secretary testified that the agency's biggest
success so far had been evidenced in its ability to respond
more quickly to the needs of veterans. Secretary Brown also
discussed VA's continuing efforts to help veterans from the
Persian Gulf War, addressed questions relating to VA hospital
utilization rates and the accessibility of health services to
veterans.
On May 9, 1995, the subcommittee convened a second
oversight hearing to identify opportunities for improved
efficiency and management reforms in the $38.2 billion VA.
Testimony was received from the U.S. General Accounting Office
(GAO), the VA's Office of Inspector General (IG), and from
representatives of veterans organizations.
The subcommittee also probed the views of the witnesses on
VA's plans for reorganizing hospital and medical facilities.
Subcommittee Chairman Shays requested comments about plans to
improve the efficiency and quality of the VA's health care
service, and asked the witnesses for their views about how to
raise the level of management coordination and accountability
in VA programs and operations.
b. Benefits.--The VA health system is the largest centrally
managed health care delivery system in the Nation. Veterans and
every American taxpayer will benefit from cost effective VA
programs and services. If the VA health care system is to
remain viable, it must fundamentally change its approach to
providing care. The need for structural change is acute. By
holding these hearings, the subcommittee has benefited the
system by demonstrating congressional concern that the VA adapt
its health care delivery system to meet the changing demands of
the health care marketplace.
c. Hearings.--Hearings entitled ``Oversight Hearing on
Department of Veterans Affairs'' were held on March 13 and May
9, 1995.
6. Examination of Programs and Operations of the Corporation for
National and Community Service.
a. Summary.--On April 25, 1995, the subcommittee directed
an inquiry to the Corporation for National and Community
Service (Corporation) regarding the agency's AmeriCorps
program. The inquiry requested information on the per-
participant costs of the program, the quality and performance
standards applied to AmeriCorps grant applications and
programs, the amount of training received by AmeriCorps
participants and information on any AmeriCorps programs that
did not involve AmeriCorps participants.
On May 4, 1995, the Corporation responded to the
subcommittee's inquiry. The Corporation reported per
participant costs to be $17,600 for full time members. They
noted this figure was subject to change if their original
fiscal year 95 funding levels were rescinded. The Corporation
also provided a breakdown of the per-participant costs
indicating the percent of costs devoted to educational awards,
stipends, travel, training and benefits. Part-time participants
were reported to have a cost of $8,800. Again, this figure
would also be subject to change if the fiscal year 95
appropriations if rescissions were passed by Congress for that
fiscal year.
The Corporation also outlined the selection criteria
applied in the agency's evaluation of AmeriCorps program
applications. The criteria were set out under the headings of:
quality, sustainability, innovation, replicability and special
considerations (such as geographic diversity and start dates).
The Corporation further outlined the quality standards used at
both Federal and State levels in selecting grantees. These
standards are printed in the AmeriCorps grant application and
are reflected in the Corporation's ``Principles for High
Quality National Service Programs'' which include: strong
organization, excellent service projects, evaluation,
participant experience, community partnerships and diversity.
The Corporation also reported that the programs were made
subject to several levels of performance reviews conducted by
State commissions, national parent organizations, Corporation
staff and impartial national evaluators. According to the
Corporation, performance reviews include quarterly report
forms, financial status reports, site visits, and independent
evaluations. The Corporation stated that the performance
results are taken into consideration during the grant renewal
decisionmaking process.
In the response, the Corporation also described the
statutorily mandated ``planning grants'' that make up 1.5
percent of their grant budgets. Planning grants, such as one
awarded to the Northeastern University's Center for the Study
of Sports in Society, must be used for activities such as: site
selection, anticipating roadblocks, studying other AmeriCorps
programs, creating partnerships with businesses, non-profits,
police and school districts. The Corporation disputed
allegations that planning grants are used to help organizations
write grant applications.
The Corporation response indicated that AmeriCorps
participants must devote at least 80 percent of their hours to
direct service, with no more than 20 percent going to
education, training or community building activities during a
full-time or reduced term of service. The education or training
activities may include preparation for the GED.
To address questions raised by the Corporation response,
the subcommittee convened an oversight hearing to examine the
programs and operations of the Corporation for National and
Community Service. Testimony was received from Corporation
Chief Executive Officer Eli Segal, along with representatives
from AmeriCorps program sponsors, participants and critics of
the Corporation.
This was the first oversight hearing on the Corporation
since its creation in 1993, with the passage of the National
and Community Service Trust Act (Public Law 103-82). The act
consolidated responsibility for a number of community service
programs, including AmeriCorps, Volunteers in Service to
America (VISTA), the National Civilian Community Corps, Serve-
America, and the Retired Senior Volunteer Program (RSVP).
b. Benefits.--The subcommittee hearing provided a balanced
discussion of the costs and benefits of the national service
programs which became operational under the Corporation
umbrella in 1993.
c. Hearings.--A hearing entitled ``Oversight Hearing on the
Corporation for National and Community Service'' was held on
May 18, 1995.
7. Revelations of Medicaid Fraud and Scams.
a. Summary.--In 1992, the House Government Operations
Committee issued a report concluding that waste, fraud and
abuse ``cost the government $300 billion in recent years.''
\20\ The report added, ``Government waste has not only bilked
the taxpayer of billions of dollars, but it has created a
public cynicism about government at a time when effective
government is needed the most.'' After having received
testimony from the Secretaries of five cabinet departments, the
Human Resources and Intergovernmental Relations Subcommittee
convened an oversight hearing in order to seek the perspectives
and recommendations of commentators and investigators from
outside the government on ways to identify and reduce waste,
fraud and abuse in these departments. Testimony was received
from: Thomas Schatz, president of Citizens Against Government
Waste; Martin Gross, an author and commentator; James Bovard,
journalist and author; and Dr. Ronald Walters, chairman of the
political science department of Howard University.
---------------------------------------------------------------------------
\20\ ``Managing the Federal Government: A Decade of Decline,''
December 1992, Majority Staff Report to the Committee on Government
Operations.
---------------------------------------------------------------------------
Mr. Schatz testified about the Departments of Education and
Veterans Affairs. He discussed collection problems in Student
Financial Aid Programs, which he believes should be
unsubsidized and administered by the Treasury Department. He
testified that he believes that the VA frequently overpays
pension and compensation benefits and suggested forms of data
collection that he believes would fix problems of overpayment.
Mr. Gross testified about the Department of Health and
Human Services. He believes that to prevent the insolvency of
the Social Security system, the retirement age should be raised
to 70 years. Mr. Gross also discussed his views regarding how
Medicare and Medicaid could be run more efficiently.
Mr. Bovard discussed problems in the Section 8 housing
system. He cited several examples of incidences where he
belived that the government was paying for expensive housing
for the poor, and argued that Section 8 projects are linked to
many inner city problems.
Mr. Kennedy testified about his experience of going
undercover for 2 months on the streets of New York City to
expose scam artists--doctors, pharmacists and black
marketeers--who he says rip off the Medicaid program in New
York State for hundreds of millions of dollars. Mr. Kennedy
said that he was able to ``easily rent Medicaid cards'' from
unscrupulous people on the street and use the cards to obtain
thousands of dollars ``in unneeded tests, exams and services--
all at taxpayer expense.'' Mr. Kennedy further testified that
``after 30 years of existence, Medicaid has failed to require
ID photos or any other descriptive information on its cards,
allowing thousands of unscrupulous recipients to barter their
cards for quick cash or drugs.''
Dr. Walters lauded the efforts of the administration's
Reinventing Government initiative, and voiced concern about the
counterproductive outcomes of dismantling programs too quickly
or ill-advisely. Dr. Walters contended that the reason many of
the poverty programs do not work is because their operating
costs are under funded. Dr. Walters testified about his fear
that with further budget cuts to poverty programs and an
increasing number of people entering poverty, that the
situation would simply get worse.
b. Benefits.--It is the view of subcommittee Chairman Shays
that ``Even if it were possible to eliminate all losses to
waste, fraud and abuse, the savings would still not balance the
budget. However, Congressional action to produce a major
reduction in losses would go a long was toward restoring public
confidence in government.
c. Hearings.--A hearing entitled ``Waste in Human Service
Programs: Other Perspectives'' was held on May 23, 1995.
8. Fraud and Abuse in Medicare and Medicaid.
a. Summary.--Pursuing oversight issues identified in
previous general oversight hearings, the subcommittee requested
information from the Health Care Finance Administration (HCFA),
the HHS Inspector General and others concerning providers who
defraud the programs but continue to bill Medicare and
Medicaid. The effectiveness of legal and administrative
sanctions against abusive providers, and management controls
over provider access to Federal health care programs were
examined. In particular, the subcommittee focused on whether
more could be done to keep fraudulent providers out of those
important government programs.
Testimony was received from: the Administrator as well as
the Senior Advisor for Program Integrity of the Health Care
Financing Administration; the HHS Inspector General; the
Special Counsel for Financial Institutional Fraud of the U.S.
Department of Justice; the Assistant Director of the Agency for
Health Care Administration for the State of Florida; and the
executive director of the National Health Care Anti-Fraud
Association.
Federal health care programs will cost $262 billion this
year. According to the GAO, up to 10 percent of health care
spending is lost to fraud and abuse. That means Medicare and
Medicaid losses are perhaps as much as $26 billion, or $71
million each day!
b. Benefits.--Losses of this magnitude pose a real threat
to the solvency of Federal health care programs. The
subcommittee learned of the limited impact of penalties--such
as suspension or debarment--that can now be imposed on
providers who are consistently abusive, or are indicted or
convicted of defrauding the Government's health care systems.
c. Hearings.--A hearing entitled ``Keeping Fraudulent
Providers Out of Medicare and Medicaid'' was held on June 15,
1995.
9. Lengthy FDA Delays in Reviewing Food Additive Petitions.
a. Summary.--This hearing was the first oversight hearing
on the FDA's management of this premarket review program since
enactment of the food additive amendments of 1958. As
subcommittee Chairman Shays noted, a serious look at how the
FDA handles its responsibilities was long overdue. Thus, the
subcommittee convened an oversight hearing on this subject to
span a 2 day period, June 22 and 29, 1995, where testimony was
received from representatives of the FDA; the Grocery
Manufacturers of America; National Food Processors Association;
the University of Texas Graduate School of Biomedical Sciences;
the Institute of Food Technologists; the National Academy of
Sciences' Food Forum; the Calorie Control Council, the center
for Science in the Public Interest and the Federation of
American Societies of Experimental Biology and from others.
Under the Food Drug and Cosmetic Act, the FDA has up to 180
days to review and act on food additive petitions. The FDA has
a backlog of 295 food additive petitions under review. Among
the backlog of pending food additive petitions, 66 percent have
been pending since 1990, 27 percent since the 1980's, and 7
percent since the 1970's. More than 100 new petitions are
submitted each year to the FDA. Food additives affect the
characteristics of food. They are commonly used to impart or
maintain consistency, nutrition, texture, flavor, color or
wholesomeness.
b. Benefits.--The delays in the current food additive
petition review process impede food technology research and
delay benefits to the consumer. By convening these hearings,
the subcommittee sought to identify the causes of and solutions
to these lengthy FDA delays. According to subcommittee Chairman
Shays, from a public health standpoint, the public wants
minimum risk in food additives, but also wants the benefits of
the same nutritional and dietary advances available to
consumers in other nations. The current FDA review process
appears to allow endless studies with no definite deadlines for
action. The subcommittee will continue to explore the issue of
whether the delays are caused by bad management, inadequate
resources or a lack of confidence by the FDA in the agency's
scientific personnel who review food additive petitions.
Based on these subcommittee oversight hearings, the
committee adopted its fourth report to the 104th Congress on
December 14, 1995, entitled ``The FDA Food Additive Review
Process: Backlog and Failure to Observe Statutory Deadline,''
House Report No. 104-436, December 21, 1995, Fourth Report by
the Committee on Government Reform and Oversight, Together with
Additional Views.
c. Hearings.--Hearings entitled ``Delays in the FDA's Food
Additive Petition Process and GRAS Affirmation Process'' were
held on June 22 and 29, 1995.
10. Bringing Health and Support Services to Women, Minorities and
Adolescents--Growing Segments of the AIDS Population.
a. Summary.--On July 17, 1995, the subcommittee convened a
field hearing held in Brooklyn, NY, to examine how the U.S.
Department of Health and Human Services (HHS) and local health
care providers are preparing to bring health and support
services to women, minorities and adolescents--growing segments
of the AIDS population. Testimony was received from:
representatives from Deputy Inspector General for Evaluations
and Inspections, HHS; the Associate Director of Health Policy
of the U.S. General Accounting Office; the Director of the
Office of HIV/AIDS Policy, Assistant Secretary of Health, HHS;
the acting commissioner of health, New York City department of
health; the director of the AIDS Institute of the New York
State Title II grantee; the AIDS program coordinator of the
Stamford department of health of the Connecticut Title II
grantee; the vice president of institutional advancement of the
Brooklyn and Caledonian Hospitals; the executive director of
Brooklyn Housing Works; the chairman of the Stewart B. McKinney
Foundation; a board member of the LAMBDA Independent Democrats;
Senator Velmanette Montgomery, New York State Senator, 18th
Senate District in Brooklyn, NY; and the executive director of
the Corporation for Supportive Housing.
The subcommittee found that, in 1993 and 1994, over one-
half of the newly reported AIDS cases were in minority groups.
The United States has also seen a 17 percent yearly increase in
the number of women infected with AIDS. Fifty-four percent of
those women are between the ages of 13-19. HHS provides funding
to local service providers through the Ryan White CARE Act,
administered by the Health Resources and Services
Administration (HRSA). In fiscal year 95, HRSA will provide
$633 million in Ryan White CARE Act funds.
b. Benefits.--By holding the oversight hearing, the
subcommittee acknowledged the importance of slowing the spread
of AIDS and provided an opportunity for members to discuss how
available Federal funding can be effectively utilized to meet
the needs of the changing AIDS population.
c. Hearings.--A hearing entitled ``AIDS in the 90's:
Service Delivery to Emerging Populations (Field Hearing)'' was
held on July 17, 1995.
11. Debating and Defining Federalism--the Sharing of Power Between the
Federal Government and the States.
a. Summary.--The subcommittee is charged under the Rules of
the House with the responsibility of studying the
intergovernmental relationships between the United States and
the States and municipalities. Pursuant to this authority, the
subcommittee convened this oversight hearing in the form of a
debate regarding what principles should guide Congress in
balancing the relationship between the national government and
the States, counties, cities and towns. This debate,
essentially, a discussion of the meaning of federalism--the
unique system of shared sovereignty that unites the States into
one Nation--was actually launched by the ratification of the
Constitution, waged fiercely in the Civil War, reshaped by the
exigencies of the Depression and a World War.
Testimony at the hearing was received from: the director of
State-Federal relations of the National Governors Association;
a former regional EPA Administrator; an author and director for
the center for american political studies at Harvard
University; the director of the Center on Budget and Budget
Policy Priorities; a senior fellow from the Progressive Policy
Institute; a commissioner from the Advisory Commission on
Intergovernmental Affairs; the director for the center for
constitutional studies from the CATO Institute; and the
director for the Governors' forum for the Heritage Foundation.
Today, it is hardly debatable that modern federalism is
entirely out of balance. Federal powers and programs occupy,
and in many cases, pre-empt, virtually every area of public
concern. As subcommittee Chairman Shays explained, the legacy
of the conflict between States' rights and civil rights
continues to haunt efforts to empower State government. Any
``new federalism'' will have to overcome that historical
barrier and reassure all Americans that States can do what
needs to be done more effectively, more efficiency and more
fairly than a top-heavy, one-size-fits-all Federal bureaucracy.
b. Benefits.--The great national debate over the proper
distribution of the people's sovereign powers has raged since
the Founders wrote the Constitution. Today, as Congress moves
to implement a smaller Federal Government, it is beneficial to
continue that discourse over the responsibility and capacity of
each level of government to perform essential public functions.
c. Hearings.--A hearing entitled ``Federalism Debate: Why
Doesn't Washington Trust the States?'' was held on July 20,
1995.
12. Joint Hearing on the FDA Regulation of Medical Devices, Including
Silicone Gel Breast Implants.
a. Summary.--Continuing oversight conducted in previous
Congresses, the Human Resources and Intergovernmental Relations
Subcommittee and the National Economic Growth, Natural
Resources, and Regulatory Affairs Subcommittee investigated
FDA's approval process and enforcement standards for medical
devices, including silicone gel breast implants.
The subcommittees reviewed scientific and medical
literature on so-called ``silicone diseases,'' requested
extensive documents from the FDA on device review and
enforcement policies and interviewed physicians, researchers
and patients. These inquiries explored how the FDA, doctors and
scientists assess the risks of silicone and other materials
used in medical devices.
The subcommittees inquired how the FDA establishes
enforcement standards for medical device regulations, how
consistently those standards are enforced, and the appearance
of arbitrary or selective enforcement practices. In addition,
the subcommittees also explored formal and informal procedures
used by the FDA to promulgate enforcement standards.
Pursuant to the results of these inquiries, both
subcommittees became concerned that the FDA's evaluation
standards and enforcement procedures for medical devices may
create product shortages and inhibit innovation and technical
advances. In order to explore these issues further, the
subcommittees convened two oversight hearings.
At the first hearing, testimony was received from: Hon.
Marilyn Lloyd, a former Member of Congress; Hon. James A.
Traficant, Jr. (D-OH), a Member of Congress; Hon. Greg Ganske,
M.D. (R-IA), a Member of Congress; the Commissioner of the FDA;
the Director for the Center for Devices and Radiological Health
from the FDA; the chief medical officer from Vanderbilt
University Medical Center; an official from the department of
pathology from the University of Tennessee in Memphis; an
associate professor of medicine and epidemiology at the Mayo
Clinic; an official from the department of gynecology and
obstetrics from Emory University; medical device patients;
device industry representatives; clinicians; and scientists.
At the second hearing, testimony was received from the FDA
Deputy Commissioner, device industry representatives, and
device manufacturers. The witnesses testified about the
development and promulgation of FDA standards used in
enforcement of statutes and regulations governing the
manufacture and distribution of medical devices.
b. Benefits.--The investigation updated the status of FDA
review of silicone gel breast implants and the impact of that
protracted review on the development and availability of other
life-sustaining devices containing silicones. In addition,
there is a great need for the American public to know that
there is an open and predictable FDA process for promulgating
enforcement guidance. As a result of these hearings, the FDA
committed to more timely device review and a more open process
for the development and issuance of guidance.
c. Hearings.--A hearing entitled ``FDA Regulation of
Medical Devices (Joint Hearing)'' was held on August 1, 1995. A
hearing entitled ``FDA Enforcement Standards for Medical
Devices (Joint Hearing)'' was held on September 14, 1995.
13. Federal Takeover of the Chicago Housing Authority.
a. Summary.--The subcommittee convened an oversight
investigation into the Federal takeover of the Chicago Housing
Authority (CHA) after Congresswoman Cardiss Collins, ranking
member of the Government Reform and Oversight Committee (D-IL),
submitted a request to Committee Chairman William F. Clinger,
Jr., (R-PA) on June 1, 1995, that hearings be conducted in
Chicago on the role of U.S. Department of Housing and Urban
Development (HUD) in the operation of the CHA.
On May 30, 1995, HUD assumed control over the day to day
operations of the ``troubled'' CHA. A declared breach of
contract between CHA and HUD signed by HUD Secretary Henry
Cisneros on June 2, 1995, made the takeover legally effective.
Executed in the wake of the resignation of CHA's Board of
Commissioners on May 26, 1995, the takeover was an
unprecedented HUD action. Although HUD has authority to
intervene in troubled housing agency operations at any time,
HUD has never assumed responsibility for the day to day
operations of a housing agency the size of CHA.
CHA is the Nation's third largest public housing authority
(PHA), surpassed in size only by those of Puerto Rico and New
York city. CHA was created in 1937 by a resolution of the city
of Chicago pursuant to the Housing Authorities Act of the State
of Illinois, and administers over 55,000 public and assisted
housing units serving over 150,000 residents.
The socio-economic status of the resident population of CHA
creates particular challenges for the housing authority. Eleven
of the 15 poorest neighborhoods in the Nation are located in
CHA communities.
CHA is plagued by a poorly conceived and distressed housing
stock, an acutely poor resident population and a historically
mismanaged administrative bureaucracy. HUD's ability to carry
out the CHA takeover effectively has immediate impact on the
people of Chicago and broad implications for the 86 other
housing agencies presently listed as ``troubled'' by HUD. The
subcommittee's hearing focused on HUD's progress at CHA since
the May 30 takeover, the department's short and long term
strategies for reforming CHA and HUD's plans for installing new
leadership and management at the housing authority. At the
hearing, testimony was received from Hon. Henry Cisneros,
Secretary of HUD and other HUD officials; the U.S. General
Accounting Office; panels of tenants; public housing management
experts and city and private sector representatives.
b. Benefits.--Although HUD has not yet articulated a long
term plan to reform CHA and to extricate itself from CHA
management, if the takeover sets CHA on a course for recovery,
HUD's assumption of control of CHA operations may be validated
as an acceptable model of intervention at troubled housing
agencies.
In addition, based on this and the subcommittee's two other
oversight hearings of HUD (on February 13 and 22, 1995), the
committee adopted its fifth report to the 104th Congress on
December 14, 1995 entitled ``The Federal Takeover of the
Chicago Housing Authority--HUD Needs to Determine Long-Term
Implications,'' House Report No. 104-437, December 21, 1995,
Fifth Report by the Committee on Government Reform and
Oversight, Together with Additional Views. (See II.A.2.)
c. Hearings.--A hearing entitled ``HUD's Takeover of the
Chicago Housing Authority (Field Hearing)'' was held on
September 5, 1995.
14. Management of Threats to the Nation's Blood Supply.
a. Summary.--After infection with the HIV virus, there is a
period of time known as a ``window'' in which infection may be
present but antibodies to the virus have not been produced in
sufficient quantity for detection. This window can last up to 6
months in some individuals, but is usually about 20 days.
However, antigens appear and can be detected sooner than
antibodies, reducing the window by 10 days or more.
Subcommittee investigation discovered that on June 23,
1995, the FDA's Blood Products Advisory Committee (BPAC)
recommended against routine HIV-1 antigen screening of blood
donor units. On July 12, subcommittee Chairman Shays wrote to
FDA Commissioner David Kessler urging him not to accept the
BPAC's decision and to approve the immediate licensing of HIV-1
antigen tests for the screening of the Nation's blood supply.
Subcommittee Chairman Shays pointed out that antigen testing
would further close the window of potential infection in
recipients of blood and blood products, a goal which was
consistent with remarks made by Commissioner Kessler at a
September 26, 1994 FDA Conference. Kessler said, ``[The FDA
has] an obligation to foster the development of new
technologies, especially if these technologies hold the promise
of a blood supply that is even safer. This is especially true
for detecting HIV--the AIDS virus. We need to close the
window.''
On August 10, 1995, the FDA announced its recommendation
that, despite the BPAC recommendation, blood establishments
should test donors with new HIV-1 antigen test kits after the
tests become available. Under the new guidance, the FDA
recommended that blood establishments begin screening all blood
and plasma donors with newer test kits for HIV-1 antigen within
3 months after FDA approves one of the kits.
To examine this and other issues raised by the
subcommittee's inquiries, the Human Resources and
Intergovernmental Relations Subcommittee convened two oversight
hearings to discuss efforts by the U.S. Department of Health
and Human Services (HHS) and the blood products industry under
HHS jurisdiction to protect the Nation's blood supply from
emerging infectious agents.
At the October 12, 1995 oversight hearing, HHS Secretary
Donna Shalala provided the agency's response to a recent study
that was critical of past HHS efforts to protect the blood
supply from infectious agents. Secretary Shalala testified that
HHS accepted recommendations of the report released by the
Institute of Medicine (IOM)--HIV and the Blood Supply: An
Analysis of Crisis Decisionmaking (July 13, 1995)--which had
concluded that the medical and governmental response in the
early 1980's to blood-borne HIV infection strongly suggests the
need for greater coordination and more aggressive policies by
HHS to meet the threat of future infectious agents.
In addition, the Secretary named the Assistant Secretary
for Health to the newly created post of Blood Safety Director
and created a Blood Safety Committee which she indicated would
include the FDA Commissioner, the Director of the National
Institutes of Health (NIH), and the Director of the Centers for
Disease Control and Prevention (CDC).
Other hearing witnesses included representatives from the
Committee of 10,000, the National Hemophilia Foundation, the
Hemophilia Federation, the Oklahoma Blood Institute, and
Michigan State University.
A second oversight hearing on the subject was convened on
November 2, 1995, so the subcommittee could consider the blood
industry's response to the IOM report. In addition, the roles
of the CDC and NIH in protecting blood safety were discussed.
Witnesses included representatives from the CDC, NIH, the
American Association of Blood Banks, the Council of Community
Blood Centers, the American Red Cross, the American Blood
Resources Association, the Bayer Corp., the Baxter Healthcare
Corp. and the Armour Pharmaceutical Co.
b. Benefits.--With 4 million patients in the country
receiving transfusions of whole blood and blood components each
year, raising the standards for blood collection and processing
to meet new threats is a critical national priority. These
hearings brought together all the major governmental and
private sector players in the blood safety field and elicited a
new commitment to diligence in protecting against infectious
agents in the blood supply.
c. Hearings.--Hearings entitled ``Protecting the Blood
Supply from Infectious Agents: New Standards to Meet New
Threats'' were held on October 12 and November 2, 1995.
15. The Occupational Safety and Health Administration's (OSHA) New
Strategy for Changing the Way it Does Business.
a. Summary.--On October 17, 1995, the Human Resources and
Intergovernmental Relations Subcommittee convened an oversight
hearing to explore initiatives and programs claimed to have
been adopted by the Occupational Safety and Health
Administration (OSHA) as part of the agency's change in its
strategy for doing business in a technology-based workplace.
The agency had indicated in numerous publications and
announcements that it was seeking to form new partnerships of
employers, workers and OSHA to promote common sense
regulations, focus on results, and reduce red tape.
In the past the agency had earned a ``red tape
reputation.'' The agency was widely perceived as an agency with
a ``gotcha'' mentality, a preoccupation with small technical
violations and governed by confusing, outmoded rules.
OSHA's Assistant Secretary of Labor for Occupational Safety
and Health Joseph A. Dear discussed the innovative programs the
agency has developed to improve workplace protections for
America's working men and women. Assistant Secretary Dear fully
discussed what the agency refers to as the newly reinvented and
responsive--``New OSHA''--and promised that the agency would
continue to become more customer friendly and less driven by
adherence to red tape and technical rules.
In addition to Assistant Secretary Dear, testimony was also
received from: the Associate Director for the U.S. General
Accounting Office (GAO); the director of the Voluntary
Protection Programs Participants' Association; and
representatives from trade unions and the private industry.
b. Benefits.--Through this hearing, the subcommittee was
able to confirm that OSHA's efforts to re-engineer worker
safety standards and enforcement to meet the new realities of
the 21st century workplace are welcomed by business and
workers. Given that no amount of enforcement resources would
ever permit the agency to inspect all of America's workplaces,
cooperation as opposed to confrontation will permit OSHA to
better focus scarce budget resource and meet its core mission
of correcting the most serious hazards in the most dangerous
workplaces.
c. Hearings.--A hearing entitled ``OSHA: New Mission for a
New Workplace'' was held on October 17, 1995.
16. Management of U.S. Department of Housing and Urban Development
Funds in Public Housing Tenant Programs.
a. Summary.--In September 1995, Representative William
Martini (R-NJ), a member of the Human Resources and
Intergovernmental Relations Subcommittee, forwarded to the
subcommittee materials regarding a convention of public housing
tenants sponsored by the National Tenants Organization (NTO).
The subcommittee initiated inquiries to the Department of
Housing and Urban Development (HUD) and several local public
housing authorities regarding the use of HUD funds to attend
the NTO convention which was described as a ``vacation'' in the
promotional material.
The subcommittee also learned that public housing tenants
attended this and other training sessions using funds from
HUD's Tenant Opportunity Program (TOP). At least two tenant
groups obtained advances of anticipated TOP grant awards from
their public housing agencies.
As a result of these inquiries, the subcommittee also
learned that 6 TOP grants had been awarded then rescinded by
HUD in Delaware after questions were raised regarding the level
of consultant fees and the planned use of the funds.
On November 9, 1995, the subcommittee convened an oversight
hearing on possible waste and mismanagement of HUD grant funds
used in public housing tenant programs. Tenant programs support
training and leadership activities in order to empower tenants
for resident management purposes.
The subcommittee investigated whether HUD has appropriately
controlled or monitored TOP program results to ensure that
program objectives are met. Testimony at the hearing was
received from representatives from HUD, HUD's Inspector
General, and from tenant and public housing organizations.
b. Benefits.--Abuses of HUD's management of tenant training
funds suggest fundamental weaknesses that raise concerns about
the goals and effectiveness of certain TOP supported programs.
The subcommittee will continue to monitor TOP and other public
housing programs, as it does other Government programs within
its jurisdiction, so as to ensure that the mission and
integrity of HUD's tenant technical assistance grants and
resident management programs will remain true to their
principles and intended purposes.
c. Hearings.--A hearing entitled ``HUD's Management of
Tenant Empowerment Funds'' was held on November 9, 1995.
17. Status of Major Computer System Development.
a. Summary.--Testimony at earlier oversight hearings on
Medicare claims processing, and General Accounting Office (GAO)
reports on Health Care Finance Administration (HCFA)
acquisition and implementation of a centralized Medicare claims
system, presented troubling questions regarding whether HCFA
had the capacity to develop, procure and implement such a large
computer application. Earlier testimony by HCFA also indicated
the agency had foregone other claims management and program
integrity efforts in favor of placing all their emphasis on the
new Medicare Transaction System (MTS). Based on a GAO analysis,
the subcommittees were concerned that the use of available
claims screening software by HCFA contractors could yield
significant savings to the Medicare program immediately, while
the MTS system was being developed.
To answer these questions, the Subcommittee on Human
Resources and Intergovernmental Relations and the Subcommittee
on Government Management, Information, and Technology convened
a joint oversight hearing on HCFA's MTS project, a proposed
$127 million data system to process Medicare claims and enable
HCFA to detect and control fraud and abuse.
Witnesses at the hearing discussed the status of the MTS
computer programs which HCFA began planning in the early 1990's
and which the agency claims will curb the loss of billions of
dollars annually from fraud and abuse in Medicare claims. HCFA
Administrator Bruce Vladek appeared before the Human Resources
Subcommittee on June 15, and testified that the system would be
fully implemented by late 1999. The subcommittee chairmen and
other members wanted to know whether that schedule would be
kept and whether the system, with potential for significant
cost overruns, would be delivered on budget.
b. Benefits.--The hearing provided necessary oversight of
the MTS contract terms and milestones. The subcommittees
learned that HCFA's schedule and cost estimates for MTS were
neither reliable nor realistic, and that HCFA was using an
inconsistent approach to define current and future system
requirements. This information will be beneficial to those
guiding health care management and anti-fraud policy pending
the implementation of the MTS system.
c. Hearings.--A joint hearing entitled ``Oversight and
Review of Medicare's Transaction and Information Systems'' was
held on November 16, 1995.
18. Radioactive Contamination of 27 People, Including Researcher Dr.
Maryann Ma, in June 1995 at the National Institutes of Health
(NIH).
a. Summary.--A study by the Human Resources and
Intergovernmental Relations Subcommittee, requested by
Congresswoman Constance Morella (R-MD), was conducted over a 5-
month period to determine if the National Institutes of Health
(NIH) was negligent in conforming to safety regulations in its
handling of nuclear materials. On June 28, 1995, a
contamination of 27 people occurred at the NIH Main Campus in
Bethesda, MD, Building 37, Fifth Floor, Laboratory 5D18.
The subcommittee also studied the 3-year safety record of
NIH to see if there was a pattern of safety violations present
at the facility. These studies were aided through
documentation, meetings and conversations with the Nuclear
Regulatory Commission (NRC) and with the NIH.
b. Benefits.--The subcommittee study, in conjunction with
an NRC investigation, established that NIH's current handling
of nuclear materials at its Bethesda facilities are not a
threat to the safety of NIH employees, the community, or the
public at large.
c. Hearings.--None.
19. Unfunded Mandates in Medicaid.
a. Summary.--The subcommittee examined the cost of unfunded
Medicaid mandates and the inflexibility of the joint Federal/
State Medicaid program, which adds burdensome costs to the
States and prohibits them from taking full advantage of market
efficiencies which exist in the private sector.
Medicaid's enacting legislation and the subsequent
regulations dictate that every State provide specific services
to specific populations. Federal mandates in the Medicaid
program expanded rapidly between 1983 and 1993 to include such
requirements as catastrophic care provisions, mandated coverage
for families leaving the AFDC program, coverage for women and
children with incomes at 133 percent of the poverty line, and
mandated coverage for children up to age 18 at 100 percent of
the poverty line. Medicaid costs have more than tripled since
this expansion and program enrollment has grown by more than 50
percent. Viewed by States as the most burdensome mandate, the
1980 Boren Amendment was interpreted (through substantial
litigation) to require a cost-based payment standard, where all
costs incurred by providers must be reimbursed. Without program
modifications, CBO and GAO project Medicaid spending is likely
to double in the next 5 to 7 years, having serious fiscal and
human consequences in the States.
In response to this rapid growth of unfunded Federal
mandates, States have attempted Medicaid delivery reforms in
order to reduce their budgets. Governors are in agreement on
the need for more flexibility in the Medicaid program. Through
the waiver process, States (approximately half) have requested
greater flexibility to address issues related to financing and
delivery of care, arguing that if States are receiving less
money to meet the increased eligibility and services coverage
requirements then they must have the flexibility to operate
programs that can respond to cost efficiencies. In response to
the increased cost burden to State budgets, State reform
initiatives have resulted in 40 States now enrolling a portion
of their Medicaid population in some form of managed care.
To address the issue, the Clinton administration's FY 96
budget for Medicaid proposed a per capita cap on Federal
Medicaid spending to limit growth, control costs of per
beneficiary expenditures (keeping in place the mandated
eligibility and services), contribute savings to the Federal
budget, and provide States with additional flexibility. The
House Republicans proposed that Medicaid be turned into a block
grant program, called ``Medigrant.''
Those States testifying agreed they would like authority to
design effective, innovative health care programs responsive to
the special needs of their respective States, arguing that
changes are imperative because the current rate of growth in
State Medicaid spending will exceed the rate of total State
spending ability, at which point the States will be forced
either to increase taxes or to divert money from other
important State programs to Medicaid.
GAO reviewed for the panel those States that have been
involved with innovation and reform in their Medicaid programs,
elaborating on the States' experiences transitioning to new
delivery systems.
b. Benefits.--The hearing served as a forum to broaden the
discussion of unfunded mandates and as such, helped Members of
Congress and policymakers quantify and assess the cost of the
unfunded Medicaid mandates to the States in their delivery of
Medicaid services to beneficiaries. The Boren Amendment was
cited as the most costly expansion mandate, which State
officials feel should be repealed in order to help States
reduce the escalating cost of Medicaid services.
c. Hearings.--A hearing entitled, ``Unfunded Mandates in
Medicaid'' was held on January 18, 1996.
20. HUD Management of Tenant Initiative Programs.
a. Summary.--On November 9, 1995 the subcommittee held a
hearing to hear testimony about the Department of Housing and
Urban Development's (HUD) role in the National Tenants
Organization (NTO) August 1995 conference in Puerto Rico. At
that hearing the subcommittee received strong indications that
more than $330,000 in Federal taxes were inappropriately spent
on the conference and that there was little substantive
training offered. As a result, the subcommittee asked the
Inspector General to investigate HUD's active, visible and
taxpayer-funded support for a convention advertised as a
vacation.
At the February 29, 1996 hearing the Inspector General
testified among other things, that HUD officials played a key
role in planning and conduction the conference, the NTO cleared
an estimated $35,000 to $45,000 from the conference, little
substantive resident training was provided, there was
substantial lobbying and advocacy against Republican housing
proposals, and HUD's participation in the convention violated
department policies issued by HUD's Office of General Counsel
regarding participation in conferences sponsored by non-Federal
entities. The Inspector General also made a number of specific
recommendations on steps HUD needed to take to remedy the
problems and prevent future ones.
Kevin Marchman, the Acting Secretary for Public and Indian
Housing at HUD, told the subcommittee the steps HUD was taking
to implement the Inspector General's recommendations and to
strengthen HUD's internal controls and management. Also
testifying at the hearing were Maxine Green, president of the
NTO; Miguel Rodriguez, the executive director of the Puerto
Rican Housing Authority; Ed Moses, deputy executive director of
community relations and involvement for the Chicago Housing
Authority; and Patricia Arnaudo, Deputy Director for Program
Development at HUD.
b. Benefits.--Tenant empowerment programs, such as TOP, are
an important path out of isolation and dependence for those who
use them. The investigation and hearing identified the
weaknesses that led to the misuse of the TOP funds, ensured
that steps were being taken to rectify the problems, and
strengthened HUD's management and internal controls.
c. Hearings.--A hearing entitled, ``HUD Management of
Tenant Initiative Programs'' was held on February 29, 1996.
21. The Status of Efforts to Identify Persian Gulf War Syndrome.
a. Summary.--The subcommittee investigated issues related
to the Gulf War veterans' illnesses and convened four hearings
during 1996 as a result of those investigations. These hearings
began with a primary concern--how ongoing efforts to diagnose,
treat and compensate Gulf War veterans can be more sharply
focussed and urgently pursued.
The first two hearings, in March 1996, dealt with veterans'
symptoms and complaints about the handling of their health
problems by the VA, especially about inappropriate medical
treatment or denial of treatment, compensation issues, and lack
of funded research by the VA into causes of their illnesses.
The subcommittee also wanted to ensure that any research
programs conducted by the Departments of Defense (DOD), Health
& Human Services (HHS), and the Environmental Protection Agency
(EPA), were focussed and coordinated. Witnesses in these
hearings included sick veterans, veterans service
organizations, the VA, and non-government medical research
experts.
The third hearing in June dealt with coordination of Gulf
veterans issues between the DOD and VA, including medical
recordkeeping and compensation procedures. Witnesses included
DOD and VA health and compensation officials. The fourth
hearing in September covered typical symptoms of sick Gulf
veterans, studies of effects on humans and animals to low level
chemical exposures, and probable exposures of large numbers of
troops to chemical warfare agents and other toxins during the
war. Witnesses were from the VA, EPA, Central Intelligence
Agency (CIA), Gulf War Research Foundation, and non-government
experts from the field of neurology and toxicology.
The September hearing was critical and a turning point in
the subcommittee's investigation. It was established that the
typical complaints of Gulf veterans--chronic fatigue, flu-like
symptoms, rashes, joint pain, headaches, gastrointestinal
problems and other maladies--are similar to known effects on
humans who have been exposed to organophosphates, such as
pesticides and other chemical agents. Organophosphates are
chemically related to sarin and other chemical warfare agents.
Until recently, DOD had denied that chemical weapons were
deployed or used in the Gulf. They also denied that troops were
exposed to chemical agents, in spite of information to the
contrary available to the Pentagon from reliable sources such
as UN inspectors and Czech detection experts. Based on this DOD
position, the VA appears to have given little priority to the
possibility of low level chemical exposures in their diagnosis,
treatment and compensation of sick Gulf War veterans.
In the September hearing, Dr. Frances Murphy, Director of
the VA Environmental Health Service, conceded in testimony that
the VA research agenda through 1995 placed a low priority on
low level chemical warfare agent exposure ``because military
and intelligence sources had stated that U.S. troops had not
been exposed to chemical agents.''
In June, DOD finally admitted that 400 troops may have been
exposed to chemical agents. In August, DOD raised the exposure
estimate to 1,100 troops; in September to 5,000; and in October
to more than 20,000. And recently the Associated Press quoted a
high Pentagon official as conceding that ``big numbers'' of
130,000 troops could have been exposed. These probable
exposures came from fallout following the detonation of Iraqi
munitions bunkers at Khamisiyah and the air bombardment of
Iraqi chemical/biological weapons factories.
The health problems of some veterans may have come also
from other sources such as: the heavy use of pesticides and
insect repellants during the war, leaded diesel fuel used in
vehicles and for heating and dust mitigation, radioactivity
from depleted uranium shells fired at Iraqi tanks, dense smoke
from the oil well fires, parasites that cause a chronic
infection called leishmaniasis, and perhaps the side effects of
troop inoculations in combination with taking the experimental
anti-nerve gas drug, pyridostigmine bromide.
It is of major concern that many VA doctors have insisted
since the war's end that the veterans' symptoms are physical
manifestations of Post-Traumatic Stress Disorder (PTSD). While
this may be true in some cases, this may also indicate an over-
reliance on theories of psychological causation to the
exclusion of obvious physical toxins and stressors.
With DOD's admission of troop exposures to low level
chemical warfare agents, the next concern of the subcommittee
was the extent to which DOD and the VA acknowledge the effects
of those exposures.
In testimony before the subcommittee, Dr. Stephen Joseph,
DOD's Assistant Secretary for Health Affairs, stated that ``. .
. chronic symptoms or physical manifestations do not later
develop among persons exposed to low levels of chemical nerve
agents who did not first exhibit acute symptoms of toxicity.''
This statement was challenged at the September 1996 hearing.
A 1974 study of low level exposures (e.g. workers in
chemical weapons plants) entitled ``Delayed Toxic Effects of
Chemical Warfare Agents,'' by German scientist Dr. Karlheinz
Lohs, tends to refute Dr. Joseph's testimony. The study
concludes that ``. . . even in the case of exposure to very
slight amounts [of low level mustard agents] which do not
necessarily bring on acute symptoms, toxic reactions may later
set in.''
The question of whether delayed or chronic effects result
from exposure to low level chemical agents without first having
acute or immediate symptoms is critical to veterans. The answer
determines whether or not Gulf veterans will be compensated
appropriately for injuries suffered during the war. Many sick
veterans did not report acute symptoms during the war but later
developed chronic symptoms, thereby being denied higher
compensation for war-related injuries. On the other hand, many
veterans report that they may have had flu-like symptoms or
rashes in-theater which they ignored as part of serving in a
harsh, desert environment. These ``low-level'' symptoms could
be considered acute, but mild, reactions to low level chemical
agents.
In December, the subcommittee held two additional hearings
to discuss recent revelations about chemical detections and
exposures in the Gulf War, and to determine the extent to which
VA research and treatment protocols are being modified to take
these disclosures into account. A panel of active-duty military
officers testified regarding their experiences during Operation
Desert Shield. Two of the witnesses operated sophisticated
chemical detection equipment during the war. They testified
that positive readings for mustard and other chemical warfare
agents had been verified and recorded at locations other than
Khamisayah. The third veteran testified that he heard chemical
alarms and was told an Iraqi chemical mine had been detonated.
He believes his subsequent medical problems, including
Amyotrophic Lateral Sclerosis, or Lou Gherig's Disease, are the
direct result of his exposure to residual chemicals after the
``all clear'' was sounded and his unit proceeded through the
contaminated area.
A former Central Intelligence Agency analyst testified that
standard intelligence sources were not relied upon to reach the
conclusion that no chemical warfare agents were present in the
Gulf War. Instead, the analyst believes the agency relied
solely on representations made by the Department of Defense.
At the second hearing, veterans of the Gulf War testified
about the difficulty in getting the VA health system to
recognize war-related illnesses. The VA's Chief Public Health
and Environmental Hazards Officer testified that while the VA
``has always remained open to the possibility'' of chemical
exposures, no veteran had even been diagnosed as suffering from
the after-effects of such an exposure. She testified that the
VA health screening protocol for Gulf War veterans was modified
in late 1995 to ask specific questions about toxic exposures.
She also said epidemiological research into the effects of low-
dose chemical exposures was just beginning.
Two VA doctors who treat Gulf War veterans also testified.
They believe the various combinations of symptoms and illnesses
presented by Gulf War veterans are the result of exposures to
one or more environmental hazards present in the Gulf,
including chemical warfare agents.
b. Benefits.--The series of subcommittee hearings focused
attention on the Persian Gulf War veterans' illnesses and
helped produce admissions from the DOD that U.S. troops were
exposed to chemical warfare agents. The investigation and
hearings generated pressure on the VA to change their medical
protocol and compensation policies toward sick Gulf veterans.
The VA has also updated its research priorities and has
begun studies into the long term health effects of low-dose
exposures to chemical warfare agencts and other toxins. Also as
the result of increased congressional scrutiny, the Department
of Defense increased the size of its Gulf War Illnesses
Investigation Team from 12 to more than 100 investigators and
staff.
c. Hearings.--Hearings entitled, ``The Status of Efforts to
Identify Persian Gulf War Syndrome'' were held on March 11,
March 28, June 25, and September 19, 1996. Hearings entitled,
``Persian Gulf Veterans' Illnesses: Intelligence on Chemical/
Biological Exposures'' were held on December 10 and 11, 1996.
22. Unfunded Mandates Reform Act of 1995: A One Year Review.
a. Summary.--On March 22, 1996, exactly 1 year after the
bill was signed into law, the subcommittee convened a hearing
that focused on implementation and the impact of the Unfunded
Mandates Reform Act of 1995 (Public Law 104-4).
The act requires the legislative and executive branches to
identify and quantify implementation costs of statutory and
regulatory mandates on State and local governments. The
subcommittee has been monitoring Federal department compliance
with the requirements of Title II of the act regarding analysis
of mandates in proposed and final regulations.
Title II also requires the executive branch to conduct an
explicit analysis of proposed and final rules to quantify the
costs and benefits of mandates and identify the most cost
effective, least burdensome regulatory approach. Departments
and agencies are required to consult with State and local
governments, and the Office of Management and Budget (OMB) is
directed to collect those regulatory statements and forward
them ``periodically'' to the Congressional Budget Office (CBO).
OMB is required to submit a written report detailing compliance
by each agency during the preceding year.
The subcommittee also been monitored the design and
implementation of the study of existing mandates required under
Title III of the act. Title III required the Advisory
Commission on Intergovernmental Relations to (a) study issues
involving the calculation of costs and benefits of mandates on
State and local governments, (b) conduct a study and make
recommendations to the President and Congress concerning the
impact of existing mandates on intergovernmental (Federal-
State/local) relations, and (c) monitor and evaluate the
implementation of the act. Testimony was received from
representatives from Federal departments and agencies; State
and local governments; community organizations, and Members of
Congress.
b. Benefits.--As a result of the investigation and hearing,
the subcommittee found that OMB had concluded in the report
required by Title II that only 16 out of more than 3,000
proposed or final rules met the act's threshold for a detailed
cost/benefit analysis and review. Moreover, the subcommittee
found that OMB compliance with the requirement to share these
analyses with Congress had been minimal since enacted of the
act. Although reporting is required ``periodically,'' not one
of the required statements had been forwarded to CBO prior to a
day or two before the subcommittee's hearing convened. Then all
16 arrived at once, just in time to be included in the report.
The subcommittee was assured that future compliance would be
more periodic and less episodic.
Additionally, the subcommittee discovered that agencies had
``begun considering, but had not yet developed'' pilot programs
to reduce reporting and compliance requirements on small
governments, as required by the act.
c. Hearings.--A hearing entitled, ``Unfunded Mandates
Reform Act of 1995: A One Year Review'' was held on March 22,
1996.
23. Job Training That Works/Common factors in effective job training
programs.
a. Summary.--At the subcommittee's request, the General
Accounting Office (GAO) prepared a report on the common
features shared by effective job training programs. The GAO
studied six programs that successfully helped graduates attain
self-sufficiency. It was learned that the programs employed
four key features to ensure that participants were successful
in obtaining and maintaining employment. First, there was a
focus on ensuring that participants were committed to training
and getting a job. Second, the programs removed barriers that
could limit clients' ability to finish training and get and
keep a job. The third feature was improving participants'
employability skills as part of their training curriculum. This
included skills such as dependability, promptness, ability to
work effectively in groups, and the ability to resolve
conflicts appropriately. The fourth feature was linking
occupational skills training with the local labor market so
that the project could monitor the local labor market and make
adjustments in course offerings to meet employer demand.
At the hearing the GAO testified about its work and
findings. The subcommittee also heard from the directors and
graduates of two of the programs reviewed by the GAO, and two
additional successful job training programs.
b. Benefits.--As the GAO noted, in fiscal year 1995, the
Federal Government appropriated about $20 billion for about 163
employment training programs yet large numbers of individuals
remain unprepared for employment. The report and hearing form a
basis from which to start in redesigning the structure and
delivery of Federal job training so that it more successfully
helps disadvantaged adults acquire and maintain permanent
employment.
c. Hearings.--A hearing entitled, ``Job Training That
Works'' was held on April 18, 1996.
24. Preventing Teen Pregnancy: Coordinating Community Efforts.
a. Summary.--The subcommittee examined strategies at the
community level to prevent and reduce teen pregnancy in
America. The subcommittee found that teen pregnancy is a near
certain path to poverty, and that poverty is a major underlying
cause of teenage childbearing. More than 1 million American
teenagers become pregnant each year the rate of births per
1,000 teenagers (age 15-19) in the United States is six times
the rate of France and Italy, and twice the rate of Great
Britain. About half the pregnant teens in the United States
will go on to give birth, and of those, 72 percent will be
unmarried. Childbearing teens make up less than one-third of
out-of-wedlock births, but for a variety of reasons, they
represent a disproportionate economic and social burden to
society. Most teenage parents who drop out of school never
return. Teenage mothers have half the lifetime earnings of
women who postpone childbearing under age 20. Teen mothers are
at greater risk of developing complications in pregnancy and of
delivering low birth weight babies due to poor prenatal care.
Low birth weights in turn are associated with increased infant
mortality, illness and disabilities.
The subcommittee also found that adult men father more than
half the children born to 15 to 17 year old mothers. This
shocking finding, combined with information on the extent to
which initial sexual activity by teenage girls is involuntary,
shattered some of the myths surrounding teen pregnancy.
At on oversight hearing on Federal, State and private
sector programs to reduce teen pregnancy, testimony was
received from: Dr. Henry. W. Foster, Jr., senior advisor on
teenage pregnancy to President Clinton, and White House liaison
to the National Campaign to Prevent Teenage Pregnancy; the
National Campaign to Prevent Teen Pregnancy; U.S. Congress; the
U.S. Department of Health and Human Services; the Maryland
Lieutenant Governor; Child Trends; Advocates for Youth; the
Best Friends Foundation; and the Institute for Responsible
Fatherhood and Family Revitalization.
b. Benefits.--The subcommittee's investigation and hearing
into teen pregnancy prevention programs brought needed public
attention to the need for greater public/private collaboration
in the design and implementation of effective intervention
programs. This was the first examination of Federal, State and
private teen pregnancy prevention programs since publication of
new studies attributing the majority of under-age pregnancies
to have been caused by men over the age of 20. This finding
argues for a greater emphasis on enforcement of statutory rape
laws, along with traditional program focus on abstinence and
education about the results of early parenthood.
c. Hearings.--A hearing entitled, ``Preventing Teen
Pregnancy: Coordinating Community Efforts'' was held on April
30, 1996.
25. Food Safety: Oversight of the Food and Drug Administration's Center
for Veterinary Medicine.
a. Summary.--The subcommittee reviewed the performance of
the FDA's Center for Veterinary Medicine (CVM), particularly
regarding FDA's failure to issue a regulation prohibiting
feeding of ruminant protein to other ruminant animals. This was
a step recommended by the World Health Organization in
preventing the spread of Bovine Spongiform Encephalopathy (BSE)
or ``Mad Cow Disease'' in countries currently believed to be
free of the disease, such as the United States.
The subcommittee convened an oversight hearing into FDA's
management of the programs of the Center for Veterinary
Medicine on May 10, 1996. The hearing examined the lack of
adequate funding and program priority for veterinary medicine
issues overseen by FDA's Center for Veterinary Medicine as
evidenced by the lengthy review process for new animal drugs.
Testimony was provided by: FDA Deputy Commissioner Michael
Friedman; Dr. Frederick Murphy, University of California School
of Veterinary Medicine; Dr. Lester Crawford, Association of
American Veterinary Medical Colleges; Dr. Gary Weber, National
Cattlemen's Beef Association; Dr. Don Franco, National
Renderers Association; Robert Hahn, Public Voice for Food and
Health Policy; Dr. John Welser, Pharmacia and Upjohn; Dr.
Sherbyn Ostrich, American Veterinary Medical Association and
Dr. Cindy Wolf, American Sheep Industry Association.
b. Benefits.--Delays in the review of new and supplemental
animal drug applications were identified and corrective
measures were examined. At the hearing and during subsequent
meetings with the subcommittee, the FDA took further action on
the issuance of the regulation banning the feeding of ruminant
protein to other ruminant animals.
c. Hearings.--A hearing entitled, ``Food Safety: Oversight
of the Food and Drug Administration's Center for Veterinary
Medicine'' was held on May 10, 1996.
26. Food Safety: Monitoring of Food Borne Illnesses by the Centers for
Disease Control, Food and Drug Administration and U.S.
Department of Agriculture.
a. Summary.--Three of the four pathogens considered most
important by the Centers for Disease Control were unrecognized
as causes of food borne illnesses just 20 years ago. While the
food supply becomes more vulnerable to pathogens, the food
safety system on which we rely appears fragmented among three
different Federal agencies.
Therefore, subcommittee investigated issues affecting food
safety and convened an oversight hearing on the monitoring of
food borne illnesses by CDC, FDA and USDA. The oversight
hearing evaluated the need for closer coordination, better
surveillance and implementation of scientifically based hazard
control systems. Testimony was taken from: Dr. David Satcher,
Director, Centers for Disease Control; Dr. Fred Shank, Food and
Drug Administration; Dr. Glen Morris, USDA; Mr. Robert
Robinson, GAO; Dr. Ban Mishu Allos, Vanderbilt University
School of Medicine; and Dr. John Kobayashi, Washington State
Department of Health.
b. Benefits.--The growing threat to the public health posed
by food borne pathogens, such as Campylobacter jejuni which
causes over 40 percent of the Nation's cases of the paralytic
illness Guillaine-Barre Syndrome, was brought to the attention
of the public. The inadequate monitoring of food borne
illnesses by three different Federal agencies as well as State
governments was identified and corrective actions suggested.
c. Hearings.--A hearing entitled, ``Food Safety: Monitoring
of Food Borne Illnesses by the Center for Disease Control, Food
and Drug Administration and U.S. Department of Agriculture''
was held on May 23, 1996.
27. The Development of Successful Public Housing Resident Management
(Field Hearing).
a. Summary.--This hearing was the third oversight hearing
on resident management programs in public housing developments.
The field hearing examined the elements of success at Cochran
Gardens in St. Louis, MO. Cochran Gardens has operated one of
the best tenant management programs in the country and the
hearing examined the elements that make it, and other programs
a success. Effective resident programs can provide superior and
more cost effective site management than public housing
authority management.
At the hearing the subcommittee learned that the elements
of successful resident management programs include strong
tenant leadership, active housing authority support, and
effective Department of Housing and Urban Development
oversight.
The subcommittee heard from non-resident public housing
professionals as well as from residents engaged in resident
management.
b. Benefits.--The hearing demonstrated that resident
management programs can be effective and can build strong
communities and improve the lives of their residents. The
hearing identified the key elements of successful resident
management programs, challenges all programs to use those
elements to meet the same standards of success.
c. Hearings.--A hearing entitled, ``The Development of
Successful Public Housing Resident Management'' (Field Hearing)
was held on June 3, 1996.
28. Department of Education Oversight: Gatekeeping.
a. Summary.--Gatekeeping is the process for screening
higher education institutions for participation in Federal
student financial aid (SFA) programs. Institutions must meet
standards set by the triad of State licensing authority,
accrediting agencies, and the U.S. Department of Education.
Effective front-end controls are more efficient than back-end
institutional monitoring and enforcement. Gatekeeping is
particularly important in controlling non-degree-granting
vocational trade schools, which pose the greatest risk to SFA
programs in terms of fraud, waste, and abuse.
b. Benefits.--The Department of Education discussed plans
for a more focused oversight effort, including plans to realign
staffing toward a case-management approach to enforcement.
State government representatives made recommendations for a
strong State role in improving institutional integrity
following the elimination of State Postsecondary Review
Entities. State governments can be effective due to their
proximity to institutions within their borders, and because,
unlike accrediting bodies, State governments are independent
and accountable to the public. Also discussed were
institutional concerns about over reliance on student loan
default rates to determine institutional quality. High default
rates supersede other regulatory reviews that institutions must
pass to participate in Title IV.
c. Hearings.--A hearing entitled, ``Department of Education
Oversight: Gatekeeping'' was held on June 6, 1996.
29. Oversight of the Department of Labor's Efforts Against Labor
Racketeering.
a. Summary.--As a result of an oversight review of
Department of Labor Enforcement activities, the subcommittee
found that racketeering is costly to the interests of union
members in particular, and to society as a whole. Corrupt union
officials betray the trust bestowed upon them as elected
representatives of union workers and undermine the public
confidence and trust in the collective bargaining agreement
system. In some cases, millions of dollars of workers' dues and
benefit moneys have been siphoned off by organized crime
through outright embezzlement or more sophisticated devices,
such as loans or excessive fees paid to corrupt union and trust
fund service providers. Millions of consumers unknowingly pay
organized crime what amounts to a surcharge on a wide range of
goods and services due to organized crime's exercise of power
in the marketplace.
The subcommittee also examined the Department's current
anti-racketeering strategy in view of the administrative and
legislative recommendations made 10 years ago by the
President's Commission on Organized Crime (Report to the
President and Attorney General: ``The Edge: Organized Crime,
Business and Labor Unions,'' 1985). The subcommittee found that
despite the recommendations of the Presidential Report more
than 10 years ago, despite the work of the Labor Secretary's
1989 Task Force on Enforcement, despite a report in 1990 and
subsequent reports by the DOL Inspector General of ``material
weakness'' in DOL criminal enforcement efforts, and despite
more than 5 years of in-depth oversight by the Inspector
General, DOL enforcement activities ``remain inconsistent and
uncoordinated with no integrated approach to common criminal
enforcement issues.'' Moreover, the Report's call for ``New
directions for the Department of Justice and fundamental
changes in the structure and operation of the Department of
Labor, the two principal agencies charged with responsibilities
involving organized crime, labor organizations, and businesses'
had not been implemented. The Department continues to resist
repeated call to integrate and coordinate criminal and civil
enforcement efforts to provide a sharper focus on labor
racketeering. As a result, the Department appears to remain an
inattentive, at times unwilling, partner in the fight against
organized crime in labor unions.
The subcommittee convened an oversight hearing to assess
the Department of Labor's (DOL) strategies designed to detect,
prosecute and eliminate labor union corruption. Testimony was
received from representatives from the Office of Labor-
Management Standards, the Pension and Welfare Benefits
Administration, the Office of the Solicitor and the Division of
Labor Racketeering, a part of the Office of Inspector General--
all DOL operations responsible for the effectiveness and
efficiency of the agency's efforts against criminal labor
racketeering activity.
b. Benefits.--The investigation and hearing were the first
attempt in many years to resolve the issue of what it would
take to overcome the legal, political and bureaucratic barriers
that prevent the Department of Labor from playing a more
effective role in the detection of labor racketeering and the
protection of union members' rights and funds from exploitation
by organized crime. Testimony at the hearing exposed
bureaucratic resistance within DOL to a more unified, effective
assault on labor racketeering. Calls for uniform case
information, Department-wide outcome tracking, consistent
information sharing and cross-agency training cooperation were
pronounced too difficult, too complicated, too time-consuming,
too costly, not feasible, unnecessary, impractical or secondary
to the unique mission each enforcement entity within the DOL
responsible for preventing labor racketeering.
The Department of Labor and the Inspector General committed
to a review of longstanding recommendations and a resolution of
outstanding coordination issues.
c. Hearings.--A hearing entitled, ``Oversight of the
Department of Labor's Efforts Against Labor Racketeering'' was
held on July 13, 1996.
30. Oversight of the Department of Education and the National Institute
of Mental Health: Current Approaches to Attention Deficit/
Hyperactivity Disorders.
a. Summary.--Attention Deficit/Hyperactivity Disorder
(ADHD) has become the Nation's leading psychiatric disorder.
The Department of Education estimates that 3 to 5 percent, or
up to 2\1/2\ million school-aged children, have ADHD. As
measured by growth in the use of methylphenidate, or Ritalin,
the most commonly prescribed drug treatment for ADHD, the
number of children diagnosed with the disorder has grown two
and a half times since 1990. ADHD diagnoses in adults are also
increasing dramatically. These trends have profound
implications for health research and education policy.
The subcommittee review and hearing examined what
constitutes a proper diagnosis of the disorder, why there has
been an increase in the diagnosis of individuals with the
disorder, the appropriate treatment for the disorder, the role
of medications such as methyphenidate (Ritalin) in treatment,
the implications for Federal educational and health policies of
current information and planned research, and the appropriate
accommodations by schools to the diagnosis and treatment.
b. Benefits.--The hearing helped address the uncertainty
and controversy surrounding the proper definition, accurate
diagnosis and appropriate treatment of ADHD. It also identified
the significance of the problem and its implications on Federal
education policy and research priorities.
c. Hearings.--A hearing entitled, ``Oversight of the
Department of Education and the National Institute of Mental
Health: Current Approaches to Attention Deficit/Hyperactivity
Disorders'' was held on July 15, 1996.
31. Consumers and Health Informatics.
a. Summary.--With today's health care consumers demanding
more and more information at ever increasing speed in receiving
that information, the subcommittee explored the accessibility
of health care information to consumers through the use of
computers and other telecommunication tools. A report prepared
by GAO at the request of subcommittee Chairman Christopher
Shays, titled ``Consumer Health Informatics: Emerging Issues,''
was released at the hearing.
The GAO report stated that health informatic systems are
capable of providing many different types of health related
information to consumers, giving them additional information
resources to assist them in making more informed choices and
decisions as it relates to their health care. The information
benefits health care consumers in areas such as the pros and
cons of elective surgery, self-care techniques when
appropriate, preventative habits and life style choices,
training and practice patterns of physicians, medically
approved alternative types of treatments, et cetera. In
addition, medical practitioners have the benefit of easily
accessible patient records and updates on the latest medical
practice techniques.
HHS highlighted the growth in consumer interest in the data
sources available through their information programs, noting
that consumers are seeking more detailed health informatics,
but are limited in gaining access. HHS reported their primary
informatics efforts are coordinated in four main areas: (1) the
direct provision of information through these technologies; (2)
coordination to improve access to consumer health informatics;
(3) partnerships with other pubic and private organizations to
extend the reach and impact of consumer health informatics; and
(4) research and development and evaluation.
Witnesses from private sector organizations and medical
facilities presented testimony about their specific health
information projects which are providing health information
products, infrastructure, data bases and information banks to
help disseminate health care information more widely to health
care consumers in a variety of settings.
b. Benefits.--The hearing highlighted increased demand for
health care related information, the potential cost savings in
overall health care dollars spent and the benefit to consumers,
at the same time calling attention to the problems associated
with accessability, quality, privacy and availability of such
information.
c. Hearings.--A hearing entitled, ``Consumers and Health
Informatics'' was held on July 26, 1996.
32. The Management of HUD's Section-8 Multi-Family Housing Portfolio.
a. Summary.--The subcommittee examined this issue to begin
to address a potential multi-billion dollar housing problem.
The cost of rent subsidies on more than 700,000 units of low-
income, multi-family housing will soon be unsustainable. As a
result, the Federal Housing Administration (FHA) will be forced
to pay up to $18 billion on defaulted mortgages. Without
definitive administrative and legislative action, this will
mean that the place that 1 million Americans call home will be
left to decay, or be torn down.
At the hearing the subcommittee heard from the Department
of Housing and Urban Development (HUD) about its plans to
address this problem. The subcommittee also learned from the
General Accounting Office (GAO) that there are three main
factors that have caused this problem. These factors are high
subsidy costs, high exposure to mortgage insurance loss, and
the poor physical condition of many properties. These factors
can be attributed to program design flaws that inflate
subsidies above market rents and place all the risk of
financial loss on HUD. The GAO also told the subcommittee that
weakness in HUD's oversight and management of its multi-family
portfolio has permitted the physical and financial problems
facing these units to fester and grow.
In addition to hearing from the GAO, the subcommittee
learned what past efforts HUD took to address this problem and
why they failed, and HUD's current plans and why HUD expects
them to succeed.
b. Benefits.--The hearing began to identify the causes and
depth of a potentially multi-billion dollar problem. The
hearing also examined the management and information challenges
facing HUD so that any proposed solutions are made with a
complete understanding of the capacity to structure and manage
such an undertaking.
c. Hearings.--A hearing entitled, ``The Management of HUD's
Section-8 Multi-Family Housing Portfolio'' was held on July 30,
1996.
33. Off-Label Drug Use and FDA Review of Supplemental Drug
Applications.
a. Summary.--The subcommittee evaluated the extent of off-
label drug use in cancer, rare disease and pediatric
indications and the rate at which supplemental indications are
added by the FDA to the labeling of already marketed drugs. GAO
testified that approximately 90 percent of cancer drug use, 80
percent of pediatric use and 80-90 percent of drugs used to
treat rare diseases are used off-label. For 50 million
children, 40 million cancer patients and 20 million Americans
suffering from rare, or orphan, diseases, most of their
treatments are off-label. While perfectly legal, the widespread
off-label use of medicines raises significant public policy and
public health issues. Physicians need label information to
treat patients effectively. Patients need the same information
to make decisions about their own care. Both public and private
health care payers need safety and efficacy data upon which to
base reimbursement policies GAO and representatives of Tufts
University Center for Drug Development testified that FDA's
review of supplemental indications in the past was not timely.
Testimony was heard from: Sarah Jagger, GAO; Dr. Joseph
DiMasi, Tufts University Center for Drug Development; FDA
Deputy Commissioner Michael Friedman; Dr. Carolyn Runowicz,
American Society of Clinical Oncology; Dr. Ralph Kauffman,
American Academy of Pediatrics; Abbey Meyers, National
Organization for Rare Diseases and Dr. William Kennedy, Zeneca
Pharmaceuticals (representing the Pharmaceutical and Research
Manufacturers of America).
b. Benefits.--This hearing examined the impact of the
absence of up-to-date labeling for drugs used by nearly half of
America's patients and the adverse impact this lack of
information has on medical care. At the hearing, FDA, patient
groups, physicians and the pharmaceutical industry pledged to
address the problem of inadequate drug labeling and problems
with FDA's review of supplemental indications for already
marketed drugs.
c. Hearings.--A hearing entitled, ``Off Label Drug Use and
FDA Review of Supplemental Drug Applications'' was held on
September 12, 1996.
34. Investigation into Possible Misuse of ``New Age'' Training Programs
by Federal Departments and Agencies.
a. Summary.--On February 21, 1996, the subcommittee
directed an inquiry to the Equal Employment Opportunity
Commission (EEOC) regarding the number and type of objections
or complaints regarding training programs, including diversity,
management, motivation, ``new age,'' and other work training
programs.
On March 15, 1996, the EEOC reported a total of 22 charges
made against private sector employers and no charges made
against public sector employers. Of the 22 charges located, 8
had Letters of Determination issued citing a violation of Title
VII of the Civil Rights Act of 1964, as amended, on the basis
of religious discrimination. In addition, in seven of the cases
it is clear that the respondent conducted its own training.
The EEOC analysis indicated that 17 of the 22 charges
involved allegations that employees were inappropriately
required to participate in Church of Scientology training
sessions or religious practices and/or were told to utilize
Church of Scientology philosophies in conducting their work.
The other charges involved a diffuse set of ``new age''
practices that employees found objectionable.
On May 29, 1996, the subcommittee directed inquiries to the
Federal departments and agencies within its oversight
jurisdiction regarding the impact of ``new age'' training
programs, including the use of consultants for that purpose.
The inquiries sought: a list of all requests for proposals for
employee training issued; a list of all contracts for employee
training entered into; copies of not less than five of the
contracts; a tally of the number of objections or complaints
from any source involving training programs; an analysis of the
tally indicating the basis of each complaint; and an analysis
of the objections or complaints tallied indicating common
themes or trends.
The departments and agencies all responded between June 5,
1996 and August 2, 1996. Many of the agencies did not utilize
or rarely utilized training programs. All responses, however,
proved comprehensive. The responses were characterized by very
few or no objections or complaints concerning the violation of
individual civil rights.
b. Benefits.--As questionable, and often dubious, practices
falling under the category of ``new age'' training have gotten
more attention, it has become important to protect against such
explicit and implicit indoctrination and insure continued use
of proven and effective training practices. The department and
agency responses provided the subcommittee with a comprehensive
listing of training programs. Based on these responses, it was
concluded that Federal dollars were used responsibly in the
choosing of appropriate and sound diversity, management,
motivation, and other such employee training programs.
c. Hearings.--None.
NATIONAL ECONOMIC GROWTH, NATURAL RESOURCES, AND REGULATORY AFFAIRS
SUBCOMMITTEE
1. Grantee Lobbying.
a. Summary.--For decades, the Federal Government has
awarded billions of dollars in grants to organizations that
engage in lobbying and other forms of political advocacy. Much
of this money is given to non-profit organizations. According
to IRS figures, in 1992 alone, approximately 44,274 non-profit
groups received $42.6 billion in grants from the Federal
Government. Non-government sources put the figures even
higher.\21\ The Independent Sector, a coalition of some of the
largest non-profits in the country, reports that non-profits
received nearly $160 billion from all government sources in
1992; and OMB Watch's Gary Bass claims the Federal Government
granted approximately $226 billion in fiscal year 1994 to non-
profits, for-profits, and to State, local and tribal
governments.
---------------------------------------------------------------------------
\21\ Letter from the U.S. General Accounting Office, Associate
Director, Tax Policy and Administration Issues, Natwar M. Gandhi, to
Ernest Istook, 11/08/95, found in subcommittee files.
---------------------------------------------------------------------------
In many instances, government funding far exceeds donations
received directly from private citizens. For example, in 1994
Catholic Charities, one of the largest non-profit organization
in the country, obtained $1.2 billion or 65 percent of its
total annual revenue from government sources.
While much of the money given away by the government is
undoubtedly put to good use, too much of it is spent to
subsidize political advocacy--whether it be lobbying on pending
legislation, buying paid advertisements for political races, or
simple grass-roots organizing. Federal grantees naturally
develop a symbiotic relationship with their governmental
funding sources. Even where Federal funds are not directly used
for political advocacy, indirect support is inevitable--after
all, money is fungible. Several votes have clearly demonstrated
that Congress firmly believes the practice of giving grants to
politically active organizations, termed ``Welfare for
Lobbyists,'' must stop.
The subcommittee explored the issue of Welfare for
Lobbyists in great detail throughout the first session of the
104th Congress. A total of four hearings were held by the
subcommittee to investigate allegations that certain groups
receiving Federal grants were engaging in political advocacy;
to consider how Welfare for Lobbyists adversely affects both
government and charity; and to explore possible solutions to
the problem.
The subcommittee also worked in coordination with the
General Accounting Office to investigate the National Council
of Senior Citizens (NCSC). NCSC is a non-profit organization
that receives over 95 percent of its funding from the Federal
Government (ostensibly to provide housing and jobs to senior
citizens). Yet it is highly active in partisan politics. Half
of NCSC's annual report for 1994 was devoted to a description
of its political activities. As part of this investigation,
electronic copies of NCSC's financial records for fiscal year
1994 were requested. Those records are now being analyzed to
determine whether current restrictions on the use of Federal
funds were violated, and, if no violations took place, to
identify the loopholes that permit an organization so heavily
funded by the government to engage in significant political
activity.
In addition to investigatory hearings, the subcommittee and
other Members also proposed legislation to address some of the
problems associated with Welfare for Lobbyists. Ultimately,
language was added to section 18 of the Lobbying Disclosure Act
of 1995 to prohibit certain non-profit organizations (qualified
as tax-exempt under IRC section 501(c)(4)) from receiving
Federal funds in any form, if they engage in lobbying
activities. That bill was signed into law by President Clinton
on December 19, 1995, as Public Law No. 104-65. Those
restrictions have no effect on grantees other than 501(c)(4)'s,
nor do they prevent a 501(c)(4) grantee from creating shell
corporations to separate, on paper, the grant receipts from the
political activity.
b. Benefits.--There is a need to protect the taxpayers by
ensuring that Federal funds are not used to subsidize
legislative or political advocacy. To that end, the
subcommittee's hearings have exposed abuses of Federal grants.
Many Members believe that further reforms are needed to
increase accountability to the taxpayers and to prevent the
abuse of tax dollars. With at least $42 billion in government
grants each year, there is substantial room for waste, fraud,
and abuse by unscrupulous grantees. The subcommittee's efforts
will continue with an eye toward exposing existing abuses and
demonstrating the case for reform to protect the American
taxpayers.
c. Hearings.--As part of its investigatory work, the
subcommittee held four hearings on the question of Welfare for
Lobbyists. Hearings were held to investigate allegations that
certain groups receiving Federal grants were engaging in
political advocacy; to consider how Welfare for Lobbyists
adversely affects both government and charity; and to explore
possible solutions to the problem. On June 29, 1995, the
subcommittee heard from representatives from non-profits that
refuse to engage in political activity or take Federal grants;
General Accounting Office researchers and private scholars who
have studied Welfare for Lobbyists; and Congressmen and
Senators who are concerned about the problem as well. In
addition, the subcommittee questioned representatives of the
Nature Conservancy and the National Fish and Wildlife
Foundation about allegations of improper political activity in
connection with Federal grants they receive. Subsequent
hearings were held on July 28, August 2, and September 28,
1995.
2. Investigation of Improper EPA Lobbying on Pending Legislation.
a. Summary.--The Anti-Lobbying Act is a criminal statute
that prohibits executive branch agencies from using any
appropriated money directly or indirectly to influence a Member
of Congress on pending legislation, except through proper
official channels. (18 U.S.C. sec. 1913.) The dual purpose of
the act is to prevent agency officials from squandering public
money in attempts to increase their budgets or protect their
jobs, and to prevent executive branch agencies from using tax
dollars to disseminate propaganda about pending legislation.
Pursuant to this statute, and other Federal anti-publicity and
propaganda statutes, the executive branch is free to propose
such legislative measures as the President deems appropriate
and communicate its comments directly to Members of Congress on
any pending legislation. Executive branch officers and
employees are prohibited, however, from engaging in any grass-
roots lobbying, even indirect grass-roots lobbying, that is
intended to influence the legislative debate.
In late February 1995, the committee learned the following
facts regarding improper EPA lobbying: (1) EPA officials had
used taxpayer funds to create non-public advocacy material
strongly condemning pending regulatory reform legislation; (2)
the EPA used taxpayer funds to fax these documents to more than
150 grass-roots lobbying organizations and industry groups that
are active in lobbying Members of Congress on these legislative
proposals; (3) an objective reader would interpret these
documents as a call to action, or in the words of one
newspaper, ``a call to arms;'' (4) most of the documents,
including the strongest advocacy pieces, were not solicited;
(5) the mass-faxing of these documents was carefully timed to
coincide with important votes in the House of Representatives;
and (6) such action was consistent with a pattern of other EPA
contacts with grass-roots lobbying organizations to defeat the
reform legislation. These undisputed facts constituted strong
evidence that some EPA officials had violated the criminal
anti-lobbying laws. Indeed, the concerted EPA actions appeared
to precisely fit the accepted definition of prohibited grass-
roots lobbying.
On March 2, 1995, a written request for information was
submitted to EPA Administrator Carol Browner. The Administrator
initially responded that the EPA would cooperate with the
oversight investigation and provide answers to the questions.
However, EPA did not provide complete answers to any of the
questions that were posed after an extension of time was
granted. For example, EPA refused to say who approved the
content of the lobbying material and who was involved in the
decision to send it out. The EPA also refused to disclose
whether EPA officials had meetings or conversations with
outside lobbying groups to discuss lobbying Members of
Congress. Instead, EPA's response to the legitimate oversight
request was largely an argument why EPA need not provide
Congress information regarding potential wrongdoing and waste
of taxpayer resources.
On March 21, 1995, subcommittee Chairman McIntosh and
ranking subcommittee Member Peterson sent Administrator Browner
a letter insisting on complete responses to all of its
questions pursuant to its authority under Rules X and XI of the
U.S. House of Representatives. The March 21 letter explained
that the subcommittee knew of documents that EPA was refusing
to produce, which raised concerns about possible violations of
several Federal statutes besides the Anti-Lobbying Act,
including other appropriation laws, the Hatch Act prohibitions
against political activity by executive branch officials, the
conspiracy statute, and the statute prohibiting misprision of
felony. As the March 21 letter relayed:
EPA simply cannot pick and choose which of the
subcommittee's requests for information it will honor
and which it will reject. We insist on complete
responses to all of our requests. . . . It is
impossible for the subcommittee to discharge its
oversight duty without uncovering all of the facts.
Your position that the Congress is not entitled to the
information because no one at EPA violated the Anti-
Lobbying Act is troubling for two reasons. First, your
assertion that the act prohibits almost nothing is
unsupportable. The very opinions cited in the EPA
letter from the Department of Justice refute EPA's
interpretation of what the law allows and what it
prohibits.
Second, even if we accepted EPA's . . . construction
of the law and blindly accepted EPA's conclusion (based
on EPA interviews not provided to us) that no laws were
violated, the information we seek still would be highly
relevant to our core legislative duty. If current law
is as empty as you assert, then our oversight
investigation is necessary to determine whether to
propose new legislation, similar to that which exists
for many agencies, which prohibits an even broader
category of publicity and propaganda activities.
The March 21 letter also contained a four-page appendix that
refuted the agency's legal interpretation of the Anti-Lobbying
Act.
In the following months, EPA missed every agreed-upon
deadline to provide the requested information. Although EPA
eventually produced a significant number of documents, the
agency continued to stonewall on producing answers to the most
important questions and the most relevant documents and e-mail
messages. At the same time, the Department of Justice's Office
of Legal Counsel (OLC) issued new ``guidelines'' to executive
branch agencies on interpreting the Anti-Lobbying Act. The OLC
guidelines were substantially different from prior General
Accounting Office (GAO) and OLC guidelines and directly
contradicted the text of the Anti-Lobbying Act without
justification.
Despite the Department of Justice's refusal to investigate
the facts, committee Chairman William F. Clinger, Jr., and
subcommittee Chairman McIntosh reviewed the available evidence
of improper lobbying by EPA and a host of other executive
branch agencies. That evidence was more than sufficient to find
a widespread pattern of lobbying by executive agencies within
the Clinton administration, including the Departments of
Commerce, Interior, Housing and Urban Development, Labor, the
EPA, the Small Business Administration, and AmeriCorps.
Chairman Clinger introduced an amendment to H.R. 2564, the
``Lobbying Disclosure Act of 1995,'' which would clarify
existing prohibitions and create a civil enforcement mechanism
to prevent further improper lobbying activity. Although the
amendment was narrowly defeated, there was widespread
recognition that legislation of this type was needed to correct
executive branch abuses.
In early 1996, Chairman Clinger introduced H.R. 3078, ``The
Federal Agency Anti-Lobbying Act,'' to create a civil law
prohibiting agency grass-roots lobbying in support of or in
opposition to pending legislation. Although H.R. 3078 did not
move from committee, Chairman Clinger was able to have a
similar prohibition enacted as section 631 of the Treasury
Postal portion of the Omnibus Consolidated Appropriations Act
of 1997.
b. Benefits.--This investigation demonstrates the need for
additional civil legislation, and greater enforcement of
existing criminal laws regarding improper executive branch
lobbying. The investigation also laid the groundwork for the
consideration of civil legislation which was passed as part of
the Omnibus Consolidated Appropriations Act that creates a
civil enforcement mechanism to prevent further waste and abuse
of taxpayer resources.
c. Hearings.--The full committee conducted a hearing on
H.R. 3078, on May 15, 1996, (see Part Two I.A.4.k.)
3. OSHA's Ergonomics Standards.
a. Summary.--During the 104th Congress, the subcommittee
conducted oversight into the Occupational Safety and Health
Administration's (OSHA) rulemaking process for an ergonomics
standard. The term ``ergonomics'' originated in industrial
engineering to explain the idea that workplaces should be
designed around the people who use them. The recent attention
focused on ergonomics comes from its association with
repetitive strain injuries (RSI's), also known as cumulative
trauma disorders (CTD's). In spite of the lack of scientific
evidence to support either of these theories, OSHA has
proceeded aggressively with an ergonomics regulation.\22\
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\22\ Eugene Scalia, ``Ergonomics: OSHA's Strange Campaign to Run
American Business,'' White Paper, National Legal Center for the Public
Interest, Vol. 6, No. 3, August 1994, pp. 8-20.
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The regulatory moratorium bill (H.R. 450) would have
prevented further work by OSHA on an ergonomics standard. When
an OSHA official publicly indicated her intent to defy the
moratorium, Congress passed a ``Stop Work Order'' on this
rulemaking as part of H.R. 1158 and H.R. 1944, the 1995
Rescissions Bill. Press accounts in June 1995 reported that
OSHA had abandoned the ergonomics rulemaking. As Congress
continued to review comprehensive regulatory reform proposals,
the subcommittee held a hearing on July 12, 1995, with OSHA
Assistant Secretary Joseph Dear as a witness, to finally
establish the status of OSHA's regulatory activities on the
ergonomics issue.
The committee also examined whether a single, one-size-
fits-all rulemaking could ensure workplace safety and health,
especially when serious questions still existed about the
scientific basis of the regulation. The investigation brought
into light the fact that the sweeping regulation would require
that 96 million jobs across the Nation be formally reviewed for
ergonomic ``risk factors.'' These risk factors are inherent in
every job they include: repetitive motion; frequent or heavy
lifting; contact stress; unsupported or awkward postures for
long periods; and vibrating tools and equipment.\23\ Under this
standard, workers would be prohibited from repeatedly pinching
small binder clips or twisting their necks to cradle a
telephone receiver. The investigation revealed that many jobs
which include these risk factors would be abolished altogether
in favor of automation.\24\ As a result of this investigation,
the committee was able to establish that OSHA is continuing to
work on the promulgation of an ergonomics rulemaking. Prior to
the July 12, 1995 hearing, conflicting press reports were
written on the subject. In addition to establishing the status
of the ergonomics rulemaking, the hearing helped make a strong
case that the rulemaking was overreaching and the House showed
its agreement by passing a rider to deny funding DOL for
promulgation of the ergonomics regulation.
---------------------------------------------------------------------------
\23\ OSHA's Regulatory Process and Activities Regarding Ergonomics
before the Subcommittee on National Economic Growth, Natural Resources,
and Regulatory Affairs. Testimony of Joseph A. Dear, Assistant
Secretary of Labor for Occupational Safety and Health. (Original
transcript pp. 26-28, in subcommittee files.)
\24\ Ibid., pp. 36-40.
---------------------------------------------------------------------------
b. Benefits.--During the investigation, the committee
learned from Assistant Secretary Dear that the agency is
continuing to work on its proposed ergonomics regulation.
Assistant Secretary Dear also confirmed that the agency is
already enforcing the scientifically dubious ergonomics
principles under the general duty clause, without a regulation.
The airing of this information refuted press reports that the
agency had stopped work on the massive regulation and renewed
congressional scrutiny of the rulemaking process. A study
released in January 1995, conducted by experts in occupational
medicine, concludes that OSHA did not ground its proposed
ergonomic regulation in sound medicial science. Rather OSHA
selected research that supported its position and ignored or
minimized findings that did not. In the Labor-HHS
Appropriations bill to fund OSHA in 1996, Congress approved a
prohibition on funds for further work on the ergonomics
standard.
c. Hearings.--The subcommittee held a hearing on July 12,
1995, on ``OSHA's Regulatory Activities and Processes Regarding
Ergonomics.'' Testimony was received from: Joseph A. Dear,
Assistant Secretary of Labor for Occupational Safety and
Health, U.S. Department of Labor; Joseph M. Woodward, Esquire,
Associate Solicitor, Occupational Safety and Health Division,
Office of the Solicitor, U.S. Department of Labor; David
Sarvadi, attorney, Keller and Heckman; Howard M. Sandler, M.D.,
president, Sandler Occupational Medicine Associates, Inc.; C.
Boyden Gray, Esquire, chairman, Citizens for A Sound Economy;
Rick Treaster, president, Local 2400, Amalgamated Clothing and
Textile Workers Union; Deborah Berkowitz, director, office of
occupational health, United Food and Commercial Workers
International Union.
4. Improper FDA Rulemaking.
a. Summary.--The committee conducted an investigational
hearing on the improper use of informal rulemaking by the Food
and Drug Administration in cooperation with the Subcommittee on
Human Resources and Intergovernmental Relations. This
investigation resulted from a compelling Citizens' Petition
filed with the FDA pursuant to section 553 of the
Administrative Procedures Act by the Indiana Medical Device
Manufacturers Council and the law firm of Baker & Daniels on
May 2, 1995. That Citizens' Petition asked the FDA to add back
certain language that the agency had deleted from its
regulations in 1991 requiring notice and comment procedures for
most rules. The 1991 language deletion permitted the FDA to
issue guidance documents without subjecting them to notice and
comment rulemaking. The Petition also asked the FDA to
implement a consensus-based approach to the initiation,
development and issuance of guidance documents that do not
impose new rules, and to adopt greater internal controls over
its communications with the public. In support, the Petition
identified dozens of examples where informal guidance documents
had been used by the FDA to justify enforcement actions or
approval decisions that could not be otherwise justified by a
formal rule or statute.
Subcommittee Chairmen McIntosh and Shays submitted written
questions to the FDA, which resulted in the production of
hundreds of pages of documents and a number of instructive
answers. For example, the FDA revealed that its decision in
1991 to exempt guidance documents from notice and comment
rulemaking procedures was made despite criticism from an
independent government agency charged with improving government
regulations. In a September 24, 1990 letter, Marshall Breger,
chairman of the Administrative Conference of the United States,
advised the Acting Commissioner of the FDA, James Benson, ``FDA
should reconsider its seeming ``all-or-nothing'' approach with
regard to using notice-and-comment procedure in the
promulgation of interpretive rules.''
In addition to focusing on the Citizens' Petition, the
hearing also provided an opportunity for Members to consider a
briefing paper published by David Murray of the Hudson
Institute, entitled ``The Human Cost of Regulation: The Case of
Medical Devices and the FDA.'' In that paper, the Hudson
Institute concluded thousands of Americans had died as a result
of FDA delay in approving just four medical devices. As one
example from the paper indicates, nearly 1,100 Americans died
as a result of a 24-month delay in the FDA's approval of
endocardial leads.
On October 30, 1995, the FDA provided a preliminary written
response to the Citizen's Petition. Significantly, the FDA
granted the petitioners' request that the FDA improve its
guidance document procedures. In a letter signed by the Deputy
Commissioner for Policy, the FDA concluded:
``FDA believes that there is merit to your concern
about the initiation, development, and issuance of
guidance documents. FDA agrees that public
participation benefits the guidance document
development process. Moreover, FDA believes that the
Agency can do a better of [sic] job of communicating to
its employees and to the public the non-binding nature
of guidance documents.''
However, the FDA denied the petitioners' request for the
FDA to add back certain language that the agency had deleted
from its regulations in 1991 requiring notice and comment
procedures for most rules. The FDA ruled ``notice-and-comment
rulemaking would significantly delay the issuance of guidance
documents, or more likely, make it impracticable to issue them
at all. The Agency believes that the proper balance between the
need for public input and the need for timely guidance can be
struck if FDA modifies its guidance document procedures. This
approach addresses your concerns regarding adequate public
participation but does not make it impossible for FDA to
continue making guidance available.''
In that same letter, the FDA also announced plans to
publish by January 31, 1996, a Federal Register notice setting
forth its proposed ideas for revising guidance document
procedures and its intention to solicit comment on the issues
raised in the Citizens' Petition.
b. Benefits.--The investigation helped focus both the
public's and the FDA's attention on an issue that is of
significant importance to the regulated community. The extent
to which guidance documents and other informal statements
issued by a regulatory body are used by that body is a core
problem for any regulatory system. The Administrative
Conference of the United States has recognized this concern,
and has attempted to address solutions on a governmentwide
basis. This investigation helps to highlight this concern with
respect to the FDA. However, the FDA is not the only agency
that could benefit from considering its treatment of informal
rulemaking. The EPA, OSHA, and every other regulatory body
needs to voluntarily examine their current rulemaking
procedures. Failure to act voluntarily will inevitably lead
more private citizens to use the Citizens' Petition process as
a means of forcing the agencies to act responsibly. The
subcommittee encouraged the filing of such petitions, and
invites private citizens to bring them to its attention.
c. Hearings.--A hearing on this matter was held on
September 14, 1995. Witnesses included: William Schultz, Deputy
Commissioner for Policy, FDA; Brad Thompson of the law firm of
Baker & Daniels; Larry Pilot, counsel to the Medical Device
Manufacturers Association; Ed Kimmelman, regulatory affairs
director for Boehringer Mannheim Corp.; Thomas Lenard, Ph.D.,
director of regulatory studies at the Progress & Freedom
Foundation; David Murray of the Hudson Institute's
Competitiveness Center; and Jeff Brinker, M.D., director of
interventional cardiology, Johns Hopkins Hospital.
5. Regulatory Reform.
a. Summary.--The committee conducted an examination of the
impact of Federal regulations on average Americans across the
Nation. The subcommittee visited 17 cities and held hearings on
the need for regulatory reform. Testimony from the hearings
clearly showed that Government regulations place undue burdens
on small business and the American people--burdens that are not
outweighed by regulatory benefits.
In Washington, DC, Federal agency officials and some
Members of Congress make the case that more and more
regulations are needed. However, outside Washington, DC,
citizens plead for relief from the needless burden of
regulations that already exist. In some cases the burden of
regulations just makes it more difficult for these individuals
to do their jobs. In other cases, regulations threaten to drive
them out of business completely.
The subcommittee found that America's hard-working farmers,
who grow the food on which we all subsist, are heavily and
unnecessarily burdened by regulations. One farmer in Oklahoma,
Robert Ross, testified that Federal agencies issue so many
convoluted regulations that it is nearly impossible for farmers
not to break the law. Farmers are left with no other option but
to follow the rules to the best of their ability, knowing that
at any time, an agency inspector could fine them for a minor
violation or, worse, take their land away. Another Oklahoma
farmer, Ruby Henderson, testified that she can no longer farm
her own land because it has been classified as a wetland--
although it remains dry most of the year.
The subcommittee also found that regulations can be
counterproductive, hurting the very people our society and our
government should be trying to help. In Modesto, CA, a Laotian
immigrant farmer leased 20 acres of land between two major
roads which are good for only one thing--farming strawberries.
Two agencies, the Fish and Wildlife Service and the Army Corps
of Engineers, quickly stepped in to stop him from farming his
own land. After much headache and paperwork, which involved the
agencies first losing and then rejecting his forms because the
drawings were not quite to scale, this farmer is still in
limbo. He came to America because he thought it was the land of
opportunity, and he wanted to escape governmental abuse.
Unfortunately, he has not been able to do that here. His
American dream has become a personal nightmare.
Testimony from the field hearings also showed that
regulations can have a counterproductive impact on large
pockets of the American populace. For example, the small city
of Manson, IA was forced to reduce the level of fluoride in the
public drinking water--it was 4 to 5 milligrams per liter while
Federal regulations required only 4 milligrams per liter. Even
though the discrepancy between the actual level and the
mandated level was very small, and fluoride is a good thing,
the city was forced to install a reverse osmosis treatment
plant to remove 1 milligram or less of fluoride per liter of
water at a cost of more than $700,000. Water rates were
increased by 45 percent to cover the operational costs of the
plant. Property taxes were raised and now approximately 24
percent of these taxes are allocated to paying off the bonds
the city had to sell to build the plant. Some 50,000 gallons of
water are rejected by the plant daily.
In some cases, regulations aren't as much at fault as the
methods Federal agencies use to enforce them. According to Dr.
Jonathon Wright, on May 6, 1992, a group of flak-jacketed
police and FDA agents kicked in the front door of the Tahoma
Clinic, and with guns pointed at the staff demanded, among
other things, their B vitamins. The raid came without any prior
contact or inquiry from the FDA. In September 1995, the FDA's
``criminal investigation'' was dropped without as little
warning as it was started--and without any explanation, apology
or reimbursement of costs.
b. Benefits.--The field hearings have given private
citizens across the Nation the opportunity to participate in
the regulatory reform debate in Congress. By reaching outside
Washington, DC, and listening to those people who must comply
with Federal regulations on a daily basis, the subcommittee
learned about many of the problems that the Federal regulatory
system poses: use of excessive force by agencies, costly
regulations that threaten to drive farmers and small business
owners into bankruptcy, and counterproductive regulations that
burden the American consumer without providing the benefits of
protection for health and safety. The testimony of witnesses at
the field hearings has helped build the record for regulatory
reform, supporting the need for legislation to enact true,
common-sense reform. Such significant legislation was enacted
in the Small Business Regulatory Enforcement Fairness Act of
1996, which gives Congress veto power over agency regulations.
c. Hearings.--The subcommittee held the following field
hearings: ``The Regulatory Transition Act of 1995 (H.R. 450)
and Clean Air Act Regulations'' in Fairfax, VA, on February 2,
1995. Testimony was received from: Robert W. McGillicuddy,
AutoCare, Inc.; Dennis Dwyer, Potomac Mills Exxon; Ron Harrell,
Capital Services, Inc.; Becky Norton Dunlop, secretary of
natural resources, Commonwealth of Virginia; Robert E.
Martinez, secretary of transportation, Commonwealth of
Virginia; Robert B. Dix, Jr., Fairfax County board of
supervisors; Lorraine Lavet, Fairfax County chamber of
commerce; Stan Laskowski, Deputy Regional Administrator, Region
3, Environmental Protection Agency; Ellen Bosman, vice
chairman, Arlington County board; Sheryll Crosby, Shortness of
Breath Club, American Lung Association. ``The Need for
Regulatory Reform'' in Muncie and Indianapolis, IN, on April
17, 1995. In Muncie, testimony was received from: Betty Devoe,
executive director, Westminster Village; Joseph Russell,
farmer; Wayne Townsend, farmer; Tom Miller, vice president,
commercial lending, American National Bank; Lowell Williams,
senior vice president, First Merchants Bank; Eugene Roach,
M.D., medical director, Anderson Center of St. John's; James
Currier, M.D., radiation oncologist; Robert Brodhead,
president, Ball Hospital; George Brannum, M.D., Pathologists
Associated; G.W. Bartlett, president, G.W. Bartlett Co.;
Richard Brown, sales manager, Beckett Bronze; Robert Kersey,
president, Rochester Metal Products; Robert Anderson, plant
manager, Delphi Interior and Lighting Systems; Richard
Sullivan, vice president and division manager, New Venture
Gear; Mike Lunsford, realtor; Terri Quinter, supervisor, Rose
View Transit; Katherine Kleber, Abate of Indiana PAC; Dan
Conaway, Abate of Indiana PAC. In Indianapolis, testimony was
received from: Alan Kemper, farmer; Warren Baird, farmer; Bart
Dye, farmer; Jean Ann Harcourt, president, Harcourt Outlines;
Malcolm Applegate, president and general manager, Indianapolis
Newspapers; Jeff Bowe, president, Benham Press; John Keach,
Jr., president, Home Federal Savings Bank; Jerry Baumgartner,
president, Tri County Bank and Trust; Jeff Robinson, Indiana
American Water Co.; Myles Brand, president, Indiana University.
``Regulatory Problems Maine Citizens Face Under the Clean Air,
Clean Water, and Safe Drinking Water Acts'' in Portland, ME, on
May 26, 1995. Testimony was received from: Richard Verville,
Citizens for Sensible Emissions; Monte Sloan, United Bikers of
Maine; David Dixon, Earth Tech; Jinger Duryea, C.N. Brown Co.;
Edward F. Miller, American Lung Association of Maine; Everett
B. Carson, Natural Resources Council of Maine; Senator Jeffrey
H. Butland, president of the senate, Maine State Senate; David
Sweet, superintendent, Kennebunk, Kennebunkport and Wells Water
District; Delores Lymburner, Maine Peoples Alliance; Judy W.
Hayes, president, Consumers Maine Water Co.; Dale Glidden,
superintendent, Augusta Sanitary District. ``Regulatory Reform
and the FDA Drug Approval Process'' in Norristown, PA, on June
9, 1995. Testimony was received from: Beverly Zakarian,
president, Cancer Patients Action Alliance; David and Faith
Samowitz; Mariah Gladis; Kiyoshi Kuromiya; Dr. David Bios, vice
president, worldwide regulatory affairs, Merck & Co.; Dr. James
Molt, vice president, worldwide regulatory affairs, Rhone-
Poulence Rorer; Dr. Robert Powell, vice president, regulatory
affairs, SmithKline Beecham Co.; Bruce Carroll, manager,
government relations division, Centocor, Inc.; Dr. Robert
Larkin, director, registration & regulatory affairs,
agricultural chemicals business, Rohm & Haas Co.; Mike Lumpkin,
Deputy Director, Center for Drug Evaluation and Research, FDA.
``The Need for Regulatory Reform'' in Tampa, FL, on July 17,
1995. Testimony was received from: Juan Adriatico, farmer; Roy
Davis, nurseryman and president, Hillsborough County Farm
Bureau and president, Tampa Bay Chapter of the Florida
Nurserymen and Growers Association; Tommy Brock, farmer and
president, Hillsborough County Strawberry Growers Association;
David Boozer, executive director, Florida Tropical Fish Farms
Association; Charles E. Weeder, chairman and CEO, Homes of
Merit, Inc.; Bruce Congleton, president and CEO, Florida Food
Industry Association. ``Federal Regulatory Reform'' in St.
Cloud, MN, on August 7, 1995. Testimony was received from:
Harold Anderson, president, Anderson Trucking Service; Mike
Helfeson, CEO, Gold'n Plump Poultry; Bruce Gohman, president,
W. Gohman Construction Co.; Morrie Lanning, mayor, Moorhead,
MN; Don Adams, director, Stearns County Environmental Services;
David Volker, loss control manager, Berkley Administrators;
Peter Larsen, M.D., F.A.C.S., St. Cloud Eye Clinic; John
Solheim, CEO, St. Mary's regional health center, Detroit Lakes;
Ed Zapp, president, chairman and CEO, Zappco Inc. ``Federal
Regulatory Reform Pertaining to Federal Contracts'' in St.
Paul, MN, on August 8, 1995. Testimony was received from: Ron
Turner, president, Minnesota Federal Contractors Council, Joe
Weis, chairman, Weis Builders; Todd Goderstad, legal counsel,
Ames Construction Co.; Ted Arneson, president, Professional
Instruments; Donnovan Eaker, owner, Steve's Meat Market;
Charles McDuff, director of government and technical affairs,
Ecolab Inc.; Lyle Clemenson, president, CEI, Inc.; William D.
Smith, Jr., executive vice president, Brown & Bigelow. ``FDA
Medical Product Approvals'' in Rochester, MN, on August 8,
1995. Testimony was received from: Dr. Robert Schwartz,
cardiologist, the Mayo Clinic; Dr. Richard Geier, president,
Olmsted Medical Group; Dr. Mike Murray, president-elect,
Minnesota Medical Association; Paul Citron, vice president of
science and technology, Medtronic; Mike Gozola, president,
Rochester Prosthetic Laboratories. ``The Federal Regulatory
Climate in Maryland,'' in Towson, MD, on January 26, 1996.
Testimony was received from: Paul Abenante, president, American
Bakers Association; William Paterakis, H&S Bakery; John
Morrison, vice president of Human Resources, Schmidt Baking
Co.; Alvin Manger, president, Manger Packing Co.; Edward Lauer,
owner, Lauer's Super Thrift; Joseph DeFrancis, president,
chairman and CEO, Pimlico Race Course; Timothy Capps, Maryland
Horse Breeders Association; William A. Good, executive vice
president, National Roofing Contractors Association; Mark
Gaulin, president, Magco, Inc., and president, Associated
Roofing Contractors of Maryland; Calvin Coblentz, president,
Wimpey Minerals U.S.A., Inc., and president, Maryland
Associated General Contractors; William T. Popmaronis,
president, EPIC MD Professional Pharmacies and owner, Edwards
and Anthony Pharmacy; Hugh Brown, president, Safeguard
Maintenance Corp.; Michael Stappler, president, Overlea
Caterers, Inc.; Thomas Meighan, safety manager, Stromberg Metal
Works, Inc.; Rabbi Moshe Heinemann, Star-K Kosher
Certification; Joseph DiCara, GOW International, Inc. ``The
Need for Regulatory Reform,'' in Sioux City, IA, on February 8,
1996. Testimony was received from: Harold Higman, Higman Sand &
Gravel; David Calhoun, Wells Blue Bunny Dairy; Corky Bailey,
JEBRO; Ellen Prescott, Security National Bank; George
Valentine, Terra Industries, Inc.; Craig Davis, Davey & Jim's
Seed Store, Inc.; Ron Marr, Petroleum Marketers of Iowa; Bob
Hamilton, chief, Sioux City Fire Department; Linda Madison,
Sioux City Community School District; Stephen Brevig, Northwest
Iowa Power Cooperative; Don Meisner, Siouxland Interstate Metro
Planning Council. ``The Need for Regulatory Reform,'' on
February 9, 1996 in Des Moines, IA. Testimony was received
from: Wes Houston, human resources manager, Johnson Machine
Works, Inc.; Loren Duchman, consultant, James B. Meehan, PE,
PC; Don Beal, president, Beal Development Corp.; David Whiton,
owner, Whiton Feed and Milling Co.; Bill Willis, Soil
Conservation Consultant; Richard Seigel, farmer; Royal
``Curly'' Holtz, II, farmer; Howard Alff, farmer; Harvey
Johnson, farmer; Dean Torreson, city administrator, city of
Atlantic; Robert Layton, city manager, city of Urbandale;
Fletcher Reel, mayor, city of Missouri Valley; Tom Hanafan,
mayor, city of Council Bluffs; Joe A. Gray, mayor, city of
Manson; L.D. McMullen, CEO and general manager, Des Moines
Water Works. ``The Impact of Regulations on California's
Central Valley,'' in Modesto, CA, on April 1, 1996. Testimony
was received from: Shel Thompson, president, Charter Mortgage;
Robert Rucker, president, Rucker Construction; Ron West, Ron
West Consulting; John Roberts, CEO, California Rice Industry
Association; Norma Cordova, director, Sand Creek Flood Control
District; Dan Nelson, executive director, San Luis Delta
Mendota Water Authority; Allen Short, general manager, Modesto
Irrigation District; Roger Wood, corporate vice president, J.R.
Wood Co.; Manuel Cunha, president, NISEI Farmer's League;
Carolyn Richardson, director, Department of Environmental
Advocacy; Pat Paul, chair, Stanislaus County Board of
Supervisors. ``Creating an Employer-Friendly Regulatory
System,'' in Auburn, WA, on April 2, 1996. Testimony was
received from: Dr. Jonathon Wright, Tahoma Clinic; Timothy S.
Cooke, CEO, the Electrode Store; Ray Schow, State senator and
owner, All-Night Printery and ANP Publishers; Ann Anderson,
State senator; Suzette Cook, State representative; Pat Cattin,
owner, Cattin's Restaurant; Don Guthrie, vice president,
Wayne's Roofing; David Cornforth, co-owner, Cornforth-Campbell
Pontiac, Buick, GMC; Keith Shay, former employee, Cornforth-
Campbell Pontiac, Buick, GMC. ``Taxing Times: The Case for IRS
Reform,'' in Phoenix, AZ, on April 3, 1996. Testimony was
received from: Sybille Koberstein; Alma Davis; Marlan Walker,
Walker Ellsworth, P.L.C.; Yale Goldberg, Fraiser, Ryan,
Goldberg & Hunter, L.L.P.; Mike Pietzsch, Polese, Pietzsch,
Williams and Nolan; William Raby, the Raby Law Office; Natwar
Ghandi, Associate Director of Tax Policy, General Accounting
Office; Leigh Cheatham, deputy director, Arizona Department of
Revenue; Judith C. Dunn, Associate General Counsel (domestic),
Internal Revenue Service. ``The Impact of Regulations on the
Oil Industry,'' in Norman, OK, on May 20, 1996. Testimony was
received from: Frank McPherson, chairman of the Board, Kerr
McGee; Richard Bilas, John A. & Donnie Brock Chair in Energy
Economics & policy director, University of Oklahoma Energy
Center; Christine Hansen, Interstate Oil and Gas Compact
Commission; Terry Ross, executive vice president, Love's
Country Stores; Susie King, senior staff engineer, Conoco;
Barbara Price, vice president, Health, Environment and Safety,
Phillips Petroleum; Mike Cantrell, president, Oklahoma
Independent Petroleum Association; Troy Vickers, deputy
director of Regulatory Services, Amoco Corp.; Commissioner Ed
Apple, Oklahoma Corporation Commission. ``The Hidden Cost of
Government Regulations,'' in Claremore, OK, on May 20, 1996.
Testimony was received from: Wayne Francis, mayor of Henryetta;
Sam Wade, deputy CEO, National Rural Water Association; Gene
Whatley, executive director, Oklahoma Rural Water Association;
Ron Meadows, superintendent, Prue Public Schools; Sue Ann
Clayton, Cystic Fibrosis Patient; Joe Cox, president,
Hydrohoist International; Ted McGuire, president & CEO, RCB
Bank; Ruby Henderson, farmer; Robert Ross, farmer; Charles
Sloan, farmer, Sequoyah County Farm Bureau; Don Turner, Turner
Bros. Meats; Larry McFerron, McFerron's Quality Meats; James
Zangger, Greenleaf Nursery.
6. Privatization of Sallie Mae and Connie Lee.
a. Summary.--The Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs and the Subcommittee
on Postsecondary Education, Training and Life-Long Learning of
the House Committee on Economic and Educational Opportunities
held a joint hearing on the possible privatization of Sallie
Mae and Connie Lee, both of which were chartered under the
Higher Education Act. Sallie Mae was established in 1972 as a
shareholder-owned, for-profit corporation to help ensure
adequate private sector funding for federally guaranteed
education loans. Sallie Mae supports financing for higher
education loans primarily by making a secondary market in such
loans and providing related financial and operational support
to lending and educational institutions. Connie Lee was
established in 1986 as a Triple-A rated, for-profit municipal
bond insurance company which guarantees the repayment of bonds
issued by colleges, universities, and teaching hospitals for
the construction and renovation of facilities. Connie Lee helps
educational institutions with lower investment grades obtain
low cost, long-term capital.
Members were interested in hearing testimony on whether it
was in the public interest, and the interest of the
stockholders of Sallie Mae and Connie Lee, that they be
privatized because of changes in the secondary markets that
these government-sponsored enterprises (GSE's) serve, and other
changes in government policy.
b. Benefits.--The information gained by the hearing
provided valuable information on the following three questions:
(1) whether the markets served by Sallie Mae and Connie Lee
were mature enough to allow these GSE's to be privatized and
pursue other socially productive business opportunities; (2) if
the markets were mature enough, whether it was fundamentally
unfair to prevent the stockholders of these companies from
deciding for themselves the future of their companies; and (3)
if privatization of Sallie Mae and Connie Lee was in the public
and private interest, what general form the legislation should
take to accomplish this objective.
c. Hearings.--On May 3, 1995, the Subcommittee on National
Economic Growth, Natural Resources, and Regulatory Affairs and
the Subcommittee on Postsecondary Education, Training and Life-
Long Learning of the House Committee on Economic and
Educational Opportunities held the joint hearing. The first
panel of witnesses included Larry Hough, the president of
Sallie Mae; Oliver Stockwell, the president of Connie Lee;
along with representatives from the U.S. Department of
Education and the U.S. Department of the Treasury. These
witnesses testified about advantages of privatizing these GSE's
and the possible terms of such privatization arrangement. The
second panel of witnesses included experts on the financial
markets served by Sallie Mae and Connie Lee. These witnesses
discussed the typical life cycle of a GSE and explained that
the secondary markets served by Sallie Mae and Connie Lee were
sufficiently mature to make privatization appropriate.
7. Mismanagement of Grants by the Environmental Protection Agency.
a. Summary.--The subcommittee initiated an investigation of
the Environmental Protection Agency's grantmaking process. The
subcommittee's investigation, spurred by a September 28, 1995
report entitled ``Final Report of Audit on EPA's Controls Over
Assistance Agreements'' by the EPA's Inspector General, found
financial mismanagement that potentially places billions of tax
dollars at risk. Grants generally compose more than half of the
EPA's annual budget of approximately $6 billion.
The agency's Inspector General found violations of EPA
policies and procedures, destruction of critical grant
documents, and blatant disregard for sound management
practices.
The Inspector General's report stated that ``audits have
shown that the recipients of assistance agreements have at
times misspent and wasted millions of dollars.'' The report
attributes some of the abuse to the fact that EPA ``personnel
did not comply with EPA policies and procedures when
administering assistance agreements.''
The Inspector General's audit revealed that an examination
of agency grant records showed a ``disregard of basic
management techniques.'' For example, in many documents, the
grant agreement itself--the contract between the grantee and
the government--could not be found. In some cases, EPA
employees improperly destroyed grant documents, despite
``numerous directives prohibiting the destruction of records.''
The EPA has acknowledged the problems. In response to the
Inspector General's report, the official EPA response stated
flatly: ``The findings are consistent with the findings in
previous reports. Basically, no new issues are identified.''
\25\ A later agency response indicated that ``many of the
conditions which affect [EPA's] ability to administer and close
out assistance agreements are a result of Agency priorities and
lack of resources.''\26\
---------------------------------------------------------------------------
\25\ A memorandum from Sallyanne Harper, Acting Assistant
Administrator for Administration and Resource Management at EPA to
Elissa Karpf, Deputy Assistant IG for Acquisition and Assistance Audits
dated September 19, 1995.
\26\ A memorandum from Al Pesachowitz, Acting Assistant
Administrator for Administration and Resource Management at EPA to
Elissa Karpf, Deputy Assistant IG for Acquisition and Assistance Audits
dated March 25, 1996.
---------------------------------------------------------------------------
The EPA has clearly indicated what its priorities are.
Today, there are only 11 people in EPA headquarters in
Washington watching out for the billions of dollars in
taxpayer's money sent out each year in grants. To put that in
perspective, more than 13 people work in EPA's public relations
shop.
On July 30, 1996, the subcommittee held a hearing to hear
from Inspector General John Martin regarding the variety and
volume of abuses of the grantmaking process uncovered. EPA
Administrator Carol Browner was invited but refused to appear
before the subcommittee to respond to the concerns raised by
the Inspector General about half of the Agency's annual budget.
Instead, the subcommittee heard from Deputy Administrator Fred
Hansen.
The subcommittee heard from Inspector General Martin that
the Agency had not filed a formal response outlining proposed
corrective action related to the September 28, 1996 report
until just days before the subcommittee's hearing. Under the
EPA's own guidelines, this report should have been provided
months before the hearing.
Further, the subcommittee heard from Deputy Administrator
Hansen that it would take the EPA years in order to relieve the
backlog of unmonitored grants and to establish the policy,
procedures, and training necessary to adequately protect
taxpayer funds from abuse.
Mr. Hansen also testified that the EPA could not assure the
Congress that taxpayer funds are not being used for lobbying or
political purposes due to the EPA's lax management practices.
Inspector General Martin agreed to work with the subcommittee's
staff to initiate a review of potential abuse of taxpayer-
funded grants to subsidize lobbying and political activity.
b. Benefits.--The EPA Inspector General found that more
than $33 million in additional funds could have been spent
cleaning up the environment if EPA had properly closed out
completed grants. By failing to do so, grantees escaped a final
audit and the American public was cheated out of a cleaner,
safer environment.
The subcommittee and the Inspector General of the EPA both
intend to carefully monitor the Agency's ongoing corrective
actions in order to ensure that the taxpayer's money is
adequately protected while maintaining a cleaner, safer
environment.
c. Hearings.--``Mismanagement of Grants by the
Environmental Protection Agency,'' July 30, 1996.
8. Investigation of the White House Database (WhoDB).
a. Summary.--In response to press reports related to the
committee's investigation of the improper acquisition of FBI
files by the White House, the subcommittee undertook a review
of the White House Database.
The subcommittee has requested documents and information
from the White House, various Federal agencies, and outside
contractors with regard to their involvement with the WhoDB.
The White House has not cooperated with the subcommittee's
requests in a timely fashion.
The subcommittee's initial review of the WhoDB shows that
it is a computerized system of records that has information on
more than 350,000 individuals and 80,000 organizations. The
computer data base maintains sensitive personal and political
information on these individuals and organizations.
The subcommittee held an initial hearing on the WhoDB on
September 10, 1996 and heard from witnesses from the General
Accounting Office and legal experts on privacy and
appropriations law.
The General Accounting Office (GAO) testified that the
White House cannot ``ensure that users are properly accessing
and using'' the White House Database and that there is ``an
opportunity for misuse'' of the system. In testimony by GAO's
Director of Information Resources Management, Jack Brock, the
independent auditing agency stated that the WhoDB system lacks
basic security features, such as an access log and audit trail,
that would track whether the ``sensitive information'' was
being misused. He testified that the White House should assure
``accountability'' in the WhoDB by operating under the
``principles of [OMB Circular] A-130.''
OMB Circular A-130, the official guidance document for
computerized data bases, states that the government shall
``limit the collection of information which identifies
individuals to that which is legally authorized and necessary
for the proper performance of agency functions.'' It does not
appear that the White House's policy of keeping information on
the fact that individuals attended DNC functions or received
DNC or Re-election Committee Holiday Cards in 1995, as the
WhoDB does, complies with this standard.
b. Benefits.--The subcommittee's investigation of the WhoDB
is ongoing, as is the General Accounting Office's review of the
system. The investigation seeks to ensure that taxpayer funds
are protected from abuse and that the White House has properly
and legally spent appropriated funds.
The investigation also will determine whether new
safeguards or other restrictions need to be placed on the White
House Database specifically or on government information
systems generally.
Internal White House estimates show that more than $1.7
million of taxpayer money has been spent to design, develop and
maintain the WhoDB.
c. Hearings.--``Propriety of the White House Database,''
September 10, 1996.
9. The Effects of a Minimum Wage Increase.
a. Summary.--The subcommittee examined the consequences of
an increase in the minimum wage. The subcommittee held a
hearing at which it heard from economic experts on the wage
issue as well as employers and minimum wage employees. The
testimony presented to the subcommittee clearly showed that an
increase in the minimum wage would have a significant negative
effect on employment.
David Neumark, professor of economics at Michigan State
University, testified that a hike in the minimum wage would
have detrimental effects. Neumark has researched the minimum
wage issue with William Wascher of the Federal Reserve Board
for the past 6 years. In their first paper on the general
employment effects of a minimum wage increase, Neumark and
Wascher used data from the 50 States and Washington, DC between
1973 and 1989 to estimate the effects of a change in the
minimum wage on the employment of workers, aged 16 to 24. They
concluded from the data that a 10 percent increase in the
minimum wage results in a reduction of the employment rate of
young workers by 1 or 2 percent. Applied to the proposed
minimum wage increase of about 20 percent, their results
predict a decline in employment of 2 to 4 percent among young
workers. Neumark testified that, taking into account a rise in
nominal wages, he now estimates the proposed minimum wage hike
will result in a decline of 100,000 to 200,000 jobs among young
workers.
Given the fact that employment declines when the minimum
wage goes up, Neumark examined the question of whether minimum
wage increases are the best way to reduce poverty. He concluded
that minimum wage increases are an ineffective means of
reducing poverty because such increases do not target
individuals in poor families and they result in some low-wage
workers losing their jobs.
Neumark and Wascher's research went beyond employment
effects to examine the effects of minimum wage increases on
school enrollment. Their findings were compatible with economic
theory which suggests that minimum wage increases lead
employers to decrease the number of lowest-skilled workers, who
cost more to employ when the minimum wage goes up, and choose
more skilled workers. This leads to two results for teenagers:
those teenagers who have already left school and are employed
full time lose their jobs at a high rate; and those teenagers
who were enrolled in school and are more skilled have more
attractive job opportunities and leave school for full-time
work. Thus, increases in the minimum wage lead to increases in
the high school drop out rate.
Neumark and Wascher's most recent research has disproved
the study done by David Card and Alan Krueger, which is most
frequently cited in support of raising the minimum wage. The
Card and Krueger study looked at fast-food restaurants in New
Jersey before and after the minimum wage was increased from
$4.25 to $5.05. They concluded from their data that relative
employment rose in New Jersey as a result of the minimum wage
increase. Neumark and Wascher, however, point out that Card and
Krueger's data were obtained from a telephone survey and were
very imprecise measures of changes in employment. Neumark and
Wascher studied payroll data from the same restaurants and came
to the exact opposite conclusion--that New Jersey's minimum
wage increase led to a decline in employment in fast-food
restaurants in the State.
Several renowned economists also testified about the
negative consequences of an increase in the minimum wage,
particularly on employment. Finis Welch, Abell Professor of
Liberal Arts and Distinguished Professor of Economics, Texas
A&M University testified that his studies have shown that
increases in the minimum wage will cause significant
unemployment, particularly among teenagers. Kevin Murphy,
George Pratt Shultz Professor of Business Economics and
Industrial Relations, University of Chicago, testified that his
studies have shown that increases in the minimum wage will
cause significant unemployment among the least skilled workers.
His studies have also shown that the minimum wage is one of the
least effective means of helping poor wage earners. He
explained how the cost of goods and services will increase for
the poor under a hike in the minimum wage. William A. Niskanen,
Ph.D. economist, former Economic Adviser to President Reagan,
and chairman, Cato Institute, has studied what type of worker
earns the minimum wage. He testified that current minimum-wage
workers are not family breadwinners. He testified that other
anti-poverty approaches, such as EITC and other tax cuts, are
much more targeted to help family breadwinners.
In contrast to the other witnesses, Edward Montgomery,
Professor of Economics at the University of Maryland, testified
that the evidence suggests that the employment losses
associated with an increase in the minimum wage would be small.
He also stated that since the evidence points to small
employment losses, it would be short-sighted to ignore the
financial gains a minimum wage increase would offer to minimum
wage workers. All of the other expert and citizen witnesses
disputed Montgomery's conclusions.
b. Benefits.--The subcommittee learned that the unintended
consequences of raising the minimum wage would be felt most by
those least able to absorb them--seniors, the disabled and new
employees in the work force--because it would create higher
unemployment and higher prices for goods and services.
Subcommittee Chairman David McIntosh introduced legislation
proposing a minimum wage tax cut as an alternative to raising
the minimum wage. McIntosh's legislation would cut Federal
taxes for workers earning between $4.25 and $5.15 an hour, and
it would raise workers' take home pay to $4.57 an hour,
compared to the current $3.92 when Federal withholdings are
deducted.
c. Hearings.--The subcommittee held a hearing on May 14,
1996, on ``The Effects of a Minimum Wage Increase.'' Testimony
was received from: David Neumark, Ph.D., professor of
economics, Michigan State University; Melody Rane, Burger King
Franchisee; Don Baisch, manager, Burger King Franchise; Jim
Militello, Jr., Attorney, Militello, Zanck & Coen, owner,
Source Team, and Partner, Super Wash; Bernie Hellgeth, Source
Team; Taalib-Din Abdul Uqdah, co-owner, Cornrows & Co., and
president, Hairbraiders & Natural Haircare Association; Gail
Robbins, Pizza Inn Franchisee; Finis Welch, Ph.D., professor of
economics, Texas A&M University; Kevin Murphy, Ph.D., professor
of economics, University of Chicago; William A. Niskanen, Ph.D.
economist, chairman, Cato Institute; Edward Montgomery,
professor of economics, University of Maryland.
10. The Impact of Regulations on Employment.
a. Summary.--The subcommittee examined the impact of
Federal regulations on employment. Witnesses at many of the
subcommittee's field hearings testified that if they didn't
have to absorb the huge cost of complying with government red
tape, they would hire more workers, pay higher wages, or
otherwise expand their businesses. Testimony presented before
the subcommittee clearly showed that Federal regulations and
big government in general depress job and economic growth.
The subcommittee held a hearing on this issue at which
expert economists and policy analysts, who have studied how the
cost of big government depresses job, wage, and overall
national economic growth presented testimony. One witness,
Professor Lowell Gallaway from Ohio University, conducted a
recent study for the Joint Economic Committee which showed that
limiting big government spending is critical to raising the
average American worker's wages. In fact, it showed that if
Federal spending levels were held constant at their 1965 level
and Federal taxes were adjusted accordingly, the typical worker
would have taken home enough additional pay between 1973 and
1994 to buy a home. His study used historical data on Federal
regulatory costs from the Center for the Study of American
Business to determine the relationship between productivity
growth and regulation. One of the study's results showed that
rising regulatory activity is to blame for almost half of the
slowdown in long-run productivity growth from the last year of
the Kennedy administration (1963) to the first year of the
Clinton administration (1993). Therefore, if regulatory
activity had remained at its 1963 level, annual productivity
growth today would be nearly 1 percent higher. The cumulative
effect of this 30-year drag on productivity caused by
regulation has been to lower the Nation's output by 1993 by
$1.3 trillion a year.
Gallaway pointed to work by other economists supporting the
idea that growth in regulatory activity lowers productivity
growth. For example, Clark University Economist Wayne Gray has
studied EPA and OSHA regulations in 450 manufacturing
industries and found that increased regulatory activity
explained more than 30 percent of the growth slowdown from the
1960's to the 1973-78 period. In a National Bureau of Economic
Research study, Gray and Ronald J. Shadbegian concluded that
each dollar of regulatory compliance costs lowered total factor
productivity by $3 to $4 dollars.
Another witness, Professor Thomas D. Hopkins of the
Rochester Institute of Technology, has studied the effects of
regulations on the economy since he served in the Executive
Office of the President from 1975-1984, conducting regulatory
analysis. Hopkins has concluded that not only does Government
regulation impose burdens on those who are regulated, but
regulatory compliance costs are not distributed evenly and
burden small businesses disproportionately. His work has shown
that approximately $670 billion is spent each year to comply
with all Federal regulations. If all regulatory compliance
costs were shared evenly, every American household in 1995
would have paid $7,000. Although it is the household that
ultimately pays the price of regulation, initially business
pays the compliance costs. Ninety percent of all U.S. firms are
small businesses with fewer than 20 employees. In 1992, the
average small firm with under 20 employees spent some $5,500
per employee to comply with Federal regulations. The larger the
firm, the smaller the compliance cost per employee, with firms
of 500 or more spending about $3,000 per employee. Hopkins
points out that compliance costs alone do not capture the
decline in productivity that results from Government
regulation. Regulation forces businesses to change their
methods, giving up their most profitable and productive ways of
doing business. Regulation also limits innovation and growth.
Regulation makes it more expensive for businesses to hire
workers--particularly small businesses which account for more
than half the total employment in the United States. Mark
Wilson, labor policy analyst at the Heritage Foundation,
testified that the average cost of hiring an employee in
private industry is $17.10 per hour, 43 percent of which is due
to Government regulations, taxes and mandated benefits. For a
minimum wage worker the cost is $4.76 per hour, 22 percent of
which is due to Government regulations, taxes and mandated
benefits.
Several small business owners also presented testimony to
the subcommittee. Gary Bartlett, President, G.W. Bartlett & Co.
in Muncie, IN, testified that if it weren't for the huge
regulatory burden, he would be able to build a new facility and
create 100 new jobs in 18 months. Judi Moody, a small business
owner in Washington State testified that she wants to open a
small retail business. When she started investigating the
matter seriously, she discovered that she would have to comply
with myriad regulations and codes, hire a lawyer, and get
industrial insurance before she could even open the doors. Due
to this regulatory burden, she has decided not to open the
business. Her spirit of entrepreneurship has been squashed and
the jobs she would have created are lost.
b. Benefits.--The subcommittee learned that reducing the
cost of regulation, and big government in general, will promote
greater productivity and economic growth, creating new jobs and
enabling workers to take home more pay. Getting rid of
unnecessary and counterproductive regulations will lift some of
the disproportionate burden off small businesses, which
comprise 90 percent U.S. firms. As a result, small businesses
will have more money to expand, hire more workers and pay their
workers higher wages.
c. Hearings.--The subcommittee held a hearing on May 16,
1996, on ``The Impact of Regulations on Employment.'' Testimony
was received from: Gary Bartlett, president, G.W. Bartlett Co.;
Judi Moody, owner, CEG Northwest; Dick Walton, owner, Maroney's
Cleaners & Laundry; Lowell Gallaway, distinguished professor of
economics, Ohio University; Thomas D. Hopkins, Arthur J.
Gosnell professor of economics, Rochester Institute of
Technology; Mark Wilson, Rebecca Lukens Fellow in Labor Policy,
the Heritage Foundation.
11. Travel Practices of Department of Transportation Administrators.
a. Summary.--The subcommittee investigated the travel
practices of the Department of Transportation's administrators
to determine the cost and nature of senior executive travel in
the department. An initial letter was sent from subcommittee
Chairman McIntosh on April 26, 1996, to Administrator Rodney
Slater, Federal Highway Administration (FHWA); Administrator
Jolene Molitoris, Federal Railroad Administration (FRA);
Administrator David R. Hinson, Federal Aviation Administration
(FAA); and Admiral Robert E. Kramek, U.S. Coast Guard (USCG).
Subcommittee Chairman McIntosh sent an initial letter on May
23, 1996 to Administrator Albert J. Herberger, Maritime
Administration; Administrator Ricardo Martinez, National
Highway Traffic Safety Administration (NHTSA); Administrator
Gail McDonald, Saint Lawrence Seaway Development Corp. (SLSDC);
and Administrator Gordon Linton, Federal Transit Administration
(FTA). This letter requested information from each DOT
Administration about their travel budget for fiscal years 1991
through 1996 and about compliance with Federal travel
practices. The letter also requested each administrator to
disclose each time he or she traveled at government expense
since becoming administrator, the purpose of the trips, and the
cost to the Federal Government for the trips.
Based on each administrator's response to the
subcommittee's initial request for information, subcommittee
Chairman McIntosh sent follow-up letters to Administrators
Slater, Molitoris, Hinson, and Admiral Kramek.
b. Benefits.--The subcommittee learned that certain DOT
administrators traveled on frequent trips at great expense to
the taxpayer. FHWA Administrator Rodney Slater took 134 trips
totaling 328 travel days, between June 14, 1993 and January 17,
1996. His travel included 9 trips to 11 foreign cities: Moscow,
St. Petersburg, Berlin, Acapulco, Johannesburg, Calgary,
Budapest, Paris, San Juan, Montreal, and Tokyo. His total
travel (including accompanying staff) cost the taxpayer
$168,719. Among his domestic trips, Slater traveled at least 14
times to his home State of Arkansas at taxpayer expense. At
least one of these trips included political activity. On
October 29, 1994, Slater billed taxpayers for a trip to Austin,
TX, while he also participated in political events for then-
Governor Richards' re-election campaign. From June 16 to 26,
1996, Slater took a $20,000 cross-country trip to celebrate the
Federal highway system. This costly trip included stops at
several national landmarks and popular vacation spots, such as
the Lone Tree Gold Mine in Nevada and the Olympic Sports Park
in Utah.
FRA Administrator Jolene Molitoris traveled almost as
frequently as her colleague at the FHWA, taking 86 trips
between August 10, 1993 and April 10, 1996. Her total travel
(including accompanying staff) cost the taxpayer $116,567.79.
On 32 of these trips she had free, unscheduled days, some of
which she took as personal time. These trips included 12 visits
to Columbus, OH, her home town where she keeps a residence. On
most occasions her trips to Columbus did not coincide with any
official business in the city. She attached stops in Columbus
to other trips to Ohio. In one case, Molitoris attached a stop
in Columbus to a trip to San Francisco, spending five personal
days in Columbus when she had no official business in the city
or even in the State. Molitoris also took six international
trips to 21 foreign cities: Caracas, Vienna, Frankfurt, Calais,
Paris, Geneva, Lille, London, Berlin, Warsaw, Yokota, Bangkok,
Hanoi, Hong Kong, Jakarta, Kuala Lumpur, Osaka, Tokyo, Manila,
Vancouver, and Victoria.
Coast Guard Commandant Robert Kramek, incurred especially
high travel costs relative to the number of trips he took due
to his frequent use of Government (USCG) aircraft. Between June
1994 and June 1996, Admiral Kramek took 62 trips. Five of these
trips were international, during which he visited England,
France, Cuba, Norway, Russia, Iceland, Japan, Panama,
Argentina, Bolivia, Peru, and Venezuela. His travel costs
(including accompanying staff and his wife) were $304,471.30.
Admiral Kramek's wife accompanied him on about half (30) of his
official trips. The USCG covered her transportation costs. The
USCG justifies Mrs. Kramek's travel because she ``plays a
critical representational role'' as a service chief's wife.
In response to the subcommittee's inquiry, the USCG noted
that Admiral Kramek ``will reduce his overall travel by 15%''
in 1996 and that ``Admiral Kramek has also mandated that all
other Coast Guard flag officers and SES's reduce their overall
travel by 15%.'' Admiral Kramek's seemingly sudden decision to
reduce travel in 1996 is curious because as of the second
quarter of the year, he had already spent more than half of his
total travel expenses for previous years. To achieve a 15
percent reduction in travel, he would have to sharply curtail
his travel for the remainder of the year.
FAA Administrator David Hinson took 90 trips between August
1993 and April 1996. His travels included eight international
trips to 15 foreign locales: Paris, Toulouse, Zurich,
Amsterdam, Brussels, Bejing, Tokyo, Geneva, Tel Aviv,
Frankfurt, London, Madrid, Santiago, Montreal, and Saudi
Arabia. His trips (including airfare for accompanying staff,
but not their per diem and lodging expenses) cost $320,963.53.
Like Admiral Kramek, Administrator Hinson incurred very high
travel costs because of his frequent use of Government (FAA)
aircraft. For many of the trips, the FAA did not report an
estimated cost for the FAA aircraft, so the subcommittee's
figure for Hinson's costs is an underestimate.
[NOTE: All the above data on each DOT administrator was
provided to the subcommittee by the respective DOT
Administrations at the subcommittee's request.]
c. Hearings.--None.
12. Travel Practices of SEC Chairman Arthur Levitt.
a. Summary.--The subcommittee investigated the travel
practices of the Securities and Exchange Commission's (SEC)
Chairman Arthur Levitt. An initial letter was sent from
subcommittee Chairman McIntosh to Chairman Levitt on March 8,
1996, requesting information about the SEC's travel budget for
fiscal years 1991 through 1996 and about compliance with
Federal travel practices. The letter also requested that Levitt
disclose each time he traveled at government expense since
becoming chairman, the purpose of his trips, and the cost to
the Federal Government for the trips. In subsequent letters
sent on April 23, April 29, May 6, June 4, November 13, and
December 6, 1996 as well as in meetings with Levitt's staff,
the subcommittee requested further information, including
copies of his schedule for all travel days, a complete list of
all days he took as personal leave, copies of vouchers for all
his trips, and a list of all the occasions on which Mrs. Levitt
accompanied him on official travel.
The period of Levitt's travel reviewed by the subcommittee
is August 1993 through November 1996 (approximately 3 years).
During that time, Levitt took numerous trips paid for or
subsidized by the U.S. taxpayer. The approximate total cost of
his international and domestic travel through October 1996 (not
including accompanying staff) was $104,758.
b. Benefits.--The subcommittee plans to continue its
inquiry into the travel practices of Chairman Levitt.
Particularly, the subcommittee will examine what internal
controls are in place at the SEC to prevent abuse of taxpayer
dollars and whether these controls are being properly
implemented by the comptroller and others.
[NOTE: All the above data on SEC Chairman Arthur Levitt's
travel was provided to the subcommittee by the SEC at the
subcommittee's request.]
c. Hearings.--None.
13. Travel Practices of NTSB Chairman Jim Hall.
a. Summary.--The subcommittee investigated the travel
practices of the National Transportation Safety Board (NTSB)
Chairman Jim Hall. An initial letter was sent from subcommittee
Chairman McIntosh to Chairman Hall on March 8, 1996, requesting
information about the NTSB's travel budget for fiscal years
1991 through 1996 and about compliance with Federal travel
practices. The letter also requested that Hall disclose each
time he traveled at Government expense since becoming chairman,
the purpose of his trips, and the cost to the Federal
Government for the trips. In subsequent letters on April 17 and
June 4 as well as in discussions with Hall's staff, the
subcommittee requested further information, including copies of
his schedule for all travel days, copies of vouchers for all
his trips, copies of NTSB trip reports filed for each of his
official trips, and information regarding the designation of
Chattanooga as an alternate home base.
b. Benefits.--The subcommittee learned that Chairman Hall
has traveled extensively since taking the position as acting
chairman in June 1994. (He was confirmed as chairman in October
1994.) He took 51 official trips between July 1994 and February
1996. His trips were largely domestic, but also included visits
to foreign locales, including London, Paris, Moscow, Australia,
Puerto Rico and Canada. The total cost to the taxpayer for his
travels (including accompanying staff) was $141,251.14.
In Hall's May 10 letter to the subcommittee, he wrote that,
``During the process of compiling the requested documents, a
few instances were discovered in which the complex and
confusing rules governing alternate home base appear to have
been unintentionally misinterpreted. For example, my
understanding that establishing Chattanooga as my alternate
home base allowed me to be reimbursed as if I were traveling
out of Washington was incorrect.'' Therefore, as a result of
the subcommittee's investigation into the matter, Hall was
forced to reimburse the Government $1,887, a direct savings to
the American taxpayer.
[NOTE: All the above data on NTSB Chairman Hall's travel
was provided to the subcommittee by the NTSB at the
subcommittee's request.]
c. Hearings.--None.
14. Cleaning Up the Superfund Program.
a. Summary.--On May 8, 1996, the subcommittee held a
hearing on the Federal Superfund program in order to continue
the oversight performed by its predecessor subcommittee and to
assist ongoing efforts to reauthorize this program. The
subcommittee's review focused on: the current state of the
Superfund program; how well the program is being managed under
the reforms initiated by the Environmental Protection Agency
(EPA); and on the limits to improving the cleanup process
without new legislation.
The Superfund program was created in 1980 when Congress
enacted the Comprehensive Environmental Response, Compensation
and Liability Act (CERCLA) to identify and cleanup the Nation's
worst hazardous waste sites. Activity under the program
includes emergency cleanups (removal actions) and the
designation of sites on a National Priorities List (NPL) for
longer-term remedial actions. Since 1980, approximately $16
billion has been obligated by the EPA. For this investment,
EPA's program has cleaned up only 128 sites as of November,
1996, about 9 percent of the 1,387 sites on the NPL.\27\
Moreover, at least 40 percent of the deleted sites required no
remedial action at all.
---------------------------------------------------------------------------
\27\ 40 CFR Part 300, App. B, Table 1. Also, see the Federal
Register generally for NPL deletions.
---------------------------------------------------------------------------
On April 23, 1996, in testimony before the Senate Committee
on Environment and Public Works, EPA Administrator Carol
Browner claimed great strides in reforming Superfund. She
stated that ``the current program is fundamentally different
from the program as it existed just three years ago.'' Over the
past 3 years, the Agency has implemented three rounds of
Superfund reforms. Among other initiatives, the EPA has
established a remedy review board to consider costly remedies,
and drafted guidance to better control costs in remedy
selection, to increase the number of protected small
contributors, and to conduct national risk-based priority-
setting for funding cleanups. Administrator Browner maintained
that these initiatives have produced ``measurable benefits'' to
Superfund stakeholders and to public health and the environment
by providing significant resource savings, accelerating
cleanups, reducing transaction costs, and relieving small
businesses of liability.
About 11 million Americans live within one mile of the
Nation's Superfund sites.\28\ Nonetheless, the current pace of
cleanups has not accelerated at all. It still takes at least 12
years on average to clean up a Superfund site.\29\ The fact
that, within the last 3 years, sites are finally reaching the
construction completion stage is simply a function of the
Superfund pipeline and has nothing to do with the pace of
cleanup. Indeed, testimony from a wide array of witnesses who
appeared at the subcommittee's hearing indicated that EPA's
initiatives have done little as yet to reduce the inordinate
cleanup delays caused by interminable legal disputes over
liability issues and the remedy selection process. Moreover,
these disputes continue to generate enormous transaction costs.
Over 30 percent of the $28 billion that has been spent on
Superfund to date has gone to lawyers, consultants, and other
non-cleanup expenses, instead of to cleaning up the most
serious hazardous waste sites threatening the health and
environment of the American public.\30\
---------------------------------------------------------------------------
\28\ Agency for Toxic Substances and Disease Registry's ``Report to
Congress: 1993, 1994, 1995'' at 5 (Oct. 1996).
\29\ EPA, Office of Inspector General, ``Review of Barriers to
Superfund Cleanups,'' at 2 (Nov. 29, 1995).
\30\ See testimony of Jan Paul Acton, Assistant Director,
Congressional Budget Office, Superfund Reauthorization Hearings,
Committee on Transportation and Infrastructure, June 22, 1995, at 678.
---------------------------------------------------------------------------
In his testimony at the hearing, EPA's own Inspector
General identified negotiations over who pays for cleanup costs
as a major barrier to cleaning up Superfund sites. Based on an
audit of several highly toxic waste sites, the Inspector
General concluded that liability negotiations clearly consume a
lot of time and significantly delay completion of site
cleanups. Moreover, several witnesses observed that such
extended negotiations are inescapable due to the inherent
unfairness of the current liability scheme. In theory,
Superfund is supposed to enforce a ``polluter pays'' policy.
That is, if culpable parties can be linked to a polluted site,
these ``potentially responsible parties'' (PRPs) must pay for
cleanup efforts. However, these witnesses testified that, in
practice, Superfund's rule of ``retroactive, joint and several,
and strict liability'' has been used to force numerous parties
to pay for cleanup, even when they were not at fault. The
Superfund statute established a sweeping liability system that
declares that any person who contributed to contamination at a
Superfund site at any time can be held liable for all costs of
cleaning up that property, regardless of the degree of
involvement of that person with the site, or even if the person
fully complied with the laws at the time of disposal. As a
result, EPA's Inspector General found that cleanups have been
significantly delayed while PRPs and EPA negotiate the extent
of the total liability and the allocation of liability among
the PRP's.
Several witnesses also pointed out the disproportionate
impact that this unjust liability scheme has had on small
businesses. Indeed, Mr. Leon Dixon testified that his family
bronze foundry business, Beckett Bronze, is now facing a third
party liability suit seeking a contribution of about $26,000
for cleanup costs. The only evidence of Beckett Bronze's
contribution to the contamination is a dump receipt for $16.l5,
dated January 3, 1972. Furthermore, as Mr. James Nerger
testified, persons are frequently named as PRP's even when they
had no control over where their wastes were sent for disposal,
and even though they were not required at the time to keep
detailed records. His small family-owned solvent recycling
business, Marisol, Inc., is potentially liable for $3-$10
million. This is a business with $12 million in total annual
sales that recently received its fifth consecutive E.I.
Digest's Regulatory Compliance Award.
Remedy selection, when based on unrealistic land-use
assumptions, also can be viewed as a barrier to cleanups. By
making cleanups unnecessarily expensive, such remedies reduce
the cost-effectiveness of the Superfund program. As
Representative Lincoln stated in written testimony, ``Sites
that are located in industrial areas should not meet soil
eating standards that are required for land used for day care
centers.'' Stated differently by the representatives of the
General Accounting Office (GAO), using realistic land-use
assumptions will help to maximize Superfund resources for the
protection of public health and the environment. GAO reviewed
the sites contained in an EPA data base on health risks from
Superfund sites to evaluate the significance of land-use
assumptions. About half of the sites (119) in the data base did
not pose health risks serious enough to justify their cleanup
under current land-use assumptions. However, EPA nonetheless
judged cleanup necessary because the agency assumed the sites'
uses would change in a way that would increase human exposure
to contaminants in the future. (The sites studied represent
most of the sites where EPA made cleanup decisions between 1991
and mid-1993.)
Both GAO and Mr. Jeffrey Rosmarin, whose company is the
current owner of the Liberty Industrial Finishing Superfund
Site, testified that EPA has often assumed a site will be used
for residential purposes and used residential exposure
scenarios when calculating risks, even when the planned future
use of a site was commercial or industrial redevelopment. Mr.
Rosmarin testified that, although the Liberty Site has been
zoned light industrial and used for that purpose for over 80
years, EPA Region II did not even include light industrial use
as a possible future use at this site in the Remedial
Investigation report, issued in January 1994. According to one
EPA estimate, the commercial level cleanup would be in the $6
million range, while the residential level cleanup would be
approximately $60 million. Moreover, Mr. Rosmarin noted that an
EPA toxicologist has stated that the commercial industrial
level cleanup would have the same health benefits for the
surrounding community as the residential cleanup.
In addition, GAO testified that EPA can reduce the risks at
sites more quickly and economically by using its removal
authority, where appropriate, instead of its more expensive and
time-consuming traditional remedial techniques. If the
accelerated cleanup techniques were used more consistently, GAO
estimated that the Federal Government's and private sector's
Superfund costs could be reduced by as much as $1.7 billion
over the life of the program. However, GAO also noted that
restrictions in CERCLA on the cost and time allowed for removal
actions and inflexible funding arrangements have limited EPA's
use of non-time-critical removals (where removal action in
response to threats to human health or the environment can be
delayed for at least 6 months in order to adequately plan for
cleanup.)
Finally, Representative Lincoln pointed out that ``one size
does not fit all'' when it comes to cleanup remedies. Today, a
large amount of cleanup spending is devoted to meeting cleanup
criteria under other statutes and regulations that were not
developed for remediation waste and/or complying with
Superfund's current statutory preference for treatment--whether
or not such standards are, in fact, necessary to protect human
health and the environment at a specific site. The
Congresswoman believes that, given the truly local impacts of
the Superfund program, States should be given the flexibility
to design site-specific, risk-based remedies that are tailored
to their particular environmental make-ups.
Witnesses also testified regarding significant management
inefficiencies in the implementation of the Superfund program.
GAO observed that the estimated cost of cleaning up the
Nation's hazardous waste problem has grown to $75 billion for
nonfederal Superfund sites. GAO maintains that, in this time of
fiscal constraint, EPA could achieve more cost-effective
cleanups by basing its priorities for funding cleanups on the
principle of risk reduction. However, GAO has found that, to
date, although one of the EPA's key policy objectives is to
address the ``worst sites first,'' relative risk plays little
role in the agency's determinations of priorities. EPA
headquarters leaves the task of setting priorities to the
regions, yet the regions do not rank sites by risk. As a
result, the risks most dangerous to human health are not
necessarily those that are addressed first.
Commissioner Charles Williams of the Minnesota Pollution
Control Agency stated that while the national average cost for
cleaning up Federal Superfund sites is $31 million, the average
cost to the State of Minnesota for cleaning up its sites is $3
million.
Finally, Mrs. Helena Tielmann testified that the
``cleanup'' of her property by EPA contractors represents a
prime example of gross mismanagement; a case where the property
was left in far worse environmental condition than before
remediation. Mrs. Tielmann lives with her husband and three
children on a Superfund hazardous waste site, a 30-acre farm
that had been the dumping ground for asbestos 25 years ago.
After excavating the asbestos throughout their property and
solidifying the flaky substance into a concrete monolith in
their backyard, EPA's contractor backfilled the excavated soil
with more than 100,000 tons of untested industrial fill from a
contaminated industrial site. When later tested, the industrial
fill, which, in fact, contained asbestos, exceeded New Jersey's
residential use criteria. There is now more asbestos on the
surface of the Tielmann's yard than there was before EPA
implemented its remedy. Mrs. Tielmann maintains that this
nightmare would never have occurred if there had been proper
management, supervision, and controls; if EPA had used
competent contractors; and if the Agency had been responsive to
the property owner and the local community.
b. Benefits.--This hearing has served to document further
Superfund's fundamental flaws. Once again, testimony reflects a
rigid statutory process that does not provide the flexibility
to address effectively the wide variety of circumstances
encountered at sites. It also is clear from the testimony that
this program continues to wreak havoc on the lives of hard-
working and law-abiding citizens. Overall, the program
continues to fall far short of protecting human health and the
environment.
Moreover, the record developed in the subcommittee's
hearing stands in sharp contrast to Administrator Browner's
recent assertion that the current program is fundamentally
different from the one in years past. This subcommittee has
heard testimony that shows that EPA's initiatives to improve
the pace, cost, and fairness of the Superfund program within
the constraints of the law are not really being implemented.
Clearly, these reforms have not received sustained management
attention and follow-through.
Most importantly, the testimony given in this hearing
reflects a dire need for legislative reform of this wasteful
and expensive program. As J. Lawrence Wilson, chairman and
chief executive of Rohm & Haas Co, stated before the Senate
Environment and Public Works Committee on April 23, 1996:
``Every month that continues to go by without reauthorization
means more delays in cleanups, more litigation resulting from
an inequitable liability scheme, more controversy between the
public and EPA, and more wasteful spending by both the
government and the private sector.''
c. Hearings.--The subcommittee held a hearing entitled,
``Cleaning up the Superfund Program,'' on May 8, 1996.
15. Havertown Superfund Site.
a. Summary.--The subcommittee is examining the process that
the Environmental Protection Agency has followed in developing
a cleanup plan for the Havertown PCP Superfund site (NPL No.
542; CERCLIS No. PAD 002338010). This investigation was
prompted by complaints from township citizens. Residents of the
local community expressed difficulty in obtaining information
about EPA's technical and economic analyses and raised concerns
about whether the Agency has properly evaluated all viable
remediation options. In addition, the subcommittee undertook
this inquiry because this case involves issues that are the
focus of EPA's Superfund administrative reforms.
The Havertown PCP site is a National Priorities List
Superfund site in Havertown, PA. The site, which has been on
the NPL since 1983, is surrounded by a mixture of commercial
establishments, industries, parks, schools and residential
homes. The site covers 12 to 15 acres, including a wood
treatment facility. From 1947 to 1963, National Wood Preservers
disposed of wood treatment waste materials into a 25 to 35 foot
deep well that entered the groundwater under the plant. These
wastes generally consisted of spent wood-treatment solutions
containing pentachlorophenol (PCP) and diesel-type oil. The
Agency also has found arsenic and dioxins on the site. The
liquid wastes leached into a nearby small stream that flows
through a residential area and eventually into the Delaware
River.
EPA has taken various steps, such as conducting an
emergency removal action, fencing the site, and installing an
oil/water separator, in order to stem the further spread of
site contamination and, thus, to reduce the potential of
exposure to contamination. Recently, to respond to soil and
ground water contamination, EPA began the preparatory work for
placing a protective cap over areas of the site. The cap is
part of EPA's response action at the site and will be used to
prevent contact with contaminated soil and prevent rain water
from trickling down through the soil and moving additional
contamination into the groundwater.
On July 26, 1996, the subcommittee sent a letter of inquiry
to EPA requesting information about its remedy decisions. The
letter called upon EPA to provide the studies and analyses on
which the Agency has relied for remedy selection at the
Havertown site. On August 15, 1996, the subcommittee received
from EPA Region III information and documentation in response
to the inquiry. In reviewing these documents, the subcommittee
has focused particularly on the following matters:
1. Re-evaluation of the Remedy Decision. Whether material
changes in site conditions and/or technological developments
have occurred since the Havertown site was listed on the NPL
that justify an alternative or modified remedy. Has EPA
performed a coordinated current review of the site to determine
the potential effectiveness of the selected remedy, including
collecting and analyzing updated site information, re-
appraising the remedy's expected performance and costs, and
evaluating currently available alternatives.
2. Community Participation. Whether the community has had
the opportunity to play a meaningful role in the selection of
the cleanup remedy. Has EPA provided the local community with
the material information needed for informed participation.
3. Consideration of Future Land Use. To what extent has EPA
conferred with local officials and other interested parties in
developing a land use plan to guide decisionmaking on remedy
selection.
4. Economic Redevelopment of Contaminated Property. To what
extent will the selected remedy inhibit productive use of the
property. To what extent will this remedy keep the source areas
under control so that the contamination will not continue to
migrate.
5. National Risk-Based Priority Setting. Whether the
Havertown site is truly 1 of the 10 worst sites in this
country, based on the criteria that EPA used to set national
risk-based priorities for funding cleanups.
Finally, the subcommittee's review of EPA's responses has
raised additional questions that the subcommittee plans to
probe further.
b. Benefits.--In this Superfund case, the issues that are
in dispute between the local community and EPA are the focus of
the Agency's administrative reforms. The subcommittee is
reviewing the Agency's implementation of such reforms at this
site. Also, the Agency has listed this site as 1 of the 10
worst sites in the country on its national risk-based
priorities list for funding. After reviewing the Havertown
Superfund documentation, this designation appears inappropriate
based on the criteria that the Agency applied in developing the
list.
c. Hearings.--None were held.
NATIONAL SECURITY, INTERNATIONAL AFFAIRS, AND CRIMINAL JUSTICE
SUBCOMMITTEE
1. Office of National Drug Control Policy.
a. Summary.--The National Narcotics Leadership Act of 1988
(21 U.S.C. 1501 et seq.) established the Office of National
Drug Control Policy (ONDCP). The act also provided for
appointment of a Director of ONDCP, and required that the
Director develop an overall strategy and budget for Federal
anti-narcotics efforts, including both supply and reduction.
Specifically, the statute provides that ONDCP: ``(A) include
comprehensive, research based, long-range goals for reducing
drug abuse in the United States; (B) include short-term
measurable objectives which the Director determines may be
realistically achieved in the 2 year period beginning on the
date of the submission of the strategy; (C) describe the
balance between resources devoted to supply reduction and
demand reduction; and (D) review State and local drug control
activities to ensure that the United States pursues well-
coordinated and effective drug control at all levels of
government.'' Pursuant to the Government Reform and Oversight
Committee's jurisdiction over ONDCP, the Subcommittee on
National Security, International Affairs, and Criminal Justice
convened five indepth oversight hearings during 1995 to assess
the status and effectiveness of the Nation's Federal drug
control strategy and the strategy's implementation. The
subcommittee zeroed in on the interdiction program, source
country, law enforcement, prevention and treatment components
as prescribed by the Federal strategy.
Before, during and after these hearings, expert advice and
recommendations were sought from top administration officials
and preeminent outside experts. The subcommittee's twin aims
were to (a) identify strategic and implementation problems, and
(b) identify sound recommendations for achieving measurable
improvement in combating illegal drug importation and use.
As a backdrop for this investigation, the committee
recognized that the impact of illegal drugs on our society has
been a growing concern since the early 1970's. For example, in
June 1971, President Nixon told Congress that a national
response to drug addiction was needed since ``the problem has
assumed the dimensions of a national emergency.'' \31\
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\31\ Musto, David F. The American Disease: Origins of Narcotic
Control, at 256 (1987).
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Moreover, by 1980, illegal drug use was so widespread that
antidrug parent groups such as Pride and National Family
Partnership began to take root in America's heartland; in fact,
by 1979 more than half of all minors surveyed acknowledged
illegal drug use.\32\
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\32\ In 1979, 54 percent of youth respondents to the Monitoring the
Future Survey indicated drug use. See the 1995 Pride Report, Executive
Summary, at 1.
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During the early 1980's, the Nation awakened to the
enormity of the incursion being made by illegal drugs. Former
First Lady Nancy Reagan became a leader in the anti-drug, or
drug abuse prevention, movement. Mrs. Reagan effectively led
the campaign to educate our Nation's youth and stem rising
youth drug abuse. Her most famous statement, ``Just Say No,''
the answer to a child's question about how to respond if
pressed to take drugs, became a guiding phrase in the
prevention movement. Unrivaled in her energy and commitment,
Nancy Reagan became the movement's chief spokesperson for much
of the decade.
Finally, as indicated earlier, during the mid-1980's,
President Reagan showed unprecedented leadership in what soon
became known as a war against illegal drug use and those who
trafficked in illegal drugs.\33\
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\33\ See ``Testimony of Admiral Paul Yost,'' supra.
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In 1988, Congress passed the Anti-Drug Abuse Act of 1988
(Public Law 100-690, Title I, Subtitle A), which established
the Office of National Drug Control Policy (ONDCP) and created
the new position of ``White House Drug Czar'' or ONDCP
Director. In recognition of the threat posed to our society by
the menace of illegal drug use, the act required the White
House ONDCP Director to present an annual strategy with
measurable goals and a Federal drug control budget to the
President and Congress.\34\
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\34\ Public Law 100-690, Title I, Subtitle A.
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The 1988 act has been tinkered with in the years since. In
1994, pursuant to the Violent Crime Control and Law Enforcement
Act of 1994 (Public Law 103-322, Title X), the ``Drug Czar''
was authorized to make recommendations to agencies during
budget formulation. The aim of this 1994 change was to improve
resource targeting and policy consistency at Federal agencies
involved in implementing the National Drug Control Strategy, as
well as to heighten overall counternarcotics coordination
throughout the Federal Government. In addition, the ``Drug
Czar'' was authorized under the 1994 act to exercise discretion
over 2 percent of the overall drug budget. While some have
suggested that this provision achieved little, the ``Drug
Czar'' could theoretically transfer up to 2 percent of the
budget among National Drug Control Program accounts, upon
approval by the appropriations committees.\35\
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\35\ In fact, this 2 percent measure has proved more theoretical
than actual, as particular agency heads have resisted the transfers and
prevailed in those efforts. For example, FBI Director Louis Freeh
reportedly blocked resource allocations by ONDCP in 1994.
---------------------------------------------------------------------------
Beyond these hallmark 1995 hearings, during recent prior
sessions of Congress, legislative and oversight hearings have
been held on various aspects of national drug policy. However,
these hearings have focused on particular aspects of the ONDCP
Strategy and have been conducted against the backdrop of
falling drug use or general support by the minority-controlled
Congress for the overall White House Strategy.
This subcommittee's 1995 oversight hearings, proposed and
supported by both minority and majority subcommittee members,
were the result of recent developments, including the steep
rise in juvenile and overall drug use (including both rising
casual drug use, and increasing regularity of use); the growing
awareness that increased juvenile drug use is linked to rising
juvenile crime; \36\ the absence of a long-promised White House
Heroin Strategy; \37\ an objective reduction in interdiction
efforts; \38\ an apparent lack of progress in source countries
toward goals set forth for so-called source country programs;
\39\ reports of lagging accountability in certain drug
prevention programs; \40\ deemphasis by the media on drug
abuse; \41\ overall rise in drug related juvenile violence;
\42\ and general concerns about interagency coordination of the
Federal counternarcotics effort.\43\
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\36\ 1995 OJJDP Report, pp. 58-65.
\37\ The President promised a Heroin Strategy within 120 days of
taking office. Without any White House announcement, he signed a Heroin
Strategy in late November 1995. The signed Strategy offers little
detail, and was promulgated without Implementing Guidelines, which has
so far made it a nullity.
\38\ See ``Interdiction Policy Oversight'' section, below.
\39\ See ``Source Country Program Oversight'' section, below.
\40\ In particular, reports of waste and misapplication of funds
have been associated with certain States' administration of Safe and
Drug Free Schools moneys, and these allegations are under continuing
investigation by the Department of Education Inspector General's Office
and the General Accounting Office.
\41\ See ``prevention Policy Oversight'' section, below.
\42\ See ``Background'' section, below.
\43\ See, e.g., Yost Testimony, below.
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The intent to examine National Drug Control Strategy was
set forth in the February 6, 1995 subcommittee Strategic Plan
in accord with both the majority and minority view that the
area required oversight.\44\
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\44\ The topic was discussed at a meeting of the full subcommittee
in early February, views were solicited by the subcommittee chairman,
and both minority and majority members indicated a desire to conduct
oversight in this area.
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In the course of investigating the status of the National
Drug Control Strategy, the Strategy's implementation and the
need for improvement, the subcommittee engaged in extensive
correspondence with the administration, including direct
correspondence with the President; the Vice President; Anthony
Lake, the President's National Security Advisor; Dr. Lee P.
Brown, Director of ONDCP; Admiral Robert E. Kramek, U.S.
Interdiction Coordinator and Coast Guard Commandant; Thomas A.
Constantine, Administrator of the Drug Enforcement
Administration; George Weise, Commissioner of the U.S. Customs
Service; Brian Sheridan, Department of Defense Deputy Assistant
for Drug Enforcement Policy; Ambassador Jane E. Becker,
Department of State Deputy Assistant Secretary for
International Narcotics and Law Enforcement; and others at the
Departments of Justice, Defense, State, ONDCP and elsewhere in
the administration.
The committee investigation included one fact finding trip.
Subcommittee members, and members of the United States Coast
Guard traveled to the Seventh Coast Guard District in the
Caribbean transit zone. There, they attended briefings at
Seventh District Headquarters in Miami, Coast Guard
interdiction initiatives at sea, Drug Enforcement
Administration (DEA) activities in the Greater Antilles, high
level interagency briefings in Puerto Rico by the FBI, DEA,
Customs, Border Patrol, and local authorities, and received
indepth briefings by Admiral Granuzo and others at Joint Task
Force Six in Key West, dedicated to Eastern Caribbean Drug
Interdiction. This trip was arranged in coordination with the
U.S. Coast Guard, and invitations were extended to majority and
minority members. The trip occurred on June 16 through 19,
1995. Additionally, in coordination with ONDCP, subcommittee
Chairman Zeliff traveled with the White House Director of ONDCP
to see prevention and treatment programs first-hand in
Massachusetts.
Throughout 1995, the subcommittee met extensively with the
agencies involved in the counternarcotics effort, and
endeavored to collect directly and indirectly both statistical
and anecdotal evidence on the effectiveness and accountability
of the current National Drug Control Strategy and programs.
These efforts spanned the key areas of interdiction, law
enforcement, prevention, treatment, and source country
initiatives. The subcommittee sought further insight from GAO
investigators, agents in the field, and departmental inspectors
general.
b. Benefits.--As a result of its investigation into the use
of illegal drugs in America and the Nations fight against
drugs, the committee uncovered the following basic facts:
(1) Casual teenage drug use trends have suffered a
marked reversal over the past 3 years, and are
dramatically up in virtually every age group and for
every illicit drug, including heroin, crack, cocaine
hydrochloride, LSD, non-LSD hallucinogens,
methamphetamine, inhalants, stimulants, and marijuana.
(2) Rising casual teenage drug use is closely
correlated with rising juvenile violent crime.
(3) If rising teenage drug use and the close
correlation with violent juvenile crime continue to
rise on their current path, the Nation will experience
a doubling of violent crime by 2010.\45\
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\45\ See Juvenile Offenders and Victims: A National Report, OJJDP,
Department of Justice, September 1995.
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(4) The nature of casual teenage drug use is
changing. Annual or infrequent teenage experimentation
with illegal drugs is being replaced by regular,
monthly or addictive teenage drug use.\46\
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\46\ See 1995 surveys conducted by PRIDE, The National Household
Survey, and The University of Michigan's Monitoring the Future Survey.
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(5) The nationwide street price for most illicit
drugs is lower than at any time in recent years, and
the potency of those same drugs, particularly heroin
and crack, is higher.\47\
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\47\ See ``Interdiction Policy Oversight'' section, below.
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(6) Nationwide, drug related emergencies are at an
all time high.\48\
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\48\ See ``Background'' section, below.
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(7) The 1994 and 1995 White House ONDCP strategies
consciously shift resources away from priorities set in
the late 1980's, namely from prevention and
interdiction to treatment of ``hardcore addicts'' and
source country programs.
(8) During 1993, 1994, and most of 1995, the
President put little emphasis on, and manifested little
interest in, either the demand side war against illegal
drug use or the supply side war against international
narcotics traffickers. An objective look at the
President's public addresses and his actions regarding
gutting the ONDCP when he became President,
interactions with Congress, and discussions with
foreign leaders reveals that attention to the rising
tide of illegal drug use is a low Presidential
priority.\49\
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\49\ See ``Background,'' ``Interdiction Policy Oversight'' and
``Prevention Policy Oversight'' sections, below.
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(9) The President's actual attention to this problem,
measured by other than the paucity of speeches and
proposed budget cuts, has been uniformly low. In
addition to the absence of direct Presidential
involvement in the drug war, the President produced no
1993 Annual Strategy, despite a statutory duty to do so
under the 1988 Antidrug Abuse Act; delayed appointment
of a White House Drug Czar, or ONDCP Director, until
half way through 1993; and produced only a terse
``interim'' 1993 Strategy.
(10) The Drug War appears also to have been expressly
reduced to a low national security priority early in
the administration, and not to have been formally
elevated at any time since.\50\
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\50\ See ``Interdiction Policy Oversight'' section, below.
Reportedly, the drug war's national security priority during the first
3 years of the Clinton administration was number 29 out of 29.
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(11) While the position is contested by the
administration's ONDCP Director, a wide cross section
of drug policy experts inside and outside of the
administration concur that the absence of direct
Presidential involvement in foreign and domestic
counternarcotics efforts is one reason for the recent
reversal in youth drug use trends, reduced street
prices for most narcotics, and increased potency of
most illicit drugs.
(12) Prevention programs that teach a right-wrong
distinction in drug use, or ``no use,'' such as
D.A.R.E., G.R.E.A.T., the Nancy Reagan After School
Program, community-based efforts run by groups such as
C.A.D.C.A., PRIDE, the National Parents Foundation, and
Texans War on Drugs, as well as other local school and
workplace programs, have proven both successful and
popular where they have been well-managed and
accountable--despite the 1995 White House ONDCP
Strategy statement that ``[a]ntidrug messages are
losing their potency among the Nation's youth;''.\51\
---------------------------------------------------------------------------
\51\ See ``Prevention Oversight'' section, below.
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(13) Federal drug prevention programs, such as Safe
and Drug Free Schools, while supporting successful
prevention programs in many parts of the country, have
also been subject to misapplication, waste and abuse.
\52\
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\52\ See ``Prevention Oversight'' section, below.
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(14) The Nation's law enforcement community needs
greater flexibility and support from the Federal
Government in addressing the rise in juvenile and drug
related crime. While certain developments are
promising, such as the $25 million increase in Byrne
Grant funding in fiscal 1996, a law enforcement block
grant to supersede the COPS program, and increased
reliance on joint interagency task forces, valuable
time has been lost in addressing this need. Renewed
attention to strengthening Local, County, State and
Federal law enforcement's counternarcotics efforts is
required.
(15) The Nation's interdiction effort has been
dramatically curtailed over the past 3 years, due to
lack of White House support for interdiction needs,
reduced funding, a tiny staff at the United States
Interdiction Coordinator's Office, the absence of an
ONDCP Deputy for Supply Reduction, reduced support for
National Guard container search days, the elimination
of certain cost effective assets in the Eastern
Caribbean, reassignment or absence of key intelligence
gathering assets, reluctance by the Department of State
to elevate counternarcotics to a top priority in
certain source and transit countries, unnecessary
interagency quarreling over asset management and
personnel issues, and the apparent inability or
unwillingness of the White House Drug Czar to bring
essential interdiction community concerns to the
attention of the President or to aid the President's
Interdiction Coordinator in doing so; and
(16) Poor management and interagency coordination in
source countries.
c. Hearings.--The subcommittee held five hearings in
conjunction with its investigation of ONDCP. Those hearings
include the following: (1) ``Effectiveness of the National Drug
Control Strategy and the Status of the Drug War,'' March 9 and
April 6, 1995. (2) ``Illicit Drug Availability: Are
Interdiction Efforts Hampered by a Lack of Agency Resources?,''
June 27 and 28, 1995. (3) ``The Drug Problem in New Hampshire:
A Microcosm of America,'' September 25, 1995.
On March 9, 1995, the subcommittee investigation resulted
in its first hearing. The purpose of this hearing was to
examine President Clinton's 1995 National Drug Control
Strategy, and to begin an assessment of how effectively the
Nation is fighting illegal drug abuse, domestically and
internationally. Acknowledged components of the Drug War under
review include prevention, treatment, interdiction, law
enforcement, and source country programs.
At this hearing, testimony was received from four panels.
The subcommittee heard first from former First Lady of the
United States, Nancy Reagan.
Testimony was received from William J. Bennett, former
Director of the Office of National Drug Control Policy (ONDCP);
Robert C. Bonner, former Administrator of the Drug Enforcement
Administration; and John Walters, former Acting Director of
ONDCP.
The subcommittee also heard testimony from Dr. Lee Brown,
Director of ONDCP. Finally, the subcommittee heard from Admiral
Paul A. Yost, Jr., former Coast Guard Commandant; and several
nationally recognized drug abuse prevention experts, including
Thomas Hedrick, Jr., senior representative of the Partnership
for a Drug-Free America; G. Bridget Ryan, executive director of
California's BEST Foundation; James Copple, national director
of the Community Antidrug Coalitions of America (CADCA); and
Charles Robert Heard III, director of program services for
Texans' War on Drugs.
With varying degrees of emphasis, all panels acknowledged
that current Federal efforts are under strain from reduced
emphasis on certain components of the Drug War, budgetary
pressure, and in some cases accountability.
The panels also acknowledged that, over the past several
years, there has been a marked reversal in several important
national trends including most notably a rise in casual drug
use by juveniles, but also reaching to perceived drug
availability (up), perceived risk of use (down), average street
price (down), drug related medical emergencies (up), drug
related violent juvenile crime (up), total Federal drug
prosecutions (down), and parental attention to the drug issue
(down).\53\
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\53\ Press Release, the University of Michigan, ``Drug Use Rises
Again in 1995 Among American Teens,'' December 15, 1995; Press Release,
PRIDE, ``Teen Drug Use Rises for Fourth Straight Year,'' November 2,
1995; Preliminary Estimates from the Drug Abuse Warning Network, U.S.
Department of Health and Human Services, September 1995; James E.
Burke, ``Presentation: An Overview of Illegal Drugs in America,''
Partnership for a Drug-Free America, Fall 1995.
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The subcommittee found that these reversals have continued
through the period 1993 to 1995, although certain trend lines,
including a shift from falling to rising casual use, typically
among juveniles, began in 1992. In addition, a shift of certain
interdiction resources, which were earlier a part of the
counter narcotics force structure, began in late 1991 with the
advent of the Persian Gulf War.
All panels agreed, albeit with differing emphases, that
renewed national leadership, including both Presidential and
congressional leadership, will be necessary to combat these
recent trend reversals, especially the rise in juvenile drug
abuse and drug related violent juvenile crime.
Subcommittee Chairman Zeliff initiated the hearing by
noting that Mrs. Reagan ``woke the Nation up to this [juvenile
drug abuse] problem and its pervasiveness in the early
1980's.'' Subcommittee Chairman Zeliff observed that the former
First Lady's ``Just Say No'' campaign effectively launched a
``national crusade'' for drug abuse prevention.
Subcommittee Chairman Zeliff also noted that, in April
1985, Mrs. Reagan held the first International Drug Conference
for the world's First Ladies. In 1988, she held the second such
conference and became the first American First Lady to speak
before the United Nations; and after leaving the White House,
she founded the Nancy Reagan Foundation, which has since
``awarded grants in excess of $5 million to drug prevention and
education programs . . .''
Appearing before the subcommittee, First Lady Nancy Reagan
testified that America has forgotten the dangers of drug use,
that America's children are at increased risk in 1995, that
there is an absence of national leadership on the drug issue,
and that a national strategy focused on treatment of so-called
hardcore addicts misses the largest at-risk population, namely
children participating in casual use. Specifically, Mrs. Reagan
explained that she had ``decided to speak [before Congress on
the drug issue] only after a lot of soul searching . . .
because my husband and everything he stands for calls for me to
be here.''
She then explained that the Nation ``is forgetting how
endangered our children are by drugs,'' that societal
``tolerance for drugs'' is up, and that ``the psychological
momentum we had against drug use [in the late 1980's and early
1990's] has been lost.'' In short, she asked, ``How could we
have forgotten so quickly?''
Directing herself to national policy, Mrs. Reagan quoted
from President Clinton's 1995 National Drug Control Strategy,
which states that ``[a]nti-drug messages have lost their
potency.'' Mrs. Reagan disagreed, testifying: ``That's not my
experience. If there's a clear and forceful `no use' message
coming from strong, outspoken leadership, it is potent . . .
Half-hearted commitment doesn't work. This drift, this
complacency, is what led me to accept your invitation to be in
Washington today . . . [W]e have lost a sense of priority on
this problem, we have lost all sense of national urgency and
leadership.''
John P. Walters, president of the New Citizenship Project
and former Acting Director of ONDCP, testified that President
Clinton has promoted policies that reversed or accelerated the
reversal of nearly a decade of falling drug use. Mr. Walters
tagged President Clinton as the source of major reversals in:
the cultural aversion to drug use, falling drug availability,
falling drug purities and rising drug prices. He sees these
trends as significant and dangerous.
Mr. Walters pointed to the President's 80 percent reduction
of ONDCP staff,\54\ the Attorney General's stated goal of
reducing mandatory minimum sentences for drug trafficking,\55\
and a Presidential directive reducing Department of Defense
support to drug interdiction efforts as damaging to the drug
control program. Further, Walters testified, the reduction in
resources to transit and source countries by 33 percent (from
$523.4 million in fiscal year 1993 to $351.4 million in fiscal
year 1994),\56\ a reduction in Federal domestic marijuana
eradication efforts, a call by the President's Surgeon General
for study of drug legalization,\57\ and ``no moral leadership
or encouragement'' from President Clinton himself as
significant factors in the Nation's rising drug problems.
---------------------------------------------------------------------------
\54\ On February 9, 1993, the White House announced that ONDCP
would have its personnel cut from 146 to 25.
\55\ See also Isikoff, the Washington Post (November 26, 1993),
pps. A1, A10-A11.
\56\ See also, ONDCP, National Drug Control Strategy: Budget
Summary (February 1994), pp. 184.
\57\ See also, Reuter, ``Elders Reiterates Her Support for Study of
Drug Legalization,'' the Washington Post (January 15, 1994), pp. A8.
---------------------------------------------------------------------------
In short, Mr. Walters testified, ``the drug problem is
simply not a part of the foreign policy agenda of the United
States under President Clinton--there is no carrot and no stick
facing countries from which the poison destroying American
lives every day comes.'' Finally, he noted that this de-
emphasis on international efforts ``fuels calls in other
countries for abandoning antidrug cooperation.'' [See also the
New York Times (February 20, 1994), pp. A6; the New York Times
(February 27, 1994), Section 4, pp. 15.]
In Mr. Walter's view, ``if these trends continue, by 1996,
the Clinton administration will have presided over the greatest
increase in drug use in modern American history.''
William J. Bennett, current Co-Director of Empower America
and former Director of ONDCP, testified that there has been a
``sharp rise in drug use,'' citing many of the same studies
cited by subcommittee Chairman Zeliff, Mrs. Reagan, Mr. Walters
and others.
According to Mr. Bennett, this rise should have ``mobilized
the Federal Government to forcefully state the case against
drug use, enforce the law and provide safety and security to
its citizens.'' Instead, ``the Clinton administration has
abdicated its responsibility'' and ``has been AWOL in the War
on Drugs,'' said the former White House Drug Czar.
Widely regarded as the most effective White House Drug Czar
to date, Mr. Bennett denounced the 80 percent cut by President
Clinton in the ONDCP staff, and the willingness of Clinton's
Attorney General to endorse reductions in mandatory minimum
sentences for drug traffickers.
Mr. Bennett introduced new facts into the national dialog
when he observed that, ``last year, the Clinton administration
directed the U.S. Military to stop providing radar tracking of
cocaine-trafficker aircraft to Colombia and Peru,'' a policy
``Congress again had to reverse,'' and noted that ``last month,
for the first time in history, the nation's drug control
strategy was introduced without the participation of the
President.'' He also believes that, if present trends continue,
by 1996 the Clinton administration will have presided over the
greatest increase in drug use ``in modern American history.''
Expanding his analysis beyond the failure of public policy,
Mr. Bennett testified that ``the Clinton administration suffers
from moral torpor on the issue'' and that, as a general matter,
``policy follows attitude.'' In support of this statement, Mr.
Bennett quoted several statements by the President on his own
prior use of drugs, in particular, President Clinton's 1991
statement that he had never ``broken any drug law,'' followed
by the 1992 statement that he had used marijuana in England but
``didn't inhale it,'' followed in turn, when asked if he would
inhale if he had it to do over, by: ``Sure, if I could, I tried
before.''
Mr. Bennett noted, on closing, that ``success in the drug
war depends above all on the efforts of parents and schools and
churches and police chiefs and judges and community leaders.''
Giving examples from more than 100 cities visited when
President Bush's Drug Czar, Mr. Bennett urged renewed
leadership.
Robert C. Bonner, former Administrator of the Drug
Enforcement Administration (DEA) under both Presidents Bush and
Clinton, a former Federal judge, and currently a partner at
Gibson, Dunn and Crutcher, testified forcefully for renewed
leadership in the Drug War: ``The bottom line is unmistakable--
during the past two years, drug use among the youth of America
has soared in nearly every category of illegal drug . . . When
juxtaposed against the immediately preceding period and nearly
a decade of declining drug use, there can be only one
conclusion--the Clinton administration's National Drug Strategy
has failed miserably, and indeed it is a tragedy.''
Crediting Mrs. Reagan's ``Just Say No'' campaign and the
Antidrug Abuse Act of 1988, Mr. Bonner noted that the onslaught
of direct and indirect damage from illegal drugs was turned
back in the mid-1980's and early 1990's. In Mr. Bonner's view,
national will and a combination of ``strong law enforcement,''
a strong ``educational and moral message,'' and effective
treatment programs for hardcore users made the difference.
However, he warns that drug treatment programs should not be
``oversold.''
Bluntly, Mr. Bonner concluded, ``there has been a near
total absence of presidential leadership by President Clinton
in the fight to turn back illegal drug use . . .'' and his
Surgeon General's remarks on legalization ``arguably encourages
it'' by further reducing perceived risk; Mr. Bonner called
Surgeon General Jocelyn Elders' statement on legalization
``dead wrong and flagrantly irresponsible for a national public
health official.''
Dr. Lee P. Brown, Director of ONDCP, testified defending
the 1995 National Drug Control Strategy. Dr. Brown testified
that President Clinton's fiscal 1996 budget sought $14.6
billion in funding across the Federal Government for drug
related Federal programs.
For context, the President's 1995 National Drug Control
Strategy lists the total ``Drug Budget'' as $14,550.4
(millions). This figure is somewhat misleading, however, since
it contains funding for a variety of programs mixed purposes,
such as the Federal Court System, Food and Drug Administration,
Social Security Administration, Department of Agriculture's
Agricultural Research Service and U.S. Forest Service,
Department of Interior's Bureau of Indian Affairs, Bureau of
Land Management, Fish and Wildlife Service, and National Park
Service, Department of Justice's Community Policy, Immigration
and Naturalization Service, U.S. Marshal's Service and Tax
Division, an unidentified grant to the Department of Labor,
ONDCP's ``gift fund'' (zeroed out in fiscal 1996), the Small
Business Administration, the Agency for International
Development (AID), the Department of Treasury's Internal
Revenue Service, and United States Secret Service, the U.S.
Information Agency (USIA), and a range of other disparate
Federal initiatives.\58\
---------------------------------------------------------------------------
\58\ See National Drug Control Strategy, February 1995, the White
House, pp. 120-121.
---------------------------------------------------------------------------
A dual concern raised by some members of the subcommittee
was how these funds are actually spent and who coordinates the
spending. The latter concern boiled down to accountability,
avoiding duplication, and assuring interagency coordination.
Seeking to justify the administration's acknowledged shift
to treatment of hardcore drug users and the President's request
for ``$2.8 billion for treatment'' in fiscal 1996, Dr. Brown
noted that ``chronic hardcore drug users comprise 20 percent of
the drug user population but consume two-thirds of the drugs .
. .'' From this, he argued that ``past strategy [sic] ignore
this inextricable part of the drug problem.''
In fact, while the 1995 National Drug Control Strategy does
increase the proportion of overall spending devoted to
treatment, past strategies have included--and have steadily
increased--funding for treatment. In fact, Federal treatment
funding has increased every year from 1982 to 1995.\59\
---------------------------------------------------------------------------
\59\ Fiscal year 1992, Federal treatment spending stood at $505.6
million. Fiscal year 1995, Federal treatment spending stood at $2.65
billion. National Drug Control Strategy: Budget Summary, Office of
National Drug Control Policy, February 1995, pp. 238.
---------------------------------------------------------------------------
Dr. Brown acknowledged that ``drug use among adolescents is
rising,'' but attributed the trend to the final year of the
Bush administration. Dr. Brown offered the view that Safe and
Drug Free Schools moneys are ``the cornerstone of this nation's
efforts to educate our children about drug use'' and are
currently disbursed to ``94 percent of the school districts in
this country.''
Dr. Brown confirmed a shift in trafficking patterns toward
greater use of container cargo and noted that ``over 70 percent
of the cocaine entering our country crosses the border with
Mexico,'' but was unable to explain reduced emphasis in the
current strategy on National Guard Container Search Workdays
along the United States-Mexican border. Specifically, Dr. Brown
had no answer for the question why National Guard Container
Search Workdays fell from 227,827 in 1994 to a 1996 projection
of 209,000, as described in ONDCP's own 1995 Strategy at page
41.
Generally, Dr. Brown condemned ``Congress'' for having
``failed to fulfill [the President's] budget request.''
However, Dr. Brown made no attempt to provide specific answers
to Members' questions concerning (1) the President's own
proposed deep cuts in interdiction and international program
funding; (2) accountability; (3) shifting interdiction
resources to source countries, (4) a reduction of Customs
agents at the Southwest border; or (5) the shift in resources
from prevention of casual use (80 percent of total users) by
juveniles to treatment for older, chronic, hardcore users (20
percent of total).
Subcommittee Chairman Zeliff introduced an unclassified
piece of correspondence dated December 1994 between the
Interdiction Coordinator, Admiral Kramek, and the Director of
ONDCP, Dr. Brown, which stated that a consensus of agency heads
believed ``we need to restore assets to the interdiction force
structure . . .'' and ``we must return to the 1992-1993 levels
of effort.''
The Kramek letter also indicated that the source country
programs were not yet ``producing necessary results.''
Addressing drugs as a national security threat, the Kramek
letter specifically asked for a meeting with the President. The
letter read, ``I believe it appropriate that we meet with the
President and National Security Advisor as soon as possible to
brief them on the results of our conference and discuss the
current state of implementation and national strategy . . . Of
key importance to this meeting is the determination of priority
of counting narcotics trafficking as a threat to national
security of the United States as evaluated against other
threats to our security that compete for resources.''
Subcommittee Chairman Zeliff asked Dr. Brown if he had
followed the Interdiction Coordinator's and agency heads'
consensus that drug interdiction resources be returned to the
``1992-1993 levels.'' Dr. Brown indicated that he held a view
different from that of the Interdiction Coordinator and had,
apparently, not followed that recommendation. Similarly,
subcommittee Chairman Zeliff asked Dr. Brown if he had taken
the Interdiction Coordinator's request to the President or
National Security Advisor. Dr. Brown indicated that he had not,
and apparently also had not set up the requested meetings
between Kramek and the President, or between Kramek and the
National Security Advisor to ``determin[e] [the] priority of
counting narcotics trafficking as a threat to national security
. . .''
Admiral Paul Yost, former 18th Commandant of the U.S. Coast
Guard and presently president of the non-partisan James Madison
Fellowship Foundation, testified on the topics of interdiction
and interagency coordination. He testified that the Nation
witnessed a ``major build-up in drug interdiction in the at-sea
war on drugs from 1984 through 1990,'' with the result that
this interdiction effort ``successfully interrupted the flow of
bulk marijuana by sea and cocaine by air over the water routes
[of the Caribbean].''
In Admiral Yost's view, ``strong interdiction and law
enforcement were providing a climate [from 1984 through 1990]
that made it clear to the [drug] trafficker that `this is
wrong, and your chances of being intercepted are very high.' ''
Since that time, he testified, there has been a ``tragic
dismantling'' of the at-sea interdiction effort, so that today
``there are several orders of magnitude less effort spent on
drug interdiction.''
Calling the resultant increase in drug availability and
drug use predictable, Yost testified that the Nation ``will
never stop drug use without a solid interdiction foundation for
. . . education and treatment programs.''
Accordingly, Admiral Yost favored a return to
``emphasiz[ing] the interdiction prong of the drug strategy''
and increased budget authority for the Coast Guard.
Finally, Admiral Yost discussed the need for better
interagency coordination. He supports greater ``authority'' for
the White House Drug Czar and President's Interdiction
Coordinator. Without the ability, specifically, to ``direct
cabinet-level officers regarding budget allocation, personnel
allocation, or forced deployments'' on this issue, both
positions are ``largely ceremonial,'' he said.
Thomas Hedrick, Jr., vice chairman of the Partnership for a
Drug-Free America, testified that prevention and interdiction
advocates must begin to work together, and that ``preventing
drug use by young people'' is essential ``if we are to have
prayer of building safe and healthy families and communities.''
As a prevention expert with 10 years of experience, Mr.
Hedrick testified that, ``quite frankly, I am frightened
because after nearly a decade of progress, drug use is rapidly
increasing. The issue has `overarching importance.' `Crisis' is
not an overly dramatic or inappropriate description,
particularly when you consider that drug use among our youngest
kids, 13 and 14, has more than doubled in the last three
years,'' observed Mr. Hedrick.
Mr. Hedrick favors increased parental involvement in
setting a ``clear expectation of no use,'' better in-school
education, and reduced exposure of children to ``pro-drug
information,'' especially exposure to the ``recent re-
glamorization of drug use in some of the media.''
Significantly, Mr. Hedrick reported that the Partnership
has received--since inception--``over $2 billion in time and
space'' from the media. In 1990 and 1991, this produced roughly
one antidrug message per household per day.
However, Mr. Hedrick testified that ``support for these
messages has declined 20 percent in the past three years,''
apparently ``because the media is not as convinced that the
drug issue is as important as it was.''
Media coverage is also down, from 600 antidrug stories on
the three major networks in 1989 to 65 last year, which Mr.
Hedrick said is tantamount to ``zero'' from a communications
point of view.
Mr. Hedrick expressed the view that ``Federal support and
Federal leadership in making drugs a critical national priority
is essential, if we are to help convince the media that this is
an important issue.'' National leaders must also tell those
community leaders involved in this fight that what they are
doing is important.
Mr. Hedrick's 14-year-old son, Todd, testified briefly that
his generation is surrounded by drugs. He said that ``parents
need a serious wake-up call'' and that all kids now know where
to get drugs in their schools. ``This entire country needs a
huge turn-around in how it deals with drugs,'' since ``the fact
that drugs aren't a prominent issue anymore tells kids that
adults don't care about it.'' The younger Hedrick said,
``that's suicide to my generation . . .'' He proposed starting
prevention earlier, in elementary school, having parents talk
more with their kids, increasing media attention to the
problem, and stopping the legalization movement.
Bridget Ryan, former program director for the Charles
Stuart Mott Foundation and presently executive director of the
BEST Foundation for a Drug-Free Tomorrow, testified that a
recent RAND study advocated drug prevention as ``the first
priority'' in curbing drug abuse. Ms. Ryan distinguished
between ``validated'' and ``unvalidated'' drug prevention
programs, and urged that the former be adequately funded.
The best ``validated'' prevention programs build, Ms. Ryan
testified, on three propositions: first, ``target[ing]
substances used first and most widely by young people;''
second, ``helping students develop the motivation to resist
using drugs;'' and third, teaching effectively.
Ms. Ryan described a recent RAND study on the effectiveness
of prevention as one ``conducted with methodological
exactitude'' and ``one of the most rigorous ever undertaken.''
Ms. Ryan testified that the RAND prevention study disproves
three common criticisms of prevention--``first, that it works
only for middle class, largely white, suburban situations;
second, that the programs work only for kids who need them
least; and finally, that prevention programs prevent only
trivial levels of use.''
RAND found that a properly designed prevention program,
such as Project Alert, ``works well in urban, suburban, and
rural areas, in middle- and low-income communities, and in
schools with high and low minority populations.'' Project Alert
is one of the prevention programs made available to ``schools
across America'' by the BEST Foundation.
James Copple, national director of the Community Anti-Drug
Coalitions of America (CADCA), testified that CADCA is a non-
partisan group with approximately 2,500 community coalition
members in every State and two U.S. territories. He noted that
CADCA was founded in 1992 by the President's Drug Advisory
Council, a creation of President Bush, and is privately funded.
Expressing support for the Safe and Drug Free Schools
Program, Mr. Copple retold a moving story of a young child that
``made her stand'' against drugs, while forced to live in a
crack house. During a law enforcement raid of the house, this
child was found in her room, surrounded by antidrug posters and
``a workbook on drug refusal skills;'' the posters and workbook
were funded by Safe and Drug Free Schools moneys.
In closing, Mr. Copple cited Peter Drucker's recommendation
that budget cutting be conducted without imperiling the Federal
Government's ability to conduct some ``national crusades.'' Mr.
Copple noted that Drucker identified the war on drugs as one
such crusade, and Mr. Copple urged the Congress to ``embrace a
national strategy that is comprehensive, balanced and directs
the majority of the resources to local communities to address
local problems.''
Charles Robert ``Bobby'' Heard III, director of program
services at the Texans' War on Drugs, testified that ``parents,
community leaders, and elected officials don't realize how easy
it is for kids to get involved in drugs.'' He credited the
precipitous drop in drug use ``between 1979 and 1992'' to
substance abuse prevention, and noted that ``no other social
issue can claim that kind of success.''
Mr. Heard sees the primary solution to drug abuse in demand
reduction. He testified that ``prisons alone will not break the
cycle,'' and ``we can't treat our way out of this problem.'' He
also noted that prevention is not a one-time mission, but an
ongoing duty that must continue ``from generation to
generation.''
The subcommittee continued it's investigation into the
Nation's drug control strategy with a hearing on April 6, 1995.
Testimony at this hearing was received from Dr. Lee P. Brown,
Director of ONDCP, who continued testimony he gave the
subcommittee on March 9, 1995. Dr. Brown testified on a range
of topics, including treatment, prevention, law enforcement,
interdiction and source country programs.
The purpose of this hearing was to continue an evaluation
of President Clinton's 1995 National Drug Control Strategy, and
assess the status of the Nation's fight against illegal drug
trafficking and drug abuse.
In his opening statement, subcommittee Chairman Zeliff
noted that the subcommittee's March 9 hearing may have jump-
started media interest in the drug war, since a series of
articles appeared after the hearing. Subcommittee Chairman
Zeliff credited the Washington Post with ``an excellent series
of articles describing the brutal infiltration by Colombia's
Cali drug cartel in our own society.'' The series included the
assessment that, ``[t]he Cali cartel is increasingly using
violence to protect it's lucrative U.S. cocaine market . . .
and they are trying to do things in this country similar to
what they do in Colombia.'' Subcommittee Chairman Zeliff also
noted that the newly powerful Mexican drug cartels present
looming challenges to United States law enforcement, and
credited the media with writing about this development.
Subcommittee Chairman Zeliff returned to the December 1,
1994 letter from Admiral Kramek, U.S. Coast Guard Commandant
and Interdiction Coordinator, addressed to Dr. Brown containing
Kramek's views that drugs constituted a national security
priority, and that funding of drug interdiction must be
returned to the 1992-1993 levels. Admiral Kramek's letter also
requested a meeting with the President and National Security
Advisor to discuss this issue.
Subcommittee Chairman Zeliff and others were disturbed by
Director Brown's failure to divulge the existence of the
December 1, 1994 Kramek letter, despite clear oral and written
requests for it. Subcommittee Chairman Zeliff noted that he had
personally asked Dr. Brown on March 3, 1995--4 days before they
met in subcommittee Chairman Zeliff's congressional office and
6 days before the March 9, 1995 hearing--for ``any
communications received by you from the administration's
Interdiction Coordinator regarding the adequacy of interdiction
resources.'' Dr. Brown had provided several letters, but the
key December 1, 1994 letter was not included.
Subcommittee Chairman Zeliff asked Dr. Brown, who
subsequently acknowledged having received the subcommittee
chairman's requests, why he had failed to include this
unclassified and critical letter.
Dr. Brown conceded that subcommittee chairman had been
denied the document, but explained that this was because ``this
letter was attached to a classified document.'' Dr. Brown's
answer struck many as non-responsive, since the letter itself
was unclassified. Indeed, it was secured by the subcommittee
through other sources independent of attachments. Moreover, it
was obvious to all present that there was no legitimate reason
for a Federal agency to hide or refuse disclosure of such a
material document to a Member of Congress, whether classified
or not. The issue was thereafter dropped.
On the substance of the Kramek letter, Brown stated that
Admiral Kramek's recommendation for returning interdiction
funding to ``1992-1993 levels'' did not ``provide [Brown] with
the appropriate information upon which to make decisions.''
Although he did not elaborate, Dr. Brown indicated he was
``working with the Interdiction Coordinator,'' and ``once we
come to a conclusion about what we need, then we can make some
decisions'' Dr. Brown did not address the then-existing lapse
of 6 months from October 1994 to April 1995, and why the
relevant interdiction decisions had not been made during that
period.
Referring again to the Kramek letter, subcommittee chairman
Zeliff asked Dr. Brown if he had presented to the President the
October 1994 interdiction conference findings, along with
Admiral Kramek's specific request to meet with the President
and National Security Advisor. Brown conceded that ``the
specific request was never given to the President. . . .''
The subcommittee chairman closed the discussion by
observing that the Admiral Kramek's letter represented not only
the Interdiction Coordinator's views, but an ``agency head
consensus.'' Dr. Brown responded that he was a co-sponsor of
the conference, and was ``working with the Interdiction
Coordinator,'' which struck many as non-responsive.
Dr. Brown testified that the Bush administration's ``linear
kingpin strategy'' was still being pursued, contradicting
testimony on March 9, 1995, by former Clinton DEA Administrator
Bonner, but stressed that the Clinton administration had
shifted resources to source country programs and away from the
``less than effective interdiction efforts.'' Dr. Brown offered
no statistical support for his view that interdiction was
``less than effective.''
Questioned about the President's fiscal 1993, 1994, and
1995 requests for reduced interdiction spending--collectively,
a 12.3 percent cut, Brown responded that it was Congress which
had cut the Defense and State Department budgets in 1993, and
further that the President's interdiction cuts were part of the
administration's ``controlled shift'' to the source countries.
During the hearings, there was much debate about the
success of safe and drug free schools programs and their
accountability. On balance, the difference of opinion between
those who favored deep 1995 cuts in programs which appear
subject to abuse, such as Safe and Drug Free Schools, and those
who did not favor such cuts was relatively straight forward:
whether to fund programs that are highly successful in some
locations, but have been subject to waste and abuse in others,
and do not yet have adequate accountability mechanisms.
The aim shared by all subcommittee members and Dr. Brown
appeared to be strong encouragement for effective and
accountable drug prevention programs, as well as adequate
funding for such programs, once accountability and the no-use
message could be assured.
Subcommittee Chairman Zeliff closed the hearing by
applauding Dr. Brown's participation, noting that the drug war
and drug abuse is ``probably the number one issue facing our
country,'' and pledging to work with the administration if the
administration will re-focus on this issue. The subcommittee
chairman also asked Dr. Brown to seek a meeting between key
congressional leaders concerned about this issue and the
President.
The subcommittee's investigation into the Nation's war on
drugs turned to efforts to fight the influx of drugs from
outside America's borders. In the first of two back-to-back
interdiction hearings held on June 27, 1995, and June 28, 1995,
entitled ``Illicit Drug Availability: Are Interdiction Efforts
Hampered by a Lack of Agency Resources?,'' the subcommittee
received testimony from a variety of witnesses, beginning with
a technology and K-9 demonstration,\60\ and proceeding through
testimony from student witnesses. The hearing continued with
testimony from the Administrator of the Drug Enforcement
Administration and three investigators from the General
Accounting Office (GAO), who evaluated the effectiveness of the
Clinton administration's source country programs.
---------------------------------------------------------------------------
\60\ The U.S. Customs Service Canine Training Center provided a
demonstration on the utilization of drug sniffing dogs in illicit
narcotic interdiction. Also, a representative from the U.S. Coast
Guard's Miami Law Enforcement Division demonstrated how an Ionscan and
the Compact Integrated Narcotic Detection Instrument (CINDI) operate to
detect and locate illicit narcotics.
---------------------------------------------------------------------------
The subcommittee first heard from four students affected by
drugs in their schools, including Michael Taylor of Browne
Junior High School, Natasha Surles of Roper Junior High School,
Willie Brown of McFarland Middle School, and Lan Bui of Bell
Multicultural School.
Subsequently, the subcommittee heard testimony by Thomas A.
Constantine, Administrator of the Drug Enforcement
Administration, and expert witnesses Joseph Kelley, Allan
Fleener and Ron Noyes of the General Accounting Office. Mr.
Kelley is Director-In-Charge of the International Affairs
Section and Mr. Fleener and Mr. Noyes are investigators who
principally assisted in producing the June 1995 GAO report on
Source Country Programs.
Finally, the subcommittee heard testimony from Jane E.
Becker, Acting Assistant Secretary of State for International
Narcotics and Law Enforcement Affairs, U.S. Department of
State; and Brian Sheridan, Deputy Assistant Secretary for Drug
Enforcement Policy and Support at the Department of Defense.
During this hearing, the subcommittee examined the current
drug interdiction efforts of the major Federal agencies engaged
in the National Drug Control Strategy, namely DEA, the U.S.
Coast Guard, U.S. Customs, and the Departments of Defense and
State.
Collectively, the expert witnesses confirmed that on
November 3, 1993, President Clinton signed a Presidential
Decision Directive for counter narcotics (PDD-14), which
instructed Federal agencies to shift the emphasis in United
States international antidrug programs from the transit zones
such as Mexico, Central America and the Caribbean to the source
countries such as Colombia, Peru, and Bolivia. PDD-14 provided
that the Director of the Office of National Drug Control Policy
(ONDCP) should appoint a Coordinator for Drug Interdiction ``to
ensure that assets dedicated by the Federal drug program
agencies for interdiction are sufficient and that their use is
properly integrated and optimized.'' [PDD-14, November 3,
1993.]
The aim of this hearing was to offer the administration's
principals on interdiction, those whose mission was affected by
PDD-14, an opportunity to assess their own efforts and explain
the impact on their agencies of PDD-14 and its concomitant
``controlled shift'' of resources.
The opening panel consisted of local students: Michael
Taylor of Browne Junior High School, Natasha Surles of Roper
Junior High School, Willie Brown of McFarland Middle School,
and Lan Bui of Bell Multicultural School. The students offered
testimony on the availability of illegal drugs in their
schools. Summing up their collective testimony, Lan Bui stated
that ``[drugs] are really cheap to buy . . . I have seen them
everywhere, from the streets which we use to get to school
every day to right in front of my building.'' The students
focused on the importance of role models, antidrug programs in
their schools, student drug testing, and the need for national
leadership.
Thomas A. Constantine, Administrator of the Drug
Enforcement Administration (DEA), testified on the role that
the DEA, as the lead Federal agency in enforcing narcotics and
controlled substances laws and regulations, plays in the
interdiction of illicit narcotics. He noted that DEA has
offices throughout the United States and in more than 50
countries.
Emphasizing the importance of interdiction Constantine
stated, ``[w]hat happens in the source country often affects
what happens on the streets of Boston or Schenectady or Tulsa
or Savannah, GA,'' adding that those in charge of interdiction
efforts must ``strike a balance between our domestic and our
international role.''
Mr. Constantine addressed the ``controlled shift'' to
source countries by stressing that it is imperative that we
``destroy some of these organizations [drug trafficking
cartels] rather than merely disrupt them.'' He also testified
that he was ``concerned that if we relent on any of our efforts
to control the drug problem in this country [the United States]
. . . we're going to be facing immense problems in the future .
. . [so] we have to address this problem effectively and
dramatically in the present.''
Joseph Kelley, Director-In-Charge of International Affairs
Issues at the General Accounting Office (GAO), testified on the
GAO's review of the source country programs, including sub-
strategies and Federal efforts to stop production and
trafficking of cocaine and heroin.
As part of GAO's review, investigators traveled to
Colombia, Mexico, and other nations to observe counter
narcotics programs in those countries. GAO discussed these
programs with U.S. officials at in-country headquarters and
field locations. Mr. Kelley offered five general observations,
each corroborated by the investigators themselves.
First, in response to the shift in strategy from the
transit zone to the source countries, the executive branch has
had difficulty implementing key elements of their strategy. In
fact, ``resources applied to the transit zone [have] been
significantly reduced,'' said Kelly. ``At the same time, we
have not seen a shift in resources to the source countries.''
This observation troubled GAO, and Kelly confirmed that counter
narcotics assistance to each of the three primary source
countries (Colombia, Bolivia, and Peru) was less in 1995 than
it was in 1991 and 1992. Mr. Kelley also emphasized that ``a
plan for a country as well as a region [is necessary].''
Second, GAO found that there is high intensity competition
for attention and resources with other foreign policy
objectives which are deemed important by the Department of
State. As Mr. Kelley noted, ``. . . these decisions may result
in counter narcotics objectives receiving less U.S. attention
than other objectives.'' For example, ``In Mexico . . .
countering the drug trade is the fourth highest priority in
what the [U.S. Department of State] call[s] the U.S. Mission
Program Plan.'' Incredibly, the United States Ambassador to
Mexico told the GAO that he had focused his attention during
the last year and a half on other issues.
Third, GAO found that more coordination and leadership are
needed in this effort. Mr. Kelley, in his testimony, stated
they found U.S. officials generally agreed that ``no single
organization was in charge of antidrug activities in the
cocaine source countries of the transit zone.''
Fourth, GAO reports that U.S. funds are ``not always well
managed.'' While end-use monitoring requirements have been
established in the source countries, oversight is limited. Mr.
Kelley testified that, ``In Colombia, the Narcotics Affairs
Section of the Embassy conducts reviews of how the national
police uses counter narcotics assistance,'' but ``they lacked
reports from the Colombian Air Force on how U.S. provided
equipment is being used--and this is some of the big ticket
items . . . C-130s and things like that.''
Finally, GAO found that our dependence on the willingness
and ability of the foreign governments to combat the drug trade
leaves us vulnerable in our counter narcotics efforts. This is
especially apparent in countries such as Colombia and Mexico,
where extensive corruption is prevalent, according to GAO. As
the Ambassador in Mexico emphasized to the GAO review team, in
Mexico, the key lies with the Mexicans, who must be committed
and involved if counter narcotics efforts are to take hold.
Jane E. Becker, Acting Assistant Secretary of State for
International Narcotics and Law Enforcement Affairs, testified
on what she sees as her two missions. Ms. Becker said that the
office of International Narcotics and Law Enforcement Affairs
(INL) ``provide[s] counter narcotics support to those countries
that demonstrate a commitment to narcotics control,'' adding
the observation that ``the goal is for those countries to use
this assistance to reduce the supply of illicit drugs destined
for the United States.'' She noted that ``INL leads bilateral
and multilateral diplomatic efforts to advance our
international narcotics control policies.''
Ms. Becker noted, somewhat surprisingly and contrary to
other testimony on this topic, that cooperation with Mexico and
Colombia has been good. She highlighted the source country
focus of the administration when she stated that ``transit
interdiction is important to our overall counterdrug effort,
[but] it is not the sole solution.'' For the record, no member
of the subcommittee had suggested that interdiction alone could
serve as a ``sole solution.'' Ms. Becker drove the point home
when she stated that ``the heart [of the administration's
counterdrug] policy lies in the source countries.''
Ms. Becker had no response to the GAO study, and seemed
unfamiliar with essential facts surrounding the source
countries, for example, she seemed unable to identify major
cities in Colombia.
Brian Sheridan, Deputy Assistant Secretary for Drug
Enforcement Policy and Support at the Department of Defense
(DOD), focused on DOD's five-point counterdrug program. DOD
offers support to the following efforts: source nations,
transit zone, domestic law enforcement, demand reduction, and
dismantling drug cartels.
Mr. Sheridan emphasized DOD's objectives in the source
nations, testifying that these efforts were threefold: They
were: (1) to support the host nation interdiction efforts and
help them disrupt the flow of semi-finished cocaine from Peru
and Bolivia up to Colombia; (2) support for our law enforcement
and for host nation C14 programs, communications, equipment,
and intelligence support; and (3) to provide a significant
amount of training for host nation police and for some military
units that are engaged in counter narcotics work.
Assessing programs in Colombia, Peru, and Bolivia, Sheridan
testified that Colombia gets a ``C'' for their counterdrug
performance, but their efforts of late have been much better.
One area he highlighted is the Colombian military occupation of
San Adreas Island and denial of the island to the drug
traffickers as a transshipment point.
Mr. Sheridan noted that, in the transit zone, the use of
general aviation aircraft by drug traffickers continues to
decrease. He offered no clear support for this apparent
development, although he observed that smuggling of drugs is
now more common via maritime and ground transport.
On DOD program for reduction of demand, Mr. Sheridan again
rolled out three points: (1) DOD employs rigorous military drug
testing; (2) prevention and education are part of DOD's plan;
(3) community outreach is conducted. Details of these programs
and who they reach were not discussed.
On June 28, 1995, the subcommittee received testimony on
interdiction policy from additional administration witnesses,
including Admiral Robert E. Kramek, Commandant of U.S. Coast
Guard and U.S. Interdiction Coordinator, as well as George
Weise, Commissioner of U.S. Customs. This hearing, was a
continuation of the June 27 hearing, ``Illicit Drug
Availability: Are Interdiction Efforts Hampered by a Lack of
Agency Resources?''
Admiral Robert E. Kramek, U.S. Interdiction Coordinator and
Commandant of the U.S. Coast Guard, serves a dual role in the
Nation's interdiction efforts. He testified before the
subcommittee in both capacities. Initially, he explained that
the U.S. Coast Guard serves as the lead agency for maritime
interdiction and as co-lead with Customs for air interdiction,
adding that drug interdiction takes only 9 percent of the Coast
Guard budget and emphasizing the important role intelligence
plays in drug interdiction. On this topic, he testified that
``70 percent of our operations are based on intelligence.''
Admiral Kramek, in his role as Interdiction Coordinator,
does not have command or control of the affected agencies, nor
does he have any authority over their budgets. Rather, he works
with the agencies ``in a collegial atmosphere'' and coordinates
their activities. According to Kramek's testimony, the
Interdiction Coordinator holds quarterly conferences that bring
agency heads together.
Admiral Kramek took particular note of the importance of
national leadership on this issue. Offering implicit criticism
of a reduced interdiction effort in the Clinton administration,
he testified that, when the smugglers see our foreign policy
priorities change and make drug interdiction much lower on the
priority list than other things, they're quick to take
advantage of that.
More pointedly still, he said ``. . . when they see it
doesn't rate number one on our national security priority list,
they're quick to take advantage of that.'' He stressed that, in
his view, the issue stands ``number one'' with the American
people.
George Weise, Commissioner, U.S. Customs, testified on
Customs' interdiction of drugs at the Nation's borders. Mr.
Weise reiterated the importance of knocking out smuggling by
private plane into this country, and attributes the increased
shift to ground smuggling along the Southwest border to the
efforts against air transport. He believes that the 2,000 miles
of the Nation's Southwest border has now emerged as the primary
entry point for cocaine, although he did not contradict Admiral
Kramek's assessment that Puerto Rico has recently taken on new
significance as a port of entry into the United States.
Said Weise, ``Our big load strategy is causing traffickers
to . . . reduce the load size,'' although support for this
assertion was thin. Reckless and aggressive driving along the
border, or ``port running,'' has increased in the last few
years, Weise stated.
The subcommittee's investigation led to an examination of
the fight against drugs on the streets of America's cities. At
the subcommittee's September 25, 1995, hearing on the drug
problem in New Hampshire, entitled ``The Drug Problem in New
Hampshire: A Microcosm of America,'' members received testimony
from an array of highly qualified witnesses.
The purpose of the hearing was to continue an examination
of national drug control policy, focusing on the successful
drug fighting efforts of Manchester, NH, which had recently
participated in a joint interagency task force called Operation
Streetsweeper.
Collectively, the expert testimony confirmed the following
facts. Early in 1995, statistics showed that the overall crime
rate in Manchester, which is New Hampshire's largest city, had
declined. However, these statistics also showed that arrests
for drug offenses had increased dramatically, as they had for
other drug related crimes. After a number of murders were
linked to drug distribution and usage, the community ``came
together to rid their city of this scourge.''
Manchester Police Chief Peter Favreau received a $100,000
grant to help pay for State police officers to patrol city
streets with city police, and a short time later Manchester
Police were joined by the Sheriff's Department, the State
Attorney General's Drug Task Force, the State Police Special
Investigations Unit, the Drug Enforcement Administration, the
Bureau of Alcohol, Tobacco and Firearms (ATF), and the
Immigration and Naturalization Service (INS). This Federal-
State-local interagency task force put jurisdictional issues
aside and singularly pursued the aim of getting drug dealers
off the streets of Manchester.
As various panelists and community representatives
testified, the change on the streets of Manchester could be
felt immediately. As Chief Favreau testified, ``With as much
coverage as we have out there, I honestly feel [the criminals]
are going elsewhere. It's almost impossible not to have that
happen.''
In an effort to understand how the interagency task force
worked and what made it so effective, the principals in this
successful antidrug effort testified before the subcommittee.
Since illegal drugs and associated violent crime plague
virtually every city in America, the accounts these witnesses
told offer valuable insights into how best to tackle drugs and
violent crime in other cities around this country.
First, Jeff Howard, attorney general for the State of New
Hampshire, offered testimony regarding the value of effective
coordination between local, State, and Federal law enforcement
in the fight against drugs. The Attorney General specifically
credited the creation of the New Hampshire Drug Task Force with
``keep[ing] pressure on all areas of the problem, going from
what we have identified as kingpins to mid-level dealers to
street dealers, and putting as much of the resources as we can
into treatment programs to include treatment of State
prisoners, and prevention particularly through educational
efforts.''
The Attorney General also singled out the Byrne grant
programs as an effective means of funding law enforcement,
since it offers needed flexibility in how valuable law
enforcement funds may be utilized. In New Hampshire's case,
Howard noted that the State has committed less than one-quarter
of the grant funds to State agencies. The rest of it has all
gone back to the communities.
The subcommittee then heard from Geraldine Sylvester, the
director of New Hampshire's Office of Alcohol and Drug Abuse
Prevention. Ms. Sylvester, in her testimony, emphasized the
importance of giving ``equal attention to the battle fronts of
treatment and prevention.'' She also noted the important role
that student assistance programs, parental training and peer
leadership groups play in preventing or abating drug usage
among young people.
Paul Brodeur, commissioner of New Hampshire Department of
Corrections, offered testimony on the Byrne grant funded
correctional options program called ``Pathways'' utilized by
the New Hampshire Department of Corrections. Mr. Brodeur noted
that Pathways emphasizes education, substance abuse treatment
and employment counseling. He further illustrated the
importance of programs like Pathways by pointing out that in
New Hampshire 20 percent of the State's inmates are
incarcerated for drug related offenses, and 80 percent or more
of the inmates have substance abuse problems.
Neal Scott, assistant unit commander of the narcotics
investigation unit with the New Hampshire State Police, offered
testimony regarding the status of current drug usage in New
Hampshire. Statewide, he testified, the No. 1 problem is
marijuana; cocaine in powder form is No. 2; crack, LSD and
heroin run third. Mr. Scott quantified drug usage according to
regions of New Hampshire, further emphasizing the importance of
localities being able to set their own priorities according to
local need.
Billy Yout, Special Agent in Charge of Drug Enforcement
Administration, concurred with Commander Scott, stating that
``marijuana . . . is by far the biggest problem [because it is]
easily accessible to children.'' Mr. Yout also testified on how
traffickers are moving their bases of operation into New
Hampshire from Massachusetts and other New England States,
although he noted that New Hampshire remains predominantly a
consumer State.
Ray Wieczorek, the mayor of Manchester, in his testimony,
focused on the important role that a public sector-private
sector relationship plays in the war against illegal drugs.
Wieczorek encouraged other communities to follow Manchester's
model of how to establish a public-private partnership. Mayor
Wieczorek explained how the city has effectively tapped all
available resources, including cooperation from financial
institutions, citizens and the business community, in uniting
to fight this battle.
Peter Favreau, chief of the Manchester Police Department
(MPD), reviewed the creation of Operation Streetsweeper and its
importance as a model for future multi-agency efforts. Early in
1995, Favreau and U.S. Attorney Paul Gagnon, planned a round-up
of crack dealers. Favreau testified that MPD's undercover
people, along with the State drug task force arranged to make a
lot of buys from crack dealers, and make the round-up all at
one time. This round-up occurred in June 1995. As a result,
most of the 55 dealers picked up by more than 150 law
enforcement officers are now behind bars. This was Phase I of
Operation Streetsweeper.
Favreau testified that Phase II included cooperation
between the MPD and the New Hampshire State Police in
dismantling street gangs and getting them off Manchester's
streets. Phase III was a continuation of the anti-gang
component of the Operation, Phase II, but included Federal law
enforcement agencies.
Paul Gagnon, U.S. attorney for New Hampshire, focused on
interagency cooperation, indicating that the success of
Operation Streetsweeper was as dependant upon cooperation as
upon the institutional framework that made it possible. Mr.
Gagnon also noted the importance of Federal funding in the
success of Operation Streetsweeper, and urged continued
funding. Finally, Mr. Gagnon recommended a similar marshaling
of law enforcement resources and key agencies in the future.
Alice Sutphen, a representative from the citizen's group
Take Back Our Neighborhoods, delivered testimony to the
subcommittee on the importance of citizens working with law
enforcement and local authorities, as well as mobilizing on
their own, to take back their neighborhoods. She described how
a coordinated and dedicated citizenry can make a difference,
and can genuinely assist law enforcement. Chief Favreau and
Mayor Wieczorek credited Sutphen and the local citizenry with
making Operation Streetsweeper a success and echoed her
sentiments about citizen participation.
Dana Mitchell, captain, Dover Police, offered testimony on
the success and overall utilization of Dover's Drug Free
program. He testified that this program includes an expansive
D.A.R.E. program beginning in elementary school, and continuing
through junior high and high school. Ms. Mitchell also stressed
the importance of law enforcement's role in prevention,
focusing on Dover's Youth Outreach Program. Ms. Mitchell noted
that this program represented a successful initiative to bring
the community's young people into the prevention effort in the
form of organized student groups.
Ms. Mitchell also urged congressional leaders to allow
greater creativity and flexibility as they authorize Federal
drug prevention programs. For example, Mitchell noted that the
Dover Police Department recently approached the director of a
180-unit low-income Dover Housing Authority, which is a
Department of Housing and Urban Development facility, about
mandating that all parents receiving the housing subsidy
receive a D.A.R.E. seminar. The Housing Authority's director
stated that Federal regulations bar that kind of condition on a
housing subsidy. Greater flexibility in the hands of local
authorities would allow them to cooperate more fully and adapt
Federal programs to community needs.
Michael Plourde, executive director of the Nashua Youth
Council, offered testimony on how community coalitions assist
in assessing the priorities that are needed for a locality. Mr.
Plourde recommended that any Federal money that comes down to
localities should require that those coalitions exist prior to
the money being received, and that those coalitions assess the
community needs prior to the money being distributed to those
communities.
John Ahman, regional program director for Marathon House,
testified that there is a definite link between crime and drug
use, and emphasized the importance of effective drug treatment
in breaking this link. Effective treatment, Ahman said, means
that ``after treatment, recovering addicts are less likely to
be involved in crime and more likely to be employed.'' Ahman
also stated that, in the case of drugs, treatment is often more
appropriate and less expensive than incarceration.
Dick Tracy, sergeant, crime prevention division, Manchester
Police Department, offered testimony on the effectiveness of
the 17-week D.A.R.E. program for Manchester students. Tracy
went on to testify that having a police officer in the school
to teach the kids about the dangers of drugs is more effective
because the officer can relate firsthand experience of cases he
has dealt with. Tracy's testimony concluded the expert witness
portion of the hearing.
As indicated above, the subcommittee's 1995 investigation
included one fact finding trip to the Drug War's front line.
Subcommittee members, the U.S. Coast Guard and staff, traveled
to the Seventh Coast Guard District in the Caribbean transit
zone between June 16 and June 19, 1995.
In the transit zone, subcommittee members and staff
attended briefings at Seventh District Headquarters in Miami,
Coast Guard interdiction initiatives at sea, DEA activities in
the Greater Antilles, high level interagency briefings in
Puerto Rico by the FBI, DEA, Customs, Border Patrol, and local
authorities, and received indepth briefings by Admiral Granuzo
and others at Joint Interagency Task Force East (JIATF East) in
Key West, dedicated to drug interdiction in the transit zone.
This interdiction trip was arranged in coordination with
the U.S. Coast Guard, and invitations were extended to minority
and majority members. Additionally, in coordination with ONDCP,
subcommittee Chairman Zeliff traveled with the White House
Director of ONDCP to prevention and treatment programs in
Massachusetts.
In the transit zone, the subcommittee learned a number of
important facts. In addition to traveling on HU-25 interdiction
aircraft as they demonstrated interceptions, witnessing FLIR or
forward-looking infrared radar tracking during interceptions,
and traveling to the United States Coast Guard Cutter MELLOIN
on the heels of that cutter's successful interdiction of 5,000
pounds of marijuana, the subcommittee received demonstrations
of the ion scanner and CINDI technologies, received briefings
by agents participating in Operation OPBAT on the remote island
of Great Inagua, and toured OPBAT assets by HH-60 helicopter.
Before receiving briefings at JIATF East, the subcommittee also
visited the interdiction cutters Ocracoke and Spenser.
In briefings, a number of interdiction facts became more
clear. Agents participating in OBAT (Operation Bahamas, Turks
and Caicos), a multi-agency, international operation based in
Nassua, Bahamas, made clear that they have lost major assets
over the past 2 years.
At the Greater Antilles Section Coast Guard Base (GANTSAC)
in Puerto Rico, which covers 1.3 million square miles, multi-
agency briefers expressed the view that, if 70 percent of the
cocaine coming into the United States comes over the Southwest
border, the rest comes through Puerto Rico, which has seen as
much as $40 million in money laundering in recent years.
In attendance at the briefing were representatives of the
FBI, DEA, Border Patrol, Coast Guard, INS, Customs, Department
of Defense and Puerto Rico.
Summarizing the candid counsel received at this briefing,
the assets most needed are: more radars (including a suggested
radar in Belize); more Jayhawk helicopters; more 378-foot Coast
Guard Cutters; ion scanners and CINDI's; air rights agreements
with more Caribbean nations (perhaps 1 day Cuba); and more top
people. The Coast Guard also indicated that they have recently
lost 4 of 10 HU-25 intercepter aircraft by re-deployment or
demobilization.
At JIATF East, briefers included Rear Admiral Andrew A.
Granuzo, who bluntly admitted that the central obstacle to
waging a more effective drug war, particularly in interdiction,
is that ``there is no one in charge.'' This assessment mirrored
the views of Admiral Yost, Bill Bennett, John Walters, Robert
Bonner, and a host of others inside and outside the
administration.
JIATF East was created by Presidential Decision Directive
14 (PDD 14), which ordered a review of the Nation's
counternarcotics command and control intelligence centers.
Creation of three joint interagency task forces and a domestic
air interdiction center was authorized by the White House Drug
Czar in April 1994. Accordingly, JIATF East is joined in its
interdiction mission by JIATF West in Almeda, CA; JIATF South
in Panama; the DAICC at March Air Force Base, CA; and JTF-6 in
El Paso, TX.
JIATF East is dedicated to deconfliction of all non-
detection and monitoring counter drug activities in the transit
zone. The command integrates intelligence with operations, and
coordinates the employment of the United States Navy and United
States Coast Guard ships and aircraft, United States Air Force
aircraft, and aircraft and ships from allied nations, such as
Great Britain and the Netherlands. The command's mission boils
down to maximizing the disruption of drug transhipment,
collecting, integrating and disseminating intelligence, and
guiding detection and monitoring forces for tactical action.
Just as importantly, JIATF East integrates law enforcement
personnel, primarily from Customs, into the international
interdiction effort. For that reason, the command includes FBI,
DEA, DIA and State Department, in addition to the Department of
Defense.
2. Federal Law Enforcement Actions in Relation to the Branch Davidian
Compound in Waco, TX.
a. Summary.--The conduct of three executive branch
Departments, and subsidiary agencies, came under intense
scrutiny following the defective raid and burning of the so-
called Branch Davidian compound in West Texas in 1993.
Accordingly, the committee conducted a 5-month prehearing
investigation into executive branch conduct of these
departments and agencies, presented testimony by 97 witnesses
in 10 days of hearings, and concluded 1995 with a 4-month post-
hearing investigation.
The essential facts, while well known and extensively
covered in the media, nevertheless bear reporting. On February
28, 1993, the Bureau of Alcohol, Tobacco and Firearms (ATF)
attempted to serve an arrest warrant on Vernon Howell (a.k.a.
David Koresh) at the Branch Davidian Compound in Waco, TX. The
initial raid brought about the death of four ATF agents and
numerous Branch Davidians, thereby commencing the longest
stand-off in the history of the Federal Bureau of
Investigation. The siege ended tragically. The Branch Davidian
compound burned to the ground, resulting in the death of 22
children and more than 60 adults. The initial raid apparently
consisted of participants from the Department of Treasury
(DOT), ATF, and local law enforcement officials. U.S. Special
Forces personnel may have been involved in training some of the
foregoing agents in specific raid techniques. The standoff
progressed, the effort intensified and brought about the
involvement of the Federal Bureau of Investigation (FBI) and
others at the Department of Justice (DOJ), the White House, the
Department of Defense (DOD) and the Texas National Guard.
Pursuant to its oversight jurisdiction over the Federal law
enforcement community, the committee's National Security,
International Affairs, and Criminal Justice Subcommittee,
jointly with the Crime Subcommittee of the House Committee on
the Judiciary, conducted an investigation into the initial
raid, ensuing standoff, and eventual fire at the Branch
Davidian Compound near Waco, TX.
b. Benefits.--As has been widely reported, throughout the
investigation and the hearings, the committee had difficulty
obtaining information from certain agencies and offices under
investigation. Unfortunately, correspondence files that will
likely be released with the committee's final report attest to
a constant battle for documents and evidence relating to the
tragedy at Waco. This battle was largely institutional with the
legislative and executive branches both seeking to assert and
protect their respective procedural and institutional rights.
Nonetheless, the investigation and the hearings brought to
light a great deal of new information, educated the public on a
matter that had continued to be unsettling, and put to rest
many errant theories about the incident. The committee
meticulously organized and indexed hundreds of thousands of
documents in its possession, some of which were law enforcement
sensitive and classified. After months of investigating the
facts about Waco, the subcommittee heard from 97 witnesses
during 10 days of televised hearings. To the committee's
knowledge, there exists no more exhaustive compilation of
testimony or comprehensive set of documentation than that which
was gathered during these hearings into executive branch
conduct at the Branch Davidian Compound near Waco, TX.
This investigation opened up to the public more information
about this tragedy than ever before and also unearthed many of
the institutional strengths and weaknesses inherent in our
current Federal executive branch.
Unlike prior reports and investigations undertaken by the
agencies involved in the tragedy, the subcommittee presented a
divergence of highly detailed views to be presented, and seen
together, in an attempt to find out exactly what went wrong at
Waco. The central purpose of this investigation, as indicated
earlier, was to initiate internal reforms that would prevent
any such tragedy from occurring again. As a result of this
investigation, agencies have changed their policies in an
attempt to approach future investigations and operations with
less likelihood of tragedy, and greater opportunity for
success.
Specifically, ATF has experienced an entire change of
leadership. Moreover, the FBI now has 30 Senior Agents
specially trained as ``crisis managers,'' who can be called on
at any time to assist in any similar crisis. The FBI's Hostage
Rescue Team (HRT) has increased personnel and equipment, as
well as the size and training of its negotiating team. Today,
there are 9 FBI SWAT teams around the country to assist the HRT
in any similar emergency. The FBI has also established a
working relationship with the crisis resolution centers at
Michigan State University and George Mason University, and now
keeps a resource list of experts on marginal eclectic or
unusual religious groups. In addition, FBI Director Louis Freeh
has implemented a new policy regarding the use of force in
crisis situations that reinforces the FBI's standing policy in
favor of a negotiated solution, and has finally disposed of the
prior FBI policy permitting a barrage of unseemly noise-making
in hostage or barricade situation.
Perhaps the most beneficial aspect of the investigation of
Waco was refutation of various errant theories of conspiracy
and generally circulating accusations of malfeasance on the
part of particular government agencies.
c. Hearings.--Oversight Hearings on Federal Law Enforcement
Actions in Relation to the Branch Davidian Compound in Waco,
TX, July 19, 20, 21, 24, 25, 26, 27, 28, 31, and August 1,
1995. Witnesses testified regarding the involvement of
different agencies on pre-assigned ``agency days.'' This
testimony grouped witnesses together by agency, but also
allowed the presentation of raid and post-raid evidence in
rough chronological order. The particular days, witnesses and
testimony are described below. Since several agencies were
investigated, the evidence collected at these hearings is
grouped under agency headings, e.g. ATF, FBI, etc.
(i) The Bureau of Alcohol, Tobacco and Firearms.--The
initial investigation of Vernon Howell was conducted by ATF.
ATF's investigation began in late May 1992. With the results of
that investigation, the ATF obtained an arrest warrant for
Vernon Howell. The attempt to serve that warrant on February
28, 1993, went badly awry resulting in an armed confrontation
which cost the lives of four Federal agents and several Branch
Davidians. Following a 51 day stand-off, the siege ended
tragically, on April 19, 1993, when the compound was totally
destroyed by fire costing the lives of 22 children and more
that 60 adults. Based on those facts, the subcommittee
initiated an investigation into ATF's actions leading to the
raid. The committee submitted document requests to the
Department of the Treasury for all documents in its possession
pertaining to the initial investigation of Vernon Howell. The
committee carefully analyzed the documents relating to the
investigation and interviewed numerous individuals involved in
the investigation and the raid. ATF agents, supervisors and
legislative affairs personnel briefed subcommittee staff on
events surrounding the investigation of Vernon Howell and
preparations for the initial raid on the Mt. Carmel complex.
Surviving Branch Davidians instructed the subcommittee about
conditions at Mt. Carmel and events surrounding the initial
raid. In addition to the defense attorneys for certain Branch
Davidians, representatives of the National Association of
Criminal Defense Lawyers gave their interpretation of the
sufficiency of the warrant that the ATF attempted to serve on
Vernon Howell. These briefings and interviews were in addition
to the many telephone conversations and informal briefings that
were conducted.
An integral part of the inquiry into ATF's investigation of
Vernon Howell was a schedule of hearings lasting 10 days and
comprising 97 witnesses. As indicated earlier, the subcommittee
held these hearings jointly with the Subcommittee on Crime of
the House Committee on the Judiciary. Following the chronology
of the actual events, the early days of the hearings focused on
ATF's investigation and plan to serve Vernon Howell (a.k.a.
David Koresh) with an arrest warrant.
July 19 marked the first day of hearings. On that day, the
subcommittee heard testimony from Dick Reavis, author of Ashes
of Waco; Stuart Wright, contributor and editor of Armageddon in
Waco; Ray Jahn, assistant U.S. attorney; Gerald Goldstein,
president of the National Association of Criminal Defense
Lawyers; Robert L. Descamps, president of the National District
Attorneys' Association; Henry McMahon, firearms dealer; David
Thibodeau, resident at Mt. Carmel; Kiri Jewell, resident at Mt.
Carmel; David Jewell, father of Kiri Jewell; Lewis Gene Barber,
former lieutenant with the McLennan County Sheriff's Office;
Bill Johnson, assistant U.S. attorney; Davey Aguilera, ATF
Special Agent; Chuck Sarabyn, former ATF ASAC in Houston; Earl
Dunagan, former ATF acting SAC in Austin; Dan Hartnett, former
ATF Deputy Director for Enforcement; Ed Owens, ATF Firearms
Expert; H. Geoffrey Moulton, Jr., Project Director of Treasury
Department Review Team; and Dr. Bruce Perry, associate
professor of psychiatry and behavioral sciences at Baylor
College of Medicine.
Noteworthy among those testifying on the first day of
hearings was Kiri Jewell. Jewell, a former resident of Mt.
Carmel, testified about the conditions as she understood them
at Mt. Carmel, her view of the beliefs of the Davidians, and
her treatment by Vernon Howell. In particular, she strengthened
the existing view that Howell was a nefarious individual.
Another engrossing witness on the first day of hearings was
former ATF Special Agent Davey Aguilera. Aguilera went
undercover among the Branch Davidians posing as a philosophy
student. A fact discussed publicly for the first time in detail
through the testimony of Aguilera was that ATF agents knew the
Branch Davidians were expecting the raid on Mt. Carmel.
Aguilera testified to his desperate attempts to inform ATF
Supervisory Special Agents not to go ahead with the raid, and
tearfully recalled the results of not being able to turn back
the raid.
Chuck Sarabyn, former ATF Assistant Special-Agent-in-Charge
in Austin, testified before the subcommittee about his decision
to allow the raid to proceed in light of the fact that the
Branch Davidians knew the ATF was planning to raid Mt. Carmel.
Sarabyn defended his decision to go ahead with the raid, and to
do so forcefully. Sarabyn maintained the view that the ATF was
afraid of mass suicide among the Branch Davidians.
The subcommittee heard additional testimony on day two,
July 20, 1995. Those testifying before the subcommittee
regarding the role of ATF included Robert Sanders, Former ATF
Deputy Director for Enforcement; Wade Ishimoto, Sandia National
Laboratories; George Morrison, Los Angeles Police Department;
William Buford, ATF Resident-Agent-in-Charge, Little Rock, AR,
Office; Lewis Merletti, Deputy Director of Treasury Department
Review Team.
This second day of testimony concentrated on the
investigation of Howell's collection of weapons and the alleged
or initially asserted existence of a methamphetamine laboratory
on the premises of Mt. Carmel. Mr. Morrisson, of the Los
Angeles Police Department, testified that ATF should have
employed better investigative techniques and more organized
methods for case management. He told the subcommittee that
newspaper articles surfacing soon before the raid on Mt. Carmel
could have assisted ATF in gathering information. Mr. Ishomoto,
of Sandia National Laboratories, told the subcommittee that the
team assembled in Waco to serve the arrest warrant on Howell
was inexperienced and that the raid plan lacked the
sophisticated procedures necessary for such an operation.
Several witnesses testified to the danger of explosive devices
in the presence of chemicals necessary for the production of
methamphetamines.
The third day of hearings on Waco was July 22, 1995. On
this day, the subcommittee obtained the statements of Steve
Higgins, former Director of the ATF; John Simpson, former
acting Assistant Secretary of Treasury; Christopher Cuyler, ATF
Liaison for Acting Deputy Assistant Secretary Michael Langan;
Michael Langan, former acting Deputy Assistant Secretary of
Treasury; Lloyd Bentsen, former Secretary of Treasury; Joyce
Sparks, Texas Department of Child Protective Services; George
Morrison, Los Angeles Police Department; Tim Evans, attorney;
John Kolman, formerly with the Los Angeles County Sheriff's
Department; Victor Oboyski, Law Enforcement Officers
Association; Lewis C. Merletti, Deputy Director of the Treasury
Department Review Team; Robert Rodriguez, ATF Special Agent;
Chuck Sarabyn, former ATF Special Agent-in-Charge in Houston;
Phillip Chojnacki, former ATF Special Agent-in-Charge; Sharon
Wheeler, ATF Special Agent; Dan Hartnett, former ATF Deputy
Director for Enforcement; Daniel Black, ATF Personnel Office;
James Cadigan, FBI Firearms expert; William Buford, ATF
Resident Agent-in-Charge; Roland Ballesteros, ATF Agent; and
John Henry Williams, ATF Agent.
On this final day of testimony regarding the actions of ATF
at Waco, the subcommittee heard the testimony of former
Secretary of Treasury Lloyd Bentsen. Secretary Bentsen
testified about the actions he took in response to ATF actions
at Waco. He told the subcommittee that, upon hearing of the
failure of the raid, he established an in-house review
commission that investigated the incident for 5 months and
compiled a report based on more than 500 interviews. Secretary
Bentsen testified that he believed the review team had the
total cooperation of ATF. Bentsen listed for the subcommittee
those agencies involved in the Treasury investigation: Secret
Service, Customs Service, the IRS, and the Financial Crimes
Enforcement Network. Notably, Bentsen was unable to explain why
a warning from Mr. Altman, his aide at the time, was not viewed
with seriousness or passed on to the FBI; the Altman warning
indicated the possibility of ``tragedy'' if the Davidian
Compound was, as occurred on April 19, 1993, confronted with
what Davidians might perceive as an assault.
Secretary Bentsen also mentioned corrective actions taken
by ATF and Treasury in the wake of the incident at Waco.
According to Bentsen, ATF leadership was replaced, the
intelligence chief was demoted, and the two raid commanders
were relieved of their law enforcement duties. In addition,
Bentsen told the subcommittee that Treasury has enhanced the
formal and informal communication between the Office of
Enforcement and the bureaus within the department.
(ii) The Federal Bureau of Investigation.--Almost
immediately after the raid on Mt. Carmel, the FBI was called in
to take over the operation of the standoff. The FBI Hostage
Rescue team was in place and FBI negotiators were on the phone
with Davidians almost continuously for the succeeding 51 days.
Jeffrey Jamar, FBI Special Agent-in-Charge in San Antonio,
commanded the FBI team and was charged with deciding which
tactics to employ. The subcommittee investigation produced
audiotapes and transcripts of these negotiations, as well as
contemporaneous memoranda from both inside and outside experts
attempting to explain the actions of Vernon Howell and the
Branch Davidians. After 51 days of standoff, the siege ended
tragically. The Branch Davidian compound burned to the ground
and resulted in the death of 22 children and more than 60
adults.
The investigation into the role of the Department of
Justice and the Federal Bureau of Investigation continued into
a second day, constituting day four, of the subcommittees'
hearings. On this day, the subcommittee heard from John Coonce
of the Drug Enforcement Administration and Donald A. Bassett,
Former FBI Crisis Management Specialist.
John Coonce testified before the subcommittee on the
dangers of the use of explosives in the presence of those
chemicals used to produce methamphetamine. The Branch Davidians
had been accused of operating a methamphetamine laboratory at
Mt. Carmel. Coonce testified that in order to ``take down'' a
methamphetamine laboratory, an agent must first be certified by
the Occupational Safety and Health Administration (OSHA), and
must be very knowledgeable about the process involved. Coonce
enumerated the hazards involved with drug enforcement of
laboratories producing methamphetamines. In particular, he
discussed the effect of firing a gun, the possibility of
explosion or leakage of chemicals, and the safety of
individuals inside or entering any such laboratory.
The investigation into the Department of Justice and FBI
participation at Waco continued on the fifth day of hearings.
On July 25, 1995, the subcommittee heard the testimony of Jack
Zimmerman, attorney for Steve Schneider; Dick DeGuerin,
attorney for Vernon Howell; Philip Arnold, Ph.D, Reunion
Institute, Houston, TX; James Tabor, Ph.D., associate professor
of religious studies, University of North Carolina at
Charlotte, author of Why Waco?; Captain Maurice Cook, senior
Texas Ranger; Captain David Byrnes, Texas Ranger; Glen Hilburn,
Baylor University; Captain Frank McClure, deputy sheriff,
Douglas County, GA.
Jack Zimmerman and Dick DeGuerin, attorneys for Steve
Schneider and Vernon Howell, testified before the subcommittee
about their dealings with the Branch Davidians and explained in
detail their attempts to assist in negotiating a surrender.
DeGuerin testified about difficulties he personally encountered
in brokering a potential surrender. DeGuerin told the
subcommittee about his trips into Mt. Carmel and the
breakthrough he believed he had achieved upon receiving
Howell's final promise to surrender. DeGuerin obtained a letter
from Howell in which Howell promised to complete his
interpretation of the ``Seven Seals,'' contained in the Bible,
and then surrender with all the Branch Davidians. DeGuerin
testified that he believed Howell was sane. Although others
later disagreed, DeGuerin perceived Howell as a person deeply
committed to and sincere in his religious beliefs.
Also testifying on July 25 were several of the local Texas
Rangers. The Texas Rangers were charged with investigating the
deaths of the four ATF agents killed on the day of the initial
raid. Captain Byrnes testified that the Texas Rangers had many
disagreements with FBI's Jamar, and generally felt excluded.
Byrnes testified that, in addition to problems with destruction
of the crime scene by FBI tactical personnel, the Rangers were
disappointed about a lack of communication between FBI
personnel and local officials.
On its sixth day of hearings, the subcommittee heard, in
greater detail, the facts surrounding the Department of Justice
and FBI involvement in Waco. On July 26, 1995, the subcommittee
received testimony from Peter Smerick, former Criminal
Investigative Analyst, Investigative Support Unit, National
Center for the Analysis of Violent Crime, FBI Academy,
Quantico, VA; Jim Cavanaugh, ATF Special Agent; Byron Sage, FBI
Supervisory Special Agent, San Antonio, TX; Ronald McCarthy,
former officer, Los Angeles Police Department; George F. Uhlig,
professor of chemistry, College of Eastern Utah; David Upshall,
Ph.D, British biochemist; Paul Rice, Ph.D., toxicologist,
Environmental Protection Agency; Dr. Alan A. Stone, professor
of psychiatry and law, Harvard Law School; Larry Potts, former
FBI Assistant Director, Criminal Investigations; Anthony Betz,
FBI CS Gas Expert; Dick Rogers, former Head of the Hostage
Rescue Team; Jeffrey Jamar, former FBI Special Agent-in-Charge
in San Antonio; Byron Sage, FBI Supervisory Special Resident
Agent in Austin; and Harry Salem, Defense Department
Toxicologist.
James Cavanaugh, although an ATF Special Agent, testified
before the subcommittee regarding negotiations with the Branch
Davidians and the transition from ATF control of the operation
to FBI control. Cavanaugh was the first person to engage in
serious negotiations with the Branch Davidians. He recounted
the planning of the initial raid, the ensuing negotiations for
a cease-fire, the first surrender offer of the Branch Davidians
and the lengthy negotiations for a surrender. Cavanaugh
described the tension between negotiators and tactical
personnel: in general, he expressed the view that negotiators
prefer to wait for a peaceful solution to a crisis and tactical
personnel generally prefer to intercede with tactical measures.
Peter Smerick was the Criminal Investigative Analyst the
FBI used to profile Howell for the FBI negotiators and the
FBI's Hostage Rescue Team. Smerick testified that his first
four memoranda urged the FBI to ``wait Koresh out'' and advised
against increasing the pressure from outside. Smerick told the
subcommittee that he changed his final memorandum based,
essentially, on his knowledge that the FBI was not pleased with
the tone of his memoranda. Smerick told the subcommittee that,
although he felt no overt pressure to change the approach of
his memoranda, he knew that FBI agents on the ground in Waco
wanted a view that supported a more clearly tactical approach.
Jeffrey Jamar, the FBI Special Agent-in-Charge in San
Antonio at the time, was the onsite commander of all forces in
Waco. Jamar testified before the committee that he was hopeful
of a surrender based on Koresh's promise to come out of Mt.
Carmel when he completed his interpretation of the Seven Seals.
In response to questions regarding the possibility of the
withdrawal of the FBI from Mt. Carmel, Jamar explained that the
danger of gun fire from the building, the risk to children
inside, and the sanitary conditions in Mt. Carmel made
withdrawal untenable. Jamar testified before the subcommittee
regarding the decision to implement the CS gas plan. Jamar
said, ``I would have waited a year if we had something to work
with, if there was just something there we could attach
something to. We did it from February 28 until a decision was
made in late March that we thought we were going nowhere.''
Jamar told the subcommittee he was certain that Koresh would
end the standoff ``his way.'' Jamar also testified that he knew
with ``99 percent'' certainty that the Davidians would open
fire on the FBI's Bradley vehicles inserting CS gas, an
eventuality that he also knew would mean acceleration of the CS
gas, under the FBI's CS gas insertion plan.
On July 28, 1995, the subcommittee heard compelling
testimony from many decisionmakers regarding the events at
Waco. The subcommittee took the testimony of Webster Hubbell,
former Associate U.S. Attorney General; Mark Richard, Deputy
Assistant Attorney General; William Sessions, former Director
of the FBI; Floyd Clarke, former Deputy Director of the FBI;
Larry Potts, former Assistant Director of the FBI, Criminal
Investigations; Harry Salem, Ph.D., Defense Department
Toxicologist; Rick Sherrow, fire expert; Paul Gray, Houston
Fire Department and leader of the fire review team; James
Quintere, arson expert, University of Maryland; and Clive
Doyle, former Branch Davidian.
Webster Hubbell, the former Associate U.S. Attorney General
and close associate of President and Mrs. Clinton, testified
before the subcommittee on the decisionmaking process that led
to the implementation of the CS gas insertion plan. According
to Hubbell, the decision to implement the CS gas insertion plan
was based essentially on two facts: (1) a lack of progress in
negotiations, and (2) military personnel assuring him that the
inhabitants would exit the building upon insertion of CS gas.
Hubbell testified that the President wanted to be advised of
any change in strategy from one of negotiation to one of
tactical maneuvers. Hubbell testified before the subcommittee
that he was told that Howell was manipulating the attorneys.
Howell's statement that he would come out upon having
interpreted the ``Seven Seals,'' according to Hubbell, was a
ruse. Hubbell told the members of the subcommittee that Howell
was responsible for the deaths of those inside Mt. Carmel.
The Assistant Director of the FBI at the time of the Waco
standoff was Larry Potts. Potts testified before the
subcommittee regarding the FBI's strategy for resolving the
standoff. Potts stated that the strategy was: ``(1) to verbally
negotiate a peaceful surrender of Koresh and his followers; and
(2) to gradually increase the pressure on those inside the
compound by tightening the perimeter around the compound and
denying the Davidians certain comforts.'' Potts recounted how
this strategy was perceived as a failure, and he outlined the
roles that the FBI and the Department of Justice played in the
development of the CS Gas insertion plan.
Potts testified that the FBI, in response to questions
about its conduct of the standoff at Waco, had improved three
aspects of FBI crisis management. ``Jurisdictional issues are
being clarified, crisis response operations have been
reorganized and expanded, including the availability and use of
outside experts; and research efforts have been enhanced,'' he
stated. Potts displayed a diagram of the crisis management
changes implemented as a result of the standoff at Waco.
The subcommittee followed up on the investigation into the
actions of the Department of Justice and the FBI at Waco with
the testimony of Jeffrey Jamar, former FBI Special Agent-in-
Charge; Dick Rogers, former Head of Hostage Rescue Team; Edward
S.G. Dennis, Jr., former Assistant Attorney General, Criminal
Division; R.J. Craig, FBI Special Agent; James McGee, FBI
Special Agent; John Morrison, FBI Special Agent; and Byron Sage
FBI Special Supervisory Resident Agent in Austin.
The most compelling testimony was given on July 31, hearing
day nine, by Resident Agent, Byron Sage. Sage testified
regarding his last pre-fire conversation with Attorney General
Reno. In Sage's view, Reno was attempting to gauge negotiators'
opinions regarding the potential for a negotiated surrender to
the standoff. Sage testified that he told Reno the negotiations
were at a standstill and that there was no evidence that
negotiations were meeting with renewed success. Apparently, in
this conversation, Sage stated or implied to Reno that he
favored the tactical option.
On the final day of hearings into the events at Waco, the
subcommittee heard from the Nation's top law enforcement
officer, the Attorney General, Janet Reno. On August 1, 1995,
Attorney General Reno gave her reasons for what she termed her
decision to implement the plan to insert CS gas into Mt.
Carmel. The Attorney General described the 51-day standoff, the
efforts to negotiate a surrender, and the reasons that Howell
was not trusted by FBI negotiators. Reno stressed changes the
FBI had implemented since Waco. According to her testimony, the
FBI now has 30 Senior Agents specially trained as ``crisis
managers'' to be called on at any time to assist in a crisis
the magnitude of Waco. These managers form an element of the
Critical Incident Response Group, a group formed to deal with
crisis situations. Reno told the subcommittee that the Hostage
Rescue Team will increase its personnel, equipment, and the
size and training of the negotiating team. Today, there are 9
FBI SWAT teams around the country to assist the Hostage Rescue
Team in an emergency. To assist the FBI in dealing with
complex, psychological hostage takers in the future, Reno
testified that the FBI will establish a working relationship
with the crisis resolution centers at Michigan State University
and George Mason University, and will keep a resource list of
experts on marginal religious groups.
Much of Reno's testimony involved her decision to implement
the CS Gas Insertion Plan. The Attorney General told the
subcommittee she thought she had all the information she needed
to make her decision. She indicated however, that someone
informed her of ongoing abuse in the compound; at no time could
she recall who that individual was. She believed that briefings
on CS gas were proper and complete. She did confirm that she
had not read all pre-fire briefing material and was not in the
command center when the tragedy occurred. In her statement to
the subcommittee, Reno assured the members that the FBI was
continuing its research into non-lethal technologies as
alternatives to deadly force.
(iii) The Department of Defense.--The subcommittee
investigation into the participation of Department of Defense
personnel in the events at Waco continued with the subcommittee
hearings on the events at Waco. On July 20, 1995, the first day
of hearings that delved into the participation of military
personnel, the subcommittee heard the testimony of Ambassador
H. Allen Holmes, Assistant Secretary of Defense for SOLIC;
Major General John M. Pickler, U.S. Army, Commander Joint Task
Force 6; Brigadier General Walter B. Huffman, U.S. Army,
Assistant Judge Advocate General for Civil Law; Chris Crain,
Special Forces Group; Lieutenant Colonel Philip Lindley, U.S.
Army, former Deputy Staff Judge Advocate for U.S. Army, Special
Forces Command; Major Mark Petree, U.S. Army, formerly of 3/3D
Special Forces Group; Staff Sergeant Steve Fitts, U.S. Army,
formerly of 3/3D Special Forces Group; Staff Sergeant Robert W.
Moreland, U.S. Army, formerly of 3/3D Special Forces Group; and
Sergeant Chris Dunn, U.S. Army, formerly of 3/3D Special Forces
Group.
Ambassador Holmes testified before the subcommittee
regarding the role of the military in domestic law enforcement
actions and about military participation before Waco. Holmes
told the committee that, in his opinion, the process developed
to monitor military involvement in domestic law enforcement was
a sound process. The Ambassador testified that, in his view,
there were no violations of the law regarding military
assistance at Waco and that the process regarding requests for
military assistance had worked effectively.
Staff Sergeant Steve Fitts, U.S. Army, formerly of 3/3D
Special Forces Group, testified before the subcommittee
regarding the military preparations for involvement in
methamphetamine laboratories. Staff Sergeant Fitts told the
subcommittee that he conducted extensive research on the
dangers and precautions required to ``take-down''
methamphetamine laboratories. According to Staff Sergeant
Fitts, he wrote the paper at the instruction of Major Mark
Petree, U.S. Army, formerly of 3/3D Special Forces Group.
Sergeant Fitts testified that Major Petree then presented the
paper to ATF agents in Houston. According to Staff Sergeant
Fitts, it was clear to him from the reaction of the ATF agents
that these agents anticipated no actual methamphetamine
laboratory at Mt. Carmel. Indeed, based on the lack of interest
shown by ATF agents in the procedures necessary to dismantle a
methamphetamine laboratory, it was Fitt's belief that ATF
agents knew that no methamphetamine laboratory existed at Mt.
Carmel.
3. The Bureau of Census and Its Planning for the 2000 Census.
a. Summary.--Article I, Section 2, of the U.S. Constitution
calls for an ``actual enumeration'' of the citizens of the
country ``within every subsequent term of ten years, in such
manner as they shall by Law direct.'' The Nation's first census
was taken in 1790. Title XIII, enacted into law on August 13,
1954, established the parameters for taking the national census
and created the Bureau of the Census. This law requires the
compilation of statistics and information far in excess of that
intended by the Constitution. That element of the Census which
evokes the greatest controversy, however, remains the counting
of citizens of the United States.
Until recently, the percentage of people not being counted
has declined each census since that particular statistic was
first measured in 1940. However, in 1990 the undercount rose to
1.8 percent, from 1.2 percent in 1980. Furthermore, official
reports suggest that the 1990 Census may have missed
substantially more persons, particularly blacks and other
minorities, than suggested by the official net undercount
estimate. The decline in the accuracy of the census cannot be
attributed to spending less than was spent in 1980. The 1980
Census cost $1.1 billion over 10 years, while the 1990 Census
cost about $2.6 billion. If the current approach to taking the
census is retained in the year 2000, the costs could rise to
about $4.8 billion in current dollars. In 1994 an expert panel
at the National Academy of Sciences concluded that to contain
costs and increase accuracy, the Bureau should use statistical
sampling as an integral part of the design for Census 2000.
Pursuant to its oversight jurisdiction of the Bureau of the
Census, the committee conducted an investigation into the
preparations for the next census which resulted in the hearing,
``Oversight of the Census Bureau: Preparations for the 2000
Census.'' With the focus on the status of preparations, the
committee wanted to learn the Bureau's plans for changes to the
2000 Census that will alleviate problems encountered in the
1990 Census. The committee had additional concerns about the
Bureau's success in obtaining consensus among major
stakeholders for these planned changes.
b. Benefits.--The investigation and subsequent hearing was
the first real effort to study the complexities surrounding the
taking of the Census. The investigation showed unresolved
questions and problems at the Bureau of the Census. In
addition, the investigation confronted the controversy
surrounding the adjustment issue, and potential solutions to
the problem of undercounting. With the analysis of the issues
surrounding the development of Census 2000, the committee is
now prepared to offer substantive contributions to those who
will administer the Census 2000.
c. Hearings.--``Oversight of the Census Bureau:
Preparations for the 2000 Census,'' October 25, 1995. The
subcommittee heard from three witnesses regarding Census 2000.
The first panel consisted of Inspector General Francis D.
DeGeorge of the U.S. Department of Commerce and L. Nye Stevens,
Director of Planning and Reporting of the General Government
Division of the U.S. General Accounting Office. The first panel
concentrated on management problems at the Bureau of the Census
and controversy surrounding the preparations for Census 2000.
Martha Farnsworth Riche, Director of the Bureau of the Census,
responded to those questions in the second panel.
Francis D. DeGeorge told the subcommittee that he believes
the recommended statistical sampling does not go far enough to
address the problems of the 1990 census. He recommended that
the Bureau increase the amount of sampling over the amount
currently planned. DeGeorge also expressed concern with the
Bureau's selected design. He testified that the value of the
design changes is unsubstantiated and vulnerable to cost growth
beyond the design's estimated $3.9 billion price tag. He
suggested the bureau use a design that is simpler,
operationally less risky, and less vulnerable to cost growth.
The Inspector General blamed the Bureau's choice on a
fragmented organizational and decisionmaking structure that is
not conducive, in his opinion, to completing, substantiating,
and implementing a design.
L. Nye Stevens testified that he is encouraged by the
bureau's design for the 2000 Census. Stevens said the new
design should both save money and improve quality. He said he
was particularly encouraged by the decision to adopt sampling
among the nonresponse population as a basic foundation of the
count. But he said the Bureau's decisions should be carefully
reviewed by the subcommittee and by Congress. He also warned
that managing a radically different census process presents a
formidable challenge to the Bureau. Without very tight
management over the next few years, there is a risk not only of
failing to achieve the savings that are projected, but also a
risk of a ``failed Census.''
Martha Farnsworth Riche, Director of the Bureau of the
Census, told the subcommittee that the Bureau is designing a
census that will be simpler to answer, cheaper to conduct, and
more accurate. Riche outlined, in her testimony, four
strategies to meet her objectives. She testified that one
strategy is to build partnerships at every stage of the
process. Riche stated that the taking of the Census is so far
reaching that it requires the cooperation of a broad range of
State and Federal agencies and people of diverse expertise.
Riche explained that her second strategy is to keep it simple.
The simpler the taking of the Census, according to Riche, the
better response rate we can expect. Strategy three is to use
technology intelligently. The Bureau of the Census is
experimenting with a number of innovations to help take a
better count of the people. And strategy four is to increase
the use of statistical methods in an attempt to offset the
undercount.
4. Counterterrorism Activities in the United States.
a. Summary.--On April 19, 1995, Timothy McVeigh and Terry
Lynn Nichols allegedly parked a truck bomb adjacent the Alfred
R. Murrah Federal Building in Oklahoma City, OK. The result was
the explosion of the Murrah building. Hundreds of people,
including several children, were killed and the building was
destroyed. The bombing stirred the fears of citizens throughout
the country regarding terrorist attacks on American soil. As a
result of this act of domestic terrorism, the committee
initiated an investigation into the intelligence apparatus of
the Nation's law enforcement and national security agencies.
The aim was to better understand preparations being taken to
confront the possibility of further terrorism and to prepare
for recurrence.
Pursuant to its oversight of the Department of State, the
Federal Bureau of Investigation, the Central Intelligence
Agency, the National Security Agency, and the Defense
Intelligence Agency, the committee conducted an investigation
of counterterrorism activities in the United States. The
investigation resulted in a briefing of Members of Congress and
an oversight hearing.
The subcommittee held one briefing and one hearing on the
issues of terrorism and counterterrorism. The purpose of the
closed briefing was to obtain general information about
terrorism, interagency coordination of counterterrorism
initiatives, and performance of agencies of the U.S. Government
assigned to collect intelligence on terrorist organizations,
prevent terrorism and investigate terrorist incidents.
Knowledgeable counterterrorism representatives from FBI,
DOD, State, DOE, DEA, FEMA, and ATF attended the briefing. At
the briefing, agency officials educated the members of the
subcommittee about ongoing anti and counterterrorism efforts,
and gave Members an overview of the scope and threat of
terrorism both from the preventative and the responsive points
of view. The Federal response to the Oklahoma City tragedy was
also reviewed from an operational point of view. Since the
briefing was closed the dialog may not be summarized.
The purpose of the closed hearing on terrorism and the
correlative intelligence gathering was to gain a better
understanding of, and to review the quality of, sharing and
cooperation among intelligence gatherers related to anti and
counterterrorism. At the hearing, members learned how terrorism
is defined, and were briefed on types of worldwide terrorist
groups, how such groups are organized, and the tools they may
employ. Further discussion is foreclosed by the nature of the
closed briefing.
b. Benefits.--In general, the investigation shed light on
the threat of domestic and international terrorism to the
citizens of the United States. It also informed the committee
members about the intelligence and law enforcement communities
fighting terrorism. The results may be improved by intelligence
sharing, improved training, resource sharing, and exploration
of preventive measures, that do not violate Constitutional
guarantees, which can be taken to stop terrorists before they
act. The briefing and the hearing began a constructive dialog
between the committee and the respective agencies.
c. Hearings.--``The Effectiveness of Coordination of the
Nation's Anti and Counterterrorism Intelligence,'' held on May
23, 1995. The subcommittee heard testimony from the Federal
Bureau of Investigation; the National Security Agency; the
Department of State; the Defense Intelligence Agency; and the
Central Intelligence Agency.
Each witness presented a 10 minute overview of their
agency's approach to gathering, processing, analyzing, and
sharing anti and counterterrorism intelligence. In addition,
each witness offered examples of intelligence sharing in
response to specific terrorist activities, and cited recent
instances in which intelligence sharing facilitated
apprehension of terrorists or prevention of terrorist acts.
Since the hearing was closed, the actual testimony may not
be summarized here.
5. Army Ranger Training Deaths of February 15, 1995.
a. Summary.--In the worst incident in the 44-year history
of this elite program, four U.S. Army Rangers died from
hypothermia during training at Elgin Air Force Base, near
Pensacola, FL, on Wednesday, February 15, 1995. The training
provides instruction in advanced combat skills in a punishing
2-month course in wooded, desert, mountainous and swampy
conditions. The soldiers spent up to 6 hours in chest-deep
water that ranged from 52 degrees to 59 degrees. The Army's
standard limit is 3 hours in waist deep, 50 degree water. These
casualties were part of a 34 man patrol in the final phase of
the Army's 8 week Ranger training. The soldiers had been in the
field since Saturday, February 11. At approximately 5:30 p.m.,
one of the students showed signs of hypothermia (numbness). The
students had been training in 52 degree water; the air
temperature was 65 degrees. An instructor called in a medical
evacuation helicopter which arrived 15 minutes later. When the
helicopter arrived, the original casualty and two more students
showing signs of cold were flown out. The students were treated
and released.
At approximately 9:50 p.m., two more cases of hypothermia
were reported. After being flown to the military hospital at
Elgin, these two soldiers died. At approximately 11:45 p.m.,
two more hypothermia cases were reported. Heavy fog prevented
helicopter evacuation. Carried to the nearest road in
approximately 40 minutes, the soldiers were taken by ambulance
to a civilian hospital, where one died. At midnight, one
soldier had not been found. At 7:35 a.m., Thursday morning, a
search party discovered his body in waist-deep water. Four
instructors were assigned to the 34-man patrol. In 1977,
hypothermia caused the death of two Ranger students at Elgin.
Since then, one Ranger student died at Elgin from drowning in
1985.
The committee conducted an investigation of this incident,
by examined internal DOD investigation results, explored the
Army's interpretations of those results, as well as reviewing
both post incident disciplinary and corrective actions taken by
the Army. The committee was concerned with the overall process
of the DOD investigation. The committee also made efforts to
review precisely what went wrong in this incident, and how it
can be fixed while maintaining the quality of Ranger training.
The AR 15-6 collateral investigation found that ``lack of
experienced personnel and reduction in the number of officers
available to prepare for, oversee, and conduct this training
had a detrimental effect on command and control.'' The AR 15-6
collateral investigation also found that the lack of MEDEVAC
fuel may have been a contributing factor in the deaths.
The committee, as part of its investigation, held numerous
meetings with the office of Army Legislative Liaison. In
addition, the subcommittee participated in three briefings. The
first briefing, held on April 6 in conjunction with the
Subcommittee on Military Personnel, heard from Major General
Hendrix, Commanding General of the Infantry Center at Fort
Benning, GA. The second briefing, held on May 11, heard from
Togo D. West, Jr., Secretary of the Army. The final briefing,
held on May 17, was held with the Secretary of the Army, a
representative of the Department of the Army Inspector
General's office and a representative from the Department of
the Army Safety Command. In this briefing, the subcommittee
fully reviewed the military investigation of the incident and
the AR 15-6 investigations. The subcommittee, prior to the May
17 briefing, considered holding a hearing in late May.
Following the May 17 briefing the chairman, with the agreement
of the ranking minority member, decided to postpone the
proposed hearing.
b. Benefits.--The committee investigation focused on the
actions undertaken in response to this incident. The
committee's concern regarding the Army Ranger deaths turned on
the Army's investigative process, and in particular on the
process that surrounds review of tragic incidents of this
nature. After monitoring this investigation and indepth
inquiries of the Secretary of the Army, Army Inspector General
and Commanding General of the Army Infantry Training Center,
and upon careful review of the findings, conclusions, and
recommendations of both the AR 15-6 collateral investigation
and the safety investigation, the committee was reassured that
the Army investigative process had advanced properly, and that
necessary changes were in progress.
c. Hearings.--None were held.
6. The Ballistic Missile Defense Program.
a. Summary.--The committee conducted an investigation into
the status of the Nation's Ballistic Missile Defense Program.
The end of the cold war lessened the threat of a Ballistic
Missile attack from the former Soviet Union. However, as a
result of proliferating weapons of mass destruction and missile
delivery system technology, the need remains to research and
explore implementation of theater and strategic missile
defenses. On May 18, 1995, Lieutenant General Malcolm R.
O'Neill, U.S. Army, Director of the Ballistic Missile Defense
Organization briefed the chairman and the staff on the status
of the Nation's Ballistic Missile Defense Program.
Lieutenant General O'Neil told subcommittee Chairman
William Zeliff that the current program is designed to address
the post cold war environment. The program continues within the
financial constraints set by Congress. O'Neil detailed the
existing strategy for the Ballistic Missile Defense Program.
The first priority is Theater Missile Defense. The existing
budget devotes approximately $2.3 billion to Theater Missile
Defense. General O'Neil said that the program builds on
existing systems to provide new defense capabilities as soon as
possible to meet existing threats. New systems and enhancements
are to be added to ensure robust protection.
The second priority is national strategic missile defense.
This program maintains the technological base and continues its
maturation. General O'Neil told the committee that the program
provides for evolutionary contingency deployment options if a
threat suddenly emerges. The General also stated that the
program is concentrating on technologies that will increase the
capabilities and allow the system to be deployed more rapidly
and efficiently.
During the fall of 1995 and early 1996, several
developments occurred regarding the Ballistic Missile Defense
issue. In November 1995, a National Intelligence Estimate (NIE
95-19) was produced which dealt with missile threats to the
Continental United States in the next 15 years. This National
Intelligence Estimate subsequently received much criticism from
Congress and intelligence experts including, R. James Woolsey,
former Director of Central Intelligence.
In December 1995, President Clinton vetoed the original
fiscal year 1996 Defense Authorization Act stating that its
provisions calling for deployment of a national missile defense
system by 2003 would be ``costly'' and that such a deployment
was ``unwarranted.''
In March 1996, the Clinton administration released its
fiscal year 1997 Defense Budget request which called for $2.8
billion for Theater Missile Defense, National Missile Defense,
and the associated support technologies that comprise the
Department of Defense's Missile Defense Program. The
administration's budget request reflected a reduction of more
than 25 percent from the amount authorized for ballistic
missile defense in the fiscal year 1996 National Defense
Authorization Act.
In March 1996, Congressman Bob Livingston (LA) introduced
the Defend America Act of 1996, H.R. 3144, which calls for a
national missile defense system by 2003 to defend against a
rogue missile attack or an accidental launch. Currently, the
Deployment Readiness Program (formerly called the Technology
Readiness Program) would not result in the deployment of an
actual missile defense system because the Program is designed
to support development, within 3 years of core elements of a
nationwide Ballistic Missile Defense. The actual process of
deploying such a missile defense system would take an
additional 3 years, if and when a decision to deploy is made.
In May 1996, the President repeated his assertions that a
national missile defense system by 2003 would be costly and
unwarranted. Among the administration's reasons for reluctance
to support Congressional attempts to mandate a national missile
defense were these: Deployment of an effective national missile
defense system could raise concerns over compliance with the
ABM treaty, and no immediate urgency to the long range missile
attack threat.
As a result of the foregoing events, this subcommittee the
first in what is expected to be a series of hearings on May 30,
1996. In that hearing, the subcommittee explored the rapidly
evolving threat to national security posed by existing or
potential rogue ballistic missile forces, and options for
confronting this risk. The hearing also addressed the costs and
benefits associated with competing near-term BMD options.
b. Benefits.--The investigation into the Ballistic Missile
Defense Program gave the committee timely insights into an
important element of America's national security protection.
Ensuring that this program continues to progress is crucial to
our preparedness against the growing threat of ballistic
missile terrorism. The committee learned a great deal about the
budgetary constraints under which the program is operating, as
well as it's potential for cost effective protection over the
near-, medium-, and long-term.
c. Hearings.--On May 30, 1996, the subcommittee held a
hearing on the Nation's Ballistic Missile Defense System. The
following witnesses offered testimony: Hon. Curt Weldon (PA);
Hon. R. James Woolsey, former Director of Central Intelligence;
Frank J. Gaffney, Jr., president of the Center for Security
Policy; Dr. Keith B. Payne, president of the National Institute
for Public Policy; and Michael Krepon, president of the Henry
L. Stimson Center.
7. National Drug Control Strategy.
a. Summary.--The threats posed by illegal drug use,
especially among the Nation's youth, have continued to grow
since the subcommittee's investigation began in January 1995.
All national studies show a rise in drug use among teenagers.
Both minority and majority members of the subcommittee have
demonstrated a commitment to enhancing the drug control
strategy.
Pursuant to the National Narcotics Leadership Act of 1988
(21 U.S.C. 1501 et seq.), the Director of the Office of
National Drug Control Policy (ONDCP) develops a strategy and
budget for anti-narcotics efforts, including both supply and
demand reduction. In order to evaluate the strategy and find
ways to both improve and supplement in the public and private
sector, the Subcommittee on National Security, International
Affairs, and Criminal Justice held 19 hearings supplemented
with a fact-finding trip to the Caribbean drug transit zone and
a full committee congressional delegation (CODEL) to the
transit and source countries of Mexico, Panama, Colombia,
Bolivia, and Peru. The first five subcommittee hearings and
trip to the transit zone resulted in the March 19, 1996
subcommittee report entitled ``National Drug Policy: A Review
of the Status of the Drug War,'' and are described in an
earlier section of this report. The following is a description
of the other 14 hearings and congressional delegation trip to
Central and South America.
The National Narcotics Leadership Acts requires that the
strategy: ``(A) include comprehensive, research based, long-
range goals for reducing drug abuse in the United States; (B)
include short-term measurable objectives which the Director
determines may be realistically achieved in the 2 year period
beginning on the date of the submission of the strategy; (C)
describe the balance between resources devoted to supply
reduction and demand reduction; and (D) review state and local
drug control activities to ensure the United States pursues
well-coordinated and effective drug control at all levels of
government.'' The oversight and investigation of drug policies
and programs enabled the subcommittee to determine whether the
current strategy and its execution continues to meet these
statutory obligations.
b. Benefits.--In addition to special orders by Members on
the House floor, the creation of counterdrug working groups and
an overall increase of awareness to the Nation's drug problem,
the subcommittee's work also elevated interagency coordination,
and contributed greatly to the advancement of the
appropriations process. The subcommittee Members and staff met
repeatedly with appropriators from each of the major
appropriations subcommittees, as well as the full
appropriations committee. The result was a careful targeting of
additional counternarcotics funds in areas of paramount need.
The hope is that sustained effort in these newly-revitalized
areas will generate results over the short and long-run.
c. Hearings.--(i) General Oversight.--On May 8, 1996, the
subcommittee held a hearing entitled ``Oversight of the 1996
National Drug Control Strategy,'' to hear from then newly-
confirmed Director of the Office of National Drug Control
Policy, General Barry McCaffrey. This hearing was an
opportunity for General McCaffrey to discuss and elaborate on
the President's 1996 National Drug Control Strategy. The 1996
National Drug Control Strategy states certain emphasis, goals,
and budget priorities that are subject to congressional
oversight.
On October 1, 1996, the subcommittee held a second
oversight hearing as a result of whistle-blower information
regarding a secret, Pentagon-commissioned report on the
effectiveness of interdiction in combating drugs and the
ineffectiveness of Clinton's drug treatment strategy. The
hearing, entitled ``Review of Internal Administration Study
Critical of Clinton Drug Policy and White House Suppression of
Study,'' was held to determine why the secret study's results
had not previously been shared with Congress or even other
government drug-fighting agencies. The subcommittee also sought
to find out why analysis did not lead to changes in President
Clinton's National Drug Control Strategy.
The subcommittee reached three basic conclusions from
examining the secret report: (1) Interdiction is a highly
effective method of reducing the drug-using population leading
to the inference that Clinton's deep interdiction cuts have
been devastating to drug availability, potency, price and use;
(2) the administration's heavy emphasis on drug treatment, at
the expense of drug prevention and drug interdiction, has been
a failure notably marked by reliance on a flawed RAND study;
and (3) the Drug Czar's office actively suppressed this report
and ignored its thorough analysis in forming policy.
The study, conducted by the Institute for Defense Analysis
(IDA), a well-respected and independent Pentagon think tank,
refuted the conclusions of the flawed ``Controlling Cocaine''
study released by the RAND Corporation on which the President's
strategy relies. The IDA study tracks close correlations
between major interdiction operations and increases in the
street price of cocaine, as well as availability and use. Based
on this data, IDA revised the RAND estimates of cost-
effectiveness for interdiction compared to treatment and
interdiction was shown to be much more cost-effective than the
RAND study indicated.
The subcommittee heard testimony from the authors of the
study including Messrs. Rex Rivolo, Gary Comfort, and Barry
Crane, and independent experts on research design, including
Tom Snitch. Based on their testimony, the subcommittee
determined that the report was extremely credible and confirmed
their prior findings that interdiction is a cost effective
counter-narcotics approach and Clinton's heavy-treatment
approach has failed. The IDA study confirmed the importance of
the efforts of subcommittee members to increase appropriations
for interdiction activities in the FY 97 spending bills.
In an attempt to uncover the source of suppression, the
subcommittee also called General McCaffrey, the Drug Czar, and
Admiral Robert E. Kramek, U.S. Interdiction Coordinator, who
were involved in the events surrounding the suppression of the
report. While testimony from several witnesses were not
consistent, the subcommittee believes that Admiral Kramek took
the preliminary findings of the report to General McCaffrey in
March 1996. General McCaffrey declined to discuss the findings
with the authors of the report who waited in the hall while
Kramek and McCaffrey discussed the report. According to the
authors, they felt that McCaffrey had dismissed their work out
of hand and treated Kramek dismissively. Testimony received led
the subcommittee to the same belief. At that point, in May
1996, the report entered a seemingly endless process of
revision and redrafting designed to prevent its release.
In the subcommittee's preliminary investigation, it
obtained several memos that passed between the authors of the
studies and various administration officials suggesting
inexplicable alterations in the findings of the document, like
removing the cost-effectiveness comparison and the critique of
the RAND study. The subcommittee believes that these were two
of the most valuable sections of the report and clearly should
have had great impact on forming a viable drug control
strategy; failure to consider this evidence was deemed intent
to support the misguided priorities of the current strategy for
non-policy reasons.
Based on the hearing, the subcommittee requested that
agencies involved in the Drug War keep it apprised of all
emerging research findings that should influence policymaking.
Members of the subcommittee also renewed their commitment to
enhancing interdiction as a vital component of the War on
Drugs.
(ii). Transit Zone Interdiction.--On May 23, 1996, the
subcommittee held a hearing titled, ``National Drug Control
Strategy: The Decline in Interdiction Efforts in the
Caribbean.'' This hearing focused on the Nation's interdiction
strategy in the international narcotics transit zone. According
to U.S. Law enforcement officials, up to 30 percent of the
cocaine entering the United States comes through the Caribbean
section of the transit zone. U.S. officials believe that the
level of maritime activity is increasing. In April 1994, the
executive branch issued the National Interdiction Command and
Control Plan to strengthen interagency coordination. The plan
called for creating several joint interagency task forces made
up of representatives from Federal agencies, including the
Department of Defense (DOD), the Drug Enforcement Agency (DEA),
the U.S. Customs Service (USCS) and the U.S. Coast Guard
(USCG). The various U.S. activities are expected to be
coordinated through the Joint Interagency Task Force East
(JIATF-East) in Key West, FL. JIATF-East was to be supported by
personnel from various agencies.
Witnesses at this hearing included Jess Ford, Associate
Director of International Affairs and Trade Issues, U.S.
General Accounting Office; Admiral Robert Kramek, Commandant,
U.S. Coast Guard; and a hands-on panel of Coast Guard officials
directly involved in drug interdiction. This panel included
Commander Arthur Brooks, Commanding Officer, U.S. Coast Guard
Cutter SENECA; Lieutenant Kristine Horvath, Aircraft Commander,
U.S. Coast Guard Air Station Miami; Lieutenant Glenn Gebele,
Aircraft Commander, U.S. Coast Guard Air Station Clearwater;
Lieutenant Greg Sanial, Commanding Officer, U.S. Coast Guard
Cutter ATTU.
As a follow-up to the May 23d hearing, the subcommittee
conducted another transit zone hearing titled, ``Puerto Rico:
The Rising Drug Threat and Some Recent Successes,'' held on
June 10, 1996. This hearing was held aboard the U.S. Coast
Guard Cutter COURAGEOUS in San Juan Harbor, Puerto Rico, and
focused on the rising drug threat to the United States and
Puerto Rico.
It specifically explored the island's status as a major
thoroughfare into the United States for narcotics, as well as
Governor Rossello's achievements in the current war on drug
trafficking organizations, and the requirements of Operation
``GATEWAY'' and Operation ``LASER STRIKE.''
Curbing the flow of illicit drugs through Puerto Rico would
have a profound effect on the availability of drugs in the
United States. Due to its proximity to both narcotics source
countries and the United States mainland, the island has become
a haven for those trying to escape more heavily funded
interdiction efforts in the Bahamas and at the United States-
Mexican border.
According to the DEA, Puerto Rico, along with the U.S.
Virgin Islands corridor, is the target site of over 26 percent
of all drug ventures. Once narcotics shipments reach the
island, there is no further Customs inspection before the
shipment reaches the United States mainland. The San Juan
Airport has become the largest United States point of entry for
illegal drugs by air.
This hearing also addressed the problems facing the whole
Caribbean region as a drug transit zone. The Puerto Rican State
Government has implemented several initiatives which are
committed to taking quick action against the many drug
trafficking rings that have established themselves on the
island. Included among these programs are the Safe Streets Task
Force, the Most Wanted Task Force, the Money Laundering Task
Force, and the Drug Enforcement Administration Task Force. Each
of these programs works in concert with Federal agencies to
combat the many criminal activities brought to the island by
narcotics trade.
The hearing also addressed Operation ``GATEWAY.'' Launched
on April 15, 1996, Operation ``GATEWAY'' is a Customs
interdiction program aimed at reducing the chances for
successful smuggling in the air and on the seas. ``GATEWAY''
employs an array of sophisticated technology such as cargo
container x-ray systems which Customs officials expect will
greatly reduce the opportunities for undetected drug smuggling
in Puerto Rico and the Caribbean.
Witnesses at this hearing included Pedro Rossello,
Governor, Puerto Rico; Pedro Toledo, superintendent of police
and commissioner of public safety, Puerto Rico; Carlos Vivoni,
secretary of housing, Puerto Rico; Manuel Diaz Saldana,
secretary of the treasury, Puerto Rico; Vice Admiral James Loy,
commander, U.S. Coast Guard Atlantic Area; Harv Pothier;
Director, Air Interdiction Division, U.S. Customs Service;
Felix Jimenez; Special Agent in Charge, Drug Enforcement
Administration.
The subcommittee then conducted a third interdiction
hearing titled, ``Oversight of Federal Drug Interdiction
Efforts in Mexico,'' on June 12, 1996, focusing on the growing
threat posed by increased drug trafficking across the United
States-Mexico border. It also explored the initiatives
currently being enacted to foster enhanced joint efforts
between the two nations.
This hearing revealed findings of a 6 month GAO
investigation into Mexican-United States counternarcotics
efforts. This hearing also examined counternarcotics issues
between the United States and Mexico as well as the extent to
which four Mexican drug trafficking cartels dominate cocaine
transshipment to the United States, and are major suppliers of
heroin, marijuana and methamphetamine.
Today, 400 tons of cocaine enter the United States
annually, 70 percent across the Mexico-United States border;
and 150 tons of methamphetamine are now produced in Mexico.
These facts will be amplified at the hearing. Cross border
shipments of these drugs have increased markedly in the past
several years, while at the same time incidences of drug-
related arrests and confiscations have decreased. In 1995,
Mexican authorities seized half as much cocaine as they did in
1992 and made only a third as many drug-related arrests. This
discrepancy persists despite what appears to be a renewed
commitment by the Zedillo government to address this growing
national security threat to both the United States and Mexico.
Over the past 3 years, the United States played only a
peripheral role in stemming the movement of drugs within
Mexico. Following the 1993 kidnaping of a Mexican national for
trial in the United States, the Mexican Government refused
nearly all United States counternarcotics assistance, and has
restricted the presence of the DEA within its borders.
Consequently, U.S. efforts in the region have been all but
paralyzed. Although the Zedillo government has recently made a
show of force against major trafficking organizations, there
are widespread reports of corruption among the ranks of the
Federal and State police forces, as well as within the National
Institute for Combating Drugs.
The growing influx of narcotics along the U.S. Southwestern
border poses a rising national security threat. The inability
of the Mexican Government to contain the problem underscores
the need for renewed cooperation with United States officials.
Prior to its 1993 decision to assume all costs of the
counternarcotics effort within its borders, Mexico was the
largest recipient of anti-narcotics aid from the United States,
which also provided much-needed equipment and personnel
training support.
The shortage of United States anti-narcotic support
contributed to the deterioration of the situation in Mexico.
With this realization, steps were finally initiated this year
to forge new ties between drug enforcement authorities in the
two governments. In March 1996, The Clinton administration
joined with Zedillo's government to establish a high level
contact group to address the narcotics threat faced by both
nations. Drug control issues have also been assigned elevated
importance at the United States embassy in Mexico City. A key
challenge is the need to strike a balance between restoring
stronger interdiction measures and continuing the free trade
practices introduced through NAFTA.
Witnesses at this hearing included Ben Nelson, Director of
International Relations and Trade Issues, U.S. General
Accounting Office; George Weise, Commissioner, U.S. Customs
Service; Doug Wankel, Chief of Operations, Drug Enforcement
Administration.
(iii). Drug Testing in Corporate America.--The subcommittee
also conducted a hearing on Corporate America's role in the
counterdrug effort and the importance of drug testing on June
27, 1996. This issue is of paramount importance because there
is a serious drug abuse problem in America's present and future
work place. Department of Labor studies have estimated that
drug abuse in the workplace costs American businesses in excess
of $100 billion annually. This affects the employer and
consumer through decreased worker productivity, increased
accidents, poor quality products, and higher medical and
insurance costs. In addition, co-workers of abusers are
unnecessarily burdened by higher medical and insurance
premiums, greater risk of injury on the job (drug-using
employees are 3.6 times more likely to have accidents according
to Strategic Planning for Workplace Drug Abuse Programs,
National Institute on Drug Abuse), and the general disruption
that intoxicated and compromised employees bring to the
workplace.
Witnesses included Mark A. de Bernardo, executive director,
Institute for a Drug-Free Workplace; C.R. Cummings, manager of
labor relations & employment, Chevron; William L. Bedman,
Esquire, assistant general counsel, Brown & Root; and Kevin
Connors, director for Safety and Department of Transportation
Compliance, Waste Management, Inc.
Drug testing offers companies, employers and employees an
excellent means to combat drug abuse. The subcommittee well
understands that drug testing must be done properly and with
full respect for individuals' civil rights. To be effective,
there are several criteria which must be met as a threshold
matter: (1) all testing should be done in accordance with a
written policy which may be reviewed by employees; (2) test
samples should be properly handled and documented; (3) only
certified laboratories that employ scientifically accepted
methods should test; (4) multiple tests and multiple techniques
should be used to assure a positive result; and (5)
confidentiality should be maintained whenever reasonable,
feasible or necessary.
The subcommittee, after extensive review, concluded that
when done professionally and fairly, drug testing is
unintrusive and highly effective, both case-by-case and as a
deterrent to future use. However, drug testing itself is
clearly just one element in drug prevention. It is an important
first step to help businesses move beyond detection, and into
treatment and future prevention through education.
Based on the subcommittee's investigation, subcommittee
Chairman Zeliff introduced H.R. 4017, the ``Drug-Free Workplace
and Public Safety Assurance Act of 1996,'' on August 2, 1996.
This bill would amend the Americans with Disabilities Act of
1990 and the Rehabilitation Act of 1973 to exclude individuals
with records of engaging in the abuse of drugs or alcohol from
protection under the Americans with Disabilities Act regarding
``safety-sensitive'' employment functions (any job in which an
employee could significantly contribute to an accident
resulting in loss of human life, serious bodily injury, or
significant property or environmental damage). Currently,
former drug addicts and alcoholics are considered ``disabled,''
and therefore receive protection from discrimination even if
they pose a risk to the general public. Subcommittee Chairman
Zeliff's bill would properly narrow the definition of
``disabled'' and remove former drug abusers from this
classification. This would (1) prevent suits against employers
who, in good faith, transfer or remove individuals from
``safety-sensitive'' positions that have a provable medical
history of extensive illegal drug abuse or alcoholism, and (2)
allow employers to consider former drug use as a condition for
denial of employment for ``safety-sensitive'' positions, such
as airline or oil tanker pilots.
(iv) Field Hearings.--Members of the subcommittee also
traveled to several regions of the country to examine the
counter-narcotics efforts by communities, State, and local law
enforcement agencies, as well as cooperation of those groups
with local offices of Federal counter-drug agencies.
Taken as a whole, these field hearings generated two basic
conclusions. First, the most successful way to combat drugs is
for whole communities to become engaged in tackling the issue
and to work in partnership or collegially. This includes
families, schools, law enforcement, business, church,
synagogue, and other community leaders. Second, controlling
drugs at the border and at their origins is essential to
combating their abuse, and to limiting the violence associated
with their use and distribution, especially in the southwest
border States.
The subcommittee held three field hearings in the Midwest:
one in Fort Wayne, IN on June 24, 1996, entitled ``Report from
the Front Line: Fort Wayne's Battle Against Drugs''; the second
in Elgin, IL on June 24, 1996, entitled ``Report from the Front
Line: Chicago's Land Area's Battle Against Drugs''; and the
third in Lansing, MI on September 3, 1996, entitle ``Report
from the Front Line: Michigan's Battle Against Drugs.'' In
these Midwestern States, testimony made clear that border
activity has a dramatic effect on drug-related efforts in the
schools, communities, and homes of America's ``heartland.''
According to Harold Wankel, of the Drug Enforcement Agency,
drug traffickers move their illegal cargo over the border in
Texas and Arizona, bring it through Fort Wayne and on to
Chicago and Detroit. This trafficking pattern has had serious
adverse impacts in cities like Fort Wayne where the drug
problem was fairly mild only a few years ago and has become a
crisis in the last 2 years with soaring levels of drug-related
gang violence. Controlling drugs at the border is one key
component of reducing their insidious effects in the Midwest.
In the West and Southwest, the subcommittee held field
hearings in Los Angeles and San Lusi Obispo entitled ``Report
from the Front Line: The Drug War in Hollywood'' and ``Report
from the Front Line: The Drug Battle in California'' on
September 21 and 23, 1996, respectively, and in Phoenix, AZ on
October 10, 1996, entitled ``Report from the Front Line: Losing
America's Drug War, `Just Say No' to `Just Say Nothing.' '' The
first hearing in this area covered a topic of growing
significance and concern, namely Hollywood's ``glorification,''
promotion, and general influence on youth drug use. The
subcommittee heard testimony from several actors and producers
who have been fighting what they describe as a ``losing
battle'' to reduce the portrayal and promotion of drug use and
violence in contemporary American films. According to these
witnesses, including Dee Wallace Stone, the film business elite
are convinced that drugs and violence ``sell.'' Until they are
brought face-to-face with the violence and tragedy this
approach creates, Hollywood will remain aligned against
producing more positive, family-oriented entertainment.
The hearings in San Luis Obispo and Phoenix focused on law
enforcement, education, and treatment. Based on testimony from
leading local officials in the FBI, DEA, Customs Service,
Immigration and Naturalization Service, National Guard and
State and local police, the subcommittee identified weaknesses
in the sharing of intelligence and cooperation between these
groups. The subcommittee was encouraged with the success of the
High-Intensity Drug Trafficking Area (HIDTA) initiative which
has enhanced cooperation and intelligence sharing, especially
in Arizona. The subcommittee also learned that the most
effective treatment programs are ``faith-based'' and receive no
government funds. As witnesses testified, part of the success
of these programs appears to be their reliance on the
community, rather than government, for support. This community
self-reliance allows programs to grow responsively and thus
benefit the community rather than becoming untargeted,
bureaucratic, or a nuisance to it. Awareness of the programs
and substantial success rates have resulted.
The subcommittee conducted its final field hearing in Lake
Mary, FL, a suburb of Orlando on October 14, 1996. The hearing
was entitled ``Report From the Front Line: The Drug Crisis in
Central Florida.'' Several years ago, Orlando was only a
transshipment point for drug traffickers; in the past year,
however, it has become a major distribution point. Heroin-
related deaths of several area teenagers have motivated the
community to address this problem conscientiously and together.
Again, the subcommittee found that ``faith-based,'' non-
government treatment programs had the greatest impact. The
subcommittee also received persuasive testimony on the
importance and challenges of fighting drugs in the schools. In
a nutshell, school officials are extremely limited by current
regulations and laws in the actions they can take to uncover
youth drug use and drug distribution in the schools.
(v). Current Availability and Drug Use Trends.--The
subcommittee held two hearings on the magnitude and growth of
the drug problem: ``Heroin: A Re-Emerging Threat'' on September
19, 1996; and ``The Epidemic in Teen Drug Use'' on September
26, 1996. Both hearings were held after the release of
significant 1996 studies on the magnitude of drug use. These
studies included the National Household Survey, the Drug Abuse
Warning Network (DAWN) report, the 1996 PRIDE Survey, and a
study by the Center on Addiction and Substance Abuse at
Columbia University gauging attitudes of parents and youth
toward drug use. All of the studies point to an alarming
increase in drug use by youth in the last 4 years, and
correlate disturbingly with rising violent, drug-related youth
crime.
At the heroin hearing, the subcommittee learned that heroin
has roared back as a major threat to America's youth. The new
heroin is both more potent and cheaper than in the 1960's and
1970's, when heroin made a major appearance on the national
scene. New international heroin trafficking routes have also
appeared. Today, heroin comes not only from Southeast Asia, but
from Latin America as well. Indeed, 62 percent of the heroin
entering the United States now originates in, or passes
through, Colombia. The Colombian cartels have begun to use
their increasingly secure cocaine distribution network to
market heroin, in part accounting from the dramatic upsurge in
use.
Throughout 1996, the subcommittee investigated the
administration's lack-luster response to the new usage patterns
for heroin. The administration released their heroin strategy
more than a year after it was promised by President Clinton;
while it was promised in 1993, the Clinton anti-heroin plan
only appeared at the start of the Presidential primary season
on November 29, 1995. That strategy has yet to be implemented,
or to have any implementing guidelines issued to support it.
Accordingly, little progress had been made on any of the
ambitious goals articulated therein. Finally, a GAO report
commissioned by the subcommittee identified many emerging
problems associated with enforcement in Southeast Asia, and the
general failure of the administration to respond to them.
At the subcommittee's hearing on teen drug use, testimony
was heard from organizations that conducted leading surveys on
teen drug abuse, as well as from individuals involved in
preventing drug abuse among America's youth. Expert witness
testimony clarified the already alarming picture presented by
the studies, and expounded the difficulties in delivering a no-
use anti-drug message against the backdrop of a President,
media, and parents, who seem ambivalent. The subcommittee also
discussed H.R. 4016, the Drug Free Schools Reform Act of 1996,
introduced by subcommittee Chairman Zeliff which was designed
to help correct this problem by eliminating fraud and abuse in
the Drug Free Schools program, while insuring that all moneys
spent under the program support a clear, no-use message.
(vi). Congressional Delegation to Transit and Source
Countries.--A delegation of committee and subcommittee members
participated in a counternarcotics trip to the major transit
and source countries of Mexico, Panama, Colombia, Bolivia and
Peru from April 8-15, 1996. Members met with top
counternarcotics officials in each country, including the
Presidents of Mexico and Peru, the chief of the Colombian
Police (who has lost more than 3,000 officers), Colombia's top
counternarcotics prosecutor (who has indicted the top Cali drug
kingpins, seven cabinet officers and over 100 members of the
Colombian Congress), top Bolivian officials and DEA agents in
the field, Bolivian military counternarcotics leaders, and
Peru's air force and marine personnel, including generals and
pilots responsible for Peru's highly successful force-down/
shoot-down policy (a policy that has virtually arrested air
traffic in cocaine from Peru to Colombia, reduced coca prices
ten-fold, and resulted in 20 percent to 40 percent of the coca
fields being abandoned in Peru).
Despite cables indicating 22 deaths from terrorist bombings
on April 10, 1996 in Colombia, and discovery of dynamite at
Colombia's Supreme Court also on April 10, CODEL Members stood
by their commitment to meet with the Colombian Chief of Police,
General Serrano, and top counternarcotics and anti-corruption
prosecutor, Prosecutor General Valdivieso on April 11.
In Bolivia, Members traveled by C-130 military transport to
a deep jungle military base camp in the Chapare region, where
most of the coca leaf is grown. After classified briefings on
the status of counternarcotics efforts in this major region of
cocaine base production, Members boarded UH-1H Huey helicopters
and flew to the location of a remote drug lab and coca fields,
where they observed first-hand the destruction of the drug lab
by UMOPAR (elite Bolivian counternarcotics troops) and observed
destruction of clandestine coca fields, and seed beds.
The CODEL's mission was essentially two-fold: Members
sought to observe how effective the source and transit country
programs were, including what resources in-country teams needed
to better implement U.S. counternarcotics strategy; and the
CODEL sought to deliver strong messages to each of the
respective governments on the U.S. commitment to
counternarcotics and the commitment expected of these countries
by the United States, as well as our appreciation for their
efforts where that was appropriate. Both missions were
accomplished, as reflected not only in subsequent subcommittee
work, but in the total 1996 anti-drug appropriations package,
and such subsequent events as Peruvian President Fujimori's
first visit to the United States in 1996.
On April 8, CODEL Members flew to Mexico City, where they
were briefed by Ambassador Jones on counternarcotics efforts
underway in Mexico. Members delivered the strong message to
Mexican President Zedillo and Members of the Mexican Congress
that counternarcotics efforts must become a top priority with
the Mexican Government, and close cooperation with United
States is vital for both nations. Joined by Senator Paul
Coverdell, Members spent 2 hours meeting with the Mexican
Congress; the American delegation expressed frustration at that
nearly 70 percent of the cocaine entering the United States
comes across the United States-Mexican border, along with
significant quantities of methamphetamine, heroin, and
marijuana.
The CODEL confirmed that counternarcotics is now a top
objective of the United States Embassy in Mexico, which it had
not been until very recently, and further confirmed that U.S.
policy us directed at four subsidiary priorities: (1)
apprehending heads of the highly violent Mexican drug cartels;
(2) encouraging Mexico to enact money laundering, Anti-
Organized Crime, conspiracy, criminal forfeiture, confidential
informant and wiretap legislation similar to United States
laws; (3) institution building to stem the corrupting influence
of narcotrafficking; and (4) continued narcotics crop
eradication and operational counternarcotics law enforcement.
The CODEL was pleased to hear President Zedillo and his
Foreign Minister, Jose Angel Gurria, state that
narcotrafficking is ``Mexico's number one national security
threat.'' Both the President and his Foreign Minister expressed
a personal commitment to fighting the narcotraffickers with
U.S. cooperation.
On April 9, Members flew to Panama and the United States
Southern Command (SOUTHCOM), which plans and coordinates U.S.
counternarcotics strategy for the source countries. Members
discussed potential vulnerabilities in the War on Drugs with
the U.S. Ambassador and U.S. Officials at SOUTHCOM. Meetings
with Panama's Vice President and National Security Advisor
reinforced the vulnerability of Panama as a major money
laundering and drug transit route, especially at its border
with Colombia, which remains essentially uncontrolled. A
briefing was conducted on the 1995 operation called GREEN
CLOVER, which featured a highly successful regional
coordination counternarcotics effort run by SOUTHCOM.
In Bogota, Colombia, the Members met with U.S. Ambassador
Frechette, Prosecutor General Valdivieso, National Police Chief
Serrano, Defense Minister Esguerra and Commander of the
Colombian Armed Forces Admiral Delgado.
Members expressed clear appreciation for Colombia's recent
anti-Cali efforts, particularly those of General Serrano and
Prosecutor General Valdivieso, and discussed the status of
current and future counternarcotics cooperation and efforts.
Members focused on ways to improve United States and Colombian
cooperation and coordination in destroying the Colombian drug
trafficking organization, particularly the Cali cartel, which
ships cocaine and heroin to Mexico and the United States.
Members also inquired about, and expressed concern about, a
longstanding (October 1995) request for replacement helicopters
needed by the Colombian National Police (replacing two shot
down or destroyed in crashes).
On April 12, the congressional delegation arrived in Santa
Cruz, Bolivia. Bolivia is the second largest producer of coca
and cocaine base, which is then generally processed in Colombia
(into cocaine HCL, cocaine) for transshipment (through Mexico
and the Caribbean) to the United States. Colombian cocaine has
been found in quantity in every city in the United States. This
cocaine originates with the coca and cocaine base created in
Bolivia's Chapare region and in the Peruvian Andes mountains,
largely the Upper Huallaga Valley.
The delegation traveled to a key jungle base camp manned by
DEA and Bolivian elite counternarcotics troops (UMOPAR) in
Chapare region of Bolivia. Field commanders briefed the Members
on the strategy being employed to find and destroy clandestine
coca labs, eradicate illegal coca fields, and spur alternative
crop development.
Members were able to see where major coca fields had been
eradicated and where others were growing. At the same time,
Members could see evidence of successful alternative
development, in particular the increased production of bananas.
Members then traveled with the UMOPAR, DEA representatives and
the U.S. Ambassador to the site of a jungle cocaine drug lab
and maceration pit discovered the day before. In this remote
location, Members saw firsthand the coca leaves, chemicals and
other implements used by the cocaine base producers. With the
Members present, the military destroyed the cocaine lab and
maceration pits, and then destroyed adjacent coca fields and
coca seed beds.
On April 13, the Members left Santa Cruz, Bolivia for Lima,
Peru. Peru is the single largest coca-producing country in the
world, responsible for two-thirds of all coca production
worldwide and 80 percent of the cocaine that reaches the United
States. In Lima, the delegation met with President Alberto
Fujimori, becoming one of the most recent congressional
delegations to meet with Peru's President in many years. The
delegation expressed appreciation for Fujimori's successful
efforts to cut off the so-called ``Peru-to-Colombia air
bridge,'' the route by which narcotraffickers were--until very
recently--flying the cocaine base to Colombia. The Peruvian
President's conviction that this link had to be broken, and his
implementation of a force-down/shoot-down policy (with
carefully identified warnings, chances to come to ground,
signals and radio contacts prior to shoot down), has been
highly successful.
This U.S. counternarcotics CODEL generated enormous insight
into our counternarcotics strategy's strengths and weaknesses,
operational strengths and weaknesses, coordination problems and
gaps, specific in-country resource needs, various national
convictions and attitudes toward fighting and winning this war,
and the extreme circumstances and dangers under which all those
(including American government personnel) pursing our joint
strategy function on a day-to-day basis.
Specific facts and recommendations resulting from the CODEL
include:
1) A higher degree of cooperation and coordination in
counternarcotics efforts is badly needed with Mexico. However,
recent and foreseeable events have the potential for making a
marked difference in addressing what has now become Mexico's--
and our--No. 1 national security threat;
2) Mexico is now acknowledging that drugs present the
``number one national security threat'' to that nation;
3) Mexico's President and Foreign Minister appear ready to
work more closely with the United States in a number of
specific areas which will assist in combating the rise of the
four main drug cartels in Mexico;
4) The CODEL confirmed that counternarcotics is now a
priority of the United States Embassy in Mexico, focusing on
four main objectives: a) apprehending heads of four highly
violent Mexican drug cartels; b) encouraging Mexico to enact
money laundering, anti-organized crime, conspiracy, criminal
forfeiture, confidential informant and wiretap legislation
similar to United States laws; c) institution building to stem
the corrupting influence of narcotrafficking; and d) continued
narcotics crop eradication and operational counternarcotics law
enforcement;
5) Mexico objects to the certification process, despite
having been fully certified this year. This objection is deeply
rooted in apprehensions about their northern neighbor;
6) Mexico's Congress and Administration want closer direct
ties with the U.S. Congress, to facilitate both communication
and policy coordination and understanding;
7) Panama's current position of transition, particularly
with respect to U.S. base hand-overs, is presenting the country
with a serious dilemma. Against the backdrop of rising money
laundering by Colombian drug traffickers in Panama
(particularly in projects such as high-rise construction) and
nearby border incursions from criminal elements in Colombia,
there is a view that Colombia's narcotraffickers could increase
their presence in Panama if coordinated regional action is not
more forthcoming and vigorous. It is a critical thing for the
United States to stay engaged and to provide needed
counternarcotics and other assistance to Panama;
8) Colombia's National Police, Prosecutor General and
Defense Chief all displayed their clear and convincing
commitment to the drug war, and creative new thinking in ways
to increase the pressure on the Cali Cartel and others. Clear
U.S. appreciation for the commitment of the Police and
Prosecutor is deserved, although the Nation's constitutional
crisis at the very top was also evident. Narcoterrorism remains
a clear problem, and there is concern that the U.S. commitment
in-country to this mission must remain strong to fight these
two closely allied elements of terrorism and narcotrafficking.
Particular resource needs in-country were discussed. Particular
funding priorities were also discussed, and will be explored
further. The need, for example, for replacement helicopters--
still inexplicably delayed by the Department of State--was a
matter of shared and serious concern;
9) Bolivia's UMOPAR and in-country team, especially DEA and
others on the front lines, was in considerable need of support
and seemed a victim of the phenomenon that ``Washington often
punishes those who effectively do more with less.'' This
impression was compounded by basic observation in the Chapare
of the obstacles facing lab identification, crop eradication,
narcoproducer apprehension, UMOPAR training and support,
attitude change with respect to coca and alternative crop
production. Specific resource needs were discussed--as they
were with each in-country team--and were openly weighed against
the results being shown. Regional coordination--and the need
for more of it--was voiced by those in every country; and
10) Peru's air interdiction and riverine efforts in the
Central Huallaga Valley, and the United States presence that
has assisted in these efforts, need greater support. As with
Bolivia and Colombia, near heroic efforts are being shown by
those on the ground and in the local and United States
counternarcotics teams. These efforts should receive needed
resources, particularly now, with President Fujimori's current
political will and support. These include clear needs for
consistent, adequately funded counternarcotics and alternative
crop development programs.
Perhaps more than any other recommendations out of this
trip three elements stand out: First, our source and transit
country interdiction, overall counternarcotics and alternative
crop development efforts must be consistent over the long-term.
There can be no more, for example, halting and reprogramming of
key alternative development assistance (as has occurred in the
past 3 years); no more failure to provide key support
assistance to facilitate programs known to be successful when
properly and consistently funded.
Second, these programs, while perhaps subject to earlier
coordination or management problems, are now clearly making a
difference and are positioned to establish significant,
increasingly permanent gains--in population attitudes,
apprehensions and prosecutions, narco-organizational
destruction, crop eradication, air interdiction, riverine
interdiction and obtainment of overall counternarcotics aims.
Third, for a small amount of moneys for police training,
air wing operations and other counter-narcotics initiatives, we
can and must end the massive flow of drugs to our Nation.
8. Department Of Defense Bulk Fuel: Appropriations vs. Usage.
a. Summary.--The Department of Defense (DOD) has
consistently requested and received excessive funding for fuel
products. For a number of years, DOD's funding requests have
been significantly in excess of both anticipated and actual
needs. For example, for fiscal year 1996, DOD requested $4.01
billion to buy fuel from the Defense Fuel Supply Center (DFSC),
which is the central DOD component that supplies fuel to all
the services. However, the DFSC estimated that the services
would need to purchase only $3.57 billion worth of fuel in FY
1996, leaving the additional $440 million as ``extra'' money
which DOD could divert to other expenditures, such as
administrative costs, property management and contingency
operations. Similarly, the General Accounting Office (GAO) has
estimated that for fiscal year 1997, DOD's $3.796 billion
request for fuel is excessive by $183 million. While it may be
a positive sign that the predicted overage is smaller for FY
1997 than it was for FY 1996, the amount of extra funding is
still substantial.
DOD has attempted to justify its large bulk fuel funding
requests by explaining that the services are often faced with
new missions and other unanticipated contingencies, which
require significant expenditures by DOD. However, these new
missions and contingencies are supposed to be funded by
supplementary appropriations--and not by ``extra'' money in
certain DOD accounts--so that Congress has firm control over
the appropriations process. Still, DOD contends that sometimes
supplementary appropriations do not occur in a timely and
sufficient manner.
The larger point, however, is that when DOD develops the
habit of requesting money for one purpose and then diverting it
to another, it is usurping the power of Congress to appropriate
funds. DOD may request additional funds to cover the cost of
unanticipated contingencies, or for expenses which it knows
Congress will approve of in order to spend the money on
something that Congress might not approve; however, in either
case, Congressional oversight and control over the public purse
is being thwarted. This lack of oversight and accountability
can easily lead to significant waste of taxpayer dollars.
The example of bulk fuel spending is repeated in many other
areas within the $81 billion fiscal year 1996 Operations and
Maintenance (O&M) budget (almost a third of the entire defense
budget). It covers everything from the training of tank
battalions to the running of day care centers, and is a
particularly ``flexible'' source of funding within DOD.
b. Benefits.--If it is just a matter of DOD using faulty
accounting methods to put together its budget request, then
those methods must be revised. If, on the other hand, this over
budgeting is intentional, then we must reform the DOD budgeting
process to insure greater honesty and accountability. More
generally, responding to heightened congressional scrutiny, the
GAO has found that within the O&M accounts, the Army and the
Air Force consistently request excess funding for combat-
readiness-related purposes, yet actually spend the money on
administrative costs and infrastructure expenses. The GAO was
unwilling to speculate as to whether or not such
miscalculations were intentional or merely accidental.
For example, the Navy was consistently miscalculating
future fuel requirements because it based those requirements on
average fuel consumption over 4 years. Because the Navy
downsized from over 500 ships to about 350 in the last 6 years,
the estimate was overstated. To correct this, the Navy will now
calculate future requirements based on the previous 3 years'
usage. Furthermore, DOD contends that the lengthy request and
appropriations process makes accurate estimations extremely
difficult. DOD witnesses maintain that budget adjustments
during the course of a fiscal year are understandable, due to
unpredictable military operations, a desire to provide budget
flexibility to field and base commanders, and uncertainty
surrounding supplemental appropriations.
It is clear and indisputable that, with DOD budgets
shrinking in recent years and the number and variety of DOD
missions continuing to increase, every dollar should be
appropriated and spent efficiently in accordance with the
direction of Congress. There is no room for padding of accounts
within the O&M budget. Improvements can only enhance the
security of our Nation.
c. Hearings.--``Department Of Defense Bulk Fuel:
Appropriations vs. Usage,'' July 30, 1996. Sharon A. Cekala,
Associate Director, Military Operations and Capabilities
Issues, National Security and International Affairs Division,
and Michael J. Curro, Assistant Director, Budget Issues Area,
testified for the General Accounting Office. These witnesses
testified that extra money is consistently requested for
Purpose A, and then diverted to Purpose B. They referred to
specific examples, such as the bulk fuel account, the operating
tempo (optempo) account, from which the Army diverted one-third
of its $3.6 billion combat training budget to other purposes,
(e.g., base operations and real property maintenance), during
fiscal years 1993 and 1994, and the depot maintenance account.
In the later area, the Army and Navy requested $418 million
more--and received $838 million more--than they executed for
depot-level maintenance in fiscal year 1993 and 1994.
9. Oversight of the National Aeronautics and Space Administration.
a. Summary.--The subcommittee conducted an investigation of
the National Aeronautics and Space Administration's
infrastructure ``downsizing'' efforts. In the early 1990's,
NASA infrastructure supported an agency with a projected annual
budget of more than $20 billion by fiscal year 2000. Yet, over
the last few years, the agency has been repeatedly directed to
reduce its future years' budget levels: In the fiscal year 1994
budget request, NASA's funding for fiscal year 1994 though
fiscal year 2000 was decreased by 18 percent, or $22 billion.
In the fiscal year 1995 budget request, total funding for NASA
was reduced again by almost 13 percent, or another $13 billion.
And in fiscal year 1996, NASA's projected budget through fiscal
year 2000 was lowered an additional 5 percent, or $4.6 billion.
In response to these early budget reductions, NASA
initially focused on adjusting programs (stretching out,
reducing the scope, or terminating existing efforts and/or
postponing new initiatives). However, after the fiscal year
1996 budget request, NASA Administrator Dan Goldin announced
that the agency would compensate the budget shortfall by
reducing infrastructure, including consolidating and closing
facilities. In addition, NASA planned to reduce its use of
support contractors and decrease its workforce to about 17,500
by the year 2000, calling for its smallest workforce since the
1960's. NASA also set a goal of decreasing the current
replacement value \61\ of its facilities by $4 billion (25
percent) by the end of fiscal year 2000. By all indications,
current facilities reduction plans will not meet NASA's
reduction goal or even yield substantial cost reductions. In
addition, many of NASA's closure and consolidation efforts have
lacked objective, well-supported decisions and not included
sufficient consideration of reasonable alternatives.
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\61\ Current Replacement Value is the acquisition cost of
facilities, excluding land, plus the cost of collateral equipment and
incremental book value changes escalated to the current year using a
20-city average cost index for building.
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The General Accounting Office (GAO) has found that NASA
personnel in identifying, assessing, or implementing some cost-
reduction opportunities have (1) overlooked larger potential
cost-reduction options; (2) limited the scope of consideration
for consolidation; (3) performed poor initial cost-reduction
studies; (4) made inappropriate closure recommendations; and
(5) substantially overstated cost-reduction estimates. GAO has
also identified NASA's failure to decrease its current value
replacement and lack of progress in DOD and NASA cooperative
efforts. The subcommittee and GAO acknowledge that
environmental clean-up costs could affect facility disposition
efforts.
In GAO's report,\62\ it has recommended that NASA conduct
an objective review of network consolidation. NASA agreed that
an independent group would conduct the review and decided that
its telecommunications experts would not participate in the
review because they have a ``biased'' perspective.
---------------------------------------------------------------------------
\62\ Telecommunications Network: NASA Could Better Manage Its
Planned Consolidation (GAO/AIMD-96-33, Apr. 9, 1996).
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In June 1995, NASA teamed up with DOD to begin studying how
the two agencies could reduce their operations costs and
increase mission effectiveness and efficiency. These study
teams began work in September 1995 in seven areas. GAO
monitored the groups progress in three areas--major facilities,
space launch activities, and base/center support and services.
Both the major facilities and space launch activities teams
were to assess facilities' utilization and recommend potential
consolidation and closures. Neither team made such
recommendations nor identified cost reductions in their April
1996 briefings to the Aeronautics and Astronautics Coordinating
Board. However, they did identify barriers to increased
cooperation and coordination which include conflicting goals
and differences in cost accounting systems, practices and
standards. Another significant barrier they identified is that
each NASA and DOD program was protecting its ability to
maintain technical expertise and competence, i.e. the ``old
paradigm.''
The base/center support and services team did examine eight
NASA centers and one test facility geographically near DOD
installations and reported finding over 500 existing support
arrangements and identified additional cooperative
opportunities. However, barriers to the joint support
arrangement were cited, including different negotiated wage
rates and possible complications in existing procurement in
small and disadvantaged business set-aside programs. Additional
work will continue and a joint DOD-NASA report is expected to
be released in the near future.
If NASA is to remain within its budget constraints and
downsizing goals, NASA must institute major changes in how it
conducts consolidation studies and implements its downsizing
plans. To maximize its infrastructure cost-reduction
opportunities, NASA needs to ensure that its consolidation and
closure decisions are well supported, with an adequate balance
of expertise and interests on study teams and a fair and
thorough consideration of reasonable alternatives.
b. Benefits.--The subcommittee's review of major management
issues at NASA focused attention on significant weaknesses in
the agency's infrastructure downsizing efforts, which will
require a long-term commitment and a sustained effort to
correct. Throughout its year-and-a-half-long investigation, the
subcommittee has exposed a number of problems in the National
Aeronautics and Space Administration's downsizing efforts.
Three GAO reports \63\ resulting from the subcommittee's
review, found a number of deficiencies in NASA's efforts.
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\63\ Telecommunications Network: NASA Could Better Manage Its
Planned Consolidation (GAO/AIMD-96-33, April 1996); NASA Chief
Information Officer: Opportunities to Strengthen Information Resources
Management (GAO/AIMD-96-78, Aug 1996); NASA Infrastructure: Challenges
to Achieving Reductions and Efficiencies (GAO/NSIAD-96-187, Sept 1996).
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In this time of shrinking budgets, it is important to
ensure that NASA's programs are well-managed and that each tax
dollar is spent wisely. The subcommittee's oversight has
strongly encouraged NASA management to review the process by
which it was downsizing infrastructure and led to a candid
recognition of these problems by Administrator Goldin and he
promised to take corrective action.
c. Hearings.--On September 11, 1996, the subcommittee held
a hearing entitled, ``Oversight of NASA's Infrastructure
Downsizing Efforts.'' Testimony was received from NASA
Administrator Daniel S. Goldin, NASA Inspector General Roberta
Gross and General Accounting Office personnel. This hearing
examined those deficiencies in NASA decisionmaking process
found in our investigation and attempted to address other
problems that NASA management is encountering.
10. INS.
INS Citizenship USA Program.
a. Summary.--An investigation of the Immigration and
Naturalization Service's (``INS'') Citizenship USA (CUSA)
program has uncovered a pervasive and alarming pattern of
election-year fraud and abuses within the INS' naturalization
process.
CUSA was designed to enlarge and accelerate the INS'
naturalization process from August 31, 1995 through September
30, 1996. INS statistics suggest that during that period INS
almost reached its stated goal of naturalizing approximately
1.3 million new citizens. This represents roughly four times
the annual average of naturalization from 1990 through 1994,
and triple 1995's total of 450,000. INS efforts focused on five
major cities--Los Angeles, San Francisco, New York City,
Chicago and Miami--while affecting the naturalization process
in smaller cities throughout the United States.
Beginning in May 1996, media reports began alleging that
the CUSA program was politically motivated and rife with fraud
and abuse, a vehicle used by the Clinton administration to
naturalize 1.3 million people who, given their geographic
location and ethnicity, were considered likely Democratic
voters in 1996. Various reports argued that CUSA focused on the
five cities chosen because they were located in the swing
States of California, New York, Florida and Illinois, whose
electoral college tallies would be critical to victory in the
1996 Presidential campaign. Further, they alleged that this
enormous and precipitous influx of applicants for
naturalization was made possible only by easing dramatically
the legal and procedural requirements long in place to
safeguard the process.
In a July 9, 1996, letter to INS Commissioner Meissner,
subcommittee Chairman Zeliff requested certain information and
documents regarding CUSA be provided to the subcommittee by
July 18, 1996. On July 17, 1996, INS informed Representative
Zeliff that it would be unable to respond to his request until
after Labor Day but declined to provide any justification for
non-production. Representative Zeliff reiterated his request
and INS grudgingly responded to his inquiries and produced some
30,000 pages of documents from INS headquarters and field
offices throughout the country beginning in August 1996. No
confidentiality provisions were attached to any of this
material.
While INS headquarters was providing an official response
to subcommittee Chairman Zeliff, numerous INS employees nation-
wide began contacting the subcommittee on a confidential basis.
These ``whistle blowers,'' working in INS offices in Los
Angeles, San Francisco, San Jose, Las Vegas, Denver, Dallas,
Oklahoma City, Chicago, Miami, New York City, Arlington, VA,
and Washington, DC, offered disturbing information and
corroborative documents regarding CUSA program abuses. One and
all were outraged by politically-motivated fraud and abuse.
They provided the subcommittee with a detailed picture of
CUSA's operations across the country.
INS and the Clinton administration consistently have
maintained that CUSA was nothing more than a timely and
efficient response to a growing backlog of citizenship
applications which only coincidentally ended on September 30,
1996, near the close of voter registration in many States. The
administration attributed the increase in applications
primarily to the fact that: (1) a large number of formerly
illegal aliens, granted amnesty and permanent resident status
under the Immigration Reform and Control Act of 1986 recently
had become eligible to apply for citizenship; and (2) many
long-term resident aliens perceived California's Proposition
187 and other proposed reforms as ``anti-immigrant'' and
decided to become citizens to preserve their rights.
In fact, INS documents and information indicated that INS
was doing much more than reducing its backlog of applications.
Beginning in FY 1995, and on an even greater scale in FY 1996,
INS actively solicited applications in certain communities and
geographic areas. The majority of solicitations was conducted
through ``community-based organizations'' (CBOs), most of which
were Democratic Party affiliated (or leaning) advocacy groups.
The CBOs generated massive numbers of citizenship applications
within their respective communities: 60 percent of citizenship
applications handled by the INS in Chicago and some 700,000 of
the 1.3 million citizenship applications received by the agency
during FY 1996. Some solicitations were done through the mail.
INS also changed its method of calculating the application
backlog. While applications previously were counted as part of
the backlog only after they were logged into the agency's data
files, they were counted as soon as they were received in the
mail under CUSA. This single accounting change increased the
INS' backlog by 100,000 to 200,000 applications.
The Vice President's Office (which began playing an active
role in CUSA by early 1996) and INS and CUSA articulated speed
and numbers as paramount goals. In an effort to achieve these
goals, many longstanding legal and procedural safeguards of the
naturalization process were deliberately discarded or ignored.
While a comprehensive listing of CUSA's fraudulent practices is
beyond the scope of this report, examples include:
Every applicant for citizenship is required by
law to undergo a criminal record check to establish the
good moral character required for citizenship. The FBI
conducts these checks after receiving applicant
fingerprint cards from INS. Under CUSA, however, INS
refused to allow sufficient time for routine FBI
background checks; thus INS had no opportunity to
review ``positive'' identifications of applicants with
criminal histories which automatically or otherwise
might disqualify them for citizenship. Subcommittee
examination of more than 20,000 criminal histories
(from among more than 60,000 such histories) suggest
that tens of thousands of people granted citizenship
under CUSA were not legally entitled to it and many
should have been deported.
Tests on the English language and American
history and government, which applicants must pass to
win citizenship, were ``dumbed down'' until they were
virtually fail-safe. Even so, rampant cheating was
allowed, even encouraged, by INS-licensed test
administrators. Convincing evidence indicate that tens
of thousands of people who could not speak or
understand a word of English paid hundreds of dollars
to ``pass'' the English and civics test, and were then
granted citizenship. Documents establish that INS was
aware of this fraud for more than a year, but allowed
it to continue in order to ``keep the numbers up.''
INS citizenship examiners, also called
District Adjudication Officers (DAOs) were pressured to
ignore evidence of welfare fraud, tax delinquency,
failure to register for Selective Service, non-payment
of alimony or child support, extensive travel abroad,
and other illegalities and irregularities which legally
preclude the granting of U.S. citizenship.
Even after the INS hired a thousand new DAOs
nationwide, experienced and new DAOs were forced to
work mandatory overtime, including evenings and
weekends, for many months, rewarded for ``high
production,'' and punished, harassed or removed for
opposing or delaying applications, or voicing concerns
about expedited procedures.
Most of the new DAOs were unqualified
temporary employees, hired so quickly they did not go
through required background investigations or receive
proper job training.
Personnel and resources were stripped from
other INS divisions to accommodate the politically-
driven acceleration. Legalization, Investigation,
Asylum, Deportation, and Border Patrol officers were
diverted from essential duties to assist in CUSA
processing before September 30, 1996. This severely
hindered INS' enforcement functions.
Naturalization swearing-in ceremonies became
so large and frequent that in some cases, control over
tens of thousands of green cards and naturalization
certificates was lost, creating a lucrative black
market for those documents.
Finally, naturalization was linked closely to
voter registration. New citizens immediately were
registered to vote. Democratic Party-affiliated CBOs
provided volunteer clerical services for the
naturalization and voter registration processes in
direct violation of the Federal Anti-Deficiency Act.
Overall, advocacy groups with close Democratic Party
ties blatantly were favored over other CBOs.
Naturalization Testing Fraud.
The subcommittee has focused on naturalization testing
fraud among other areas of inquiry. To become a citizen, an
immigrant is required by law to speak and understand English,
acquire a basic knowledge of U.S. history and government. Each
applicant must pass written tests in English and civics.
The subcommittee uncovered a pattern of testing fraud, most
of which involved the largest INS licensee, Naturalization
Assistance Services, Inc. (NAS), a private company with 400
branches nationwide. The subcommittee discovered that INS
continued to rely on NAS even after learning of its fraudulent
activities, preferring to maximize naturalization granted by
the September 30, 1996, deadline.
The subcommittee believes NAS should not have been approved
by INS in the first place. INS requirements for licensee
approval clearly state that each organization must demonstrate
expertise in administering English and civics tests but NAS was
a Florida-based driver education school when it filed its
application with INS in July 1994. Incredibly, while it taught
neither English nor civics, and possessed no testing expertise
in either, it was approved a month later in August 1994. INS
employee William R. ``Skip'' Tollifson approved the
application--then left INS to work for NAS in April 1996. This
legal and ethical conflict of interest has yet to be explored,
let alone resolved.
NAS was by far the largest of INS' six private testing
organizations, administering 200,000 tests annually, or roughly
as many tests as the other five firms combined. As early as
June 1995, NAS was plagued by revelations of fraudulent and
abusive testing practices at many sites. Tens of thousands of
applicants who could not speak English or conceivably pass
written English or civics tests, received ``pass'' certificates
from NAS. Multiple reports confirm that test administrators
orchestrated blatant cheating, making tests as simple as
possible, giving applicants the correct answers, and sometimes
filling in answers themselves for aliens who knew no English.
In return for this ``service,'' applicants paid as much as $850
apiece for same-day ``training courses'' which in reality
translated into sure passes.
Though well-aware of widespread irregularities, NAS not
refused to crack down on fraud, its officials routinely
pressured local INS officers to accept ``pass'' certificates
when applicants could not speak or understand English. Worse,
NAS appears to have allowed, and even encouraged, testing fraud
among its 400 affiliates. NAS went so far as to refuse to allow
Dallas-based INS officials suspecting NAS fraud to inspect
local NAS testing sites.
INS headquarters in Washington, DC, appears to have
abandoned its statutory duty to insure the integrity of its
citizenship testing program. Although high-ranking INS
officials were aware of the scope of NAS' fraudulent activities
for at least 16 months--abundant and compelling evidence of NAS
fraud was presented to the INS both privately and publicly in
the media and in a subcommittee hearing--INS allowed NAS to
administer citizenship tests in ever-increasing numbers. INS
headquarters also pressured local INS officers continually to
accept NAS ``pass'' certificates held by applicants unable to
speak or understand English.
Pressured by the Clinton White House, INS appears to have
focused on maximizing politically valuable naturalization by
knowingly permitting, and even assisting, NAS' fraudulent
testing for perceived political gain. Only after CUSA's
political goals were achieved did INS bow to mounting public
pressure and terminate NAS' testing authority. That long-
overdue termination did nothing to address the harm inflicted
by widespread fraudulent citizenship testing and
naturalization.
Naturalization of Criminals.
Perhaps the most disturbing pattern of abuses discovered by
the subcommittee involves the widespread granting of American
citizenship to unqualified and violent criminals. This appears
to have been the consequence of recklessness by top
administration officials, including INS officials, the Deputy
Attorney General, and those in the Vice President's Office. The
INS is required by law to send the fingerprints of each
applicant for naturalization to the FBI and await return of the
applicant's criminal record before deciding whether to grant
U.S. citizenship. Beginning in August 1995, this was not done
in a consistent or reliable manner in the CUSA program.
Under CUSA, when INS dramatically increased the number of
fingerprint cards submitted to the FBI, the average processing
time also increased. However INS, determined to accelerate
naturalization, intentionally decreased the amount of time
allowed for the return of a criminal record, before granting
citizenship. Predictably, this led to the granting of
citizenship to numerous unqualified and dangerous criminals
before their criminal records arrived at local INS offices, and
were placed in individual files. Indeed, there is evidence that
in Los Angeles, where the largest number of CUSA applications
were processed, INS management intentionally disabled
safeguards its own computer programs, thus increasing the
number of applicants being naturalized before their criminal
record checks had been completed.
INS also is required by law to deny citizenship to any one
who fails to report his criminal history in full--i.e. any past
arrests, charges or convictions--during the mandatory INS
application and sworn interview process, even if the
applicant's criminal history is minor (i.e. administrative
action, misdemeanor conviction, or a dismissed or unresolved
charge). Since INS refused to await the return of FBI criminal
records, it is likely that many applicants who misrepresented
their criminal history were nonetheless naturalized.
Worse still, the subcommittee learned that thousands,
perhaps tens of thousands, of fingerprint cards may not have
been submitted to the FBI at all, but were lost, misplaced, or
destroyed in the rush to meet INS' 1996 ``production goals.''
Recently, the INS provided the FBI with a supposedly
comprehensive computer tape identifying people naturalized
under the CUSA program whose fingerprint cards were submitted
to the FBI. That list contained only 864,000 individual entries
(an additional 60,000 entries were duplicates). Since INS
itself conservatively estimated that it granted citizenship to
at least 1.1 million people under CUSA, it is likely that tens
of thousands of fingerprint cards were never submitted to the
FBI. The subcommittee has learned that in Los Angeles, and
other CUSA, INS management was surreptitiously destroying or
concealing thousands of unsubmitted fingerprint cards to cover
up the scope of this problem. INS' only response to these
serious criminal actions was to intimidate employees courageous
enough to expose the situation.
Furthermore, criminal background information already in
INS' possession routinely was ignored because numerous
individual naturalization files (``A-files'') were misplaced or
delayed in transit, and INS refused to allow sufficient time
for them to be located before naturalizing the applicants. The
FBI provided the subcommittee 60,000 raw rap sheets which fully
confirmed that a large number of violent criminals improperly
were granted U.S. citizenship under CUSA. This group includes
individuals charged with or convicted of murder, rape, drug
trafficking, spouse abuse, child molestation, and virtually
every serious crime imaginable. The FBI expects to deliver
thousands of additional rap sheets to the subcommittee in the
future. While INS continues to deceive the public by minimizing
the extent of this problem, the evidence of it is both
irrefutable and highly disturbing.
In short the administration and the INS, in pursuit of
partisan political advantage, created a grave national security
and criminal justice problem, the full proportions of which are
not yet fully known. While INS spokesmen repeatedly have
promised to track down and denaturalize those criminals on whom
it bestowed citizenship, the sheer number of criminals
naturalized makes that all but impossible. In fact, INS has
demonstrated no willingness to do so. For example, the
subcommittee requested, under two subpoenas, detailed
information regarding all felons naturalized under CUSA. As of
this writing, INS steadfastly has delayed and obstructed the
subcommittee's inquiry for months, providing no information in
response to these requests. Sadly, the Department of Justice
has aided and abetted INS in its obstruction by incorrectly
challenging the validity of subcommittee subpoenas, spending
endless time ``clearing'' letters from the FBI, and falsely
suggesting that the subcommittee has deemed all ``FBI hits'' to
be ``convictions'' or has knowingly revealed any names or
addresses of naturalized citizens.
Political Motivation.
All of these abuses appear to have resulted from the
Clinton administration's political agenda. Substantial evidence
indicates that the CUSA was initiated by the Clinton
administration and ``hijacked'' by the Office of the Vice
President for political gain. Beginning in February 1996, Vice-
Presidential staffers Douglas Farbrother, Elaine Kamarck, and
Laurie Lyons among others began directing substantial changes
in INS' naturalization policies and procedures. Operating with
the apparent consent of the Vice President, they dictated a
rapid and substantial increase in CUSA resources a 40 percent
increase its ``production goals''; and, in effect, the
disabling of legal and procedural safeguards associated with
the naturalization process. Documents state this was done ``to
produce a million new citizens before election day,'' an
objective that resulted in a pervasive pattern of fraud, abuse
and recklessness.
Indeed, Vice President Gore apparently sent President
Clinton a memo detailing methods to ``Lower the Standards for
Citizenship,'' and the INS proceeded to implement them. Worse
yet, the Vice President's own Mr. Farbrother and Ms. Kamarck
achieved some of their ends by pressuring Deputy Attorney
General Jamie Gorelick, who in turn pressured INS to ``waive''
key rules, regulations, and standards. In the White House
itself, senior Presidential aides Leon Panetta, Harold Ickes,
Rahm Emanuel and Carol Rasco were involved in the process,
though the extent of their involvement is not yet clear.
Based on the criminal wrongdoing and high-level political
involvement associated with CUSA, subcommittee Chairman Zeliff
wrote Attorney General Janet Reno on October 31, 1996, to
request that she appoint an Independent Counsel to investigate
it. Subcommittee Members Souder, Mica, Ehrlich, and Shadegg
joined in this request. That request was denied on December 4,
1996. In a letter to subcommittee Chairman Zeliff, the
Department stated, ``The Criminal Division is conducting a
careful review of the issues identified in your letter, and the
Division and the Office of Inspector General have agreed to
pursue any matters that might warrant further investigation.''
b. Benefits.--The subcommittee's investigation has begun to
expose the full scope and nature of CUSA fraud, abuse and
recklessness and media reports have chronicled some of the
criminal activities and abuses of power wrought by this
politically-motivated program. INS, given mounting public
pressure, has begun to make incremental and long-overdue
reforms.
INS finally terminated NAS' license to conduct citizenship
testing in late October 1996. In addition, it promulgated new
anti-testing-fraud policies which, if actually enforced, may
begin to address the problem of fraudulent testing by the
remaining licensees.
In addition, the INS belatedly has enacted new regulations
allowing it to conduct administrative denaturalization
proceedings, against people erroneously naturalized. INS has
had statutory authority to do so since 1990, but heretofore
neglected to promulgate the necessary regulations. In response
to our investigation, these administrative proceedings will be
substantially less time-consuming and burdensome than judicial
denaturalization, previously the agency's only method of
denaturalization: a small step in the right direction.
Unfortunately, for legal and logistical reasons, these new
procedures are unlikely to be applied retroactively to those
illegally and improperly naturalized under CUSA. This raises
legal and national security concerns beyond the scope of this
report.
Finally, there are indications INS' Chicago office has
begun to remedy some CUSA-related problems. In Los Angeles, the
Department of Justice Inspector General's office apparently has
begun to investigate abuses occurring there.
In the wake of intense pressure from Congress, the public,
and the media, INS has begun to take incremental steps to
reform the naturalization process. However, remains to be done
by INS, DOJ, FBI, Congress, and possibly an Independent
Counsel. The subcommittee intends to pursue its investigation
as long as necessary to expose and correct the fraud, abuses
and recklessness CUSA.
c. Hearings.--On September 10, 1996, the subcommittee held
a hearing on naturalization testing fraud, focusing on the
operations of NAS. Ms. Jewell Elghazali, a former employee,
testified at length regarding NAS testing fraud which she
testified was permitted and even encouraged to increase NAS
corporate revenue.
Also testifying were NAS's CEO Paul W. Roberts, and William
R. (Skip) Tollifson, a former INS employee who also worked for
NAS. Both men denied any intentional wrongdoing by NAS. Mr.
Alexander Aleinikoff, INS' Executive Associate Commissioner for
Programs, and Louis D. Crocetti, INS' Associate Commissioner
for Examinations also were present Aleinikoff acknowledged the
testing fraud by NAS affiliates, but denied that INS knowingly
tolerated fraud. Mr. Crocetti said nothing.
On September 24, 1996, the subcommittee held a hearing on
CUSA. The following INS employees testified as whistle blowers,
exhibiting exceptional courage and integrity in so doing: Tom
Conklin, Chicago INS; Diane Dobberfuhl, Chicago INS; Ethel
Ware, Chicago INS; Joyce Woods, Chicago INS; James Humble-
Sanchez, Los Angeles INS; Neil Jacobs, Dallas INS; Cora Miller,
Las Vegas INS; and Robin Lewis, Oklahoma City INS. They
addressed fraud, abuses and recklessness with special emphasis
on testing fraud and the naturalization of dangerous criminals.
They also testified that after participating in CUSA, they and
their colleagues reluctantly had concluded that it was
politically motivated, and was intended to favorably influence
the November 1996 elections on behalf of the Clinton
administration and the Democratic Party.
Mr. David Rosenberg, Director of the Citizenship USA
Program, and Louis D. Crocetti, INS Associate Commissioner for
Examinations testified on behalf of the INS. Both minimized
problems associated with CUSA, and denied any politically
motivation.
POSTAL SERVICE SUBCOMMITTEE
1. General Oversight of the U.S. Postal Service: The Postmaster General
and the General Accounting Office.
a. Summary.--Congress established the Postal Service as an
independent establishment of the executive branch of the
Federal Government pursuant to the Postal Reorganization Act of
1970 (Public Law 91-375). The act provides that the Postal
Service must establish ``reasonable and equitable classes of
mail and reasonable and equitable rates of postage and fees for
postal services.'' Further, the act mandates that the Postal
Service ``break even'' as nearly as practicable. Postmaster
General Marvin Runyon testified that though the Postal
Reorganization Act has worked well for 25 years, the act did
not anticipate the highly competitive communications industry
that exists today. Mr. Runyon urged Congress to reexamine the
act in order to allow the Postal Service to become more
businesslike and more responsive to the American people.
Suggested solutions include: freeing postal employees from
bureaucracy and burdensome rules; simplifying and speeding up
the price-setting process to respond to market needs; and
making postal products more customer oriented and modern
through pricing and product flexibility. The Postmaster General
testified that the collective bargaining process is outmoded
and that employee dispute resolution mechanisms are faulty. In
addition, he urged Congress to reexamine the ratemaking process
and review proposals which would allow the Postal Service to
price its products and services to better reflect its
competitive environment.
The General Accounting Office (GAO) testified that poor
labor-management relations continue at the Postal Service.
Delivery service problems remain and customer satisfaction
indicators have not improved. GAO further reported that postage
meter revenues were declining due to fraud and deficiencies in
program controls. Automation has fallen behind schedule and
anticipated savings have not been realized.
b. Benefits.--The information received by the subcommittee
during this oversight hearing was instrumental in documenting
the progress and deficiencies of the Postal Service. This
information would be used to craft legislative language to
shape appropriate corrective measures.
c. Hearings.--Hearing entitled ``Oversight of Postal
Service'' was held on February 23, 1995.
2. General Oversight of the U.S. Postal Service: The Postal Rate
Commission.
a. Summary.--The Postal Reorganization Act of 1970
established the Postal Rate Commission (Commission) as an
independent agency of the executive branch with authority to
recommend postal rates and classes. Prior to its creation,
Congress was responsible for setting postal rates and classes.
Postal Rate Commission Chairman Edward Gleiman testified to
the role played by the Commission in postal affairs because of
its mandate to ensure that postal rates and fees are reasonable
and equitable. In addition, the Commission hears mail
classification proceedings to determine the groupings, classes
and subclasses of mail, and the more than 100 work-sharing
discounts affecting the postage rates paid by various mailers.
The Commission is permitted to take up to 10 months for
consideration of an omnibus rate case. Chairman Gleiman
stressed that the Commission is interested in streamlining and
expediting these proceedings. The Commission reissued rules
(which went unused for 5 years) giving the Postal Service the
authority to accelerate changes in Express Mail rates to meet
market pressures.
b. Benefits.--Improvements in the ratemaking process will
better enable the Postal Service to implement rate changes and
respond to competitive pressures in the communications
marketplace. Presently, competitors are able to react quickly
to changing markets, whereas the Postal Service must adhere to
a complex, mandated process before changing its rate structure
or offering new products. For the Postal Service to be
competitive, its pricing and product mechanisms must be
flexible to react to changing market forces. By having an
improved and more flexible ratemaking structure, the Postal
Service should prove competitive with its products and prices
thereby reducing losses in market share and keeping postal
rates stable. These flexibilities would help the Postal Service
fulfill its statutory mandate to break even. Americans benefit
from a fiscally sound Postal Service which operates
independently of taxpayer financed appropriated funds.
c. Hearings.--Hearings entitled ``General Oversight of the
U.S. Postal Service'' were held on March 2, March 8, June 7,
June 14, and June 28; on July 25, 1995, a hearing entitled
``Oversight of the U.S. Postal Inspection Service and Postal
Operations'' was held.
3. General Oversight of the U.S. Postal Service: The Board of
Governors.
a. Summary.--Chairman Sam Winters testified on behalf of
the Presidentially appointed Postal Service Board of Governors.
He said that the Postal Service is one of the most complex
enterprises in our country. However, both the Postal Service
and its employees could be doing better. The 1970 act empowered
the Board of Governors to authorize postal rates and
classifications following the Governors' review of the Rate
Commission's recommended decision. The board directs the
overall policy of the Postal Service and acts as the customer
representative in managing the Postal Service in a businesslike
manner. The chairman believes that cumbersome restraints levied
on the Postal Service by the Postal Reorganization Act place a
burden on the Postal Service which impedes its ability to
operate in a businesslike manner. He emphasized that the Postal
Service's competitive efforts are hampered because of the
collective bargaining process. Chairman Winters said almost 80
cents of each dollar goes toward salaries and benefits. Cost
restraints and a need to pay for performance are necessary to
achieve effective operation of the Postal Service. He echoed
Postmaster General Runyon's concern for redesigning the current
ratemaking process to make it more sensitive to market rates.
b. Benefits.--Testimony from the Board of Governors
stressed the need for further study of the Postal
Reorganization Act in order to give the Postal Service the
tools to make it more businesslike and more competitive. It is
apparent that the present act places undue restrictions on the
Postal Service which, ultimately, costs the postal customer in
money, service and reliability.
c. Hearings.--The Board of Governors appeared before the
Subcommittee of the Postal Service on March 8, 1995.
4. General Oversight of the U.S. Postal Service: Major Mailing
Customers.
a. Summary.--Eleven witnesses representing major mailing
groups (commercial mailers, publishers, and nonprofit mailers)
testified at this hearing. The witnesses included: the Mailers
Council; Advertising Mail Marketing Association; Direct
Marketing Association; Mail Order Association of America;
Parcel Shippers Association; National Newspaper Association;
Newspaper Association of America; Magazine Publishers of
America; Association of American Publishers; Alliance of
Nonprofit Mailers; and the National Federation of Nonprofits.
All had distinct opinions on privatization, the usefulness of
the Postal Rate Commission, the reform of the Postal Service
and the effect of labor-management relations on the mission of
the Postal Service. However, all but one witness testified
against privatization of the Postal Service. The witnesses also
presented their views on the Postal Service's filing in Docket
No. MC95-1 regarding mail reclassification.
b. Benefits.--This hearing provided important information
regarding the concerns of the major stakeholders in the U.S.
Postal Service. In order to meet competitive pressures, the
Postal Service must evolve into a service-oriented organization
attuned to its customers' needs. Further, the witness testimony
will facilitate the subcommittee's efforts in the conduct of
its oversight responsibilities of the Postal Service.
c. Hearings.--Hearing entitled ``Oversight of the U.S.
Postal Service: Commercial Mailing and Non-Profit Mailing
Organizations'' was held on May 23, 1995.
5. General Oversight on the U.S. Postal Service: Postal Employee Unions
and Organizations.
a. Summary.--The employees represented by the unions and
organizations who testified are responsible for moving 5
million pieces of mail each day. These organizations serve as a
sounding board for employee suggestions and complaints dealing
with labor and management problems. The organizations must
address issues pertaining to restructuring, technology,
privatization, employee schedules, delivery standards, along
with prompt, reliable and efficient customer service. At the
time of the hearing, three of the unions engaged in contract
talks with postal management were critical of management
particularly at postal headquarters. The president of the Rural
Letter Carriers Union reported that his members had job
satisfaction, motivation, and pride in their jobs. They have an
evaluated pay system that measures various criteria which
cannot be directly transferred to urban carriers. The unions
spoke, with one voice, supporting universal delivery and
uniform postal cost. They were of the opinion that the Postal
Reorganization Act served them well. They testified that though
the Postal Service can be improved, the Postal Reorganization
Act should not, and need not, be revised in the area of labor
relations. However, the unions expressed support for more
flexibility on ratesetting and the introduction of new
products. The unions testified that management should be
streamlined as there are too many intermediate steps confusing
lines of communication. The three management groups focused on
labor-management issues, adverse actions and compensation.
b. Benefits.--The subcommittee's continuing examination of
labor-management problems and collective bargaining obstacles
will serve to inform the Postal Service and the unions that
these issues are serious impediments to the good health of the
Postal Service and to employee job stability. This information
will help the subcommittee to tailor solutions when considering
legislative reforms to the Postal Service.
c. Hearings.--The subcommittee held a hearing on June 7,
1995, entitled ``Oversight of Postal Employees and Management
Group.''
6. General Oversight of the U.S. Postal Service: Postal Reliant
Businesses and Competitors.
a. Summary.--Twelve witnesses representing postal reliant
businesses and competitors participated in this hearing. These
diverse entities expressed varied opinions regarding the letter
mail monopoly, the international mail market, the inequity
created because the Postal Service is exempt from rules and
regulations applicable to private sector businesses (for
example, taxes, parking fines), and the commercial and research
value in the sale of postage meters in lieu of renting them.
Some of the witnesses testified regarding their valued
partnership with the Postal Service while others viewed the
Postal Service as an unfair competitor. The hearing explored
the extent to which the Postal Service affects contracting,
manufacturing, transportation, both inter- and intrastate
commerce, international law and business opportunities for
large and small firms.
b. Benefits.--The hearing provided useful information from
diverse witnesses regarding their evaluations of the Postal
Service. The subcommittee will continue to investigate how
better partnerships can be forged between the Postal Service
and other entities for the benefit of the customers.
c. Hearings.--On June 14, the subcommittee held a hearing
entitled ``Oversight of Postal Reliant Businesses and
Competitors.''
7. General Oversight Hearing on the Postal Service: Return of the
Postmaster General.
a. Summary.--The Postmaster General, at his second
appearance before the subcommittee, expressed his interest in
remaining on the job for several more years. He appealed to the
Congress to revise the laws governing collective bargaining.
Mr. Runyon testified regarding postal workers' right to strike,
he cautioned that in granting such rights Congress would need
to allow the Service the ability to hire replacements for
striking employees. He suggested allowing postal unions the
same bargaining rules as railroad workers under which the
President may impose a cooling off period before a strike and
can use the power of his office to persuade the parties to
reach a settlement. The Postmaster General defended his agency,
declaring it had ``come a long way'' since delivery debacles in
1994. Congress was urged to approve legislative initiatives
which would authorize the sale of postal assets in incremental
parts. The Postmaster General again asked Congress to reduce
red tape and regulations in an effort to streamline the Postal
Service making it more efficient and competitive.
b. Benefits.--This forum enabled the Postmaster General to
respond to concerns and issues raised subsequent to his
previous appearance before the subcommittee.
c. Hearings.--The Postmaster General appeared for the
second time before the subcommittee on June 28, 1995, at the
hearing entitled, ``General Oversight: Postal Service.''
8. General Oversight of the U.S. Postal Service: Postal Service
Inspector General.
a. Summary.--The Inspector General of the Postal Service
serves as the watchdog of Postal Service operations. The
hearing focused on the operational, financial and security
challenges facing the agency. The Inspector General echoed many
of the statutory restrictions on pricing, new products, and
managing the workforce that the Postmaster General had shared
with the subcommittee. The Inspector General noted that the
immediate abolition of the postal monopoly would be devastating
to the Postal Service and the concept of universal service.
However, he stated that if everything the Postmaster General
wants in the area of postal reform is granted, the monopoly
will be eliminated.
b. Benefits.--Testimony from the Inspector General
underscored many of the same problems with which the
subcommittee had been concerned. The Office of the Inspector
General and the Inspection Service are responsible for keeping
the U.S. mail safe and preventing waste, fraud and abuse in the
Postal Service.
c. Hearings.--The Inspector General appeared before the
subcommittee on July 25, 1995, at a hearing entitled
``Oversight of the Postal Service Inspector General.''
9. Review of International Mail Market.
a. Summary.--The U.S. Postal Service seeks to expand its
role in the international mail markets. However, because it has
less control over pricing than its competitors, and its
delivery systems appear unable to provide sufficiently reliable
service, the Postal Service may have neither the authority nor
the ability to compete effectively in the growing international
market competition.
The subcommittee examined the Service's statutory, current,
and planned role in the delivery of international mail. Areas
under examination include the existing relationships between
the Postal Service, foreign postal administrations and the
Universal Postal Union; and whether current postal laws and
international agreements may limit the Service's ability to
participate internationally.
The subcommittee received a final report on this issue
early in 1996. ``U.S. Postal Service: Unresolved Issues in the
International Mail Market,'' March 11, 1996, GAO/GGD 96-51
found that through multilateral and bilateral agreements, the
Postal Service, together with other foreign postal
administrations provides a worldwide delivery network that
covers even the most remote localities for the rate of $1 for a
1-ounce letter to any overseas location in the world. Private
carriers often provide some mail services that are more
dependable, faster, and cheaper than those provided by the
Postal Service. As a result, the Postal Service is concerned
that it has lost and continues to lose market share in a
growing $4.6 billion international mail market. Despite lost
market share, the Postal Service has embarked on an aggressive
marketing strategy to regain market share which includes new
service offerings, service improvements, and market-based
prices.
This aggressive strategy has drawn criticism from some
Service competitors. They say the Postal Service benefits
unfairly from its status as a Federal entity and its exclusive
access to foreign postal administrations as the sole U.S.
representative to the Universal Postal Union. In addition, some
charge that Service rates do not cover costs in contravention
of the Postal Reorganization Act directive that each class of
mail recover its direct and indirect costs. These competitors
urge Congress to give the Postal Rate Commission authority to
recommend the Service's international postage rate.
b. Benefits.--This continuing review will provide essential
information required by Congress in order to make sound
determinations regarding the role of the Postal Service in the
international mail markets.
c. Hearings.--The subcommittee and the Senate Subcommittee
on Post Office and Civil Service conducted a joint oversight
hearing on international postal administration reform on
January 25, 1996.
10. General Oversight of the U.S. Postal Service: The Board of
Governors, the Postmaster General, the Postal Rate Commission,
the Chief Postal Inspector and the General Accounting Office.
a. Summary.--The joint oversight hearing was intended to
provide a general overview of the operation of the Postal
service. A series of major events had occurred since the
oversight hearings during the first session. The Postal Service
had achieved a positive financial performance and service
record in fiscal year 1995; and the Postal Rate Commission had
recently provided a recommended decision on the
reclassification case which greatly affects the Postal Service
and was in the process of addressing a series of rulemaking
proposals.
Tirso del Junco, Chairman of the Postal Service's Board of
Governors testified that the Board had focused on audit,
compensation, strategic planning and capital projects. The
Postal Service is committed to keep the postal rates stable
through 1997. A quality management program, Customer Perfect!,
based on the Malcolm Baldridge criteria for an effectively
managed private-sector business, had been instituted and was
proving to be effective.
The Postmaster General, Marvin Runyon, testified that
fiscal 1995 was a year of achievement--volume increased to 181
billion pieces (an increase of 3 billion pieces), overnight
service was at an all-time high of 87 percent for local,
overnight delivery and record net income was $1.8 billion, more
than twice the previous high. However, he projected a dim
future due to anticipated and recorded decreasing mail volume
during the first and second quarters in 1996. The Postal
Service is growing in only one of its six product lines whereas
the overall communication market is growing in double digits.
First-Class Mail is greatly eroded with much of today's
financial transactions being made electronically. The
Postmaster General informed that 3,600 additional pieces of
automation would be available, bringing the total to more than
10,000 machines at an investment of $4.6 billion. He reported
that the Board of Governors approved the first revision in the
mail classification rules since 1970; the changes will benefit
mailers who participate in worksharing. Further reform measures
for non-profit mail, special services, parcels and expedited
services were being prepared for forwarding to the Postal Rate
Commission. Several new products are being introduced and a
separate Priority Mail network and Global Priority Mail are
being implemented. The Postal Service is trying to improve
productivity by at least 2 percent yearly, saving $1 billion
annually. Labor costs have climbed 54 percent this decade and
need to be reduced. He said that the Postal Service must have
the ability to compete and have the freedom to run like a
business--``to respond to market at market speed,'' and to have
the flexibility to test products.
Postal Rate Commission Chairman, reported that the
Commission issued the omnibus rate case and had completed a
major mail classification reform case. He expressed concern
that the Board of Governors rejected the Commission
recommendation regarding the ``bulk parcel'' issue and the
Courtesy Envelope Mail. The Commission was deliberating the
USPS' request for expedited consideration of an experimental
case regarding First Class and Priority small parcels. Progress
has been made in receiving quality data from the Postal Service
as a result of testimony for an improved process in the
previous oversight hearing; however, untimely responses are
still a problem. Reversing his position from previous testimony
because of difficulties in obtaining Postal Service
information, Mr. Gleiman requested subcommittee Chairman McHugh
to include statutory authority to subpoena Postal Service
records and documents in postal reform legislation. (This
provision was included in postal reform legislation.)
Kenneth J. Hunter, Chief Postal Inspector and Inspector
General, testified that audits regarding Delivery Point Program
(DSP) showed that additional savings could have been gained if
there had been increased conformance with national policies and
procedures. The Inspection Service conducted developmental,
financial, financial opinion, financial installation, capital
investment, contract, and six performance audits. It conducted
investigations: protecting Postal Service revenue and assets;
procurement, expenditure and false claims; employee and
contract post office embezzlements; and workers' compensation
fraud.
Michael E. Motley, Associate Director, Government Business
Operations, General Government Division, General Accounting
Office, commented on areas related to improving labor-
management relations, setting and providing competitive rates
and services and controlling operating costs. Labor-management
problems still persists; the Postal Service and employee
organization had not met to address GAO's recommendations to
develop and sign a framework of agreement. The number of
employee grievances referred to higher levels has increased 31
percent since 1993. The Postal Service is not as competitive as
it could be and has lost market share of products, including
Express Mail, because of limited flexibility in rate setting,
cost and growth of labor, less reliable service and the
inability to control internal operating costs.
b. Benefits.--The forum enabled a thorough review of all
postal operation and the status of rulemaking proposals set
forth by the Postal Service. The subcommittee had an
opportunity to explore the issues raised and recommendations
proposed by the GAO in testimony the previous session. Close
oversight by the subcommittee has focused the Postal Service's
attention to on-time nationwide delivery performance.
c. Hearings.--A consolidated hearing entitled, ``General
Oversight of the U.S. Postal Service: The Board of Governors,
The Postmaster General, the Postal Rate Commission, the Office
of the Postal Service Inspector General and the General
Accounting Office'' was held on March 13, 1996.
11. Joint Hearing with the Senate Subcommittee on Post Office and Civil
Service, of the Committee on Governmental Affairs on
International Postal Reform.
a. Summary.--During the past decade, a number of countries,
including Argentina, Australia, Canada, Denmark, France,
Germany, Netherlands, New Zealand, Sweden, and the United
Kingdom, have moved toward postal deregulation and
corporatization. Some of the countries were forced to change
their system because of crises such as workplace unrest and
union and management conflict, resulting in lack of trust and
respect between employee and employer. Some countries initiated
postal reforms as a part of greater government privatization
initiatives. While each country labored under its own set of
circumstances, a consensus among international postal observers
was that the most successful reform efforts were made when the
targeted postal system was not operating in a state of crisis.
In general, most of the countries that have restructured
their postal system conduct their business like a private
sector concern with great latitude in rate setting. However,
rate increases for monopoly services must still be approved by
some branch or department of government or are subject to a
rate cap, though non-monopoly services enjoy greater freedom in
price setting. These postal administrations have greater
managerial freedom and many are mandated to make a profit.
Though not all of the administrations are mandated to maintain
uniform rates for letter mail, all of them do; they also have
explicit social obligations to the citizens of the country and
the government. There appears to be an international view to
require universal service.
The U.S. Postal Service is unique in terms of the volume,
size and purposes for which it is used. No other postal system
compares in size to the USPS which boasts of annual revenues in
excess of $55 billion. Additionally, no other postal system is
utilized as an advertising medium to the extent of the U.S.
Postal Service.
During the first session of the 104th Congress, the
subcommittee on the Postal Service initiated a series of
hearings on postal reform. A dialog was initiated in querying
whether, and in what manner, the quarter-century old Postal
Reorganization Act should be changed. When the act was adopted,
the Postal Service faced little competition in terms of its
product structure and the act was widely heralded as
progressive legislation designed to ensure the future viability
of the Postal Service. However, advances in electronic
communication and aggressive business practices on the part of
competitors during the past 25 years has necessitated the re-
evaluation of the role of the Postal Service in today's
marketplace.
b. Benefits.--Given the studies which have been
commissioned by the USPS and requested by the Senate
Subcommittee on Post Office and Civil Service regarding
progressive postal administrations and Private Express
Statutes, respectively, the oversight committees are in a
position to analyze the applicability to the U.S. postal system
the changes which have taken place in foreign postal
administrations. Since the changes in foreign postal
administrations have included evolving from a traditional
government-owned monopoly operation into variations of
profitmaking entities with significant commercial freedom, the
suitability to the American scenario in establishing a paradigm
would be beneficial.
c. Hearings.--The U.S. Senate, Subcommittee on Post Office
and Civil Service, of the Committee on Governmental Affairs,
and the U.S. House Subcommittee on the Postal Service, of the
Committee on Government Reform and Oversight held a joint
hearing on January 25, 1996. The witnesses included, Graeme T.
John, managing director Australia Post, Georges C. Clermont,
president and director general, Canada Post Corp.; Elmar Toime,
chief executive officer, New Zealand Post Limited; Ulf
Dahlsten, president and chief executive officer, Posten AB,
Limited, Sweden, accompanied by Tommy Perrson, senior vice
president, Posten AB, Limited, Sweden; Michael E. Motley,
Associate Director, Government Business Operations Issues, U.S.
General Accounting Office, accompanied by James T. Campbell,
Assistant Director, Government Business Operation Issues, GAO;
James Waddell, partner, Price Waterhouse, accompanied by David
E. Treworgy, principal consultant, Price Waterhouse.
12. Postal Reform: H.R. 210, a Bill To Provide for the Privatization of
the United States Postal Service; H.R. 3717, the Postal Reform
Act of 1996; H.R. 3690, the Postal Service Core Business Act of
1996.
a. Summary.--The U.S. Postal Service was created by statute
to operate efficiently and economically without benefit of
taxpayer funds but with mandates to provide universal service
at uniform rates and to break even. Whereas competitors can
tailor their capital and labor resources to narrow markets, the
Postal Service must support a broad infrastructure in order to
meet its obligation of providing universal postal service.
These statutory structures impose conflicting mandates on the
Postal Service. Today, the Postal Service operates without
benefit of taxpayer financing but service and delivery
questions burden the agency along with increasing competition
from new and emerging communication technologies as consumers
and businesses move away from communicating via hard copy
delivery. Various modules have been proposed to restructure the
Postal Service, including the experiences international postal
services.
Representative Crane's bill, H.R. 210, transforms the
current Federal Government-owned Postal Service to a private
corporation with ownership divested from the U.S. Government to
the employees of the Service. The entity would operate under
some of the same restrictions as the current Postal Service.
During the first 5 years, the company would operate with
benefit of the current monopoly and rates would be established
upon consultation with the Postal Rate Commission. Following
the initial 5 years, the President would have the discretion of
continuing or nullifying the Postal Rate Commission.
Subcommittee Chairman McHugh's comprehensive reform
measure, H.R. 3717, retains the Postal Service as a government-
owned enterprise, mandated to maintain universal service and
uniform rates for noncompetitive products but with considerable
flexibility in the rate-setting of competitive products and the
launching of new products, though under the fullest extent of
antitrust provisions and under the oversight of Congress.
H.R. 3717 is the first comprehensive reform effort of the
Postal Service since the Postal Reorganization Act of 1970. The
legislation is the result of testimony presented by more than
60 witnesses over 18 months of hearings. Issues were brought to
the subcommittee's attention by postal customers, postal
employees, and business leaders, among others, whose voices
were heard and incorporated within the legislation. The
legislation guarantees the continuation of universal postal
service at uniform, affordable rates. However, during the past
decades, methods of communications have changed drastically
resulting in shifting mail volumes and stagnant postal revenue
growth. There has been a steady erosion of standard
correspondence which formerly moved through the Postal Service
but is now being sent by electronic alternatives, facsimile
machines or by private mail carriers. The General Accounting
Office (GAO) reported that within the past 25 years the Postal
Service lost approximately 13 percent of its express mail
market and is moving fewer parcels. For instance, in 1971 the
Postal Service handled 536 million parcels and in 1990 the
volume dropped to 122 million pieces, or a market share of only
6 percent. The shift of revenues negatively impacts the ability
of the Postal Service to serve the Nation.
The Postal Reorganization Act served the Nation well for a
quarter century. However, rapid changes force Congress to
examine adjustments which permit the Postal Service more
flexibility in areas where it faces competition while
guaranteeing that postal customers will receive universal
service. The legislation accomplishes this mission. The bill
allows the U.S. Postal Service the opportunity to make a profit
and removes the break-even mandate required by 1970 law.
H.R. 3690, the Postal Service Core Business Act of 1996,
was considered with postal reform legislation because it would
restrict the ability of the Postal Service to provide services
while limiting its nonpostal services.
b. Benefits.--Because of the many challenges confronting
the Postal Service in an era of ever changing technology and
competition, it is important to explore postal reform before a
major crisis befalls the Service and reform is made in haste.
The subcommittee has made consideration of substantive postal
reform its major focus. Testimony from all quarters was heard,
solicited and accepted to address each concern, including
ratemaking, the statutory monopoly, new technologies, and
organizational structure.
c. Hearings.--A joint hearing with the Senate Subcommittee
on Post Office and Civil Service was held on January 25, 1996.
Witnesses were the heads of several international postal
corporations, as listed above. Four hearings entitled ``Postal
Reform Act of 1996'' were held on July 10, July 18, September
17, and September 26, 1996. The following witnesses presented
testimony:
July 10--Postmaster General Marvin Runyon and Chairman
Edward J. Gleiman of the Postal Rate Commission.
July 18--(Postal Employee Unions and Management
Organizations) Moe Biller, president, American Postal Workers
Union; Vincent Sombrotto, president National Association of
Letter Carriers; Scottie Hicks, president, National Rural
Letter Carriers Association; William Quinn, president, National
Postal Mail Handlers Union; John Pesa, president, National
Labor Council, Fraternal Order of Police; Hugh Bates,
president, National Association of Postmasters of the United
States; Bill Brennan, president, National League of
Postmasters; Vince Palladino, president, National Association
of Postal Supervisors.
September 17--(Major Mailers) Jerry Cerasale, senior vice
president, Direct Marketing Association; Ian D. Volner, general
counsel, Advertising Mail Marketing Association; Timothy May,
general counsel, Parcel Shippers Association; David Todd,
counsel, Mail Order Association of America; Mark Silbergeld,
president, Alliance of Nonprofit Mailers; Lee Cassidy,
executive director, National Federation of Nonprofits;
Christopher M. Little, chairman Government Affairs Council,
Magazine Publishers of America; Steven B. Waters, vice
president & publisher, Rome Sentinel Co., National Newspaper
Association; John Sturm, president & CEO, Newspaper Association
of America; Steve Bair, senior vice president, Law and Business
Affairs for Time Life, Inc., Association of American
Publishers.
September 26--(Postal Service Reliant Business and
Competitors) Honorable Duncan Hunter; Maynard H. Benjamin,
president, Envelope Manufacturers Association of America; Dan
Goodkind, chairman of the board, Mail Advertising Service
Association; Charmaine Fennie, chairperson, Coalition Against
Unfair USPS Competition; John T. Estes, executive director,
Main Street Coalition for Postal Fairness; Robert Williamson,
executive director, National Association of Presort Mailers;
Frederic W. Smith, chairman & CEO, Federal Express; Kent (Oz)
C. Nelson, CEO, United Parcel Service; Philip A. Belyew,
president, Air Courier Conference of America.
13. Field Hearing on Chicago Mail Service and Postal Operations.
a. Summary.--The Chicago Division of the Postal Service has
been the subject of concern over a period of years. The various
issues include problems arising from delivery standards and the
construction of a new general mail facility in downtown Chicago
which faced cost overruns.
A Postal subcommittee hearing in Chicago during the 101st
Congress reviewed similar issues. After a visit to the Chicago
area in 1994, the Postmaster General formed the Chicago Task
Force and appointed a new Postmaster in an attempt to improve
service problems. However, the need for this oversight was
necessitated because improvement of on-time delivery in the
area has not been evident. On-time delivery scores in the
Chicago area are the lowest in the country. Quarterly
statistics issued by the Postal Service show that Chicago has,
for many quarters, consistently performed below the national
average.
The Chicago Post Office had an impact on modern postal
history. In October 1966, operations in the Chicago Post Office
came to a halt for 3 weeks under a deluge of more than 10
million pieces of mail. The results were devastating for
Chicago and for the entire Midwest. Reportedly, this was a
result of inadequate infrastructure and improper focus of
attention to postal operations nationwide. Postal observers
recognized that there were accumulated stresses and concerns
which could lead to crisis. The Chicago incident precipitated
congressional hearings which made a case for postal reform and
the formation of the Kappel Commission which lead to the Postal
Reorganization Act of 1970.
b. Benefits.--The hearing explored the reasons for the last
place showing of the Chicago postal service. It reminded the
Postal Service of its mission of service to its business and
residential customers and that a delivery problem exists at the
hub of the Nation's commerce and airline activities. As a
result of the hearing, Postal Service witnesses pledged to
improve the delivery standards in the Chicago Division by the
end of the next quarter.
c. Hearings.--A field hearing was held at the DePaul
University campus in Chicago on October 11, 1996. Members of
Congress from the Chicago area were invited to attend and
testify on the first panel. The second panel consisted of J.T.
Weeker, vice president, Area Operation, Great Lakes Area;
Postmaster Rufus Porter, district manager, Chicago accompanied
by David C. Fields, plant manager, Chicago Processing and
Distribution Center. The third panel was made up of witnesses
from local users and postal customer councils (composed of
volunteers from the local communities): Allan Bennett, Postal
Advisory Council; Donald Gutowski, village trustee, Village of
Norridge; Caroline Hill, Customer Advisory Council and Diane
Winter, Chicago Postal Customer Council. Witnesses on the third
panel were pleased with the amount of progress that has been
made during the past few years because of the new management
and their commitment, even though continued improvements are
necessary.
14. Qui Tam Provisions within the False Claims Act.
a. Summary.--The False Claim Act (FCA) Amendments was
signed into law by President Reagan in 1986. This law enables
private citizens, who have evidence, to play a role in
antifraud endeavors. Qui tam provisions, revitalized in this
legislation permit individuals to sue, on behalf of the
Government, against the entity which has fraudulently obtained
profits from the Government. The individual is permitted to
keep a portion of the compensation if awarded. Qui tam
provisions originated in the Middle Ages, encouraging police
action by private citizens because there were no organized
methods of policing. President Lincoln incorporated the
principle in the False Claims Act in 1863 but, until 1986, the
provision became greatly eroded both by statute and by
inconsistent case law. Because of clarification made by the
1986 amendments, qui tam litigation has enabled the Federal
Government to recover more than $1.13 billion in damages with
individuals (relators) receiving about 18 percent of the total
amount.
b. Benefits.--Potential for fraud against the Postal
Service, which initiates contracts worth billions of dollars,
is great. The subcommittee has initiated a study of the qui tam
provisions and the possibility of including the Postal Service
under the rubric of its application.
c. Hearings.--None.
15. USPS contract for 8,879 Cargo Minivans.
a. Summary.--The subcommittee was informed that the U.S.
Postal Service recently awarded a contract to Ford Motor Co. of
Detroit, MI for 8,879 minivans with front wheel drives. The
informant stated that though the contract award went to the
lowest bidder, there was no real competitor as there is only
one vehicle on the market which fits the Postal Service'
specification; had the Postal Service permitted more
flexibility, there would have been more competition.
Furthermore, the specification for a front wheel drive vehicle
would be costly to maintain. The Postal Service averred that
its decision to specify front wheel drive configuration took
into account the potential costs for maintenance; the
conclusion was that the benefits outweigh the drawbacks. The
solicitations were issued on July 8, 1996. Some bidders
requested that the return date for subject solicitation be
extended from 8/5/96 to 9/12/96 because of the specified amount
of equipment and training materials required. The Postal
Service responded that because the Postal Service's fiscal year
ends on September 13 the solicitation is committed to be spent
by that date and the extension was denied. The Postal Service
set specifications for training. One of the bidders suggested
that training for ``off the shelf'' minivans that were
specified was unnecessary as all maintenance requirements are
specified in the owners and service manuals. The Postal Service
responded that it requires specified training therefore the
specification would remain unchanged. It was alleged that this
was essentially a sole-source contract.
The cost of the 8,879 Cargo Minivans totaled $161.6
million. The subcommittee was informed that the Postal Service
may not have received the standard customer discount per
vehicle. Generally, a $1,500 discount is given per single
vehicle bought; the claim was that the successful bidder did
not feel the need to give bid assistance as there was no real
competition due to the specifications. The charge was that had
there been a larger competitive field with greater flexibility
in the specifications the Postal Service may have been able to
save at least $30 million in this contract. The Postal Service
indicated that the price they contracted for per vehicle
included the discount.
The subcommittee is also interested in answers from the
Postal Service regarding the justification for 7,954 front
wheel drive vehicles, whether rear wheel drive vehicles would
have been adequate in some areas, could rear wheel drive
vehicles been bought at a lesser cost, how much would the
General Services Administration have paid per vehicle for the
same or similar vehicle, whether a market study was done, was a
study done on the life cycle cost of the product, and what
procurement manual and procedures were used.
Initial dialog was initiated between the Postal Service and
the subcommittee staff. Consequently, the chairman of the
subcommittee requested the Postal Inspection Service to provide
a report on the matter.
b. Benefits.--The investigation by the Postal Inspection
Service may find that the contract is in order; however, the
likelihood is that there could have been additional savings on
a contract of this size. Revenue protection helps the Postal
Service from seeking earlier rate increases, which in turn
benefits the users of postal services. Efficient and careful
contracting will help the Postal Service meet its mandate to
act more like a business.
c. Hearings.--No hearings were held on this issue.
16. Review of Postal Service Bulk Business Mail Acceptance Practices;
Assessment of the Adequacy of the Postal Service's Systems for
Assessing, Collecting, and Otherwise Protecting Revenue and/or
Accountable Paper.
a. Summary.--Postage discounts are allowed for presorted
and prebarcoded bulk business mailings because processing costs
for the Postal Service are reduced. Discounts allowed in fiscal
year 1994 totaled $8 billion. The subcommittee is concerned
that the Postal Service may allow discounts on mail that is not
properly prepared and does not reduce processing costs. With
the assistance of the GAO, the subcommittee is evaluating
whether the Postal Service's acceptance procedures provide
reasonable assurance that all revenues due from bulk business
mailings are being received, and what actions the Postal
Service is taking to minimize its vulnerability to bulk
business mail losses.
The subcommittee received a report from the GAO on June 25,
1996, ``U.S. Postal Service: Stronger Mail Acceptance Controls
Could Help Prevent Revenue Losses,'' GAO/GGD-96-126. GAO
reported that the Service's system of revenue controls were
insufficient to provide it with reasonable assurances that all
significant amounts of revenue due from bulk business mailings
were correctly identified and received because of systemic
weaknesses. While the Postal Inspection Service has long
considered bulk business mail acceptance to be a high-risk
activity, postal management has not devoted sufficient
attention to the adequacy of acceptance controls.
b. Benefits.--This review will provide essential
information on the extent of revenue losses to the Postal
Service and review improvements to the Service's revenue
protection efforts. For fiscal year 1994, bulk business mail
accounted for $23.1 billion or 48.4 percent of the Services
total mail revenue. Identifiable losses totaled $168 million
with more than $8 billion of postage discounts at risk. This
continuing review will benefit the Nation and postal ratepayers
by helping the Service identify revenue shortfalls and areas
subject to waste, fraud and abuse.
c. Hearings.--None.
17. Review of Selected Major Postal Service Procurements.
a. Summary.--One of the major areas of subcommittee concern
is the Postal Service procurement program. In the past, the
program which is exempt from most Federal procurement laws, has
exhibited major deficiencies which have created procurement
problems. The GAO, at subcommittee Chairman McHugh's request,
reviewed the Postal Service procurement program to determine
what the underlying problems are and what might be done to
alleviate them.
The GAO found in its report, ``Postal Service: Conditions
Leading to Problems in Some Major Purchases,'' January 18,
1996, GGD-96-59, problems encountered during the seven
purchases it reviewed were due to Postal officials' poor
judgment, circumventions of existing internal controls, and
failure to resolved conflicts of interest. It also found that
many contracting officers could not exercise independent
judgment, since they reported directly to those officials who
required the products or services. Further, the GAO maintained
that the Service has taken action to increase oversight and
accountability over its purchasing process and to safeguard
against such future occurrences. In response to recommendations
by the Office of Government Ethics, the Service has outlined
actions it is taking to improve its ethics program which should
help prevent the recurrence of such purchasing problems. The
Service has also instituted a formal ethics education and
training program for contracting officers and personnel.
Further, the Service has established one purchasing executive
with management authority over the three separate Postal
purchasing groups; and the Service plans to adopt a requirement
for more explicit documentation of and rationale for
contracting officers' business and policy actions. The
subcommittee will explore the findings in subsequent oversight
hearings.
b. Benefits.--This report provided program information and
indicated possible solutions to ensure that the Postal Service
maintains appropriate internal controls and ethics rules in its
procurement program.
c. Hearings.--This issue, and others, were raised during
the conduct of the subcommittee's General Oversight hearing,
entitled ``General Oversight of the U.S. Postal Service: The
Board of Governors, the Postmaster General, the Postal Rate
Commission the Office of the Postal Service Inspector General
and the General Accounting Office'' on March 13, 1996.
18. Evaluation of USPS Oversight of National Change of Address Program
Licensees.
a. Summary.--The Postal Service National Change of Address
(NCOA) program provides postal customer address change
information to licensees who, in turn, use the data to update
proprietary address lists which are sold nationwide. In order
to protect the privacy of its customers, the USPS imposes
restrictions on licensees' use of NCOA information and monitors
compliance with those restrictions. The subcommittee, with the
assistance of GAO, is examining what restrictions the NCOA
license agreement imposes regarding the use and release of
address information; whether those restrictions are consistent
with ``privacy'' requirements of Federal law; how USPS monitors
the licensees' compliance with NCOA license agreements and
oversees corrective actions for identified violations.
The subcommittee received a report from GAO entitled ``U.S.
Postal Service: Improved Oversight Needed to Protect Privacy of
Address Changes,'' August 13, 1996, GAO/GGD-96-119. The report
concluded that the Postal Service has been unable to prevent,
detect, or correct potential breaches in agreements with the 24
licensees who collect and disseminate address-correction
information. These licensees provide address service to other
private firms and organizations in accordance with the standard
licensing agreement. GAO reported that the Service has not
expressed a clear and consistent position regarding the use of
change of address data by licensees to crease new-movers list
in violation of Federal privacy guarantees. In addition, the
Service was not enforcing its contract limitations with
licensees to ensure that the use of change-of-address data is
limited to the purpose for which it was intended.
b. Benefits.--This report provided the subcommittee with
critical information regarding privacy issues for postal
patrons. It analyzed the Postal Service's ability to quickly
and accurately correct customers' addresses which is key to
effective and cost-efficient mail delivery. However, the report
also provided the subcommittee with information identifying
concerns regarding potential misuse of change-of-address data.
The findings contained in this report further provide the
subcommittee with informational resources necessary for the
effective conduct of its oversight responsibilities. Further,
the recommendations will serve as a basis for additional
legislative inquiry regarding needed postal reforms.
c. Hearings.--None.
19. Final-Offer Arbitration as an Alternative Means of Resolving
Contract Disputes Between Postal Management and Labor Unions.
a. Summary.--In September 1994, GAO reported that
adversarial postal labor-management relations have resulted in
reliance on arbitration to settle contract disputes. Both
management and unions have expressed dissatisfaction with such
a procedure. The subcommittee asked that GAO obtain more
information on final-offer arbitration as an alternative to the
current procedure. Specifically: What is final-offer
arbitration? How and where has final-offer arbitration been
used? What do management and labor officials believe has been
the impact of final-offer arbitration on their relations?
The subcommittee received one briefing by the GAO regarding
final offer arbitration. GAO reported that final offer is a
specific approach to interest arbitration in which an
arbitrator's decision is restricted to the selection of either
management's offer or the union's offer. In contrast, the
approach used by the Postal Service and its four major postal
unions has been conventional interest arbitration, an approach
that allows an arbitrator to develop an award decision that may
be different from the offers submitted by the Service and the
unions.
Final offer has been suggested as an alternative approach
to contract dispute resolution that can encourage Postal
Service management and the unions to settle their disputes
instead of relying on an arbitrator to do it for them.
b. Benefits.--The report will indicate ways that Congress
can encourage and assist postal management and unions to
resolve longstanding labor relations problems. In addition, the
subcommittee will continue its review in determining whether
final offer interest arbitration should be included as part of
any future postal legislative reform efforts.
c. Hearings.--None.
20. Review of the Quality and Quantity of Data Produced by the Postal
Service for the Rate Setting Process.
a. Summary.--One of the areas of the subcommittee's
continuing concern is the quality and quantity of data
collected and provided by the Postal Service in the ratesetting
process.
Given the general public concern, the subcommittee, GAO,
the Postal Rate Commission, and the Postal Service are working
together to assess the setting of postal rates. The GAO study
will determine the extent to which existing systems produce
complete, current, and accurate data necessary for ratemaking.
The report should demonstrate whether the systems produce data
that are reliable enough to set and adjust rates in accordance
with relevant provisions of the Postal Reorganization Act of
1970. It should also assess the cost and quality of reports and
other results generated from existing Postal Service rate data
systems compared to alternative approaches, systems, and
techniques for gathering and reporting such data. The
subcommittee anticipates the final results by the end of 1996.
These findings will assist the subcommittee in evaluating
reform of the Postal Service's ratemaking process.
b. Benefits.--For an entity like the Postal Service that
accounts for $54 billion in annual revenue and touches the
lives of all Americans, the data provided to the Commission is
essential to establishing fair and equitable rates. In many
instances, it is the same data that the Postal Service needs to
effectively manage an organization of 855,000 people in a
businesslike manner. The results of this study will be
critically important to the Congress' deliberations on whether
to modify the ratesetting process.
c. Hearings.--None.
21. Evaluation of the Management Practices, Working Conditions, and
Security at Postal Facilities in Southern California.
a. Summary.--On July 9, 1995, at the City of Industry
Processing Center in California, a postal worker shot and
killed one of his supervisors. About the same time, workers at
the La Puente California Post Office staged street protests
over what they perceived to be a ``hostile'' work environment.
Because of these and similar incidents and complaints, the
Postal Service Inspector General was requested to evaluate the
working conditions, management practices, and security at
postal facilities in the Santa Ana District of California. The
evaluation should clarify the state of labor-management
relations in the Santa Ana District, and help indicate how
Congress and the executive branch can encourage and assist
postal management and unions to address the longstanding and
severe labor-management problems in the Postal Service. The
subcommittee coordinated a briefing with the U.S. Postal
Service, the Inspection Service and the Southern California
House delegation.
b. Benefits.--This restricted report, which the
subcommittee received from the Inspector General/Chief Postal
Inspector in February 1996 provided critical information to the
subcommittee on the status of labor-management relations at the
southern California facilities in question. It also highlighted
several problems which the subcommittee hopes is unique to
these facilities, involving favoritism in employment and
promotions; allegations of sexual harassment and a working
environment that was less than conducive to effective
performance of its many duties. The subcommittee is continuing
to examine ways in which it can encourage and assist postal
management and unions to resolve longstanding labor relations
problems not only in southern California, but, nationwide.
c. Hearings.--None.
22. Miscellaneous Investigative Issues.
a. Summary.--The subcommittee has conducted a variety of
investigations into other specific issues that are the subject
of continued monitoring through oversight hearing questions and
informal inquiries. In addition to an extensive number of
matters examined as part of the oversight hearing record, the
subcommittee reviewed the following six specific issues: (1)
the quality of the Postal Service's performance management
systems which were found to be inadequate by the GAO in
previous reviews; (2) the decision by the Postmaster General to
restructure the Service in 1992 and the extent to which, if at
all, he was aware that this decision would be viewed as a
reduction in force; (3) the feasibility of implementing the
requirements of the Postmark Prompt Payment Act (H.R. 1963);
(4) the extent to which the whistle blower protection laws
apply to Postal Service employee; (5) the extent to which the
applicable criminal statutes regarding mail fraud and theft
apply to the Postal Service's efforts in the electronic mail
environment; and (6) the effectiveness of these criminal
statutes as a deterrent to criminals utilizing the U.S. mail.
b. Benefits.--These investigations help to facilitate the
effective conduct of oversight responsibilities by the
subcommittee of the operations of the U.S. Postal Service.
Ensuring efficient postal operations meets the mandate of the
Postal Reorganization Act that the Postal Service operate in a
businesslike manner so as to break even over the long term. The
inability to prove financially viable places at risk the
obligation for the Postal Service to provide universal service
since an insolvent postal administration would require an
infusions of taxpayer funds to conduct its operations. The
conduct of these investigations furthers the public interest
that the Postal Service is operated in an efficient and
effective manner and furthers the ability of the institution to
meet its public service obligations.
c. Hearings.--None.
23. Review of the Postal Service Board of Governors.
a. Summary.--As the governing body of the U.S. Postal
Service, the Board of Governors is comparable to a board of
directors of a private corporation. The Board is comprised of
nine Governors who are appointed by the President with the
advice and consent of the Senate. The nine governors select a
Postmaster General, who becomes a member of the Board, and
those 10 select a Deputy Postmaster General who also serves on
the Board.
The Postmaster General and the Deputy Postmaster General
participate with the Governors on all matters except that they
may not vote on rate or classification adjustments, adjustments
to the budget of the Postal Rate Commission, or election of the
chairman of the Board. While the entire Board approves requests
to the independent Postal Rate Commission for changes in rates
and classes of mail, the Governors alone, upon receiving a
recommendation from the Commission, may approve, allow under
protest, reject or modify that recommendations. The entire
Board is responsible for determining the dates on which new
rates and classification adjustments become effective.
The Board directs the exercise of the powers of the Postal
Service, directs and controls its expenditures, reviews its
practices, conducts long-range planning, and sets policies on
all postal matters. The Board takes up matters such as service
standards, capital investments and facilities projects
exceeding $10 million. It also approves officer compensation.
As part of the subcommittee's continuing review of postal
operations, it found that the Board of Governors had not been
reviewed since the 1970's. The subcommittee is concerned that
the board's legal status, e.g., its authority and
responsibilities, and the compensation and qualifications of
its members may be outdated when compared to similar boards.
Key issues to be addressed include the similarities and
differences between the Postal Service Board of Governors and
other selected boards. In addition, this review solicits the
input from current and former Governors regarding the strengths
and weaknesses of the present Board structure.
b. Benefits.--The subcommittee believes that this review
will provide a long overdue review of the operations of the
governing body of the USPS. The Board is ultimately responsible
for the efficient operation of the Postal Service, a public
entity with estimated revenues of $59 billion for fiscal year
1997. Consequently, the Board, and ultimately the American
public and all postal ratepayers, will benefit by this thorough
review in order to determine what reforms may be needed of this
important governing body.
This review will be conducted in reference to the recent
enactment of Public Law 104-208 which granted the Governors an
increase in compensation from $10,000 per year to $30,000, the
first increase since enactment of the Postal Reorganization Act
25 years ago.
c. Hearings.--The subcommittee addressed the subject of
governance of the Postal Service in the conduct of two of its
general oversight hearings: (1) a hearing entitled ``General
Oversight of the U.S. Postal Service--the Board of Governors''
held on March 8, 1995; and (2) a hearing entitled ``General
Oversight of the U.S. Postal Service--the Board of Governors,
the Postmaster General, the Postal Rate Commission the Office
of the Postal Service Inspector General and the General
Accounting Office'' was held on March 13, 1996.
24. Review of the Status of USPS Initiatives to Improve Employee
Working Conditions and Organizational Performance.
a. Summary.--In its September 1994 report on Labor-
Management issues within the USPS (U.S. Postal Service: Labor-
Management Problems Persist on the Workroom Floor, GAO/GGD-94-
201A & B), the GAO made several substantive recommendations to
address the myriad of difficulties it encountered in its
analysis. That report was prompted by the November 1991
shooting of postal employees in the Royal Oak Mail Service
Center in Royal Oak, MI, and other incidents of workplace
violence at Postal facilities. The report evaluated (1) the
status of labor-management relations in the Postal Service, (2)
past efforts to improve relations, and (3) opportunities to
improve relations.
The report found that labor-management relations problems
persist on the factory floor of postal facilities. These
problems have not been adequately dealt with over many years
because labor and management leadership at the national and
local levels have been unable to work together to find
solutions to employee problems. GAO found that labor-management
problems are long-standing and have multiple causes that are
related to an autocratic management style, adversarial employee
and union attitudes, and inappropriate and inadequate
performance management systems. Further, changing working
relations on the workroom floor will require increased
flexibility, necessitating changes in union contracts and
personnel systems to allow experimentation with and evaluation
of new approaches in relations between supervisors and
employees.
Specifically, GAO recommended that the Postal Service, the
unions, and management associations develop a long-term
agreement of at least 10 years for changing the workroom
climate of both processing and delivery functions. This
agreement should provide incentives that encourage teamwork and
give employees greater responsibility and accountability for
work results.
The subcommittee has endorsed this GAO recommendation and
has urged the parties to agree to participation in this labor-
management ``summit.'' Further, the subcommittee has asked the
GAO to revisit those recommendations to determine if any have
been implemented to improve working conditions.
b. Benefits.--The subcommittee is concerned that poor
postal labor-management relations continue to plague the
operations of the U.S. Postal Service. In addition, the nature
and extent of poor labor-management relations may differ
substantially from one facility to another; this may reflect
the impact of individual management or labor representation
styles. The subcommittee believes it is incumbent upon labor
and management to review the recommendations made by the GAO in
its 1994 report and to seek to implement those initiatives to
provide a better working environment for all postal employees
and improved service for postal customers. History has shown
what hostile management-labor relations can foster.
Consequently, a mutual climate of respect between labor and
management ensures both a safe working environment and more
efficient postal operations.
c. Hearings.--The subcommittee conducted a hearing on June
7, 1995, as part of its general oversight hearing agenda,
entitled ``Oversight of Postal Employees and Management
Groups'' which explored the recommendations presented by the
GAO in its labor-management report.
25. Continued oversight of Internal Audits of the existing Inspector
General.
a. Summary.--The subcommittee receives a quarterly summary
of significant internal Audits/Investigations conducted by the
Postal Inspection Service (PIS) as part of its Inspector
General function and prepared for the Board of Governors of the
Postal Service. The format for these summaries allows the
Governors and the subcommittee to quickly monitor the amount of
the total costs of the audited subject, the total amount
avoided or recovered as result of the audit and the total
amount not recovered or avoided. For example, in Fiscal Year
1996, the Inspection Service conducted a series of Contract
Audits which relate to the purchasing or contracting for
equipment, facilities, supplies, services and transportation.
These audits questions a significant portion of postal
operating expenses and 94 percent of the costs ($1.3 billion)
questioned by the PIS in their Contract Audits was subsequently
recovered by postal management.
The Inspection Service further conducts Capital Investment
Audits which review after-cost studies of facility projects and
are used to evaluate the effectiveness of the projections
contained in the original Decision Analysis Reports (DARs).
These audits allowed the Inspection Service to make
recommendations to postal management for savings which amounted
to $33.3 million in fiscal year 1996. Financial Installation
and District Accounting Office Audits identified revenue
deficiencies of $2.4 million within postal operations for FY
1996. These audits point out deficiencies in accounting and
operational controls and practices. As an example, in a single
facility, the Inspection Service found that Post Office box and
caller service fees totaling $41,023 were not collected. In
addition, the Inspection Service found that a general lack of
management oversight regarding second-class mailings led to a
revenue deficiency of $94,334 while an additional $100,000 was
not refunded to postal customers or reported in an appropriate
postal account as required. These facility financial audits
allow the Inspection Service to focus local management's
attention on the weak spots in their internal management and
accounting practices that result in the overall loss of
revenues. With 40,000 individual facilities, it is critical the
accounting and management operations function as efficiently as
possible. In another facility, the Inspection Service found
that approximately 2.5 million pieces of first-class and
priority mail had been delayed from 24 to 48 hours due to
inadequate staffing, misunderstandings regarding reporting
requirements and certain internal practices.
b. Benefits.--These audits and investigations have has
proved invaluable for the subcommittee in the conduct of its
oversight responsibilities. In addition, this information is
critical to the subcommittee in monitoring the progress of the
Postal Service in cost-avoidance and revenue protection via
audits of its various procurement. Such audits aid the
subcommittee in evaluating the seriousness with which the
Postal Service views its internal reporting organization. These
internal controls are mandatory for organizations such as the
Postal Service. As an example, the Postal Service utilizes the
world's largest cash transaction system through which it
processes postal receipts totaling from $300 to $500 million at
more than 5,000 banks daily through more than nearly 40,000
facilities. The Service owns and maintains 6,962 buildings with
174 million square feet and leases an additional 27,626
buildings with 92 million square feet. The cost of gasoline for
the Postal Service increases by more than $1 million when the
price per gallon goes up by a penny. The protection and
recovery of postal revenues should be of prime importance not
only to postal management but to every person who buys a postal
stamp or product.
Wasteful spending by the Postal Service results in higher
postage rates or reduced service for all postal customers. The
subcommittee is committed to working to ensure that the Postal
Service operates as efficiently as possible and will work with
the General Accounting Office, the Inspector General, the
Postal Inspection Service and postal management to accomplish
this important goal.
c. Hearings.--These internal audits and the performance of
the Inspection Service, were the subject of oversight hearings
conducted during both sessions of the 104th Congress.
26. Oversight of the implementation of the new Office of Inspector
General for the Postal Service as provided in Public Law 104-
208.
a. Summary.--The 1988 amendments to the Inspector General
Act of 1978 provided that the Chief Postal Inspector of the
Postal Service perform the dual role as the designated agency
Inspector General. The subcommittee, as well as prior oversight
committees, perceived this dual role as an inherent conflict of
interest and expressed concern regarding the credibility of
this organizational structure. The subcommittee requested the
GAO to investigate whether this dual role compromised the
ability of the Inspector General to perform audits and
investigations pursuant to its statutory mandates. The GAO
reported in ``Inspectors General: A Comparison of Certain
Activities of the Postal IG with other IGs,'' September 20,
1996, AIMD-96-150, that the current structure organizationally
impaired the Inspector General in performing independent audits
of the Inspection Service.
This issue was addressed by the subcommittee in H.R. 3717,
the Postal Reform Act of 1996. Title I of this measure provided
for a Presidentially appointed Inspector General independent of
Postal Service management. Subsequent hearings and discussions
led to subcommittee Chairman McHugh obtaining authorizing
legislation in the Omnibus Appropriations Act of 1996 which
established an Independent Office of Inspector General; one who
is appointed by the Governors of the Postal Service for a term
of 7 years (see section 662 of Public Law 104-208).
b. Benefits.--An independent Office of Inspector General
benefits the Postal Service, postal ratepayers and the American
people by providing for an independent watchdog over postal
operations, free of control and organizationally independent of
postal management. It is expected this new office will provide
significant oversight of an agency which accounts for more than
$54 billion in revenue in fiscal year 1995. This arrangement
will also allow the Chief Postal Inspector to focus his
energies on his duties of ensuring the security of postal
facilities and employees, protecting the public from mail fraud
schemes and other criminal usage of the mail, and enforcing the
laws regarding revenue protection. The subcommittee will
continue to monitor the implementation of this amendment and
looks forward to working with the Governors and the new
Inspector General.
c. Hearings.--None.
27. Continued oversight of labor-management relations within the Postal
Service.
a. Summary.--The subcommittee continues to receive reports
from labor and management representatives that problems exist
in the working environments of certain postal facilities as
well as between the national representatives of labor and
management. As part of its in-depth review of this topic in
1994 the GAO recommended that the Postmaster General conduct a
``labor summit'' of the heads of all the employee groups and
labor unions and himself. This summit should be used to discuss
issues that are outside of the normal collective bargaining
discussions and that reflect the larger problems of poor
communication, numbers of grievances and treatment of managers
and employees.
b. Benefits.--Early in the first session the chairman of
the subcommittee called upon the Postmaster General to hold
such a summit. While the Postmaster General did issue
invitations for a summit, it was during the time of labor
negotiations and the invitations were generally declined until
the negotiations were completed. By the end of the second
session those negotiations were completed. The subcommittee
chairman has again called upon the Postmaster General and the
presidents of the employee associations and labor unions to
conduct a summit to explore in detail the basic problems that
exist in the framework of the existing labor-management
relationships. To ensure that such a summit takes place the
subcommittee chairman included in H.R. 3717, the Postal Reform
Act of 1996, provisions establishing a Presidentially
appointed, non-postal, Labor-Management Commission to address
these issues and make recommendations to the Congress and the
Postal Service on improvements. The subcommittee believes that
a serious dialog and a complete understanding of individual
views would serve to greatly improve the working environment
for each employee, improve service to postal customers and
allow the Postal Service to achieve increased productivity,
performance and better revenue utilization.
c. Hearings.--None.
28. Continuing Review of the Competitive Role of the U.S. Postal
Service.
a. Summary.--The subcommittee is continuing to follow-up on
an earlier report of the General Accounting Office entitled,
``U.S. Postal Service: Pricing Products in a Competitive
Environment,'' GAO/GGD 92-49, which outlined the competition
the U.S. Postal Service faces in the marketplace and its
response to that competition. The report also examined the
constraints and obstacles that hinder Postal Service efforts to
compete effectively and evaluated the major issues of pricing
postal services in a competitive environment. Specifically, GAO
recommended Congress examine the nine ratemaking criteria set
forth in the Postal Reorganization Act and consider amending
them to give demand factors--including elasticities of demand--
a greater weight in order to assure the long-term viability of
the Postal Service as a nationwide full-service provider of
postal services. GAO found that such use of demand factors
would not be inconsistent with the rate criterion requiring the
establishment of a fair and equitable rate schedule. Further,
GAO suggested that Congress consider allowing the Postal
Service to offer volume discounting to the extent it would not
result in ``undue or unreasonable discrimination'' among
mailers or result in an ``undue or unreasonable preference'' to
a mailer.
This report served as the foundation for the subcommittee's
efforts in reviewing the ratemaking criteria and in
establishing guidelines for the Postal Service to offer volume
discounts in H.R. 3717. The subcommittee will continue to
review ratemaking efforts in order to prepare the Postal
Service with the capability of providing efficient, cost-
effective service to universal audience of postal customers.
b. Benefits.--The subcommittee recognizes that a
financially viable Postal Service is critical toward meeting
the mandate of universal mail service as provided by the Postal
Reorganization Act of 1970. The subcommittee questions whether
the private sector is capable or desirous of offering such a
guarantee of universal mail delivery. However, the impact of
competition from private couriers, private mail box retail
facilities and the emerging electronic alternatives is being
felt by the Postal Service. Lost mail volumes and revenues can
contribute to a spiral of low mail volume and increased postage
rates further decreasing volume. The GAO has recognized the
competitive nature of the Postal Service, but, queries whether
it can compete fairly. The subcommittee has asked the GAO to
continue to gather data on this rapidly changing environment.
This information will be taken into consideration as it
continues to prepare postal reform legislation.
c. Hearings.--None.
29. Continuing Review of Universal Mail Service and Ratemaking in
Canada.
a. Summary.--The Canadian Government enacted the Canada
Post Corporation Act in 1981, which created Canada Post, a
Crown Corporation with commercial freedoms to operate similar
to a private business. On July 31, 1996, the Ministry
Responsible for Canada Post Corporation received the report of
the Canada Post Mandate Review. The review was critical of
Canada Post's excursions into the private sector competitive
markets.
b. Benefits.--Of all foreign postal administrations, Canada
Post most resembles the U.S. Postal Service. However, mail
volume in Canada lags considerably behind the United States.
The benefits and problems experienced by Canada in its postal
reform will prove valuable to the subcommittee as we consider
reforms for the U.S. Postal Service.
c. Hearings.--None.
30. Continuing Review of Mailing Costs for the Federal Government.
a. Summary.--The U.S. Government incurs an estimated $1.2
billion annually in mailing costs. According to the General
Accounting Office, the General Services Administration (GSA),
the central mail manager for the government, lacks data on the
extent to which Federal agencies take advantage of centralized
mail preparation and postal discounts. The subcommittee has
requested the GAO report to it concerning government mailing
costs and the extent to which agencies have taken advantage of
available postage discounts.
b. Benefits.--The subcommittee believes that opportunities
exist for the Federal Government to take advantage of the
myriad postage discounts offered to postal customers to a
greater degree than is occurring presently. Better coordination
of governmental mailing needs to take place in order to make
these opportunities a reality. By taking advantage of readily
available postage discounts, agencies--and taxpayers--can
benefit through more efficient mail service and cheaper mailing
rates.
c. Hearings.--None.
31. Continuing Review of Growth in Postal Service Employment.
a. Summary.--The subcommittee is very interested in the
apparent connection between the number of postal employees and
the impact such employment numbers have on the quality of
postal services. The Postal Service has invested billions on
automation equipment to reduce human handling of mail. Yet, the
Postal Service remains a very manually intensive operation with
more than 80 percent of its costs reflective of employee pay
and benefits.
b. Benefits.--According to the GAO, in 1989 the Postal
Service reached record employment of career and noncareer
employees at 845,141. Throughout 1992 and 1993 the Postal
Service went through an aggressive downsizing effort that
brought its numbers of employees to 781,591. Unfortunately,
service was noticeably degraded and the Postal Service
immediately launched an effort to hire additional workers to
improve service. This effort has allowed the numbers of full
and part-time employees to reach 855,471 in November 1995.
While this number exceeds 1989 employment figures, it is
important to recognize that the current number of career
employees--739,804--is less than the 1989 career employment
count of 773,699. Arguably, this indicates a conscious effort
on the part of the Postal Service to hold down its labor costs.
The numbers of employees, the need for quality postal services
and the elasticities of demand for those services require the
subcommittee to continue its oversight efforts.
c. Hearings.--None.
32. Continuing Review of the Statutory Mail Box Restriction.
a. Summary.--The United States is one of few nations to
have restricted access to the individual's mail box. Current
law provides that only that individual and the U.S. Postal
Service may have access to the mailbox. During the joint
hearing with the Senate Subcommittee on Post Office and Civil
Service, representatives of foreign postal administrations
testified that lack of restrictions on mailbox access had
little effect on exacerbating mail theft. Other witnesses
expressed envy regarding protections this offered postal
customers and law enforcement.
b. Benefits.--This restriction is an emotional issue for
postal employees and officials, customers and private sector
competitors. However, no data exists to substantiate the views
of either those who want to continue to restrict access or
those who wish to open the mail box up to non-Postal Service
delivery. The subcommittee intends to work with the GAO to
secure some insight into postal customer views on this issue
and provide the necessary data upon which future decisions can
be based.
c. Hearings.--None.
33. Express Mail Accounts and Insufficient Controls for Revenue
Protection.
a. Summary.--Express Mail Corporate Accounts allow
customers to deposit money with the Postal Service for using as
needed to pay for Express Mail delivery services. The
subcommittee is concerned that the Service's protection of
postage revenue in this area may prove inadequate and be
subject to abuse. The subcommittee requested the GAO to help it
in its investigation and requested the GAO to investigate what
steps the Service is taking to prevent fraud in this area and
what steps the Service can take to help avoid or minimize
revenue losses in this area.
GAO reported to the subcommittee in ``U.S. Postal Service:
Revenue Losses from Express Mail Accounts Have Grown,'' October
24, 1996, GAO/GGD-97-3, that some mailers obtained Express Mail
services using invalid corporate accounts and that the Service
did not collect the postage due. In fiscal year 1995, the
Service lost revenue of about $800,000--a 91 percent increase
from fiscal year 1993--largely because the Service had not
verified corporate accounts, which it later determined were
invalid.
The subcommittee is concerned that this investigation, and
others conducted by the subcommittee regarding revenue
protection, present a troubling pattern of lack of adequate
control and protection of Service revenues. The subcommittee is
continuing to maintain a focus on the problems identified and
will work with the Postal Service to assure it takes seriously
the weaknesses in its systems.
b. Benefits.--Tight controls over revenue protections
benefit both the Service and ratepayer by helping forestall
future rate increases. While some revenue losses due to lax
controls may not seem significant in comparison with an overall
Service income of $59 billion for fiscal year 1997, an
established pattern of lax revenue protection invites future
fraud and abuse in this area while requiring ratepayers to fund
the services for mailers who intentionally defraud the system.
34. Continuing Review of the role of the U.S. Postal Service in the
Electronic Information Age.
a. Summary.--The subcommittee has been monitoring the
discussions at the Postal Service regarding its tentative
efforts to develop and offer certain electronic services such
as: telephone cards, kiosks, so-called ``smart cards'' and the
``electronic'' postmark.
b. Benefits.--These topics go to the root of what type of
products the Postal Service may offer in the future and impact
greatly on similar evaluations being done in the private sector
and the need, or lack of need, for a centralized authority,
such as the Postal Service with 40,000 retail outlets, to be a
part of these emerging industries.
c. Hearings.--None.
35. Review of Postal Inspection Service investigations of the public
threat to the U.S. mails in the Unabomber case.
a. Summary.--The so-called ``Unabomber'' waged an
unprecedented, two-decade campaign of terror, setting off as
many as 15 bombs in a period of 17 years.
The apprehension of the Unabomber represented the combined
efforts of Federal, State and local law enforcement. Due to his
frequent utilization of the U.S. mail as a vehicle for the
delivery of his bombs, the Unabomber's actions fell within the
jurisdiction of the Postal Inspection Service. Following the
capture of the Unabomber, the subcommittee arranged a briefing
by the Chief Postal Inspector, Kenneth J. Hunter, for
interested congressional staff.
b. Benefits.--This briefing and review, which included
examples of how the Unabomber's packages were wrapped and
addressed, provided additional information that individuals
could use to protect themselves against suspicious packages.
While a suspect has now been arrested in the Unabomber case,
the subcommittee intends to continue to monitor use of the U.S.
mail to illegally transmit explosives and other nonmailable
matter to consider appropriate legislative changes.
c. Hearings.--None.
III. Legislation
A. NEW MEASURES
Civil Service Subcommittee
1. H.R. 3586, Veterans' Employment Opportunities Act of 1996.
a. Report Number and Date.--House Report No. 104-675, July
12, 1996.
b. Summary of Measure.--To amend title 5, United States
Code, to strengthen veterans' preference, to increase
employment opportunities for veterans, and for other purposes.
It permits preference eligibles and certain other veterans to
overcome artificial restrictions on the scope of competition
for announced vacancies, provides preference eligibles with
increased protections during reductions in force, establishes
an effective redress system for veterans who believe their
rights have been violated, extends veterans' preference to
certain positions at the White House and in the legislative and
judicial branches of government, and requires the Federal
Aviation Authority to apply veterans' preference in reductions
in force.
c. Legislative History/Status.--H.R. 3586 was introduced on
June 5, 1996, and referred to the Committee on Government
Reform and Oversight. On June 12, 1996, the Subcommittee on
Civil Service reported H.R. 3586 to the full committee. The
bill was approved and order reported, as amended, by the
Committee on Government Reform and Oversight on June 20, 1996.
H.R. 3586 passed the House by voice vote under suspension of
the rules on July 30, 1996, and was received in the Senate on
July 31, 1996.
d. Hearings.--No hearings were held on this legislation.
However, the subcommittee held a hearing, entitled ``Veterans
Preference: A New Endangered Species,'' on April 30, 1996.
2. H.R. 3841, Omnibus Civil Service Reform Act of 1996.
a. Report Number and Date.--House Report No. 104-831,
September 23, 1996.
b. Summary of Measure.--H.R. 3841, the Omnibus Civil
Service Reform Act of 1996, revises the executive branch's
ability to conduct demonstration projects under Chapter 47 of
Title 5, U.S.C., and enhances the role of performance
management in several employee evaluation activities. The bill
expands the array of benefits available under the Thrift
Savings Plan, including enabling new employees to begin
contributing to their retirement accounts when they enter the
workforce, allowing entering employees to roll their individual
401(k) retirement accounts into their Thrift Savings Plan
accounts, and liberalizing the terms under which employees can
borrow or withdraw their contributions.
The bill also authorizes agencies to exercise additional
flexibility in reducing their workforces by allowing employees
to volunteer for RIFs and by authorizing employees to enter
into nonreimbursable details as a means of demonstrating their
skills for potential new employers. The bill creates a variety
of ``soft-landing'' options to ease the transition between
Federal and private sector employment. These include allowing
employees to continue their Federal Employees Group Life
Insurance coverage by paying the premiums after leaving Federal
service, extending for up to 18 months the period during which
agencies may continue to pay the employer share of premium in
the Federal Employees Health Benefits Program, and creating a
combination of within-agency priority placement programs,
education, retraining, and relocation assistance programs that
will ease post-Federal employment transitions.
The bill enables agencies to reimburse Federal employees
for the costs of certain forms of liability insurance,
authorizes disbarment of health care providers who have
committed fraud against the Federal Employees Health Benefits
Program, and will ensure that FBI personnel have access to the
same Merit System Protection Board personnel appeals system as
other Federal employees.
c. Legislative History/Status.--H.R. 3841 was introduced by
subcommittee Chairman Mica on July 17, 1996. It was referred to
the Committee on Government Reform and Oversight and
subsequently to the Subcommittee on Civil Service on July 17,
1996. The subcommittee forward H.R. 3841 to the full committee.
On July 25, 1996, the Committee on Government Reform and
Oversight approved and ordered reported to the House, as
amended, H.R. 3841. It was called up under suspension of rules
and passed the House on September 27, 1996, by voice vote. The
Senate received H.R. 3841 on September 28, 1996.
d. Hearings.--The Subcommittee on Civil Service conducted a
hearing on the bill on July 16, 1996. In addition, the
subcommittee held a number of hearings in 1995 addressing
concerns related to the civil service reform proposals on
October 12, 13, 26, and November 29. In 1996, the subcommittee
also held related hearings on May 8 and 23.
3. S. 868, Federal Employees Emergency Leave Transfer Act.
a. Report Number and Date.--None.
b. Summary of Measure.--S. 868, the ``Federal Employees
Emergency Leave Transfer Act of 1995,'' provides the authority
for the President to direct the Office of Personnel Management
to establish an emergency leave transfer program when a
substantial number of Federal employees are adversely affected
by a disaster or emergency, including natural disasters and
emergency situations such as that created by the Oklahoma City
bombing.
c. Legislative History/Status.--This bill was introduced in
the Senate on May 25, 1995, and referred to the House Committee
on Government Reform and Oversight on October 24, 1995, and
referred to the Subcommittee on Civil Service on October 25,
1995. The Committee on Government Reform and Oversight approved
S. 868 on September 18, 1996, and ordered it reported. The
House passed an amended version on September 25, 1996,
incorporating revised language from H.R. 3586 to strengthen
veterans' preference and provisions from H.R. 3841 and S. 1080
to improve the Thrift Savings Plan for Federal employees by
adding two new investment funds, eliminating restrictions on
borrowing, establishing authority for a one-time permanent
withdrawal, and authorizing new employees to deposit funds from
their private 401(k) plans in the Thrift Savings Plan. There
was no further action in the Senate.
d. Hearings.--No hearings were held on this measure.
District of Columbia Subcommittee
1. H.R. 1345, District of Columbia Financial Responsibility and
Management Assistance Act of 1995.
a. Report Number and Date.--House Report No. 104-96, March
30, 1995.
b. Summary of Measure.--The purpose of H.R. 1345 is to
assist the District of Columbia in addressing its financial
problems and would (1) establish a new entity, the District of
Columbia Financial Responsibility and Management Assistance
Authority (Authority), to advise the District, oversee and
improve its financial and managerial activities, and (2)
provide the District with additional access to short- and long-
term debt financing.
The Authority would consist of five members appointed by
the President in consultation with Congress. The Authority
would review and approve annual financial plans and budgets
submitted by the District. These financial plans would require
the District to move its budget into balance by 1999. In order
to ensure that the actions of the District are consistent with
the approved plan, the bill would require the Authority to (1)
review District-passed legislation before it is submitted to
Congress; (2) approve or disapprove leases or contracts that
the Mayor proposes to execute; (3) comment on budget
reprogramming requests; (4) review the District's performance
quarterly and report any variances between budgeted and actual
transactions; and (5) approve all borrowing by the District,
whether from the U.S. Treasury or in the private market. Also,
the Authority would control access to the annual Federal
payment to the District as well as any funds advanced to the
District by the U.S. Treasury.
The legislation also calls for creating the position of a
Chief Financial Officer (CFO) of the District of Columbia. The
CFO is appointed by the Mayor with the advice of the City
Council. The Authority must confirm the Mayor's candidate. Only
the Authority may fire the Chief Financial Officer during a
control period. Public Law 104-8 also significantly enhanced
the Inspector General position and provided the same Mayoral
appointment, Authority confirmation and firing procedure as for
the CFO.
In addition, H.R. 1345, would create an extensive and
detailed 4 year financial plan for the District.
c. Legislative History/Status.--H.R. 1345 was introduced on
March 29, 1995. On March 29, 1995, the Subcommittee on the
District of Columbia reported H.R. 1345, to the full committee.
The bill was approved and ordered reported to the House by the
Committee on Government Reform and Oversight on March 30, 1995.
On April 3, 1995, H.R. 1345 passed the House amended by voice
vote and was received in the Senate on April 4, 1995. H.R. 1345
passed the Senate with amendments on April 6, 1995, and the
House agreed to the Senate amendments on April 7, 1995, and was
signed by the President on April 17, 1995, Public Law 104-8.
d. Hearings and Subcommittee Actions.--The Subcommittee on
the District of Columbia held hearings on February 22, March 2,
and March 8, 1995, on the financial status of the District of
Columbia and on the experience of other cities which have
operated under financial control boards. The following
witnesses testified: Johnny C. Finch, Assistant Comptroller
General, General Government Division, General Accounting
Office, on February 22; Rudolph W. Giuliani, mayor of the city
of New York; George V. Voinovich, Governor of Ohio; Hugh L.
Carey, former Governor of New York; Edward V. Regan, former
comptroller of New York State; David Cohen, chief of staff to
the mayor of Philadelphia, on March 2nd; Dr. Bernard E.
Anderson, Assistant Secretary for Employment Standards, U.S.
Department of Labor and former chairman of the Pennsylvania
Intergovernmental Cooperation Authority (PICA); and Ronald G.
Henry, former executive director of PICA, on March 8th.
On March 29, 1995, the subcommittee held a Mark-up session,
and forwarded the measure to the full committee. On March 30,
1995, the full committee held a mark-up session and ordered
H.R. 1345 to be reported by voice vote.
2. H.R. 2108, District of Columbia Convention Center and Sports Arena
Authorization Act of 1995.
a. Report Number and Date.--House Report No. 104-227,
August 2, 1995.
b. Summary of Measure.--The purpose of H.R. 2108 is to
amend the District of Columbia Home Rule Act to allow a
governmental entity selected by the Mayor to develop a new
sports arena to: (1) pledge tax revenues dedicated by local law
as security for revenue bonds to finance the cost of a sports
arena preconstruction activities; and (2) spend these dedicated
revenues without appropriations from the District Government
for both preconstruction activities and debt service. The
legislation further provides that bonds issued for arena
development are not backed by full faith and credit of the
District of Columbia and that revenues dedicated to sports
arena development are not to be included in the calculation of
the accumulative debt limit of the District.
In addition, H.R. 2108 would eliminate the current
requirement that the Washington Convention Center Authority
receive appropriations from the District Government to use tax
revenues currently dedicated to the Convention Center
Authority. These revenues may be used to pay for operating
expenses of the existing convention center and preconstruction
activities of the new convention center.
c. Legislative History/Status.--H.R. 2108 was introduced on
July 25, 1995. On July 26, 1995, the Subcommittee on the
District of Columbia reported H.R. 2108 to full committee. The
bill was approved and ordered Reported to the House by the
Committee on Government Reform and Oversight on August 2, 1995,
and placed on Union Calendar No. 119. H.R. 2108 passed House by
Voice Vote on August 4, 1995, and was received in the Senate on
August 7, 1995, and referred to the Senate Committee on
Governmental Affairs.
On August 9, 1995, the Subcommittee on Oversight of
Government Management held a hearing. On August 10, 1995, it
was ordered to be Reported to the Senate by the Senate
Committee on Governmental Affairs and placed on Senate
Legislative Calendar under General Orders, Calendar No. 180.
The Senate on August 11, 1995, passed the legislation by Voice
Vote. On September 6, 1995, it was signed by the President,
Public Law 104-28. Several amendments to Public Law 104-8 have
been enacted as part of the District of Columbia Appropriations
bills for FY 1996 and FY 1997.
d. Hearings and Subcommittee Actions.--On July 12, 1995,
the Subcommittee on the District of Columbia held a hearing on
H.R. 1862, District of Columbia Convention Center
Preconstruction Act of 1995, and H.R. 1843, District of
Columbia Sports Arena Financing Act of 1995. At the hearing the
following witnesses testified: Barry Campbell, DC chief of
staff, Office of the Mayor; David A. Clarke, chairman, DC City
Council; Charlene Drew Jarvis, council member, DC City Council;
Michelle Bernard, chairwoman, Redevelopment Land Agency; Abe
Pollin, chairman, Centre Group USAIR Arena; Eugene Godbold,
senior vice president, Nationsbank; and Jeffrey C. Steinhoff,
Director of Planning and Reporting, General Accounting Office.
3. H.R. 2661, District of Columbia Fiscal Protection Act of 1995.
a. Report Number and Date.--House Report No. 104-408,
December 14, 1995.
b. Summary of Measure.--H.R. 2661 would allow the Mayor of
the District, with prior written notification to the District
Council, the District Control Board, the Congress, and the
President, to obligate and spend District funds in the event
that a new fiscal year begins and the District's regular
appropriations bill has not been enacted. As amended, H.R.
2661, would provide that the District of Columbia could
continue its normal municipal operations using only its own
locally raised revenues in a fiscal year while awaiting final
action on its appropriation even if there is no Continuing
Resolution in effect. This measure specifically mandates that
the city must spend at the lowest spending level approved by
Congress.
c. Legislative History/Status.--H.R. 2661 was introduced on
November 17, 1995, and was referred to the Committee on
Government Reform and Oversight. On November 21, 1995, the bill
was referred to the Subcommittee on the District of Columbia.
The bill was approved and ordered reported, as amended, to the
House by the Committee on Government Reform and Oversight on
December 14, 1995, and placed on Union Calender 205.
d. Hearings and Subcommittee Actions.--The Subcommittee on
the District of Columbia held a hearing on December 6, 1995,
and the following witnesses testified: Representative George W.
Gekas, (R-PA); Edward DeSeve, Controller, Office of Management
and Budget; Dr. Andrew Brimmer, chairman, District of Columbia
Financial Responsibility and Management Assistance Authority;
Marion Barry, Mayor, District of Columbia; Anthony Williams,
chief financial officer, District of Columbia; Michael Rogers,
city administrator, District of Columbia; Charles Hicks,
president, American Federation of State, County, and Municipal
Workers; David Schlein, American Federation of Government
Employees; Diane Duff, director of Federal affairs, Greater
Washington Board of Trade; and Dr. Marlene Kelley, deputy
commissioner for public health, District of Columbia.
4. H.R. 461, Closing of Lorton Correctional Complex.
a. Report Number and Date.--None.
b. Summary of Measure.--H.R. 461, to close the Lorton
Correctional Complex, and to prohibit the incarceration of
individuals convicted of felonies under the laws of the
District of Columbia in facilities of the District of Columbia
Department of Corrections. The legislation would also create a
Commission to determine the future use of the 3,000 reservation
which is owned by the Federal Government.
For several years, Virginia local and State elected
officials, Members of Congress, and criminologists have
recommended closing this complex, which is obsolete and
potentially dangerous facility. In response to a congressional
mandate in the FY 1995 Commerce, State and Justice
Appropriations bill, the National Institute of Corrections
commissioned a study of the D.C. Department of Corrections. The
National Council on Crime and Delinquency (NCCD) was
commissioned to conduct that investigation. The subcommittee
convened an informational hearing on May 22, 1996, to review
the preliminary findings of that study. Subcommittee Chairman
Davis directed attention of the hearing to living and working
conditions at the prison, which the NCCD report showed to be
universally substandard. Other issues discussed were problems
in personnel and procurement, underfunding and the physical
condition of the facility, which was described as unhealthy and
life threatening.
c. Legislative History/Status.--H.R. 461, was introduced on
January 9, 1995, and referred to the Committee on Government
Reform and Oversight. On January 24, 1995, it was referred to
the Subcommittee on the District of Columbia.
d. Hearings and Subcommittee Actions.--The subcommittee
held three hearings on this matter and the following witnesses
testified: Senator John Warner (R-VA); Representative Frank
Wolf (R-VA); Representative James Moran (D-VA); James Gilmore,
attorney general, Commonwealth of Virginia; Michael Rogers,
city administrator, District of Columbia; David E. Clarke,
chairman, District of Columbia City Council; William Lightfoot,
District of Columbia council member; Kate Hanley, chairman,
Fairfax County board of supervisors, VA; Gerald Highland,
Fairfax County board of supervisors, VA; Maureen Caddigan, vice
chairwoman, Prince William County board of supervisors, VA; and
Michelle McQuigg, Prince William County board of supervisors,
VA, on March 17, 1995. The June 7, 1995, hearing allowed
testimony from a diverse group of citizens and organizations.
The third hearing was held on May 22, 1996, to review the
findings of the NCCD study. The subcommittee received testimony
from the following witnesses: Margaret Moore, director,
District of Columbia Department of Corrections; Dr. James
Austin, executive vice president, National Council on Crime and
Delinquency; and Steve Harlan, vice chairman, District of
Columbia Financial Responsibility and Management Assistance
Authority (Control Board).
5. H.R. 1855, To Amend Title 11, District of Columbia Code, To Restrict
the Authority of the Superior Court of the District of Columbia
Over Certain Pending Cases Involving Child Custody and
Visitation Rights.
a. Report Number and Date.--None.
b. Summary of Measure.--H.R. 1855, is intended to enable a
child to return to her native land free of fear of continued
court battles and judicial rulings on her custody and
supervision.
c. Legislative History/Status.--H.R. 1855, was introduced
on June 15, 1995, and referred to the Committee on Government
Reform and Oversight. On June 19, 1995, H.R. 1855 was referred
to the Subcommittee on the District of Columbia.
The language of H.R. 1855 was incorporated as Section 350
of H.R. 3675, Transportation Approporiations for FY 1997 and
signed by the President on September 30, 1996 as Public Law
104-205.
d. Hearings and Subcommittee Actions.--The subcommittee
held a hearing on August 4, 1995, and the following witnesses
testified on the bill: Dr. Eric Foretich; Jonathan Turley,
professor of law, George Washington University; Hollida
Wakefield, Institute of Psychological Therapies; Antonia
Morgan; Robert Morgan; Charles D. Gill, Superior Court Judge,
State of Connecticut; David Harmer, Esquire; Susan Hall, vice
president, Alliance for the Rights of Children; and Nieltje
Gedney, Committee for Mother and Child Rights.
6. H.R. 3663, District of Columbia Water and Sewer Authority Act of
1996.
a. Report Number and Date.--House Report No. 104-635, June
25, 1996.
b. Summary of Measure.--To amend the District of Columbia
Self-Government and Governmental Reorganization Act to permit
the Council of the District of Columbia to authorize the
issuance of revenue bonds with respect to water and sewer
facilities, and for other purposes. H.R. 3663 is needed to
implement legislation already passed by the District of
Columbia Council, as signed by the mayor, and approved by the
Control Board under Public Law 104-8, creating the District of
Columbia Water and Sewer Authority (Act 11-201, amended by
Emergency Act on June 5, 1996). H.R. 3663 accomplishes the
intent of Congress to allow the issuance of revenue bonds for
water and sewer purposes by the District of Columbia and to
permit the District Government to delegate the power being
vested to the new Water and Sewer Authority. Other related
provisions prevent the District Government from altering the
Authority's budget and exempts bond proceeds and repayments
from being part of the District's appropriations process. The
legislation also removes both the revenues of the Water and
Sewer Authority and outstanding General Obligation bonds issues
for water and sewer purposes from the calculation of the
District debt ceiling.
c. Legislative History/Status.--H.R. 3663 was introduced on
June 18, 1996 and was referred to the Committee on Government
Reform and Oversight. The subcommittee considered and approved
H.R. 3663, by voice vote and forwarded it the full committee on
June 18, 1996. The Government Reform and Oversight Committee
met on June 20, 1996, approved and ordered reported H.R. 3663
to the House unanimously by voice vote. On June 27, 1996, the
House considered the measure by unanimous consent and passed
H.R. 3663, as amended by voice vote. It was received in the
Senate on June 28, 1996 and passed the Senate by unanimous
consent on July 30, 1996. It was signed by the President on
August 6, 1996, and became Public Law 104-184.
d. Hearings and Subcommittee Actions.--The Subcommittee on
the District of Columbia held two hearings on February 23, 1996
and June 12, 1996. The first hearing was devoted to oversight
issues associated with the District's waste and water systems.
It also examined the overall operation and performance of the
Blue Plains Waste Water Treatment Facility and its compliance
with Environmental Protection Agency (EPA) permits and orders.
The following witnesses testified: Michael McCabe, Director of
Region III, EPA; Larry King, director of the District of
Columbia Department of Public Works, Tom Jacobus, Chief of
Washington Aqueduct, U.S. Army Corps of Engineers; Erik Olson,
senior attorney of the Natural Resources Defense Council, and
Dr. Peter Hawley, medical director of the Whitman-Walker
Clinic. The second hearing was intended to evaluate what had
taken place at the Blue Plains Facility since the February 23
hearing. The following witnesses testified: Hon. Steny H.
Hoyer; Michael Rogers, city administrator of the District of
Columbia; Larry King, director of the DC Department of Public
Works; Katherine Hanley, chairman of the Fairfax County Board
of Supervisors; Bruce Romer, chief administrative officer of
Montgomery County, MD; Howard Stone, chief administrative
officer of Prince Georges County, MD: Michael McCabe, Region
III Administrator of EPA; and Henri Gourd, vice president/
manager of MBIA Insurance Corp. Written testimony was received
from John Hill, executive director of the District of Columbia
Financial Responsibility and Management Assistance Authority
(Control Board).
7. H.R. 3336, Bill granting the District of Columbia Temporary
authority to waive reduction for early retirement under the
Civil Service Retirement System.
a. Report Number and Date.--None.
b. Summary of Measure.--A bill to provide for temporary
authority to waive the reduction for early retirement under the
Civil Service Retirement System to assist the District of
Columbia government in its workforce downsizing efforts, and
for other purposes. H.R. 3336 authorizes the Office of
Personnel Management to establish a temporary program under
which mandatory reductions in annuities for certain employees
of the District of Columbia who voluntarily separate from
service would be waived in connection with the District of
Columbia's plans for downsizing its workforce. This legislation
is intended to assist the District of Columbia in its ongoing
efforts to reduce the size of its workforce in an orderly and
effective fashion.
c. Legislative History/Status.--H.R. 3336 was introduced by
Delegate Norton on April 25, 1996 and was referred to the
Committee on Government Reform and Oversight and subsequently
referred to the Subcommittee on District of Columbia on May 1,
1996.
d. Hearings and Subcommittee Actions.--None.
8. H.R. 3389, District of Columbia Pension Liability Funding Reform Act
of 1996.
a. Report Number and Date.--None.
b. Summary of Measure.--A bill to reduce the unfunded
liability of the teachers', firefighters', police officers',
and judges' pension funds of the District of Columbia by
increasing and extending the contributions of the Federal
Government to such funds, increasing employee contributions to
such funds, and establishing a single annual cost-of-living
adjustment for annuities paid from such funds, and for other
purposes.
c. Legislative History/Status.--H.R. 3389 was introduced on
May 2, 1996, by Delegate Norton and was referred to the
Committee on Government Reform and Oversight. On May 8, 1996,
it was referred to the Subcommittee on the District of Columbia
and it currently has one co-sponsor.
d. Hearings and Subcommittee Actions.--None.
9. H.R. 3664, District of Columbia Government Improvement and
Efficiency Act of 1996.
a. Report Number and Date.--None.
b. Summary of Measure.--This bill would make several
technical corrections and enhance the operations aspects of the
District's government.
c. Legislative History/Status.--H.R. 3664 was introduced on
June 18, 1996, and was referred to the Committee on Government
Reform and Oversight and subsequently referred to the
Subcommittee on the District of Columbia. The subcommittee
considered and approved H.R. 3664 and forwarded to the full
committee by voice vote on June 18, 1996. The Committee on
Government Reform and Oversight considered, approved and
ordered reported by voice vote to the House on June 20, 1996.
d. Hearings and Subcommittee Actions.--None.
Government Management, Information, and Technology Subcommittee
1. H.R. 1271, Family Privacy Protection Act of 1995.
a. Report Number and Date.--House Report No. 104-94, March
29, 1995.
b. Summary of Measure.--Legislation protecting the privacy
of minors from federally sponsored questioning traces its
origins to the General Education Provisions Act (GEPA) (Public
Law 90-247, January 2, 1968, as amended).
The GEPA, originally enacted as Title IV of the Elementary
and Secondary Education Amendments of 1967 (Public Law 90-247),
brought together in one document statutory provisions enacted
during the previous 100 years that applied to Federal education
programs. Since 1970, most major acts extending Federal
education programs' authorization for appropriations, have
amended GEPA in some significant way. Three of those changes
have greatly affected the section of GEPA on ``Protection of
Pupils'': (1) the ``Kemp amendment'' of 1974; (2) the ``Hatch
amendment'' of 1978; and (3) the ``Grassley amendment'' of
1994.
1. The Kemp amendment (Public Law 93-380, August 21, 1974)
required that parents of pupils participating in federally
assisted educational ``research or experimentation program[s]
or project[s]'' be provided access to the instructional
materials used therein. A ``research or experimentation program
or project'' was defined as an instructional activity using
``new or unproven teaching methods or techniques.''
2. The Hatch amendment (Public Law 95-561, November 1,
1978) enhanced pupil protection by inserting several provisions
of the Privacy Act of 1974 to apply specifically in cases
covered by the Kemp amendment. The provision prohibited
requiring pupils to participate in certain forms of testing as
part of a federally assisted education program, without the
prior consent of the pupil (if an adult or emancipated minor)
or the pupil's parent/guardian. The requirement was specific in
referring to ``psychiatric'' or ``psychological'' tests or
treatments that gather information on: political affiliations;
``potentially embarrassing'' mental or psychological problems;
sexual behavior or attitudes; illegal, antisocial, or
``demeaning'' behavior; ``critical appraisals'' of family
members; privileged relationships, such as those with lawyers,
physicians, or ministers; or income (except where necessary to
determine eligibility for financial aid).
3. The Grassley amendment (Public Law 103-227, General
Education Provisions Act, March 31, 1994) sought to restore
parents/guardians' rights and powers in obtaining the redress
of family privacy violations resulting from intrusive questions
or improper procedures. The provision was no longer limited to
only research or experimentation programs or projects and
psychiatric or psychological tests. It expanded consent
requirements to ``any survey, analysis, or evaluation'' that
was federally assisted. The Grassley amendment also contained a
lower threshold for triggering the consent requirement.
Questions that happen to reveal private information trigger the
prior-consent requirement, not just questions with a primary
purpose of revealing private information. According to a
Congressional Research Service memorandum, the Department of
Education had yet to modify its regulations in order to reflect
any of the Grassley amendment provisions as of March 1995.
Because the Grassley amendment impacts only the Department
of Education, not all intrusions on family privacy by federally
sponsored questionnaires or surveys are being addressed. New
legislation is necessary to expand the scope of parental
consent requirements to cover surveys or questionnaires funded
by agencies other than the Department of Education. Some of the
Federal nationwide surveys, not now covered by the Grassley
amendment, that might be affected by the Family Privacy
Protection Act include: Head Start and other child development
programs, as well as potentially health or welfare related
surveys of the Department of Health and Human Services; child
nutrition programs of the Department of Agriculture; education
and related programs of the National Science Foundation and
National Endowments for the Arts and the Humanities; and
national surveys done by the Department of Commerce's Bureau of
the Census, either as part of its own decennial population
updates or as contract work for other Federal Departments and
agencies.
The Department of Health and Human Services and the Bureau
of the Census regularly conduct and update a number of large-
scale nationwide surveys that include minors among the
respondents. None of these surveys, as currently conducted
(except where noted otherwise), require all parents/guardians
of participating minors to provide verbal or written consent.
To the extent that any of H.R. 1271's seven categories of
private information might be revealed in the course of
surveying, the proposed legislation would significantly affect
the conduct of these surveys: National Crime Victimization
Survey; National Health Interview Survey; and Youth Risk
Behavior Survey.
H.R. 1271, the Family Privacy Protection Act, establishes a
consent requirement for those conducting a survey or
questionnaire funded in whole or part by the Federal
Government. Those seeking responses of minors on surveys or
questionnaires must obtain parental/guardian consent before
asking seven types of sensitive questions. The bill also
provides five types of common sense exceptions from this
requirement.
Areas of concern for which parental consent is required for
minors are questions related to: parental political affiliation
or beliefs; mental or psychological problems; sexual behavior
or attitudes; illegal, antisocial, or self-incriminating
behavior; appraisals of other individuals with whom the minor
has a familial relationship; relationships that are legally
recognized as privileged, including those with lawyers,
physicians, and members of the clergy; and religious
affiliations and beliefs.
The areas of exception are: the seeking of information for
the purpose of a criminal investigation or adjudication; any
inquiry made pursuant to a good faith concern for the health,
safety, or welfare of an individual minor; administration of
the immigration, internal revenue or customs laws of the United
States; the seeking of any information required by law to
determine eligibility for participation in a program or for
receiving financial assistance; and the seeking of information
to conduct tests intended to measure academic performance.
The legislation requires that Federal agencies provide
implementation procedures and ensure full compliance with the
legislation. The procedures shall provide for advance
availability of each survey or questionnaire for which a
response from a minor is sought. The Family Privacy Protection
Act does not apply to the Department of Education, because a
similar provision is already contained in the General Education
Provisions Act pertaining to that subcommittee. The act would
become effective 90 days after enactment.
The Contract With America includes a commitment to protect
and strengthen the rights of families. As part of this
commitment, H.R. 1271, the ``Family Privacy Protection Act of
1995,'' provides for parents/guardians' rights to supervise and
choose their children's participation in any federally funded
survey or questionnaire that involves intrusive questioning on
sensitive issues. H.R. 1271 is an outgrowth of the original
legislation provided for in Title IV of H.R. 11, the Family
Reinforcement Act, which is included as part of the Contract
With America.
The requirements of H.R. 1271 take effect 90 days after
enactment and would apply to current grantees of departments
and agencies, not just future recipients of funds. Therefore,
time will be of the essence in providing those conducting
surveys and questionnaires with necessary guidance through
implementing rules and regulations. By incorporating the
requirements of the Family Privacy Protection Act into these
existing administrative processes, OMB can assure expeditious
implementation.
The reported bill provides the parents or guardians the
opportunity to decide whether to consent to the participation
of their minor children in federally funded surveys or
questionnaires.
c. Legislative History/Status.--H.R. 11, Title IV was
referred to the Committee on Government Reform and Oversight,
and a hearing was convened by the Subcommittee on Government
Management, Information, and Technology on March 16, 1995. The
bill was marked-up in the subcommittee on March 22, 1995, where
subcommittee Chairman Horn presented an amendment in the nature
of a substitute to H.R. 11, Title IV. This amendment was
introduced as H.R. 1271 on March 21, 1995. Two amendments were
considered and adopted without objection. The first, offered by
Representative Maloney, ranking minority member of the
Subcommittee on Government Management, Information, and
Technology, required that agency rules and regulations
promulgated pursuant to the legislation provide for protection
of the confidentiality of survey data. The other amendment,
offered by Representative Tate, provided for advance public
availability of proposed surveys and questionnaires. The
legislation passed the subcommittee unanimously by voice vote.
On April 4, 1995, the legislation passed the House by a vote of
418 to 7, and was received in the Senate on April 5, 1995.
d. Hearings and Subcommittee Actions.--On March 16, 1995,
the Subcommittee on Government Management, Information, and
Technology, held a hearing to solicit comments from interested
parties on Title IV of H.R. 11, the Family Reinforcement Act.
Witnesses included Senator Charles E. Grassley (R-IA), Dr.
Lloyd Johnston, program director, Survey Research Center,
University of Michigan, Dr. Matthew Hilton, member of the Utah
Bar and an authority on family privacy issues, Ms. Sally
Katzen, Administrator of the Office of Information and
Regulatory Affairs, Office of Management and Budget, and Dr.
William T. Butz, Associate Director, Demographic Programs,
Bureau of the Census. Written statements were provided from the
American Association of School Administrators, the American
Civil Liberties Union, the American School Counselor
Association, the American School Health Association, the
National Association of School Nurses, Inc., the National
Association of School Psychologists, and the National School
Boards Association.
The Government Reform and Oversight Committee met on March
23, 1995, to consider H.R. 1271. Chairman Clinger presented an
amendment in the nature of a substitute to H.R. 1271 reflecting
the two subcommittee amendments. The bill, as amended, was
favorably reported to the House unanimously by voice vote and
without further amendment by the full committee.
2. H.R. 1756, The Department of Commerce Dismantling Act.
a. Report Number and Date.--None.
b. Summary of Measure.--The Commerce Department contains a
diverse group of programs, including the Bureau of Economic
Analysis, the Census Bureau, Economic Development
Administration, Export Administration, Patent and Trademarks
Office, National Institute of Standards and Technology,
Technology Administration, U.S. Travel and Tourism
Administration and the National Weather Service. About 60
percent of its budget is used for the National Oceanic and
Atmospheric Administration (NOAA), which includes the National
Weather Service. The Department has an annual budget of $4
billion and has 35,000 employees.
Title I of H.R. 1756 would redesignate the Commerce
Department as the ``Commerce Programs Resolution Agency''
(CPRA) effective 6 months after enactment, an independent
executive branch agency headed by an administrator appointed by
the President and confirmed by the Senate. CPRA would be
charged with ``winding down'' or the elimination of those
activities not intended for continuation. While most of the
continuing functions of the Commerce Department would be
transferred out of Commerce to their receiving agency 6 months
after the date of enactment of the Chrysler bill, the specific
disposition of Commerce programs are contained in Title II of
the Chrysler bill.
c. Legislative History/Status.--The bill was introduced by
Representative Chrysler on June 7, 1995, and was referred to
the Committee on Government Reform and Oversight in addition to
Committees on Commerce, Transportation and Infrastructure,
Banking and Financial Services, International Relations,
National Security, Agriculture, Ways and Means, the Judiciary,
Science, and Resources. On June 16, 1995, it was referred to
the Subcommittee on Government Management, Information, and
Technology. It was reported amended from Ways and Means on
September 21, 1995, Report No. 104-206, Pt. I.
d. Hearings and Subcommittee Actions.--The subcommittee
held a legislative hearing on September 6th to enable the
members, among other things, to examine the CPRA model as a
possible prototype for future program resolution agency models.
Subcommittee Chairman Horn, in his opening statement, noted
that the hearing would attempt to determine if the Commerce
Program Resolution Agency, as proposed, could effectively
dispose of the Department's functions. He also noted that
several other bills for eliminating agencies contained the
``Program Resolution Model,'' consequently CPRA could provide
the model for the process for eliminating a number of agencies.
Committee Chairman Clinger observed that ``Our goal is to
improve government activity where it is necessary, refocus
government efforts where it is misdirected, and get government
out of activities in which it does not belong.''
Congressman Chrysler provided testimony on his bill, citing
a Congressional Budget Office (CBO) savings estimate of $8
billion over 5 years. He emphasized what he regarded as the
inappropriateness of many of the activities in which the
Department is engaged.
In her opening statement, Mrs. Collins stressed the
effectiveness of the current Commerce Secretary in advancing
American trade interests abroad and in supporting the
development of the Nation's technological capacity.
The subcommittee received testimony from Secretary of
Commerce Brown who questioned the CBO savings estimate,
contending the new law would cost $1.542 billion more in the
next 5 years. He proposed elimination of duplicated functions
around the Federal Government by consolidating them in the
present Department.
In his questioning of the Secretary, Mr. Mica challenged
the use of Department resources to engage in a grass roots
lobbying effort to oppose legislation which would change the
organization of the Federal Government's trade functions.
Dr. Rodgers, the CEO of Cypress Semiconductor provided
testimony describing several examples of what he termed
``corporate welfare,'' which are some of the programs that
could be terminated by dismantling the Department of Commerce.
Mr. Black, president, Computer and Communications Industry
Association, provided testimony advising deliberation in
examining alternatives to the status quo, including possibly
keeping a trimmed Department of Commerce.
Mr. Cobb, Heritage Foundation, offered testimony in support
of dismantling the Department and recommending staffing the
Commerce Programs Resolution Agency with members of the Office
of the Inspector General to ensure a successful phaseout. He
noted that CPRA would not be a new agency, only the mechanism
through which an existing agency would be phased-out.
Nye Stevens, Director of Federal Management and Workforce
Issues, General Accounting Office, testified on the purpose,
structuring, and projected continuing need for a capacity like
that of the Commerce Programs Resolution Agency.
Dr. Dwight Ink, president emeritus, Institute of Public
Administration, and senior fellow, National Academy of Public
Administration cited his personal experience presiding over the
elimination of a Government agency in warning of possible legal
and personnel problems with creating the temporary resolution
agency, questioning across-the-board funding cuts, suggesting
the dismantling could be done in less than 3 years, and
reaffirming longstanding support for phasing out the Department
of Commerce.
Mr. Raymond J. Keating, the chief economist of the Small
Business Survival Committee, expressed full support for
dismantling the Department of Commerce, advocating that it be
pursued rapidly and boldly, in the spirit of small-business
entrepreneurship, in order to serve as a model for more
difficult and even bolder Federal agency reductions in the
future.
Mr. Robert McNeill, executive vice chairman, Emergency
Committee on American Trade, supported the general dismantling
thrust but expressed the need for a continued strong Government
presence in the area of international commerce.
Mr. Jeffrey Smith, executive director, Commercial Weather
Services Association, urged the committee to provide greater
opportunities to entrepreneurs through privatization to furnish
weather forecasting services on a competitive basis.
Professor Charles Bingman, another veteran of Government
agency abolition, reorganization, and creation, suggested in
written testimony that abolishing an agency is not only a
political responsibility but a management process, and is best
done as quickly as possible, with concern and sensitivity to
human consequences.
3. H.R. 2234, Debt Collection Improvement Act of 1995.
a. Report Number and Date.--None.
b. Summary of Measure.--Federal agencies are currently
authorized to use a number of debt collection tools under Title
31 of the U.S.C. H.R. 2234 strengthens the debt collection
tools available to agencies. In addition to strengthening these
tools, H.R. 2234 envisions several other changes to improve
agency performance in collecting debts. The Department of the
Treasury will be given lead responsibility for collecting debts
owed to the government and establishing consistent treatment of
similarly situated debtors. Agencies will be eligible to retain
some portion of increased debt collections, establishing an
incentive for agencies to collect debts.
Since the 1930's, Federal agencies have been occupying an
ever larger role in the Nation's credit markets. According to
the ``Analytical Perspectives'' of the fiscal year 96 Budget of
the U.S. Government, the Federal Government is responsible for
a portfolio of $155 billion in direct loans; $699 billion in
guaranteed loans; $4,986 billion in insurance; and $1,502
billion in obligations of government-sponsored enterprises.
This increased credit role has led to increased delinquencies.
The Federal Government currently has $49.9 billion in
delinquent nontax debts and $70 billion in tax debts. These
amounts have increased each of the last 5 years, despite
writeoffs averaging $10 billion each and every year. It is the
upward trend in delinquencies that H.R. 2234 is designed to
remedy.
The first modern statutory authority to collect Government
claims dates from the Federal Claims Collection Act in 1966
(the ``1966 act''). Prior to 1966, the Federal Government
collected debts under common law authority. The Debt Collection
Act of 1982 (the ``1982 act'') built upon the 1966 act and
created a number of tools available to agencies to assist in
collecting debts. The 1982 act allowed agencies the ability to
use private debt collectors, credit reporting bureaus, and
other debt collection tools.
c. Legislative History/Status.--H.R. 2234 was introduced on
August 4th with 10 original coauthors, including Mr. Horn, Mrs.
Maloney, Mrs. Morella and Ms. Norton of the Government Reform
and Oversight Committee. The major provisions include:
offsetting payments; agency coordination; disbursements/
facilitating offset; additional collection tools; and improving
financial management. The Debt Collection Improvement Act
passed the House of Representatives as part of Title V of H.R.
2491 by a vote of 227-203 on October 26, 1995. The provisions
in H.R. 2234, as amended by the Committee on Government Reform
and Oversight on September 19, 1995, were adopted by the House
on April 25, 1996, as part of H.R. 3019 by a recorded vote of
399-25, and was signed into law on April 26, 1996; Public Law
104-134.
d. Hearings and Subcommittee Actions.--The Subcommittee on
Government Management, Information, and Technology held a
legislative hearing on H.R. 2234 on September 8, 1995. In
addition, the subcommittee has examined the issue of debt
collection in related hearings on financial management issues.
Representative Jim Lightfoot testified that by moving
toward electronic disbursements, the Federal Government could
streamline its operations, send payments and benefits to
recipients faster, reduce crime and fraud, and save $66 million
over 5 years. Representative Lightfoot testified that if we
moved to electronic disbursements, the problem of lost checks
would diminish.
In the second panel, John Koskinen, Deputy Director, Office
of Management and Budget testified that the administration
supports H.R. 2234 because it will lower the deficit and
improve financial management. Mr. Koskinen mentioned the
deteriorating Federal credit picture, and that delinquencies
for nontax debts increased by nearly 25 percent from 1993 to
1994. He also referred to a report on debt collection prepared
by the President's Council on Integrity and Efficiency, which
endorsed many of the tools included in H.R. 2234.
George Munoz, Chief Financial Officer/Assistant Secretary
for Management of the Department of the Treasury also
testified, highlighting the anticipated benefits of adopting
H.R. 2234. Mr. Munoz cited the increased collections from
improved litigation tracking and systems integration. Mr. Munoz
also testified on the benefits of electronic disbursements.
Anthony Williams, then-Chief Financial Officer, U.S.
Department of Agriculture, detailed the collections achieved by
USDA using various collection tools, including administrative
offset, tax refund offset, and litigation. Upon questioning,
Mr. Williams discussed the agency's policies regarding
compromising debts.
Michael Smokovich, Deputy Commissioner, Financial
Management Service, Department of the Treasury, testified on
the advantages of moving toward electronic funds transfer. He
cited statistics demonstrating savings of $66 million per year,
a reduction in the 800,000 lost checks per year, and other
reductions in fraud, theft, crime, and forgery. Upon
questioning, Mr. Smokovich cited the security record of
electronic disbursements, noting that nobody has ever broken
through the security procedures established by Treasury and the
Federal Reserve.
Jeff Steinhoff, Director of Policy and Planning, U.S.
General Accounting Office, endorsed the additional tools
included in H.R. 2234. Mr. Steinhoff noted that agencies
assumed greater credit risk than lenders in the private sector,
and that the Government should expect higher default rates as a
result. In addition, he supported the idea to use private tax
collectors to supplement other tax collection personnel.
Bob Tobias, president of the National Treasury Employees
Union, mentioned his concern that the use of private collection
agencies would undermine voluntary taxpayer compliance and
damage operations at the Internal Revenue Service. Mr. Tobias
advocated increasing appropriations for civil servant tax
collectors and raised concerns over taxpayer privacy.
On the final panel, Thomas Gillespie testified on behalf of
the American Collectors Association, a group of private debt
collection firms. Also on the panel were Stephen Sale of Sale,
Quinn, Deese and Weiss, James Tracey of Diversified Collection
Services, and Robert Bernstein of the Commercial Law League.
Mr. Bernstein endorsed centralization of debts within the
Treasury Department. Mr. Tracey recounted his firm's successful
experience with wage garnishment in collecting student loans.
4. H.R. 1162, Lockbox Deficit Reduction Proposals.
a. Report Number and Date.--None.
b. Summary of Measure.--This hearing examined a number of
proposals designed to create a deficit reduction Lockbox, or
guarantee, that a spending cut passed during debate on an
appropriations bill is not reallocated during the House/Senate
Conference Committee to another project or program. The
multiplicity of these proposals, the varied approaches they
take, and their complicated effects on the budget process, were
important topics that Members examined in detail.
H.R. 1162 would establish a Deficit Reduction Trust Fund
and provide for downward adjustment of discretionary spending
limits in appropriations bills. This legislation stems from
perceived problems experienced when the House of
Representatives voted for a spending cut and the funds were
redirected to another project or account either in the
conference committee or when another appropriations bill was
considered. Members were interested in making permanent any
reduction in spending which was passed on the floor of the
House.
c. Legislative History/Status.--H.R. 1162 was introduced on
March 8, 1995 and was referred to the Subcommittee on
Government Management, Information, and Techonology on March
10, 1995. It was reported amended by the Committee on Rules, H.
Rept. 104-205, Part I. On September 13, 1995, the House passed
H. Res. 218, and was received in the Senate on September 14,
1995.
d. Hearings and Subcommittee Actions.--Subcommittee
Chairman Horn and subcommittee Chairman Goss of the
Subcommittee on Legislation Budget Process of the Committee on
Rules, held a joint hearing to examine proposals related to
Lockbox deficit reduction efforts. Interested Members of
Congress were invited to testify before the subcommittees.
Hon. Michael Crapo noted his frustration at passing cuts to
appropriations bills, only to see the funding shifted to
another program rather than being reduced. Representative Crapo
described his past efforts at passing Lockbox type bills.
Hon. Mark Foley described the frustrations experienced by
the freshman class in reducing Government spending.
Representative Foley presented a letter signed by virtually
every freshman advocating adoption of a Lockbox-type approach.
Mr. James Blum, Deputy Director, Congressional Budget
Office, noted the success that Congress has had in controlling
the type of discretionary spending targeted by the Lockbox
proposal, and the heavy contribution of mandatory programs
(uncontrolled by the Lockbox bill) to the problem of the
deficit.
Dr. Alice Rivlin, Director, OMB explained the Clinton
administration's views on the Lockbox proposal, and possible
unintended consequences of a Lockbox law. Dr. Rivlin also
testified that the Lockbox issue was a technical accounting
device, and that far more important was making real choices to
balance the Federal budget.
5. H.R. 1698, Mandatory Electronic Funds Transfer Expansion Act of
1995.
a. Report Number and Date.--None.
b. Summary of Measure.--The purpose of H.R. 1698 is to
amend title 31, U.S.C., to require electronic funds transfer
for all Federal payments by 2001 to promote efficiency and
economy in the disbursement of Federal funds and to eliminate
crime incident to the issuance of Treasury checks.
c. Legislative History/Status.--H.R. 1698 was introduced on
May 24, 1995, and currently has four co-sponsors. On May 26,
1995, H.R. 1698 wa referred to the subcommittee.
d. Hearings and Subcommittee Actions.--None.
6. H.R. 1907, the Federal-aid Facility Privatization Act of 1995.
a. Report Number and Date.--None.
b. Summary of Measure.--H.R. 1907 would relax the
requirement that State or local governments wishing to
privatize infrastructure facilities, but constructed partially
or wholly with a Federal grant, repay the grant prior to
privatizing or selling the asset. This change is contingent
upon several conditions, such as the asset continuing in use
for the purpose it was originally constructed, and adherence to
all applicable grant assurances.
c. Legislative History/Status.--The bill H.R. 1907 was
introduced by Representatives McIntosh and Horn on June 21,
1995. It was referred to the Committee on Government Reform and
Oversight, and in addition the Committee on Transportation and
Infrastructure.
d. Hearings and Subcommittee Actions.--Subcommittee
Chairman Horn called the hearing on November 15, 1995. The
purpose of the hearing was to focus on the use of corporate
forms of organization to examine H.R. 1907, the Federal-aid
Facility Privatization Act of 1995. H.R. 1907 would ease the
requirement that Federal grants associated with State or
locally owned infrastructure projects are repaid prior to
privatization.
Representative David McIntosh (R-IN), the author of the
bill, testified on the origins of the bill in Executive Order
12803. Representative McIntosh stressed the importance of
reducing the burden on local governments.
Mr. Robert Poole, president, Reason Foundation, testified
in support of H.R. 1907. Mr. Poole argued that H.R. 1907 could
increase the flow of funds to improve infrastructure assets and
that if Federal grants were to be repaid, they should be
considered loans.
Mr. Allen Roth, executive director, New York State Research
Council on Privatization, testified in support of H.R. 1907,
and suggested that it could be improved. Mr. Roth offered his
experience reviewing New York State infrastructure assets,
especially the New York airports.
Mr. Michael B. Cook, Director, Office of Wastewater
Enforcement and Compliance, Environmental Protection Agency
testified on the U.S. Environmental Protection Agency's water
programs, and the crucial need for increased investment in
infrastructure assets required to comply with the Clean Water
Act and the Safe Drinking Water Act. Mr. Cook noted that the
official administration position would be available soon after
the hearing.
Mr. John Dowd, senior vice president, Wheelabrator Clean
Water Systems, Inc., testified about Wheelabrator's experience
privatizing a wastewater treatment plant in Ohio based on
Executive Order 12803, and provided extensive comments on H.R.
1907, offering suggestions for improvements.
Mr. James Barr, chairman of the board, National Association
of Water Companies testified in support of H.R. 1907 on behalf
of private water companies. Barr noted the large capital
investment requirements necessitated by current law.
Mr. Raymond Holdsworth, president, Daniel, Mann, Johnson
and Mendenhall testified in support of H.R. 1907, and noted the
importance of bringing private sector expertise to bear on
solving America's infrastructure needs. Mr. Holdsworth also
surveyed some of the larger projects on which his company was
working, including the Alameda Corridor project.
Mr. Ralph L. Stanley, senior vice president, United
Infrastructure Corp. testified in support of H.R. 1907. While
supportive of the bill, Mr. Stanley believed that other
barriers to privatization should be reduced. Mr. Stanley also
advocated the increased use of toll roads.
Mr. John Collins, senior vice president, American Trucking
Association testified in support of H.R. 1907, so long as
several amendments were made protecting highway users from fee
increases unless road improvements were made.
Mr. Viggo Butler, vice president, Airport Group
International testified in support of H.R. 1907, and described
his company's experience with operating privatized airports
throughout the world, and his interest in providing capital and
expertise to solve airport management problems in the United
States.
Mr. John Yodice, general counsel, Aircraft Owners and
Pilots Association testified that the inclusion of airports in
H.R. 1907 was premature, since the Federal Aviation
Administration would be considering airport rates and the bill
should await that study before action.
Mr. Rod Grimm, president, Thicksten, Grimm, Burgum, Inc.,
testified that some of the practical difficulties of
privatizing an asset, and offered suggestions tightening the
bill's language to increase clarity.
Ms. Peggy Kelly, policy analyst, Service Employee's
International Union testified in opposition to H.R. 1907. Ms.
Kelly disagreed that privatization was the answer for providing
new capital for public infrastructure projects and that
privatization would endanger safety and threatens public
employment.
7. H.R. 2521, The Statistical Consolidation Act of 1995.
a. Report Number and Date.--None.
b. Summary of Measure.--H.R. 2521 is designed to establish
a Federal Statistical Service. The bill would improve
coordination and planning among the statistical programs of the
government and to reduce duplication and waste in information
collected for statistical purposes.
c. Legislative History/Status.--H.R. 2521 was introduced by
subcommittee Chairman Horn on October 24, 1995, and currently
has 18 co-sponsors. It was jointly referred to the Subcommittee
on National Security, International Affairs, and Criminal
Justice, and to the Subcommittee on Government Management,
Information, and Technology on October 31, 1995.
d. Hearings and Subcommittee Actions.--On March 22, 1996,
the subcommittee held a legislative hearing on H.R. 2521.
Testimony was received from: Hon. Everett Ehrlich, Under
Secretary for Economic Affairs, Department of Commerce; Hon.
Katherine Abraham, Commissioner, Bureau of Labor Statistics,
Department of Labor; Hon. Martha Riche, Director, Bureau of the
Census, Department of Commerce; Hon. Sally Katzen,
Administrator, OIRA, Office of Management and Budget; Nye
Stevens, Director, Federal Management and Workforce Issues,
General Accounting Office; Janet Norwood, senior fellow, the
Urban Institute; Dr. James T. Bonnen, professor of agricultural
economics, Michigan State University; Dr. Maurine Haver,
president, National Association of Business Economists (NABE);
Dr. John Knapp, president, Council on Professional Associations
on Federal Statistics; and Dr. Lynn Billard, president,
American Statistical Association.
Subcommittee Chairman Horn opened the hearing emphasizing
the importance of Federal statistics and that the integrity of
the data not be compromised. He pointed out that most Federal
statistical programs were established to serve the information
needs of the particular agency in which they were based.
However, government is increasingly more interconnected, and
most economical and social issues far exceed the bounds of any
one agency.
Dr. Norwood made several points noting that the United
States has the most decentralized statistical system, and that
American citizens must have access to accurate and objective
statistical data. Norwood further emphasized this data must be
collected and interpreted by competent professionals, free from
political pressure. Finally, an effective statistical system
must be grounded in an institutional and legal framework which
is credible, set appropriate priorities and have the
flexibility to conduct the appropriate and needed research.
Mr. Ehrlich, Dr. Riche, Dr. Abraham and Ms. Katzen echoed
the Clinton administration's position that agencies should not
be consolidated. They further stated that allowing for the
sharing of data is enough to address any of the concerns that
consolidation may give rise to.
Dr. Haver testified that the data produced by the Census
Bureau, the Bureau of Labor Statistics and the Bureau of
Economic Analysis, are as vital to the private sector as to the
public. These statistics provide the basis for many operational
and planning decisions and have real dollar consequences. While
the economy of the United States has changed rapidly, the
resources to measure the growing service and hi-tech sectors
have not been available.
Dr. Billard focused on five points in her testimony. First,
the need for good statistics is fundamental to the functioning
of the government; second, it is important to build an
institutional framework which enables statistical agencies to
meet basic statistical practices prerequisites such as
integrity, quality and the confidentiality of data; third, the
new agency will have to have staff expertise in many
disciplines; fourth, the commitment to quality and professional
standards and independence are best assured by a strong,
independent Chief Statistician; and finally, H.R. 2521 has the
opportunity to clarify the relationship between the
administrator of the new agency and the coordination system
established by the Paperwork Reduction Act.
8. H.R. 3184, The Single Audit Act Amendments of 1996.
a. Report Number and Date.--House Report No. 104-607, June
6, 1996.
b. Summary of Measure.--H.R. 3184 is designed to promote
sound financial management, including effective internal
controls, with respect to Federal awards administered by non-
Federal entities; establish uniform requirements for audits of
Federal awards administered by non-Federal entities; promote
the efficient and effective use of audit resources; reduce
burdens on State and local governments, Indian tribes and
nonprofit organizations; and ensure that Federal departments
and agencies rely upon and use audit work done pursuant to
chapter 75 of title 31 United States Code, to the maximum
extent practicable.
Prior to the passage of the Single Audit Act, multiple
grant-by-grant audits had produced inefficiency and duplication
of audit efforts. There was a myriad of overlapping,
inconsistent, and duplicative Federal requirements for audits
of individual programs. The Single Audit Act eliminated this
disparate approach, replacing it with a comprehensive,
organization-wide approach to the audit.
The threshold of $100,000 for requiring a single audit was
based on the premise that 95 percent of direct Federal
assistance to local governments would be subject to audit, but
resulted in approximately 98 percent of Federal assistance
being audited. Program managers were concerned because the
single audit did not appear to provide much detailed coverage
of their particular programs, especially if the dollar amount
was such that the program was not considered to be a major
program.
In 1990, the General Accounting Office conducted a study to
illustrate the influence of the act on the financial management
practices of State and local governmental entities receiving
Federal funds; identify issues that burden the current single
audit process and limit the usefulness of the single audit
reports; and develop workable solutions to improve the single
audit process.
The standards subcommittee of the President's Council on
Integrity and Efficiency (PCIE) released a report noting
concerns about some aspects of single audit implementation.
The National State Auditors Association (NSAA) also
conducted a survey of its members in 1991, and found that the
members thought the act was an effective piece of legislation
that improves overall accountability and internal controls over
Federal funds, and provides an effective mechanism to determine
compliance with applicable Federal program laws and
regulations. NSAA believed the act provided information to
Federal program managers in a cost-effective manner and
strengthened general fiscal accountability through all levels
and units of government.
The results of these studies indicated that the Single
Audit Act is working, and has caused improvements in financial
management practices. However, the studies also indicated that
a number of issues burden the single audit process, hinder the
usefulness of the reports, and limit its impact. They all
agreed that changes could improve the functioning of the act.
c. Legislative History/Status.--Senator Glenn introduced S.
1579, the Single Audit Act Amendments of 1996 on February 27,
1996; subcommittee Chairman Horn introduced the same bill as
H.R. 3184 on March 28, 1996. The subcommittee held a hearing on
March 29, 1996; and considered H.R. 3184 on April 18, 1996, and
forwarded it to the full committee. The Government Reform and
Oversight Committee considered and ordered reported H.R. 3184
favorably to the House on April 24, 1996. S. 1579 passed the
Senate by unanimous consent on June 14, 1996; the House passed
the provisions of H.R. 3184 as S. 1579 by voice vote on June
18, 1996; and S. 1579 was signed into law on July 5, 1996,
Public Law 104-156.
d. Hearings and Subcommittee Actions.--On March 29, 1996,
the subcommittee held a hearing to address the need for changes
to the original act and examined what the changes will
accomplish. Testimony was received from: Edward DeServe,
Controller, Office of Federal Management, Office of Management
and Budget; Gene Dodaro, Assistant Comptroller General, General
Accounting Office; Randy Main, representing the Association of
Independent Research Institutes; Anthony Verdecchia,
legislative auditor of Maryland; and Kurt Sjoberg, California
State Auditor.
9. H.R. 3869, The Electronic Reporting Streamlining Act of 1996.
a. Report Number and Date.--None.
b. Summary of Measure.--The bill is designed to amend the
Federal Advisory Committee Act to direct the Director of the
Office of Management and Budget (OMB) to conduct a negotiated
rulemaking for the purpose of establishing electronic data
reporting standards for the electronic interchange of certain
data that is required to be reported under existing Federal
law.
The act will also streamline government-wide use of
electronic data transmissions in place of paperwork submissions
to included a number of reforms designed to reduce the burden
of government-imposed paperwork on businesses and households.
The proposed bill was intended to encourage a reduction in the
burden of regulatory reporting for business through the more
rapid development of data interchange standards for reporting
regulatory information in electronic formats through an
advisory committee process.
Greater use of electronic filing will improve the
efficiency of Federal Government operations by allowing
electronic submission of required information. Increased use of
electronic data interchange could ease the burden on private
firms required to report regulatory information, reduce Federal
Government administrative costs associated with processing
data, and increase the public accessibility of submitted
information.
c. Legislative History/Status.--Subcommittee Chairman Horn
introduced H.R. 3869, the ``Electronic Reporting Streamlining
Act of 1996,'' on July 23, 1996, and has 9 co-sponsors. The
subcommittee considered H.R. 3869 and reported it favorably to
the full committee on July 23, 1996. The Committee on
Government Reform and Oversight considered and approved H.R.
3869, as amended, on July 25, 1996, and ordered it reported to
the House.
d. Hearings and Subcommittee Actions.--The subcommittee
held two hearings on October 10, 1995 and on May 22, 1996 on
the Electronic Reporting Streamlining Act. Witnesses at the
October hearing were: Thomas E. Kelly, Director, Regulatory
Management and Information, Office of Policy, Planning and
Evaluation, Environmental Protection Agency; Stephen D. Hanna,
assistant for information technology, California Environmental
Protection Agency; Brad W. Lamont, vice president, Romic
Environmental Technologies Corp.; David Roe, senior attorney,
Environmental Defense Fund; and Richard A. Ferguson, board
member and executive director, Environment & Safety Data
Exchange (ESDX). Witnesses at the May hearing were: Hon. Sally
Katzen, Administrator, Office of Information and Regulatory
Affairs, Office of Management and Budget; Richard A. Ferguson,
board member and executive director, Environment & Safety Data
Exchange (ESDX); David Roe, senior attorney, Environmental
Defense Fund; and Jeffrey Snow, Electronic Data Interchange
Project, International Association of Industrial Accident
Boards and Commissions.
10. H.R. 3189, To Delay Privatization of the Office of Federal
Investigations of the Office of Personnel Management.
a. Report Number and Date.--None.
b. Summary of Measure.--H.R. 3189 is formulated to delay
the privatization of the Office of Federal Investigations of
the Office of Personnel Management in order to allow sufficient
time for a thorough review to be conducted as to the
feasibility and desirability of any such privatization.
The Office of Federal Investigations (OFI) performs
background checks on Federal employees and potential Federal
employees. Agencies granting security clearances must comply
with the same security standards for background investigations,
which are overseen by the Information Security Oversight Office
(ISOO), within the Executive Office of the President. The
background checks to comply with these requirements are subject
to OPM's authority. Agencies may either use OPM investigators,
or can employ a private contractor after obtaining a delegation
of OPM's authority.
The Office of Personnel Management intends to privatize
this function through an Employee Stock Ownership Program. The
new entity will be called the U.S. Investigations Service
(USIS). OPM will grant USIS a sole-source contract for the
first 5 years of its existence. In addition, OPM will partially
prepay USIS, in effect capitalizing USIS for its initial
operations.
Questions have been raised regarding the costs of
outsourcing this function. OPM has contracted with a private
consultant to determine the costs and benefits of privatizing
USIS, and determined that $73.8 million would be saved by the
ESOP, on a net present value basis. The General Accounting
Office is working on a report related to the costs and benefits
of privatizing the Office of Federal Investigations, and will
review the OPM methodology and findings.
Others are concerned about the security and privacy of
background checks for Federal employees and the advisability of
private contractors having access to sensitive information.
Reportedly, some agencies have expressed this concern, and will
seek to establish an in-house staff of investigators to perform
checks in the future.
In addition, H.R. 3189 would delay the privatization of the
Office of Federal Investigations for 2 years, and would require
a report submitted to Congress on the feasibility of
terminating the Office of Federal Investigations and
privatizing its functions.
c. Legislative History/Status.--H.R. 3189 was introduced by
Representative Davis on March 28, 1996 with six co-sponsors. It
was referred to the Committee on Government Reform and
Oversight on March 28, 1996, and was referred to the
subcommittee on April 2, 1996.
d. Hearings and Subcommittee Actions.--The subcommittee
held a hearing on May 22, 1996. Testimony was received from:
Hon. James B. King, Director, Office of Personnel Management;
Richard A. Ferris, Associate Director, Investigations Service,
Office of Personnel Management; Lorraine Lewis, General
Counsel, Office of Personnel Management; Deborah Apperson,
Investigator, Office of Personnel Management; and Herb
Saunders, chairman, Varicon International.
11. H.R. 1281, War Crimes Disclosure Act.
a. Report Number and Date.--House Report No. 104-819 (Part
1), September 24, 1996.
b. Summary of Measure.--This bill is to amend title 5,
United States Code, and the National Security Act of 1947 to
require disclosure under the Freedom of Information Act of
information regarding certain individuals who participated in
Nazi war crimes during the period in which the United States
was involved in World War II.
Identification of Nazi War Criminals.--Current law
restricts access to information concerning individuals who are
suspected of engaging in Nazi war crimes due to privacy or
national security exemptions. Under H.R. 1281, the War Crimes
Disclosure Act, information about these individuals in Federal
Government files could be released through the Freedom of
Information Act.
The bill allows justice to be better served by allowing
information to be released to interested parties concerning
persons who may be guilty of committing such crimes.
c. Legislative History/Status.--H.R. 1281 was introduced by
Ranking Minority Member Maloney on March 21, 1995 with 29 co-
sponsors, and referred to the subcommittee. The subcommittee
held a hearing on June 14, 1996, and marked up the bill on July
16. The committee marked up the bill on July 25. On September
24, 1996, H.R. 1281 passed the House by unanimous consent. On
October 3, 1996, it passed the Senate by unanimous consent, and
was signed into law by the President on October 19, 1996 as
Public Law 104-309.
d. Hearings and Subcommittee Actions.--A legislative
hearing was held on June 14, 1996. Testimony was received from:
Representative Tom Lantos (D-CA.); Professor Robert Herzstein,
a member of the Department of History at the University of
South Carolina in Columbia, SC; and Hon. Elizabeth Holtzman, a
former Member of Congress.
12. H.R. 3802, Electronic Freedom of Information Amendments of 1996.
a. Report Number and Date.--House Report No. 104-795,
September 17, 1996.
b. Summary of Measure.--H.R. 3802 is designed to amend
section 552 of title 5, United States Code, known as the
Freedom of Information Act, to provide for public access to
information in an electronic format.
The Freedom of Information Act was written more than 30
years ago, well before the advent of the Internet and changing
technologies. H.R. 3802 clarifies that under the Freedom of
Information Act, records maintained in an electronic format are
subject to disclosure to the public. The bill also simplifies
the administration of information requests and makes more
information about the Freedom of Information Act available to
the public via the Internet.
These are important changes which will allow citizens
greater access to information.
c. Legislative History/Status.--H.R. 3802 was introduced on
July 12, 1996 by Representative Tate and was referred to the
Committee on Government Reform and Oversight. The subcommittee
held a hearing on June 14, 1996, on S. 1090, the ``Electronic
Freedom of Information Improvement Act of 1995.'' The
subcommittee considered and approved H.R. 3802 on July 16, 1996
and forwarded it to the full committee. The Committee on
Government Reform and Oversight considered, approved and
ordered reported, as amended, by voice vote to the House on
July 25, 1996. H.R. 3802 passed the House on September 17, 1996
by 402-0, and was received and passed in the Senate on
September 18, 1996. It was signed into law by President Clinton
on October 2, 1996 as Public Law No. 104-231.
d. Hearings and Subcommittee Actions.--On June 14, 1996,
the subcommittee held a legislative hearing on S. 1090, the
``Electronic Freedom of Information Improvement Act of 1995,''
and received testimony from Senator Patrick Leahy, (D-VT),
Robert Gellman, attorney and a privacy and information policy
consultant and Alan Adler, attorney.
Mr. Gellman praised the principle in S. 1090 requiring
agencies to respond to requestor format requests for electronic
records, but suggested that S. 1090 might go too far in
allowing the requestor to unreasonably require disclosure in
seldom used formats. He further suggested that a requirement
that agencies identify redacted material on electronic records
should be subject to a standard of technical feasibility. He
criticized the Department of Justice for its handling of FOIA
litigation for agencies, stating that: ``the Department of
Justice defends unreasonable agency denials in court and will
make an argument, without regard to the purpose of FOIA or the
policies of the President, department litigators bear
substantial responsibility for much of the bad FOIA case law in
recent years.''
Mr. Adler recounted the barriers that journalists face when
they request production of records in an electronic format. In
recounting the evolution of Senator Leahy's initiatives toward
an electronic Freedom of Information bill, Adler stressed that
the legislation was intended to help agencies to reduce request
backlogs and to more effectively use scarce resources. He noted
that the legislation had evolved in response to agency
concerns.
Also testifying was James Lucier, director of economic
research at Americans for Tax Reform, in support of S. 1090. He
observed that the public was now more eager to obtain
government information than it was when the FOIA was first
enacted in 1966. He suggested that increasing public access to
government information through electronic means was essential
if the government were to approach the pace of private sector
developments. He argued that government needed to keep pace in
its use of communication technologies that made information
about private institutions more accessible. Lucier testified
that the government needs to meet the expectations for
responsiveness that consumers insist upon from private
institutions.
13. H.R. 3452, The Presidential and Executive Office Accountability
Act.
a. Report Number and Date.--House Report No. 104-820 (Part
1), September 24, 1996.
b. Summary of Measure.--The Presidential and Executive
Office Accountability Act extends certain rights and
protections to employees of the Executive Office of the
President. The bill amends title three of the United States
Code, by applying 11 civil rights, labor and employment laws to
the Executive Office of the President; extending rights and
protections under these laws to covered employees, and
permitting administrative and judicial dispute-resolution
procedures, including punitive damages if applicable. H.R. 3452
as originally drafted, established a Chief Financial Officer in
the White House, amended the definition of ``special Government
employee,'' made future employment laws applicable, amended the
Congressional Accountability Act to permit awards of punitive
damages, and repealed section 320 of the Government Employee
Rights Act of 1991. The Senate made amendments to H.R. 3452,
which resulted in the above provisions being eliminated.
The Executive Office of the President will be required to
abide by the same laws that Congress and private industry must
comply with.
c. Legislative History/Status.--Representative Mica
introduced H.R. 3452 on May 14, 1996 and was referred to the
Committee on Government Reform and Oversight. Section 3 of H.R.
3452 was referred to the subcommittee and a hearing was held on
June 25, 1996. The subcommittee considered and forwarded as
amended to the full committee on July 16, 1996. The Committee
on Government Reform and Oversight considered, approved and
ordered reported as amended H.R. 3452 on July 25, 1996. On
September 24, 1996, H.R. 3452 was considered under suspension
of the rules and passed the House by a recorded vote of 410-5,
and passed the Senate, with amendments, by unanimous consent,
on October 3, 1996. The House agreed to the Senate amendments,
by unanimous consent, on October 4, 1996. The bill was signed
by the President and became law on October 26, 1996; Public Law
104-331.
d. Hearings and Subcommittee Actions.--The subcommittee
held a legislative hearing on June 25, 1996 on H.R. 3452.
Testimony was received from: Hon. John L. Mica, (R-FL); Hon.
Christopher Shays, (R-CT); Gregory S. Walden, counsel, Mayer
Brown & Platt; Sandra J. Boyd, assistant general counsel, Labor
Policy Association; Deanna R. Gelak, chair, Congressional
Coverage Coalition, and director of Congressional Affairs,
Society for Human Resource Management; and Hon. Franklin S.
Reeder, Director, Office of Administration, Executive Office of
the President. All witnesses confirmed the need for the
provisions of H.R. 3452 to apply to the White House and those
other divisions of the Executive Office of the President that
are not widely covered by employment laws.
At the committee markup on July 25, written testimony on
constitutional issues related to establishing an Inspector
General in the Executive Office of the President from CRS/ALD
and from the Office of Legislative Affairs, Department of
Justice, were put into the record.\64\ The CRS/ALD memo
concluded that encroachment on the President's authority must
be balanced by the need of Congress to be able to conduct
effective oversight over the executive branch, and, on balance,
the bill did not impermissibly encroach on the President's
constitutional authority. The letter from the Office of Legal
Counsel at the Justice Department claimed that to establish an
IG in the Executive Office of the President violated the
separation of powers between the executive and legislative
branches and was not balanced by the Congress's need for
effective oversight.
---------------------------------------------------------------------------
\64\ Memorandum dated October 22, 1993, Congressional Research
Service/American Law Division Letter undated but received July 24,
1996, U.S. Department of Justice Office of Legislative Affairs.
---------------------------------------------------------------------------
Written testimony \65\ was also received from the
Department of Justice's Office of Legislative Affairs
reiterating their support of the removal of the injunctive
relief provisions from the bill.
---------------------------------------------------------------------------
\65\ Letter undated but received July 24, 1996, U.S. Department of
Justice Office of Legislative Affairs.
---------------------------------------------------------------------------
14. H.R. 3872, The White House Inspector General Act of 1996.
a. Report Number and Date.--None.
b. Summary of Measure.--Establishing an Office of Inspector
General in the Executive Office of the President would provide
the President with a tool to prevent waste, fraud, and abuse,
and serve as an early warning system of potential problems.
H.R. 3872 amends the Inspector General Act of 1978 and would
set up an Inspector General in the Executive Office.
The White House Inspector General would serve as a watchdog
of Presidential and Executive Office financial management and
fiscal resources. It would have complemented H.R. 3452's
original provision applying the Chief Financial Officer Act to
the White House. The IG would have brought to the President's
attention situations which could cause problems before such
problems arise, and ensure that controls are in place to
prevent waste, fraud, or abuse.
c. Legislative History/Status.--H.R. 3872 was introduced by
Representative Charles Bass on July 23, 1996 and referred to
the Committee on Government Reform and Oversight. H.R. 3872 was
added as an amendment to H.R. 3452 on July 25, 1996, and
approved by voice vote. However, this amendment was deleted
from H.R. 3452 by the Senate prior to Senate passage of H.R.
3452 on October 3, 1996.
d. Hearings and Subcommittee Actions.--None were held.
15. H.R. 3637, The Travel Reform and Savings Act of 1996.
a. Report Number and Date.--None.
b. Summary of Measure.--To amend chapter 57 of title 5,
United States Code, and title 31, United States Code, to
provide employees who transfer in the interest of the
government more effective and efficient delivery of relocation
allowances by reducing administrative costs and improving
services.
Prior to 1921, Federal agencies established their own
individual travel and relocation policies. In 1921, the
legislation which created the Bureau of the Budget (BoB)
included a small section called the Federal Coordinating
Service, which enabled the President to coordinate executive
branch activities to ensure economical and efficient
operations. In 1926, President Coolidge issued Executive Order
4493 to implement uniform regulations, known as Standard
Government Travel Regulations (SGTR), recommended by the
Federal Coordinating Service. The SGTR incorporated the first
set of standardized maximum subsistence expense rates which had
just been enacted in the Subsistence Expenses Act of 1926. The
SGTR was issued by Executive order until 1931, when BoB was
given the authority to issue regulations with the President's
approval. In 1949, the Travel Expense Act of 1949 conferred
authority on the Director of the BoB to promulgate the SGTR
without the President's approval. BoB, and then OMB, continued
to issue the regulations until 1971, when the function was
transferred to the General Services Administration (GSA).
The Federal Government spends $7.6 billion per year on
Federal travel, according to the General Accounting Office. An
additional $2 or $3 billion per year is spent processing the
paperwork that this generates.
c. Legislative History/Status.--Subcommittee Chairman Horn
introduced H.R. 3637 on June 13, 1996. It was referred to the
subcommittee on June 18, 1996. The subcommittee held two
hearings and considered and reported favorably to the full
committee H.R. 3637 on July 16, 1996. The Government Reform and
Oversight Committee considered, approved and ordered reported
to the House on July 25, 1996. H.R. 3637 was incorporated into
H.R. 3230, the National Defense Authorization Act, as Title
XVII: Federal Employee Travel Reform and passed the House on
August 1, 1996. It was signed into law on September 23, 1996 as
Public Law 104-201.
d. Hearings and Subcommittee Actions.--The subcommittee
held a hearing on May 10, 1996 and another hearing on July 9,
1996 to examine H.R. 3637, the Travel Reform and Savings Act of
1996. Testimony was received from: Jack Brock, Jr., Director,
Information Resources Management/General Government Issues,
Accounting and Information Management, General Accounting
Office; Edith Pyles, Assistant Director, Information Resources
Management/General Government Issues, Accounting and
Information Management, General Accounting Office; Virginia
Robinson, executive director, Joint Financial Management
Improvement Project; G. Martin Wagner, Associate Administrator,
Office of Policy, Planning and Evaluation, General Services
Administration; Hon.John J. Hamre, Comptroller, Department of
Defense; and Hon. Donald K. Charney, Chief Financial Officer,
Agency for International Development.
16. S. 1130, Federal Financial Management Improvement Act of 1996.
a. Report Number and Date.--None.
b. Summary of Measure.--The Federal Financial Management
Improvement Act of 1996 is intended to strengthen Federal
financial management. It requires Federal financial agencies to
implement and maintain financial management systems that comply
substantially with Federal financial management system
requirements; applicable Federal accounting standards; and the
U.S. Standard General Ledger at the transaction level. Agencies
not in compliance must develop a remediation plan which will
bring them into compliance within 3 years. It builds upon the
Chief Financial Officers Act of 1990 (Public Law 101-576), the
Government Performance and Results Act of 1993 (Public Law 103-
62), and the Government Management Reform Act of 1994 (Public
Law 103-356).
Compliance with this legislation by executive branch
agencies will enable them to have better control over errors
and irregularities in financial management systems processing,
and will reduce the risk of fraud, waste, and abuse.
c. Legislative History/Status.--Senator Hank Brown
introduced S. 1130, the ``Federal Financial Management
Improvement Act of 1996,'' which was referred to the committee
on September 4, 1996, and subsequently referred to the
subcommittee on September 6, 1996. The subcommittee held two
hearings in April, 1996. S. 1130 passed the Senate on August 2,
1996; and was inserted into the Treasury, Postal Service, and
General Government Appropriations Act, 1997 which was included
in H.R. 3610, the ``Omnibus Consolidated Appropriations for
Fiscal Year 1997,'' and signed into law on September 30, 1996
as Public Law 104-208. On September 11, 1996, Representative
Talent (R-MO) introduced a similar bill, H.R. 4061, which was
referred to the subcommittee. No action was taken on H.R. 4061.
Conference Report No. 104-863 was filed on September 28, 1996,
which includes S. 1130 as Title VIII of SEC. 101(f).
d. Hearings and Subcommittee Actions.--The subcommittee
held two hearings on April 23 and 25, 1996, on Federal
Financial Management at which time an early draft of the
proposed legislation was discussed. Testimony was received
from: Hon. Charles A. Bowsher, U.S. Comptroller General,
General Accounting Office; Hon. G. Edward DeSeve, Controller,
Office of Federal Financial Management, Office of Management
and Budget; George Munoz, Assistant Secretary for Management
and Chief Financial Officer, the Department of the Treasury;
Donald R. Wurtz, Chief Financial Officer, U.S. Department of
Education; and Ted Sheridan, president, Financial Executives
Institute.
Comptroller Bowsher testified that, ``when the Congress
passed the Budget and Accounting Act of 1950, they expected the
systems and our Government to be modernized over the years and
to provide good information, information that the Members of
Congress and the public and taxpayers could understand; and the
truth of the matter is that this did not happen, until the last
four or five years. Now, with the CFO Act of 1990, the GMRA of
1994, there is in place a legislative basis for modernizing the
accounting and the financial reporting and the auditing of the
Federal Government.''
With the memorandum of understanding (MOU) that the GAO
worked out with Treasury and the OMB in 1990 to update the
standards for the Federal Government, real progress has been
made. All the basic accounting standards have been issued by
the Federal Accounting Standards Advisory Board (FASAB) which
was established under the MOU.
Mr. DeSeve provided an overview of how the administration
is continuing to improve the way the Federal Government manages
its finances and programs. The administration believes that the
FASAB process for establishing accounting standards, as
envisioned by the agreement between GAO, OMB, and Treasury, is
working. The MOU signed by Treasury, the related financial
statement preparation and auditing requirements of the CFO Act
and the GMRA achieve the same management ends without further
legislation. The administration does not believe any
legislation in this area is needed at this time.
Assistant Secretary Munoz said that the CFO Act is working,
and because of it, the Federal Government is better off than 5
years ago when it comes to financial management reform. He
stated that the development of cost accounting systems has been
identified as a priority for the Department of the Treasury,
because they will augment Treasury's ability to develop
performance measures. Treasury has also developed a framework
for financial statements, which will be helpful in preparation
for the governmentwide audited financial statements required by
the GMRA.
Mr. Wurtz said that the CFO Act of 1990, the Government
Performance and Results Act of 1993, and the Government
Management Reform Act of 1994, have each strengthened the
statutory underpinning of Federal financial management.
Witnesses at the second hearing included representatives
from the accounting industry.
17. Federal Budget Process Reform.
a. Report Number and Date.--None
b. Summary of Measure.--The subcommittee took various
legislative proposals from this and prior Congresses and
incorporated them into a proposed omnibus budget reform bill.
Three hearings were held to assess the adequacy of current
Federal budget law and review recent proposals for reform. The
budget process currently in use by the Federal Government is
the result of 75 years of legislative action which have
resulted in 15 major acts and dozens of supplementary
legislative provisions.
Starting with the Budget and Accounting Act of 1921, the
Federal Government began to establish rules and procedures for
budget formulation. In the three decades since the Second World
War and the Legislative Reorganization Act of 1946, Congress
passed the Accounting and Audit Act of 1950, the Budget and
Accounting Procedures Act of 1950, the Federal Claims
Collection Act of 1966, the Congressional Budget and
Impoundment Control Act of 1974, and the Inspector General Act
of 1978.
Major budget initiatives were enacted into law during the
1980's with the purpose of putting the Federal Government's
fiscal house in order and making deficit reduction part of the
law. The Balanced Budget and Emergency Deficit Control Act of
1985, otherwise known as Gramm-Rudman-Hollings and the Balanced
Budget and Emergency Deficit Control Reaffirmation Act of 1987
both promised to bring Federal spending under control and
reduce the size of government. This promise was not realized.
During the first half of the 1990's, a number of
comprehensive budget reform bills were crafted. One of them,
the Budget Enforcement Act of 1990, added new budget
enforcement mechanisms for discretionary spending, entitlement
and receipts. These were intended to ensure deficit reduction
over the 1991-1996 timeframe.
The subcommittee believes that a comprehensive bipartisan
effort to reform the Federal budget process and law is
warranted, and that this would provide better control of
spending by the Federal Government, reduction of the deficit,
and minimize the burden of debt passed on to future
generations.
c. Legislative History/Status.--No legislative action
taken.
d. Hearings and Subcommittee Actions.--During March and
April 1996, the subcommittee held a series of hearings on
Budget Process reform. The hearings were held on March 27,
April 23, and April 25. Congressional witnesses were
Representatives Joe Barton (R-TX); Nick Smith (R-MI); Chris Cox
(R-CA); Mike Crapo (R-ID); Lamar Smith (R-TX); Ray Thornton (D-
AK); Steve Stenholm (R-TX); and Mike Castle (R-DE). They
discussed various legislative proposals they had introduced.
They were followed by a panel of expert witnesses including
Roger Zion, honorary chairman of the 60 Plus Association,
accompanied by its president, James L. Martin; Michael
Monroney, former chairman, Coalition for Fiscal Restraint;
Thomas A. Schatz, president, Council for Citizens Against
Government Waste; Stephen Moore, director of fiscal policy
studies, the Cato Institute; Joseph White, senior fellow,
government affairs, the Brookings Institution; Richard Kogan,
budget director, Center on Budget and Policy Priorities; and
Dave M. Mason, vice president, government relations, the
Heritage Foundation.
Mr. Zion indicated that the biggest contribution to budget
simplification would be to tackle the problem of entitlements.
His organization has advocated privatizing entitlement
programs, following the Chilean model that has been successful
for 14 years.
Mr. Monroney advocated discontinuing current services
budgeting, extending some form of enhanced rescission authority
to the President, ensuring that funds cut from appropriations
bills are not spent without proper subsequent authorization,
that the Federal budget should be in the form of a binding
joint resolution, and ensuring that entitlement programs are
brought within budget control; stricter budgetary controls for
costs relating to emergencies, and an end to the abuse of
waivers which permit the Congress to ignore the budget. He
thought that the Transportation Trust fund and the Superfund
cleanup fund should not be taken off budget.
Mr. Schatz favored biennial budgeting and appropriations, a
two-thirds requirement for spending over the budget ceiling,
fixed dollar amounts for entitlements, and deficit reduction
through a lockbox mechanism.
Mr. Moore supported a balanced budget amendment and a
supermajority for raising taxes. He also thought that the
Congressional Budget Office should use dynamic rather than
static revenue analysis.
Mr. White questioned some of the legislative proposals,
because, if taken together, they are inherently contradictory.
He noted that two-thirds majority requirements may not meet
with the public's approval, and questioned the meaning of
generational accounting for programs that are all annually
appropriated where there are no commitments beyond 1 year. He
reminded the subcommittee that balancing the budget, though
helpful, does not provide markedly positive returns, that most
entitlements are entitlements for good reason, and that they
are designed to be automatic stabilizers of the economy.
Mr. Kogan pointed out difficulties with some of the
proposals. He stated that supermajorities are basically
undemocratic, unfair, and have no place in Congress. He noted
that the framers of the Constitution specifically rejected
supermajorities as a way of deciding public policy. Kogan
further testified that fixed deficit targets are wrong because
the size of the deficit or surplus in any given year depends or
should depend on what the net national savings rate is, and
that spending caps are unwise policy. He concluded that there
is a real reason to reform Medicare and Medicaid, but attaching
entitlement caps is not the right way to do it.
Mr. Mason thought that it is critical to get a mechanism
for regular review of entitlement programs, although
entitlement caps are the wrong way to do it. He supported
looking at fundamental reforms in the programs and favored a
binding budget resolution.
Witnesses at the second hearing on April 23, 1996
testifying on Federal budget process reform included
Representatives Robert Wise, (D-WV) and Jim Saxton (R-NJ);
James L. Blum, Deputy Director, Congressional Budget Office;
and Herbert N. Jasper, fellow of the National Academy of Public
Administration (NAPA), representing David Chu, also a fellow of
NAPA.
Representative Wise spoke about an amendment he had
sponsored to balance the Federal budget using a capital budget.
He supported higher real growth, and the recognition of
infrastructure needs, and stated that the present budget system
is a disincentive to investing in infrastructure improvements.
Mr. Blum expressed the view that the Congressional Budget
office was cautious about reforming the Federal budget process.
He thought that the budget process is working reasonably well
and does not need major reform at this time. The budget process
is not and cannot, in his opinion, be designed to force
particular outcomes in the absence of broad political agreement
or to obstruct those outcomes when agreement has been reached.
Blum stated that budget decisions tend to be incremental in
nature, and the budget process has evolved in a similar manner
over a period of time.
Blum further testified that the major proposals now on the
table, such as converting the budget resolution into a joint
resolution in order to get early agreement between the
President and the Congress on a overall budget plan, converting
the annual budget cycle into a biannual cycle so as to free up
legislative time for other matters, and imposing caps on
mandatory spending so as to control the annual growth rate,
have been on the table for a number of years and have potential
drawbacks that could present serious problems. He opined that
joint budget resolutions could be the cause of further delays
in making budget decisions; biennial budgets could raise the
stakes and also lead to delays; and mandatory spending caps, by
themselves, are not likely to be effective without political
consensus. Further, in evaluating reform proposals, especially
omnibus proposals, Blum thought it was important to be
cognizant of the implementation costs in terms of time and
resources needed to carry out the reforms.
Dr. Jasper, who had played an active role in fashioning the
Congressional Budget and Impoundment Control Act of 1974,
discussed the draft omnibus budget legislation. He stated that,
in his opinion, the current budget process is basically sound.
Its principal structure and provisions have lasted more than 20
years. The budget is primarily a reflection and accommodation
of many conflicting objectives and contending interest. The
current process provides a workable way of channeling
inevitable differences toward negotiations and agreements in
order to produce a budget.
At the final hearing on Federal budget process reform,
witnesses testifying included Representative Tom Campbell (R-
CA) and Ron Moe, Senior Specialist, Congressional Research
Service.
Representative Campbell asked support for a resolution
which expresses the sense of the Congress to use dynamic
economic modeling for Congressional Budget Office and Joint
Committee on Taxation projections on revenue. Presently
Congress is using something in between a completely static
model and a truly dynamic model.
Mr. Moe discussed a proposal in the omnibus budget
legislation that he supported. The proposal is to provide for
the reorganization of the present Office of Management and
Budget into two equal separate offices, an Office of Budget and
an Office of Management. This was recommended in the
subcommittee's report, ``Making Government Work,'' (see Sec.
II.A.1.) Mr. Moe emphasized that governmental management is
different than private sector management, in that the actions
of governmental officials must have their basis in public law,
not in the pecuniary interests of private entrepreneurs or
owners or in the fiduciary concerns of private managers. Moe
rejected the draft Omnibus Budget Act as an example of
extensive congressional involvement in the detailed direction
of executive management, reflecting the frustration felt by
many in Congress with what they see as the lack of management
capability in the executive branch. He suggested the
establishment of an Office of Federal Management to provide the
President and the Congress with the institutional authority and
capacity to maintain quality general management laws while
permitting flexible exceptions to these laws and encouraging
innovative experiments with an accountable system overseen by
this committee.
18. Health Information Privacy Protection Act.
a. Report Number and Date.--None.
b. Summary of Measure.--This legislation would have
established ``protected health information.'' Under this
legislation, medical records which are created or used during
the process of medical treatment would become protected health
information.
The bill would require doctors and hospitals to maintain
appropriate administrative, technical, and physical safeguards
to protect the integrity and privacy of health information. It
would require that the information be used for a purpose
related to the reason it was originally collected. Generally,
the bill would limit the use or disclosure of medical records
to the minimum number of necessary users.
The legislation also would have allowed for a review of
protected health information by subjects of the information,
and established rules for the inspection and copying of
protected health information. The act also would have
established procedures for an individual to correct information
contained in their medical records. General rules for the use
and disclosure would have been established to govern
disclosures for treatment, payment, next of kin notification,
emergency circumstances, and the creation of non-identifiable
health information for health research.
Civil penalties would be established for persons who fail
to comply with the provisions of the act. Further, anyone who
knowingly violates provisions of this act would have been
subject to a criminal penalty.
Restrictions on the disclosure of electronic payment
information to third parties for purposes other than collection
of debts would be established. An Office of Information Privacy
would have been established to serve as the principal advisor
to the Secretary of Health and Human Services on the provisions
of the act.
No provision of the act would have preempted individual
State laws, and the act would not affect the rights of a
witness or person in a non-Federal court proceeding. Further,
States could have established and enforced criminal penalties
for failing to comply with provisions of the act.
Most Americans are under the impression that their medical
records are confidential--they are not. The Health Information
Privacy Protection Act would have provided for the
confidentiality of medical records.
c. Legislative History/Status.--No legislative action was
taken.
d. Hearings and Subcommittee Actions.--The subcommittee
held a hearing on June 14, 1996 to examine the Health Care
Privacy Protection Act. Witnesses at the hearing were Janlori
Goldman, deputy director of the Center for Democracy and
Technology (CDT); Kathleen Frawley, director of the Washington,
DC, office of the American Health Information Management
Association (AHIMA); Gerry Bay, vice president of Pharmacy
Operations, East Division, American Drug Stores, National
Association of Chain Drugstores, and Dr. Steven K. Hoge of the
American Psychiatric Association.
Ms. Goldman stated that the major change affecting the
protection of personal health information has been in the
health care industry, and noted that the goal of this type of
legislation is to protect patients' privacy. She further
expressed concerns about the administrative simplification
provisions in the health portability bill since it gives total
rulemaking authority to the Secretary of Health and Human
Services.
Ms. Frawley testified that a greater professionalism is
needed when handling and reviewing patient medical records.
Frawley pointed out that AHIMA, in the absence of Federal
legislation, has taken on the responsibility for protecting the
confidentiality of health information, educating consumers of
their rights, and further noted that the Health Information
Privacy Protection Act appropriately addresses patient
concerns.
Mr. Bay testified that implementation of this legislation
would create an administrative burden for an industry which
does a great deal of its work through paperless transactions.
The legislation would ``tie the hands of the day-to-day
operations of the pharmacy.'' Bay further testified that this
legislation could hamper a person's ability to pick up a
prescription for another.
Dr. Hoge noted in testimony that the legislation
incorporated many of the suggestions which APA has made over
the years. He noted that in the past it was much easier to
protect an individual's privacy by relying on the ethical
standards of the medical profession. However, there are now a
great number of non-physicians involved in the maintenance of
medical records.
Human Resources and Intergovernmental Relations Subcommittee
1. H.R. 2086, the Local Empowerment and Flexibility Act of 1995.
a. Report Number and Date.--House Report No. 104-847,
September 26, 1996.
b. Summary of Measure.--The Local Empowerment and
Flexibility Act allows for the more efficient use of Federal,
State, local and tribal resources through program flexibility
and coordination. The legislation enables State, local and
tribal governments, and non-profit organizations to adapt
Federal grant programs to the particular circumstances of their
communities by: (1) Integrating Federal programs into
``flexibility plans'' that increase the effectiveness of the
programs; (2) eliminating wasteful duplication across Federal
programs; and (3) authorizing Federal officials to waive
statutory and regulatory program requirements to enhance the
delivery of services.
The purpose of the bill is to make each program included in
a ``flexibility plan'' more effective so that it better serves
individuals and the community. To get approval of a
``flexibility plan'' an applicant must be able to demonstrate
that each program included will be at least as effective as it
would have been if it had not been included in the plan.
The legislation has a bipartisan history. In the 103d
Congress, the Local Flexibility Act of 1993, legislation to
provide greater flexibility and allow the waiver of regulatory
and statutory requirements, was introduced by Congressman John
Conyers (D-MI), then-Chairman of the House Government
Operations Committee, and then-Ranking Member William Clinger.
The Local Empowerment and Flexibility Act retained and
clarified the same statutory and regulatory waiver authority
that was included in the Local Flexibility Act of 1993. The
Local Empowerment and Flexibility Act adds additional language
to prohibit the waiver of constitutional rights and non-
discrimination provisions. Language to prohibit waiver that
would diminish national standards in certain sensitive areas
such as labor and environmental protections was also added.
c. Legislative History/Status.--H.R. 2086 was introduced in
the House on July 20, 1995, by Congressman Christopher Shays
(R-CT), chairman of the Human Resources and Intergovernmental
Relations Subcommittee and by Congressman William F. Clinger,
Jr., (R-PA), chairman of the Committee on Government Reform and
Oversight. On April 24, 1996, H.R. 2086, was approved and
ordered reported, as amended, by the Committee on Government
Reform and Oversight.
d. Hearings and Subcommittee Actions.--The Human Resources
and Intergovernmental Relations Subcommittee held three
hearings on the Local Empowerment and Flexibility Act. On
August 3, 1995, the subcommittee held its first hearing on H.R.
2086. Testimony was received from: Hon. Mark O. Hatfield (R-
OR), U.S. Senator and former Governor of Oregon; the Director
of Housing and Community Development Issues of the U.S. General
Accounting Office; the Director of Intergovernmental Liaison of
the Advisory Commission on Intergovernmental Relations; and the
Director for the Center for Public Service of the University of
Virginia representing the National Academy of Public
Administration.
On September 20, 1995, the subcommittee held a second
hearing on H.R. 2086. Testimony was received from: the Deputy
Assistant for Operations of the Office of Community Planning
and Development from the U.S. Department of Housing and Urban
Development; the Deputy Director for Management for the Office
of Management and Budget; the superintendent of public
instruction for the State of Oregon; the chairman of the
Governor's Task Force on Human Services Reform for the State of
Illinois; a senior attorney for the Natural Resources Defense
Council (NRDC) and the director of public division for the
Services Employees International Union.
The subcommittee's third hearing on the Local Empowerment
and Flexibility Act was held on February 22, 1996. Testimony
was received from Congressman Steny Hoyer (D-MD); Andrew
Norton, Connecticut State Representative; Angela Park,
coordinator, Sustainable Communities for the President's
Council on Sustainable Development; Lloyd Smith, president and
chief executive officer of the Marshall Heights Community
Development Organization; Dick Cowden, executive director of
the American Association of Enterprise Zones; and Eddy R.
Battle, of Eddy Battle Associates.
2. H.R. 2326, The Health Care Fraud and Abuse Prevention Act of 1995
and H.R. 1850, The Health Care Fraud and Abuse Act of 1995.
a. Report Number and Date.--None.
b. Summary of Measure.--H.R. 2326 and H.R. 1850 are
designed to combat waste, fraud and abuse in the Medicare and
Medicaid programs through increased cooperation and
coordination between regulators and law enforcement agencies.
c. Legislative History/Status.--H.R. 2326 was introduced in
the House on September 13, 1995, by subcommittee Chairman
Christopher Shays (R-CT), and Congressman Steven Schiff (R-NM).
Joining Representatives Schiff and Shays as original co-
sponsors were chairman of the Committee on Government Reform
and Oversight, William F. Clinger, Jr. (R-PA) and Congressmen
Edolphus Towns (D-NY), Jon Fox (R-PA) and Charles Schumer (D-
NY). Currently, the bill has 33 co-sponsors.
d. Hearings and Subcommittee Actions.--On September 28,
1995, the Human Resources and Intergovernmental Relations
Subcommittee held a hearing on H.R. 2326. Testimony was
received from: the Special Counsel for Health Care Fraud from
the U.S. Department of Justice; the Deputy Administrator from
the Health Care Financing Administration; a past president from
the American Association of Retired Persons; the executive
director of the National Health Care Anti-fraud Association;
and the president of Citizens Against Government Waste.
Testimony focused on the need for stronger and more
specific criminal sanctions against health care fraud.
Witnesses supported ``all payer'' provisions defining various
Federal health care crimes against any health care plan.
Currently, Federal enforcement agencies must proceed against
interstate scams using only the mail fraud or wire fraud
statutes. Strengthened provisions to exclude convicted and
sanctioned providers were also supported.
Witnesses who submitted statements for the record included:
the Inspector General of the Department of Health and Human
Services; president of the National Association of Medicaid
Fraud Control Units; and president of Citizens Against
Government Waste.
At the May 2 hearing, the HHS Inspector General testified
on the vulnerability of Medicare to waste and abuse due to
inflexible pricing regulations used to establish the
reimbursement amount for certain medical supplies and services.
National Economic Growth, Natural Resources, and Regulatory Affairs
Subcommittee
1. H.R. 450, the Regulatory Transition Act of 1995.
a. Report Number and Date.--House Report No. 104-39, Part
I, February 16, 1995, together with minority views.
b. Summary of Measure.--Prior to the start of the 104th
Congress, Republican leaders of the House of Representatives
and the Senate wrote the President of the United States to ask
that he voluntarily impose a moratorium on all Federal
rulemaking for the first 100 days of the 104th Congress. (See
letter from House and Senate Leaders to President William
Clinton dated December 12, 1994, reprinted in House Rept. 104-
39, Part 1, pp. 37-38.) This request was based on the fact that
Federal regulations are estimated to drain the American economy
of approximately $600 billion every year, and that current law
does not adequately ensure that such regulations are justified
in terms of their overall impact. Congressional leaders
proposed to the President that, during the moratorium, all
Federal agencies be directed to: (1) identify regulations in
which the costs exceed the benefits; (2) recommend actions to
eliminate unnecessary regulatory burdens; (3) recommend ways to
give State, local and tribal governments more flexibility to
meet Federal mandates; and (4) share their information and
analysis with Congress.
The President refused to issue such a moratorium in a
December 14, 1994 letter signed by Sally Katzen, of OMB's
Office of Information and Regulatory Affairs. (See House Rept.
104-39, Part 1, pp. 38-39).
As a result, Congressmen Tom Delay (R-TX) and David
McIntosh (R-IN), along with 32 other House co-sponsors,
introduced the Regulatory Transition Act of 1995 on January 9,
1995. That bill sought to ensure economy and efficiency of
Federal Government operations by establishing, through statute,
a moratorium on regulatory rulemaking actions.
That bill, as amended, was eventually passed by the House
of Representatives. The Senate has failed to act on H.R. 450,
but is actively pursuing other bills that enact regulatory
reform.
c. Legislative History/Status.--Following its introduction
on January 9, 1995, H.R. 450 was referred to the Committee on
Government Reform and Oversight. Within that committee, the
bill was referred to the Subcommittee on National Economic
Growth, Natural Resources, and Regulatory Affairs for
consideration.
The subcommittee held two hearings into the merits of the
bill--on January 19, 1995, in Washington, DC, and on February
2, 1995, in Fairfax, VA. At these hearings, 28 witnesses
testified about the state of regulatory affairs, the need for a
moratorium, and the merits of the particulars contained in H.R.
450. Following those hearings, the subcommittee held a mark-up
on the bill on February 8, 1995, at the conclusion of which,
the subcommittee voted 10 to 4 to report the bill, as amended,
favorably to the full committee.
On February 10 and 13, 1995, the committee marked up the
bill. On February 13, 1995, the committee voted 28 to 13 to
report the bill, as amended, favorably to the House (Report No.
104-39, Part I).
The bill was debated in the House of Representatives on
February 23 and 24, 1995. Following debate, it was passed, as
amended, by electronic vote, 276 to 146.
On February 27, 1995, the bill was received in the Senate,
and referred to the Senate Committee on Governmental Affairs.
No action was taken on H.R. 450 by the Senate in the first
session of the 104th Congress. However, the Senate did take
action on S. 219, a companion piece of legislation to H.R. 450.
That bill was passed by the Senate on March 29, 1995, by a
unanimous vote of 100 to 0. On May 17, 1995, the House of
Representatives amended S. 219 by replacing its text with the
text of H.R. 450 (as passed by the House). The Senate, in turn,
disagreed to the House's amendment and requested a conference
on June 16, 1995. The House did not respond to the Senate's
request for a conference in the first session of the 104th
Congress.
d. Hearings and Subcommittee Actions.--January 19, 1995,
the Regulatory Transition Act of 1995. February 2, 1995, in
Fairfax, VA, the Regulatory Transition Act of 1995 and Clean
Air Regulations.
2. H.R. 994, the Regulatory Sunset and Review Act of 1995.
a. Report Number and Date.--House Report No. 104-284, Part
1, October 19, 1995, together with additional views; Report No.
104-248, Part 2, November 7, 1995, together with additional
views (Committee on the Judiciary).
b. Summary of Measure.--H.R. 994, the Regulatory Sunset and
Review Act of 1995, provides a framework for the systematic
review of current and future Federal rules. The bill requires
Federal agencies to periodically review their significant rules
to determine whether the rules should be continued without
change, modified, consolidated with other rules, or allowed to
terminate. The legislation also creates a petition process that
would permit the public and appropriate committees of Congress
to request that agencies review less significant rules in the
same manner.
A rule designated for review will not expire if the issuing
agency reviews and reissues it in accordance with the
procedures established by the bill and the rule meets all the
legal requirements that apply to the issuance of new rules.
This legislation will help ensure that obsolete, unnecessary,
duplicative, or conflicting rules are reviewed and either
modified or terminated.
c. Legislative History/Status.--H.R. 994 was introduced by
Representatives Jim Chapman, John Mica, Tom DeLay, Nathan Deal,
and Gene Green on February 21, 1995, and referred to the
Committee on Government Reform and Oversight and the Committee
on the Judiciary. On May 18, 1995, the subcommittee reported
H.R. 994 to the full committee, with a bipartisan amendment in
the nature of a substitute cosponsored by over two-thirds of
the subcommittee members. On July 18, 1995, the committee
approved H.R. 994 on a recorded vote of 39-7 and ordered it to
be reported, with an amendment in the nature of a substitute
offered by Chairman Clinger. On October 19, 1995, the committee
reported the bill to the House. On November 7, 1995, the
Committee on Judiciary reported H.R. 994 favorably with an
amendment in the nature of a substitute.
d. Hearings and Subcommittee Actions.--On March 28, 1995,
subcommittee Chairman McIntosh convened the Subcommittee on
National Economic Growth, Natural Resources, and Regulatory
Affairs for the first day of hearings on H.R. 994. The
witnesses at the hearing included Representatives Jim Chapman
and John Mica, OIRA Administrator Sally Katzen, former
Associate Counsel to the President and regulatory expert, Gene
Schaerr, and private citizens and business people concerned
about Federal regulations, including Charles Bechtel, Kaye
Whitehead, Steven Dean, Joe Bob Burgin, Paul Mashburn, and
David Vladeck.
At the request of four minority members of the
subcommittee, subcommittee Chairman McIntosh scheduled a second
day of hearings with additional testimony heard from
administration witnesses. On May 2, 1995, the subcommittee
reconvened and heard testimony from Richard Roberts,
Commissioner of the Securities Exchange Commission, Judith
Feder, Principal Deputy Assistant Secretary for Planning and
Evaluation in the Department of Health and Human Services,
James Gililand, General Counsel for the Department of
Agriculture, Edward Knight, General Counsel for the Department
of the Treasury, Stephen Kaplan, General Counsel for the
Department of Transportation, and Mr. William Kennard, General
Counsel for the Federal Communications Commission. In addition
to the testimony of the hearing witnesses, the subcommittee
received written testimony from a variety of sources, including
the President of the American National Standards Institute
(ANSI), Sergio Mazza.
3. Grantee Lobbying Legislation.
For a description of legislative proposals to stop Welfare
for Lobbyists, see II. Investigations, section B, ``Grantee
Lobbying.''
4. Corrections Day.
a. Summary.--The purpose of Corrections Day is to correct
rules, regulations, statutory laws, and court decisions which
impose a severe financial burden, or are ambiguous, arbitrary,
or ludicrous, through an expedited process in the U.S. House of
Representatives. Five months after passage of H. Res. 168
designating the Corrections Calendar, the House has held six
Corrections Days and passed 11 bills. Three of these bills have
become law. Seven bills remain to be considered by the Senate.
b. Benefits.--Through the Corrections Day process, the U.S.
House of Representatives has routinely corrected dumb laws and
regulations in an expeditious manner, answering the call of
American citizens for responsive public officials.
c. Hearings.--On May 2, 1995, the subcommittee and the
Subcommittee on Rules and Organization of the House held a
joint hearing on Speaker Newt Gingrich's proposal to create a
``Corrections Day'' in the House of Representatives
specifically for correcting legislative and regulatory
mistakes.
Postal Service Subcommittee
1. H.R. 1026, To Designate the United States Post Office Building
Located at 201 East Pikes Peak Avenue in Colorado Springs,
Colorado, as the ``Winfield Scott Stratton Post Office''.
a. Report Number and Date.--None.
b. Summary of Measure.--The bill designates the U.S. Post
Office building located at 201 East Pikes Peak Avenue in
Colorado Springs, CO as the ``Winfield Scott Stratton Post
Office''. The late Mr. Stratton was a Colorado Springs
philanthropist and benefactor. Following a successful mining
career Mr. Stratton dedicated his life to helping others less
fortunate and to advancing the development of Colorado Springs
and the State of Colorado.
c. Legislative History/Status.--The legislation was
introduced on February 23, 1995, by Representative Hefley of
Colorado and cosponsored by the entire Colorado House
delegation, as required by the Committee on Government Reform
and Oversight. The Subcommittee on Postal Service considered
and marked-up the bill on June 20, 1995, and was forwarded to
the full committee. On June 21, H.R. 1026 was ordered to be
reported by voice vote by the Committee on Government Reform
and Oversight. H.R. 1026 was called up by the House under
suspension of rules on October 17 where it passed by voice
vote. It passed the Senate by voice vote on October 24 and was
signed by the President on November 3, 1995, and became Public
Law 104-44.
d. Hearings and Subcommittee Actions.--No hearings were
held on the measure.
2. H.R. 2077, To Designate the United States Post Office Building
Located at 33 College Avenue in Waterville, Maine, as the
``George J. Mitchell Post Office Building''.
a. Report Number and Date.--None.
b. Summary of Measure.--H.R. 2077 designates that the U.S.
Post Office located at 33 College Avenue in Waterville, ME, as
the ``George J. Mitchell Post Office Building''. The
legislation honors Senator Mitchell who served in the U.S.
Senate from 1980 to 1995. He served as Senate Majority Leader
for 5 years and has a long career in public service.
c. Legislative History/Status.--H.R. 2077 was introduced by
Representative Longley on July 18, 1995, and co-sponsored by
the House delegation of the State of Maine. It was referred to
the House Committee on Government Reform and Oversight on
August 4, 1995, and the committee discharged the bill. The
House called up H.R. 2077 by unanimous consent and the measure
was passed by voice vote on August 4. The Senate approved the
bill by voice vote on August 9, 1995. The President signed H.R.
2077 on September 6, 1995, and it became Public Law 104-27.
d. Hearings and Subcommittee Actions.--No hearings were
held on this legislation.
3. H.R. 1826, To Repeal the Authorization of Transitional
Appropriations for the United States Postal Service, and for
Other Purposes.
a. Report Number and Date.--House Report No. 104-174, July
10, 1995.
b. Summary of Measure.--H.R. 1826 repeals the authorization
for transitional appropriations to the Postal Service. The
transitional appropriations provided funds to the Postal
Service to cover workers compensation liabilities incurred by
the former Post Office Department. The bill provides that
liabilities of the former Post Office Department to the
Employees' Compensation Fund shall be liabilities of the Postal
Service payable out of the Postal Service Fund.
c. Legislative History/Status.--The bill was introduced by
subcommittee Chairman McHugh on June 13, 1995, and referred to
the Subcommittee on Postal Service. The subcommittee considered
and marked up the legislation on June 20, 1995. It was
forwarded to full committee which marked up the bill on June
21, 1995, and ordered it to be reported. H.R. 1826 was reported
to the House by the Committee on Government Reform and
Oversight, House Report No. 104-174. H.R. 1826 was subsequently
included in the Balanced Budget Act of 1995, H.R. 2491, House
Report No. 104-350.
d. Hearings and Subcommittee Actions.--No hearings were
held on this measure.
4. H.R. 210, a Bill To Provide for the Privatization of the United
States Postal Service.
a. Report Number and Date.--None.
b. Summary of Measure.--H.R. 210 establishes the current
Postal Service as a private corporation with ownership divested
among its employees. The measure provides for incorporation by
up to nine individuals who are qualified to establish and
operate an effective mail service. Ownership of securities
would be limited to postal employees during the first year and
then sold to the general public. The new structure would
operate under some of the same restrictions under which the
current Postal Service operates. Small or rural post offices
could not be closed solely for operating at a deficit. Rates
would have to meet the ``fair and equitable'' criterion. During
the first 5 years of the corporation's existence, rates would
be established in consultation with the Postal Rate Commission.
Retirement benefits would be comparable to the benefits of
current postal employees.
c. Legislative History/Status.--H.R. 210 was introduced on
January 4, 1995, by Representative Philip M. Crane. It has two
co-sponsors.
d. Hearings and Subcommittee Actions.--On November 15,
1995, the Subcommittee on the Postal Service held a hearing on
H.R. 210. Representatives Philip Crane and Dana Rohrabacher
testified in support of the measure.
5. H.R. 1963, ``The Postmark Prompt Payment Act of 1995.''
a. Report Number and Date.--None.
b. Summary of Measure.--The Postmark Prompt Payment Act,
H.R. 1963, introduced by subcommittee Chairman John McHugh,
provides that the date postmarked on the envelope containing a
payment, bill, invoice or statement of account due stands as
prima facie evidence of timely payment if the date of the
postmark is on or before the bill's due date. The use of the
postmark is premised on the common law of contracts which
provides that an offer to a contract is deemed accepted at the
time such acceptance is mailed. In addition, the Internal
Revenue Service uses the postmark on envelopes as proof that
taxpayers mailed income tax returns on or before the April 15
deadline, regardless of when the IRS receives actual payment.
The legislation specifies that the envelope must be correctly
addressed with adequate postage affixed to it. Metered mail is
excluded.
The provisions of the bill would not apply to any other
type of payment other than a bill, invoice or statement of
account due. Currently, covered creditors are required to post
payment on the date received. The legislation would require
that the payment received by a creditor be posted as of the
date of the postmark. The legislation is intended to remedy the
inequity of conscientious bill payers who pay their bill on
time but, who through no fault of their own, are assessed late
fees and interest charges because the delays of others result
in the actual delivery of their payment in an untimely manner.
In addition to these charges, many bill payers see their credit
ratings adversely affected through no fault of their own.
Furthermore, the legislation would ultimately place the burden
of late delivery on the Postal Service. Unsatisfactory delivery
and service will not be tolerated by the Postal Service's
largest customers. Ultimately, the provisions of the bill
should lead to better postal service for all customers.
c. Legislative History/Status.--H.R. 1963 was introduced on
June 29, 1995, by subcommittee Chairman McHugh. The measure has
34 co-sponsors.
d. Hearings and Subcommittee Actions.--Two hearings
entitled ``Postmark Prompt Payment Act'' were held on October
19, 1995, and February 28, 1996.
On October 19, 1995, testimony was received from
Representatives Sherwood L. Boehlert, Andy Jacobs, Steve
Stockman, Thomas M. Barrett, Peter Blute, Carlos Romero-
Barcelo, Peter T. King, Thomas M. Davis, and James T. Walsh.
Also testifying were Mark Silbergeld, Consumers Union and Bruce
Williams, a syndicated radio talk show host who broadcasts on
approximately 400 stations in all 50 States, Guam, the U.S.
Virgin Islands and Puerto Rico, who suggested the legislation.
All the witnesses were in favor of the legislation.
On February 28, 1996, the subcommittee received testimony
from Casey Sewruk, Credit Union National Association; Leland
Stenehjen, Independent Bankers Association of America; Mallory
Duncan, National Retail Federation; Paul S. Reid, Mortgage
Bankers Association; and Vice Admiral Thomas J. Hughes (Ret.),
National Association of Federal Credit Unions; Al Stevens, Opex
Corp., accompanied by Mark Stevens and Bob Dewitt; Ben Brude,
ElectroCom Automation L.P.; and Tod Mongan, BancTec Inc.,
accompanied by Nolan Klier. These witnesses generally voiced
concerns about the cost of implementing the provisions of the
legislation in terms of actual monetary loss due to the costs
of retroactively crediting interest charges and technical and
operational problems. The current payment systems cannot read
the postmark or retain envelopes as evidence of timely payment.
Therefore, new systems would have to be redesigned or developed
and the costs would necessarily be passed on to the consumers.
However, the cost is yet unknown.
6. H.R. 1398, To Designate the United States Post Office Located at
1203 Lemay Ferry Road, St. Louis, Missouri as the ``Charles J.
Coyle Post Office Building''.
a. Report Number and Date.--None.
b. Summary of Measure.--The bill was introduced by
Representative Clay of Missouri on April 5, 1995, and was
cosponsored by the entire House delegation of the State of
Missouri as required by the Committee on Government Reform and
Oversight. The bill designates the U.S. Post Office building
located at 1203 Lemay Ferry Road, St. Louis, MO as the
``Charles J. Coyle Post Office Building''. Mr. Coyle was a U.S.
Army veteran and career postal worker. Mr. Coyle died on
February 18, 1995.
c. Legislative History/Status.--The bill was referred to
the Subcommittee on Postal Service on April 7, 1995. The
Committee on Government Reform and Oversight considered and
approved the bill on December 14, 1995, and ordered it to be
reported. On December 19, H.R. 1398 was called up by the House
under suspension of rules and the measure passed by voice vote.
The Senate received it the same day and referred it to the
Senate Committee on Governmental Affairs.
d. Hearings and Subcommittee Actions.--No hearings were
held on the measure.
7. H.R. 1606, To Designate the United States Post Office Building
Located at 24 Corliss Street, Providence, Rhode Island, as the
``Harry Kizirian Post Office Building''.
a. Report Number and Date.--None.
b. Summary of Measure.--H.R. 1606 designates the U.S. Post
Office Building located at 24 Corliss Street, Providence, RI as
the ``Harry Kizirian Post Office Building''. It honors Mr.
Kizirian, a World War II Marine veteran and former Providence
Postmaster.
c. Legislative History/Status.--The bill was introduced by
Representative Reed on May 10, 1995, and referred to the
Subcommittee on Postal Service. H.R. 1606 was cosponsored by
the House members of the Rhode Island delegation. The
subcommittee approved the legislation on June 20, 1995, and
forwarded it to full committee which marked up the bill and
ordered it to be reported by voice vote. H.R. 1606 was called
up by the House under suspension of the rules where it passed
by voice vote on October 17, 1995. The measure was amended and
approved by the Senate on October 24, 1995. The House disagreed
to Senate amendments, Jan. 5, 1996, and the Senate receded from
its amendments the same day. (Legislative day of Jan. 3, 1996)
by voice vote. The bill was cleared for the White House and was
presented to the President on January 23, 1996; and became
Public Law 104-100, on February 1, 1996.
d. Hearings and Subcommittee Actions.--No hearings were
held on the legislation.
8. H.R. 1880, To Designate the United States Post Office Located at 102
South McLean, Lincoln, Illinois as the ``Edward Madigan Post
Office Building''.
a. Report Number and Date.--None.
b. Summary of Measure.--H.R. 1880 honors the late Edward
Madigan by naming the U.S. Post Office located at 102 South
McLean, Lincoln, IL after him. Mr. Madigan, a native of
Lincoln, IL, served 10 terms in the House of Representatives
and was the 24th Secretary of Agriculture.
c. Legislative History/Status.--Representative LaHood
introduced the measure on June 16, 1995, and the measure was
referred to the Subcommittee on Postal Service on June 19. The
bill was cosponsored by the entire House delegation of the
State of Illinois. The committee considered and marked up the
legislation on December 14, 1995, and it was ordered to be
reported. H.R. 1880 was called up by the House under suspension
of rules on December 19, 1995, and passed by voice vote. The
measure was received in the Senate that day and referred to the
Senate Committee on Governmental Affairs. On April 18, 1996,
H.R. 1880 was ordered to be reported in lieu of S. 1443. H.R.
1880 was reported to the Senate by the Senate Committee on
Governmental Affairs on May 23, 1996, and it was placed on the
Senate legislative calendar under general orders Calendar No.
423. On June 27, 1996, the bill passed the Senate by unanimous
consent and it was cleared for the White House. On July 2,
1996, the bill was presented to the President and signed on
July 9, 1996, becoming Public Law 104-157.
d. Hearings and Subcommittee Actions.--No hearings were
held on this bill.
9. H.R. 2262, To Designate the United States Post Office Located at 218
North Alston Street in Foley, Alabama as the ``Holk Post Office
Building''.
a. Report Number and Date.--None.
b. Summary of Measure.--H.R. 2262 designates that the U.S.
Post Office Building located at 218 North Alston Street in
Foley, AL, as the ``Holk Post Office Building''. It honors
Arthur A. Holk and his father, George Holk, both of whom served
as mayor of the city of Foley. Both father and son participated
actively in various city organizations and on the city and
county school boards.
c. Legislative History/Status.--H.R. 2262 was introduced on
September 6, 1995, by Representative Callahan. The bill was
cosponsored by all the House members of the Alabama delegation.
The committee considered and marked up the bill on December 14,
1995, when it was ordered to be reported. On December 19, 1995,
H.R. 2262 was called up by the House under suspension of the
rules and passed the House by voice vote. It was received in
the Senate the same day and referred to the Senate Committee on
Governmental Affairs.
d. Hearings and Subcommittee Actions.--No hearings were
held on this legislation.
10. H.R. 2704, a Bill To Provide That the United States Post Office
building Located on the 2600 block of East 75th Street in
Chicago, Illinois Shall Be Known as the ``Charles A. Hayes Post
Office Building''.
a. Report Number and Date.--None.
b. Summary of Measure.--H.R. 2704 provides that the U.S.
Post Office building that is to be located on the 2600 block of
East 75th Street in Chicago, IL, shall be known and designated
as the ``Charles A. Hayes Post Office Building''. The
legislation honors former Representative Charles Hayes who was
elected to Congress in 1983. Prior to his departure from
Congress, Mr. Hayes served as chairman of the Subcommittee on
Postal Personnel and Modernization of the former Committee on
Post Office and Civil Service.
c. Legislative History/Status.--H.R. 2704 was introduced by
Representative Collins of Illinois on December 5, 1995. The
committee considered and marked up the measure on December 14,
1995, and ordered it to be reported as amended. The amendment
reflected the correct address of the facility. H.R. 2704 was
called up by the House under suspension of the rules on
December 19, 1995, and the measure passed by voice vote in the
same form as passed in committee. The amended bill was received
in the Senate the same day and referred to the Senate Committee
on Governmental Affairs. On April 18 the bill was ordered to be
reported and on May 23, 1996, it was reported to the Senate by
the Committee on Governmental Affairs and placed on the
legislative calendar under general orders (Calendar No. 425).
The Senate passed the measure by unanimous consent on June 27
and it was cleared for the White House the same day. On July 2,
the bill was presented to the President and was signed into law
July 9, 1996, becoming Public Law 104-159.
d. Hearings and Subcommittee Actions.--No hearings were
conducted on this legislation.
11. H.R. 885, To Designate the United States Post Office Building
Located at 153 East 110th Street, New York, New York, as the
``Oscar Garcia Rivera Post Office Building.''
a. Report Number and Date.--None.
b. Summary of Measure.--The bill designates the U.S. Post
Office building located at 153 110th Street, New York, New
York, as the ``Oscar Garcia Rivera Post Office Building''. The
legislation honors the first Puerto Rican to be elected to
public office in the continental United States. He was
instrumental in organizing and establishing the Association of
Puerto Rican and Hispanic Employees within the Post Office
Department when he was assigned to the post office in City
Hall. In 1937, Mr. Oscar Garcia Rivera was elected assemblyman
in the State of New York by the 14th District.
c. Legislative History/Status.--The legislation was
introduced on February 9, 1995, by Representative Serrano of
New York and cosponsored by the entire New York House
delegation, as required by the Committee on Government Reform
and Oversight. The committee considered and ordered H.R. 885 to
be reported on June 20, 1996. H.R. 885 was called up by the
House under suspension of rules on July 30, and passed by voice
vote. The bill was received in the Senate on July 31, 1996 and
referred to the Senate Committee on Government Affairs the same
day.
d. Hearings and Subcommittee Actions.--No hearings were
held on the measure.
12. H.R. 2700, a Bill to Designate the United States Post Office
Building located at 7980 FM 327, Elmendorf, Texas, as the
``Amos F. Longoria Post Office Building''.
a. Report Number and Date.--None.
b. Summary of Measure.--The legislation provides that the
U.S. Post Office building located on the Farm to Market Road in
Elmendorf, Texas be named after Amos F. Longoria, born in
Elmendorf, drafted into the U.S. Army during World War II and
who died in service to the country.
c. Legislative History/Status.--The bill was introduced by
Representative Tejeda of Texas on November 30, 1995 and
cosponsored by the full Texas House Delegation, pursuant to
committee policy. The legislation was referred to the House
Committee on Government Reform and Oversight and subsequently
referred to the Subcommittee on Postal Service. On April 24,
1996, the committee considered and approved the bill, as
amended to correct the address, and was ordered to be reported.
On July 30, 1996, the legislation was called up by the House
under suspension of the rules and the amended bill was passed
by voice vote. It was received in the Senate the following day
and referred to the Senate Committee on Government Affairs. The
Senate Committee on Governmental Affairs discharged the measure
by unanimous consent on September 28, 1996, and it was laid
before the Senate. At that time, the Senate attached an
amendment and passed the amended bill by unanimous consent. The
new provision amended section 3626(b)(3) of title 39, United
States Code to include in the definition of an ``institute of
higher education,'' a nonprofit organization that coordinates a
new network of college-level courses that are sponsored
primarily by nonprofit, educational institutions for older
adults. This provision is contained in H.R. 3717, the Postal
Reform Act of 1996 which has been the subject of four
legislative hearings, and was the subject of a free standing
bill, H.R. 2578. The House agreed to the Senate amendment by
unanimous consent the same day and it was cleared for the White
House. The bill was presented to the President on September 30,
1996 and it was signed on October 9, 1996, when it became
Public Law 104-255.
d. Hearings and Subcommittee Actions.--No hearings were
held on the legislation.
13. H.R. 3139, a Bill To Redesignate the United States Post Office
building Located at 245 Centereach Mall on Middle Country Road
in Centereach, New York, as the ``Rose Y. Caracappa United
States Post Office Building''.
a. Report Number and Date.--None.
b. Summary of Measure.--The bill redesignates the U.S. Post
Office building located at 245 Centereach Mall in Centereach,
New York as the ``Rose Y. Caracappa United States Post Office
Building''. The legislation honors Rose Caracappa who served in
the Suffolk County legislature for 14 years and was chairperson
of various committees. At the time of her death she was working
on building a World War II monument to honor all who served.
c. Legislative History/Status.--The bill was introduced by
Representative Forbes of New York on March 21, 1996. H.R. 3139
was cosponsored by the full New York House Delegation as
required by committee policy. The committee considered and
ordered it to be reported on June 20, 1996. On July 30, 1996,
the bill was called up by the House under suspension of the
rules and passed by voice vote. The Senate passed H.R. 3139 by
unanimous consent on August 2, 1996, and it was cleared for the
White House. The legislation was presented to the President on
August 9, 1996, and signed by the President as Public Law 104-
187 on August 20, 1996.
d. Hearings and Subcommittee Actions.--No hearings were
conducted on this legislation.
14. H.R. 3768, a Bill to Designate a United States Post Office to be
located in Groton, Massachusetts, as the ``Augusta `Gusty'
Hornblower United States Post Office''.
a. Report Number and Date.--None.
b. Summary of Measure.--H.R. 3768 provides that the United
States Post Office to be located at 80 Boston Road in Groton,
Massachusetts, shall be designated and known as the ``Augusta
`Gusty' Hornblower United States Post Office'' in honor of
Augusta Hornblower who served as State Representative to the
Massachusetts General Court from 1985 to 1994, representing the
towns of Groton, Ayer, Dunstable, Lunenberg, Pepperell,
Townsend and Tyngsborough. She served as Assistant Minority
Whip for 2 years prior to her death from breast cancer in 1994.
c. Legislative History/Status.--H.R. 3768 was introduced on
July 10, 1996, by Representative Blute of Massachusetts and
cosponsored by all the members of the House Delegation from
Massachusetts. The committee considered, and approved H.R. 3768
on July 25, 1996; and ordered it reported. On July 30, 1996,
the House called up the bill under suspension of the rules and
passed it by voice vote. The bill was received in the Senate
the following day and referred to the Senate Committee on
Governmental Affairs.
d. Hearings and Subcommittee Actions.--No hearings were
conducted on this legislation.
15. H.R. 3834, a Bill to Redesignate the Dunning Post Office in
Chicago, Illinois, as the ``Roger P. McAuliffe Post Office''.
a. Report Number and Date.--None.
b. Summary of Measure.--The legislation would redesignate
the ``Dunning Post Office'' located at 6441 West Irving Park
Road, Chicago, Illinois as the ``Roger P. McAuliffe Post
Office''. The naming of this Post Office honors the late Roger
McAuliffe who was elected to the Illinois House for 24 years.
He served the 14th District of Chicago's Northwest Side and the
suburbs of Park Ridge, Rosemont, Norridge and Schiller Park. He
had also previously represented the 16th District. He served in
the U.S. Army and graduated from the Chicago Police Academy and
remained on active duty with the Chicago Police Department even
as he served in the legislature. Roger McAuliffe was assistant
majority leader of the Illinois House when he died unexpected
in a boating accident.
c. Legislative History/Status.--H.R. 3834 was introduced by
Representative Flanagan of Illinois on July 17, 1996, and
referred to the Committee on Government Reform and Oversight.
On July 25, 1996, the committee considered approved and the
bill was ordered to be reported. On July 30, 1996, the House
called up the bill under suspension of the rules and it passed
by voice vote. H.R. 3834 passed the Senate by unanimous consent
on August 2, 1996, and was cleared for the White House. On
August 9, 1996, the bill was presented to the President and the
measure was signed on August 20, 1996, becoming Public Law 104-
189.
d. Hearings and Subcommittee Actions.--No hearings were
conducted on this legislation.
16. H.R. 3877, a Bill to designate the United States Post Office
Building in Camden, Arkansas, as the ``Honorable David H. Pryor
Post Office Building''.
a. Report Number and Date.--None.
b. Summary of Measure.--The legislation states that the
United States Post Office building located at 351 Washington
Street in Camden, Arkansas is designated as the ``Honorable
David H. Pryor Post Office Building'' in honor of Senator David
H. Pryor who served as former chair of the Senate Subcommittee
on Post Office and Civil Service and currently serves as that
panel's ranking minority member. He was elected to serve
Ouachita County in the State legislature and he then served in
the U.S. House of Representatives from 1967 through 1972. He
was elected Governor of Arkansas in 1974 and in 1976. In 1978,
David Pryor won the U.S. Senate seat and has retained it for
three terms until his retirement at the end of the 104th
Congress.
c. Legislative History/Status.--H.R. 3877 was introduced by
Representative Dickey of Arkansas on July 23, 1996, and
cosponsored by the full Arkansas House Delegation as required
by committee policy. The committee considered the bill on
September 18, 1996, and the measure was ordered to be reported
as amended by voice vote. The amendment corrected technical
changes of the bill. On September 24, 1996, the bill was called
up by the House under suspension of the rules and the bill, as
it was amended by the committee, passed the House by voice
vote. The Senate received the legislation the same day and
passed the bill by unanimous consent on September 27, 1996. It
was cleared for the White House and on September 30, 1996, the
bill was presented to the President. H.R. 3877 was signed by
the President on October 9, 1996, and became Public Law 104-
268.
d. Hearings and Subcommittee Actions.--No hearings were
conducted on this legislation.
17. H.R. 3610, The Omnibus Appropriations Act of 1996.
a. Report Number and Date.--Conference Report H. Rept. 104-
863.
b. Summary of Measure.--Sections 103 and 104 in H.R. 3717
relating to the salary of the Directors and to establishment of
the Office of the Inspector General of the Postal Service and
the appointment and removal of the Inspector General by the
Board of Governors were amended to the above-reference
legislation and required to be effective as if included in the
provision of the Treasury Postal Service and General
Appropriation Act, 1996.
c. Legislative History/Status.--H.R. 3610 was introduced by
Representative Young of Florida on June 11, 1996. The
legislation passed the House as amended on June 13, and
received in the Senate on June 14. The Senate struck the bill
after the enacting clause and substituted the language of S.
1894 and passed the measure on July 18, in lieu of S. 1894. The
Senate insisted on the amendment and requested a conference.
The House disagreed to the Senate amendment. A Conference was
held on September 10, and September 28. A Conference Report, H.
Rept. 104-863 was filed on September 28. A motion to recommit
failed in the House by voice vote but the House agreed to
Conference Report by a yea-nay vote. The Senate agreed to the
conference report by voice vote on September 30, 1996, and it
was cleared for the White House, presented to the President and
signed by the President on the same day. The legislation became
Public Law 104-208.
d. Hearings and Subcommittee Actions.--The issues of
increasing the salaries of Postal Service Directors and
establishing the Office of the Inspector General were heard
during the course of hearings on postal reform on July 10, July
18, September 17 and September 26.
18. H.R. 3690, the ``Postal Service Core Business Act of 1996''.
a. Report Number and Date.--None.
b. Summary of Measure.--The legislation was introduced to
address claims regarding unfair competition by the United
States Postal Service (USPS). Many new industries have emerged
over the last 15 years including the Commercial Mail Receiving
Agent (CMRA) which provides value added and ancillary services
to postal customers. Many home-based businesses use CMRAs as
mini offices. They also help their customers in packing and
sending packages in the most cost effective manner. CMRAs
provide services which the USPS does not. Within the past two
decades, one franchise has grown into an entity of nearly
10,000 small business persons. The CMRA industry fears that it
is at a disadvantage because of the vast resources of the
Postal Service.
Among those concerns are that the USPS: does not charge tax
on its retail items; is self-insured as an agency of the U.S.
Government; does not have to make a profit; can borrow money
from the Federal Reserve System at the most favorable rates;
and has a statutory monopoly on the delivery of first class
mail which the CMRAs think can subsidize other services.
The legislation prohibits the USPS from competing with
private industries unless the Postal Service was offering the
service nationwide as of January 1, 1994. H.R. 3690 limits the
types of commercial nonpostal service which may be offered by
the Postal Service.
c. Legislative History/Status.--The legislation was
introduced on June 20, 1996, by Representative Duncan Hunter
(R-CA) and it was referred to the Committee on Government
Reform and Oversight. Within the committee, it was then
referred to the Subcommittee on the Postal Service. Though the
merits of the bill, per se, were not the subject of a hearing,
it was heard in the context of postal reform under the rubric
of H.R. 3717 when on September 26, 1996, Mr. Hunter testified
on the impact of postal reform on small related business,
specifically CMRAs.
d. Hearings and Subcommittee Actions.--H.R. 3690 was heard
in context with H.R. 3717, the Postal Reform Act of 1995, on
September 26, 1996. No further action was taken on the
legislation.
19. H.R. 3717, the ``Postal Reform Act of 1996.''
a. Report Number and Date.--None.
b. Summary of Measure.--H.R. 3717 introduced by
subcommittee Chairman McHugh, amends Title 39, United States
Code regarding the United States Postal Service. Title I
redesignate the name of the Board of Governors to the Board of
Directors and makes additional name changes of the Postmaster
General and Deputy Postmaster General to convey the business
responsibilities of the Postal Service anticipated by the
reform bill and to communicate the experience, professionalism
and business acumen expected of the people who hold these
positions. The bill creates a Presidentially-appointed
Inspector General for the Postal Service and establishes both
an Office of the Inspector General and a separate Office of the
Chief Postal Inspector General. The bill mandates that the
Office of Inspector General will be a separate item in the
annual budget. The Inspector General is authorized to hire and
manage the office in a manner independent from Postal Service
functions and control. Compensation for the employees of the
Inspector General's Office and the Chief Postal Inspector's
Office will be compensated similarly to offices of other
Inspectors General and Federal law enforcement entities. Both
offices are mandated to develop strategic plans outlining their
goals, missions, and resources needs. Clarifying and technical
changes are included.
Title II of the legislation permanently authorizes the
employment of Postal Police Officers. This corrects an
oversight in the 1970 law which has required Congress to enact
temporary authority each fiscal year by the appropriations
process. Current law states that an appeal of a post office
closing by anyone served by that post office may be considered
if the appeal is received by the Postal Rate Commission within
30 days of notification. H.R. 3717 changes the provision by
considering the appeal timely if the date stamped on the
envelope is postmarked within 30 days of the notification.
Title III of the legislation repeals the inactive Postal
Service Advisory Council and establishes a temporary
Presidentially-appointed Postal Employee-Management Commission
which would sunset after a 3 year tenure. The Commission would
evaluate and recommend solutions to employee-management
problems which have permeated the Postal Service. This issue
was reported on by the General Accounting Office at great
length in report, U.S. Postal Service: Labor-Management
Problems Persist on the Workroom Floor (GAO/GGD-94-201A and
201B (Vols. 1 & 2), Sept. 29, 1994. Testimony received from GAO
in March 1996 stated that the problems still exist. The make up
of the Commission is specified and the first report will be
submitted within 18 months of the Commission's origination and
annually thereafter until the third report is submitted.
Title IV of the bill relates to finance issues. The measure
grants the Postal Service sole discretion to deposit its
revenues in the Postal Service Fund within the U.S. Treasury,
as it already must do, or to any Federal Reserve banks or
depositories for public funds. The Postal Service must,
however, submit a master plan detailing how it will exercise
its authority, measures to safeguard against losses, procedures
for regular accounting of its authority, to the President, the
Secretary of the Treasury, and both Houses of Congress 30 days
prior to the funds being deposited elsewhere. This section also
removes Treasury control from Postal Service investments,
allowing it to invest any excess funds only in obligations of,
or guaranteed by, the U.S. Government. This will give the
Postal Service the opportunity to take advantage of favorable
market conditions and make equity investments which fit its
business strategies. The bill severs the access of the Postal
Service to the Federal Financing Bank which would result in the
Postal Service taking advantage of the speed, flexibility,
innovation and requirements of the open market to serve its
financial needs. Though these provisions remove the control of
the Secretary of the Treasury from Postal Service financial
borrowing decisions, the Postal Service must consult with the
Secretary on the terms and conditions of sale of any
obligations issued by the Postal Service. This provision would
allow the Postal Service to minimize interest expenses by
obtaining the most cost efficient services. The bill would also
remove the requirement that the Secretary of the Treasury
purchase up to $2 billion in obligations of the Postal Service,
though it would still permit the Secretary to purchase Postal
Service obligations, but only upon mutual agreement of both
parties. Removal of the Treasury requirement is consistent with
the purpose of directing the Postal Service to borrow in the
private sector where it will be able to take advantage of
broader markets, though with some restriction. This provision
places the Postal Service in conformity with some other
government-sponsored enterprises.
Title V refers to the budget and appropriations process. It
carries out the function of H.R. 1826 which subcommittee
Chairman McHugh introduced last session, repealing the
authority for the transitional appropriations (funding for
worker's compensation liabilities of pre-1971, former Post
Office Department employees) and making those liabilities those
of the United States Postal Service, to be handled in the same
manner as all Postal Service employee worker compensation
claims. Technical and clarifying amendments are included
regarding the status of the employees affected by the change.
This section also ends the authorization for all appropriations
and funding of any postal services by the American taxpayer but
maintains a phased-in schedule of rates for certain nonprofit
organizations, free mail for the blind and disabled, free
mailing of balloting material under the Uniformed and Overseas
Citizens Absentee Voting Act and reduced rates for voter
registration purposes. The Postal Service will ultimately bear
the responsibility for social obligations as part of its
mission and charge to provide universal service. Though there
would not be an appropriation for the Postal Service, this
provision would still retain Congressional oversight of the
Postal Service.
Title VI provides for miscellaneous provisions relating to
postal rates, classes and services. It authorized the Postal
Service to forward mail in the same manner as other postal
customers, for addressees receiving their mail in Commercial
Mail Receiving Agencies (CMRAs) accepting mail on behalf of
their customers. At present, CMRAs must add postage to mail
that requires forwarding. Another provision includes in the
definition of an ``institute of higher education,'' a nonprofit
organization that coordinates college-level courses for older
adults by nonprofit, educational institutions, such as ``elder
hostels.'' This provision passed as an amendment to H.R. 2700
and was enacted into law. This section would also authorize the
Postal Service to request from the Postal Rate Commission a
rate category for periodical requester publications. The powers
of the Postal Rate Commission are expanded in this title. The
Commissioners, law judges appointed by the Commission and any
designated employee are permitted to administer oath, examine
witnesses, take deposition and receive evidence. Additionally,
the chairman or any Commissioner designated by the chairman,
and any Commission appointed law judge may issue subpoenas to
require attendance, presentation of testimony, production of
documents and order depositions and responses to written
interrogatories. Any subpena requires the written concurrence
of a majority of the Commissioners then holding office. Failure
to obey a subpena may be referred to the United States district
court and failure to obey is punishable as a contempt of court.
If any information requested by the Commission is considered
proprietary, the Postal Service must inform the Commission in
writing. In cases where proprietary information is received,
the Commission may use the information only for the purpose
supplied and restrict access to the information to Commission
officials.
A section within Title VI permits the Postal Service to
offer volume discounts in which all customers would be eligible
for the same volume discount as long as the discounted rate is
set in accordance with statutory provisions. This provision is
intended to insure greater pricing flexibility in markets
exposed to growing competition. The Postal Service is permitted
to offer volume discounts on a negotiated basis as along as the
agreements are restricted to postal services in the Competitive
Mail category, enumerated in Title X. The rates would be
attractive to the mailer and beneficial to the Postal Service.
This authority would be tested for 3 years; after notice and
comment the Comptroller General of the General Accounting
Office will report the evaluation to Congress.
Title VII deletes obsolete provisions referring to the
Interstate Commerce Commission and other matters such as
contracting for surface transportation of mail, the duration of
postal transportation contracts. One section expands the
flexibility of the Postal Service to contract for international
air transportation of mail at competitive market rates. Current
restrictions stifle the Postal Service' competitiveness in
international markets. This provision would contribute to
improvements in cost and service performance. An important
provision in this title provides that a letter may be carried
outside the Postal Service under existing law or when the
amount paid for private carriage is at least $2. Further, this
title provides for a 3 year demonstration project which would
test the feasibility of allowing non-Postal Service access to
private mailboxes. This project directs the Postal Service to
include at least one urban, suburban, and rural area in the
pilot project. Importantly, the section allows individuals in
affected areas to opt-out of the test.
Title VIII of the bill amends title 5 of the United States
Code. It permits the Chief Executive Officer (CEO) of the
Postal Service to obtain a review of any final order or
decision of the Merit Systems Protection Board (MSPB) regarding
any employee or applicant for employment with the Postal
Service by petitioning for judicial review in the United States
Court of Appeals for the Federal Circuit. The CEO could proceed
with the request if it is determined that the MSPB has erred in
interpreting civil service provisions affecting personnel
management and that the ruling would have significant impact on
civil service policies. If the CEO had not intervened in the
matter earlier, then the CEO must first petition the Board for
reconsideration. This provision gives the MSPB an opportunity
to correct any errors which may have been made at this level.
If reconsideration is denied, the CEO has the right to appear
before the Court of Appeals; judicial review would be at the
discretion of the Court.
Title IX is applicable to law enforcement. It specifically
includes contract employees within the protection of law
afforded to Federal and postal employees against the threat of
assault. The amendment broadens the deterrent to the continued
receipt of unsolicited sexually oriented advertising by
authorizing a civil monetary penalty of $500 to $1,500 for each
sexually oriented advertising mail piece in violation of
specific sections of law. The new provision allows the deposit
of asset forfeitures in which the Postal Service had primary
responsibility for investigation to be deposited directly in
the Postal Service Fund. This title also provides that the
Postal Service may bring civil action for penalties against
mailers who violate postal statutes and regulations in regard
to mailing and packaging hazardous matter. Civil penalties were
included for improper transportation of hazardous material in
the Hazardous Materials Transportation Act, but the mailing of
such items were not. This title creates criminal penalties for
stalking of Federal and postal employees; updates existing law
to prohibit the mailing of controlled substances, as defined by
the Controlled Substances Act and makes the violation a felony
punishable by fines or imprisonment or both; directs the U.S.
Sentencing Commission to appropriately enhance its sentencing
guidelines for volume mail thefts and the use of the credit
line of credit cards to compute the dollar loss in the
unauthorized use of a credit card; clarifies the Postal
burglary statute to specifically include the robbery of the
large number of post office boxes and vending machines that are
not in postal facilities and includes penalties for the receipt
or possession of stolen property through a violation of this
statute; enhances the penalties for postal robberies, including
those that result in the death of any person, to be equivalent
to the enhanced penalties for bank robber as included in the
Violent Crime Control and Law Enforcement Act of 1994.
Title X of H.R. 3717 establishes a new system for
establishing postal rates, classes, and services. It replaces
the postal rate setting process by creating a new ratemaking
framework. It is designed to reflect the regulatory approach
for monopolies or market dominant entities currently in use by
regulatory commissions in nearly all States, the Federal
Communication Commission, and several other nations. The new
system recognizes the marketplace realities and competition
faced by the Postal Service this year and into the 21st
century. This title establishes a price cap regulatory regime
for those postal products that are protected by the Private
Express Statutes and those products that have few if any
alternatives outside the Postal Service. The noncompetitive
products will be divided among four groupings of similar
classes of mail. The Postal Service will have the flexibility
to price postal products that have a sufficient number of non-
Postal Service alternatives, according to economic decisions
required in the marketplace.
The Postal Service is also given the authority to introduce
and test experimental postal services, encouraging the
investment into new services for the benefit of postal
customers. The Postal Service will then have the flexibility of
a privately owned entity to react to market conditions, to
introduce and test new products and to earn a profit.
The Postal Service is required to initiate an omnibus rate
case before the Postal Rate Commission ensuring that the most
current rates and fees are in effect before the application of
the new formula for rate setting. The baseline rates and fees
must take effect no later than 18 months after enactment. The
factors which the Postal Rate Commission must consider in
establishing baseline rates and fees include cost, demand, and
quality of service. These elements would determine the
competitiveness of the Postal Service with other delivery
services and methods of communication.
Prices in the noncompetitive mail category will be indexed
to the Gross Domestic Product Chain-Type Price Index (GDPPI)
which is published quarterly by the Bureau of Economic Analysis
of the Department of Commerce. Thus, the statistic is
straightforward and easily verifiable; it cannot be manipulated
by the regulated entity. As the GDPPI is an economy-wide
measure of prices that reflect the cost of business, it is an
appropriate link to the Postal Service as a business.
Furthermore, numerous State utility commissions and the Federal
Communication Commission base their price cap policies on
GDPPI.
B. REVIEW OF LAWS WITHIN COMMITTEE'S JURISDICTION
1. Federal Property and Administrative Services Act of 1949, as Amended
June 30, 1949, 63 Stat. 377 (the act) (40 U.S.C. Section 471 et
seq.; Public Law 152, 81st Congress).
This law provides the Federal Government with a system for
procurement of personal property and nonpersonal services, for
storage and issues of such property, for transportation and
traffic management; for further utilization and disposal of
surplus property, and for management authority was modified in
1985. GSA's original responsibilities were enacted as part of
title 44, U.S.C. The committee has amended certain sections of
the 1949 act.
With respect to Title III (Procurement Procedure), H.R.
1670, reported by the committee on August 1, 1995, as House
Report 104-222, Pt. I, would amend contract solicitation
provisions, provide for preaward debriefings, amend preaward
qualification requirements and replace these provisions with a
contractor performance system; amend all commercial items from
the Truth in Negotiations Act; and apply simplified acquisition
procedures to all commercial items regardless of their dollar
value.
Division D of Public Law 104-106, the Federal Acquisition
Reform Act of 1996, retains the provisions regarding commercial
item purchasing in modified form. The law also maintains the
original language authorizing preaward debriefings for excluded
offerors where appropriate.
Division E of Public Law 104-106, the Information
Technology and Reform Act of 1996, includes a Senate provision
that would require agencies to inventory all agency computer
equipment and to identify excess or surplus property in
accordance with title II of the act. The statement of the
committee of conference on S. 1124, which became Public Law
104-106, contains a direction of the conferees that GSA,
exercising current authority under title II of the act, should
issue regulations that would provide for donation of such
equipment under title II on the basis of this priority: (1)
elementary and secondary schools and schools funded by the
Bureau of Indian Affairs; (2) public libraries; (3) public
colleges and universities; and (4) other entities eligible for
donation under the act.
2. Brooks Automatic Data Processing Act (40 U.S.C. 759).
This provision of law is found at section 111 of the
Federal Property and Administrative Services Act (the act). It
provides the authority to coordinate and provide for the
purchase, lease, and maintenance of automatic data processing
equipment for all Federal agencies through the Administrator of
General Services. It also provides authority for the General
Services Board of Contract Appeals to review any decision by a
contracting officer that is alleged to violate a statute, a
regulation, or the conditions of a delegation of procurement
authority.
Division E of Public Law 104-106 repeals section 111 of the
act. It provides authority for the acquisition of information
technology within each of the Federal agencies and gives the
Office of Management and Budget the responsibility for
coordinating governmentwide information technology management
and purchasing. It also establishes the General Accounting
Office as the sole independent administrative forum for bid
protests.
3. Office of Federal Procurement Policy Act (41 U.S.C. Section 401 et
seq., 88 Stat. 796, Public Law 93-400).
The Office of Federal Procurement Policy (OFPP) Act
established OFPP within the Office of Management and Budget to
promote economy, efficiency, and effectiveness in the
procurement of property and services by and for the executive
branch of the Federal Government and to provide governmentwide
procurement policies, regulations, procedures, and forms.
H.R. 1760, reported by the committee on August 1, 1995, as
House Report 104-222, Pt. I, would revise the current OFPP Act
to provide for improved definitions of competition
requirements; to establish an alternative quality-based pre-
qualification system for meeting the government's recurring
needs; to exempt commercial items from the Truth in
Negotiations Act and the Cost Accounting Standards; to add a
new section to encourage the government's reliance on the
private sector sources for goods and services; to revise and
simplify Procurement Integrity provisions; to remove certain
certification requirements currently in statute and other
regulatory certifications (unless justified); to add a new
section providing that each executive agency establish and
maintain effective value engineering processes and procedures;
and to establish a series of policies and procedures for the
management of the acquisition workforce in civilian agencies.
Division D of Public Law 104-106 contains many of the
provisions of House Report 104-222 in addition to other changes
to the OFPP Act. The provisions of Public Law 104-106 include:
exempting commercial item purchases from the Truth in
Negotiations Act and Cost Accounting Standards; removing
certain unnecessary certification requirements; providing for
the inapplicability of certain procurement laws to commercially
available off-the-shelf items; extending authority for
executive agencies to establish and maintain cost-effective,
value engineering procedures and processes; establishing a
series of policies and procedures for the management of the
acquisition workforce in the civilian agencies. It also repeals
the current procurement integrity provisions and their
certification requirements. New language provides for the
protection of confidential procurement information by
prohibiting both the disclosure and receipt of such information
and imposing criminal and civil penalties for violations. There
also is a limited ban on contacts between government officials
and industry contractors, as well as governmentwide ``revolving
door'' restrictions.
4. The Competition in Contracting Act of 1984 (41 U.S.C. 253, 98 Stat.
1175, Public Law 98-369, July 18, 1984).
The Competition in Contracting Act of 1984 amended title
III of the Federal Property and Administrative Services Act of
1949 to establish a statutory preference for the use of
competitive procedures in awarding Federal contracts for
property or services; to require the use of competitive
procedures by Federal agencies when purchasing goods or
services--sealed or competitive bids; and to direct the head of
each agency to appoint an advocate for competition who will
challenge barriers to competition in the procurement of
property and services by the agency and who will review the
procurement activities of the agency.
Division D of Public Law 104-106 contains language which
retains the current statutory competition standard, but adds a
requirement that the standard is to be implemented in a manner
which is consistent with the government's need to
``efficiently'' fulfill its requirements. Further provisions
are added to allow contracting officials more discretion in
determining the number of proposals in the ``competitive
range,'' to provide for preaward debriefings of unsuccessful
offerors, and to authorize the use of special two-phase
procedures for design and construction of public buildings.
5. The Federal Acquisition Streamlining Act of 1994 (Public Law 103-
355, October 13, 1994).
The Federal Acquisition Streamlining Act (FASA) of 1994 was
developed to provide the foundation for establishing
``commercial-like'' procedures within the Federal procurement
system. FASA established a preference for commercial items and
simplified procedures for contracts under $100,000 as well as
addressing a wide spectrum of issues regarding the
administrative burden--on all sides--associated with the
government's specialized requirements.
H.R. 1670, reported by the committee on August 1, 1995, as
House Report 104-222, Pt. I, would amend section 5061 of FASA
(41 U.S.C. 413 note) to permit the OFPP Administrator to
exercise the authority granted in FASA to test ``innovative''
procurement procedures without having to wait for the
implementation of other FASA provisions.
Public Law 104-106 authorizes OFPP to test alternative
procurement procedures and removes a requirement that the
testing of these procedures be contingent upon the full
implementation of the Federal Acquisition Computer Network
Electronic Commerce (FACNET) procedures. It also would limit
the linkage between the use of the simplified acquisition
procedures and the full implementation of FACNET.
Civil Service Subcommittee
1. The Veterans' Preference Act of 1944 (58 Stat. 387).
This law provides preferences for veterans in obtaining and
retaining Federal employment. The subcommittee reviewed this
law in connection with its examination of the current status of
veterans in the Federal workforce. (See section II.B.18.
above.) Based upon this examination, the subcommittee concluded
that veterans' rights in reductions in force are often
circumvented and, most importantly, that veterans do not have
access to an effective redress system when their rights have
been violated. In addition, the subcommittee also concluded
that veterans entitled to preference and others who have served
honorably in the armed forces are frequently shut out of
competition for Federal jobs by artificial restrictions on
competition. In order to remedy these deficiencies, Chairman
Mica introduced H.R. 3586. (See section III.A.1. above.)
2. Statutes reviewed in connection with civil service reform.
The subcommittee reviewed the following laws affecting the
civil service in connection with its examination of civil
service reform legislation, H.R. 3841. (See section III.A.2.
above.):
a. Demonstration projects--5 U.S.C. Chapter 47.
These laws govern the procedures under which OPM and
individual agencies may establish demonstration
projects to experiment with innovative personnel
practices. The subcommittee proposed a number of
changes to these statutes to simplify and expedite the
establishment of demonstration projects and to remove
current limits that prevent increased experimentation
with such programs.
b. Chapters 33, 87 & 89--The subcommittee reviewed
these laws and proposed revisions to soften the impact
of layoffs and restructuring on Federal employees.
c. Chapters 35, 43, 45, 53 (5335), 71--The
subcommittee reviewed these laws and proposed revisions
to improve performance management.
d. Chapters 71, 75, & 77--The subcommittee reviewed
these laws and proposed revisions to streamline Federal
employee appeals procedures and encourage the use of
alternative dispute resolution techniques to resolve
disputes in the Federal workplace.
e. Chapters 84 & 83--The subcommittee reviewed these
laws and proposed revisions to improve the Thrift
Savings Plan (TSP) by: (1) adding two new investment
plans, (2) liberalizing borrowing authority, (3)
authorizing a one-time permanent withdrawal of
contributions, (4) permitting immediate participation
in the TSP, and (4) allowing employees to contribute up
to the IRS limit. Items (1)-(3) were enacted into law
in Public Law 104-208.
3. Statutes reviewed in connection with Treasury, Postal
appropriations.
The subcommittee reviewed a number of laws affecting the
civil service in connection with the appropriations for the
Office of Personnel Management (OPM) and other agencies.
In the first session, the following laws were reviewed in
connection with the Treasury, Postal Appropriations Act for
fiscal year 1996 (Public Law 104-52):
a. 5 U.S.C. Sec. 1104.--This statute, which deals
with delegations of authority for personnel management,
was amended to allow OPM to delegate competitive
examinations for all positions other than the position
of administrative law judge (ALJ) and to provide that
agencies using ALJs reimburse OPM for the cost of the
ALJ examination. It was also amended to allow OPM to
assist agencies conducting competitive examinations on
a reimbursable basis. Reimbursements to OPM are to be
made through the revolving fund established by 5 U.S.C.
Sec. 1304.
b. 5 U.S.C. Sec. 3329 (the second section so
designated).--The second section in title 5 designated
as section 3329, which requires OPM to establish and
maintain a government wide list of certain vacant
positions, is redesignated as 3330 and is amended to
permit OPM to charge agencies for maintaining this
list.
c. 5 U.S.C. Sec. 5378.--This statute, which deals
with pay rates for positions within the police force of
the Bureau of Engraving and Printing and the U.S. Mint,
was amended by adding a provision permitting the
Secretary of the Treasury to establish pay for the
position of chief at a rate not to exceed the maximum
rate for a GS-14.
d. 5 U.S.C. Sec. 5542.--This section, which governs
the computation of overtime, was amended by adding a
new subsection (e) to cover computation of certain
overtime work performed by Secret Service agents.
e. Section 4(a) of the Federal Workforce
Restructuring Act of 1994 (Public Law 103-226) was
amended to require additional agency contributions of 9
percent for each employee who receives a buyout and
retires under 5 U.S.C. Sec. 8336(d)(2).
f. 5 U.S.C. Sec. 8348.--Subsection (a)(1) of this
section was amended to authorize the Office of
Personnel Management to withhold State income taxes
from civil service retirement annuities.
4. Statutes reviewed in connection with the Federal Reports Elimination
and Sunset Act of 1995 (Public Law 104-66).
a. 5 U.S.C. Sec. 1304.--This statute was amended to
eliminate the requirement that the Comptroller General
report to Congress on OPM's revolving fund once every 3
years.
b. 5 U.S.C. Sec. 2304.--This statute was amended to
eliminate the requirement that GAO submit annual
reports to Congress on the activities of the Merit
Systems Protection Board and the Office of Personnel
Management.
c. 5 U.S.C. Sec. 3135.--This statute, which required
the Office of Personnel Management to submit biennial
reports to Congress on the Senior Executive Service,
was repealed.
d. 5 U.S.C. Sec. 4314(d).--This statute, which
required the Office of Personnel Management to include
certain information in the reports required under
section 3135, was repealed.
e. 5 U.S.C. Sec. 4113.--This statute, which required
agencies to report to the Office of Personnel
Management every 3 years on training programs and
plans, was repealed.
f. 5 U.S.C. Sec. 5347(e).--This statute, which
required the Federal Prevailing Rate Advisory Committee
to submit annual reports to the Office of Personnel
Management, was repealed.
g. 5 U.S.C. Sec. 3407.--This statute, which required
agencies and the Office of Personnel Management to
submit periodic reports on part-time career employment,
was repealed.
5. Repeal of the Ramspeck Act.
The subcommittee reviewed the Ramspeck Act, 5 U.S.C.
Sec. 3304(c), in connection with House consideration of the
Lobbying Disclosure Act of 1995. Section 16 of the Lobbying
Disclosure Act repealed the Ramspeck Act, which permitted the
noncompetitive appointment of certain legislative and judicial
branch employees to positions in the competitive service. The
Office of Personnel Management was directed to develop
regulations for evaluating experience gained in the legislative
or judicial branches and non-profit enterprises.
6. Statutes reviewed in connection with the ICC Termination Act of 1995
(Public Law 104-88).
In connection with the ICC Termination Act of 1995, the
subcommittee reviewed amendments to 5 U.S.C. Sec. Sec. 5314 and
5315 to reflect changes resulting from the abolition of the
Interstate Commerce Commission.
7. Statutes reviewed in connection with Public Law 104-19.
In connection with this act, the subcommittee reviewed
amendments to 5 U.S.C. Sec. 5545a, which governs availability
pay for criminal investigators. These amendments allowed
Inspectors General who employ fewer than 5 criminal
investigators to exempt those criminal investigators from the
section's coverage and applied this section to pilots employed
by the U.S. Customs Service who are law enforcement officers.
Such pilots are also to be considered law enforcement officers
for purposes of 5 U.S.C. Sec. 5542(d) and section 13(a)(16) and
(b)(30) of the Fair Labor Standards Act of 1938.
8. Statutes reviewed in connection with the Intelligence Authorization
Act for Fiscal Year 1996 (104-93).
In accordance with House consideration of this act, the
subcommittee reviewed the following statutes:
a. 5 U.S.C. Sec. 8318.--This statute was amended to
authorize the restoration of spousal benefits to the
spouse of an employee whose pension was forfeited under
5 U.S.C. Sec. Sec. 8312 or 8313 if the Attorney General
determines the spouse fully cooperated with Federal
authorities in the criminal investigation and
prosecution leading to the forfeiture.
b. 5 U.S.C. Sec. 8432(g).--This statute was amended
to provide for the forfeiture of government
contributions to the Thrift Savings Plan and all
earnings attributable to such contributions if the
individual's annuity is forfeited under subchapter II
of chapter 83.
c. 5 U.S.C. Sec. 7325.--This statute was amended to
allow employees of the agencies enumerated in
subsection (b)(2)(B) of section 7323 to engage in
fundraising or run for office in connection with
elections in certain municipalities or political
subdivisions.
9. Statutes reviewed in connection with the Legislative Branch
Appropriations Acts.
In connection with House consideration of the Legislative
Branch Appropriations Act, 1996 (Public Law 104-53), the
subcommittee reviewed an amendment to section 5 U.S.C.
Sec. 8402(c) to authorize the Director of the Congressional
Budget Office to exclude temporary or intermittent CBO
employees from the Federal Employees Retirement System.
In connection with House consideration of the Legislative
Branch Appropriations Act, 1997 (Public Law 104-197), the
subcommittee reviewed the following statutes:
a. 5 U.S.C. Sec. 3303.--This statute was amended to
prohibit anyone examining or appointing an individual
to a position in the competitive service from receiving
or considering a recommendation of the applicant by a
Senator or Representative, except as to the character
or residence of the applicant.
b. 5 U.S.C. Sec. 2302.--This statute was amended to
make it a prohibited personnel practice for anyone with
the authority to take, direct others to take,
recommend, or approve any personnel action to solicit
or consider any recommendation or statement with
respect to any individual who requests or is under
consideration for any personnel action unless such
recommendation or statement is based on the personal
knowledge or records of the person furnishing it and
evaluates the work performance, ability, aptitude,
general qualifications, character, loyalty, or
suitability of such individual.
10. Statutes reviewed in connection with Defense Authorization Acts.
In both sessions of the 104th Congress reviewed a number of
statutes in connection with House consideration of Defense
Authorization Acts.
The following statutes were reviewed in connection with the
National Defense Authorization Act for Fiscal Year 1996 (Public
Law 104-106):
a. 5 U.S.C. Sec. 3341.--This statute was amended to
eliminate the 120-day limit on details with respect to
Defense Department employees detailed to jobs that are
expected to terminate in connection with base closures
and realignments or downsizing.
b. 5 U.S.C. Sec. 3502.--This statute was amended to
permit the Secretary of Defense or the Secretary of a
military department to allow employees to volunteer to
substitute for another employee in a reduction-in-
force. The Secretary involved may refuse to allow an
employee with critical skills and knowledge to
volunteer. This authority terminated on September 30,
1996.
c. 5 U.S.C. Sec. 5595.--This statute was amended to
permit the Secretary of Defense or the Secretary of a
military department to make a lump sum payment of
severance pay to an employee of the Department of
Defense.
d. 5 U.S.C. Sec. 8905.--This statute was amended to
allow Department of Defense employees who voluntarily
separate from a surplus position to continue their
health insurance plan under the Federal Employees
Health Benefits Program.
e. 5 U.S.C. Sec. 3329.--This statute was amended to
eliminate the requirement that certain military reserve
technicians who are involuntarily separated from
technician service be offered another position.
Instead, such individuals are to be given placement
consideration through a Department of Defense priority
placement program for positions in either the excepted
or competitive services within the Department for which
he is qualified and that, to the extent practicable, is
at the same pay grade or level.
f. 5 U.S.C. Sec. 6323.--This statute was amended to
provide military reserve technicians, at their request,
with military leave of up to 44 workdays per calendar
year for participation in noncombat operations outside
the United States, its territories and possessions.
This statute was also amended to provide that Federal
employees who are members of the Reserves or National
Guard may, at their request, have the time they spend
performing public safety service charged to annual
leave or compensatory time rather than to military
leave provided under section 6323(b).
g. 5 U.S.C. Sec. 6121.--This statute was amended to
permit employees of nonappropriated fund
instrumentalities to use flexible and compressed work
schedules.
h. 5 U.S.C. Sec. Sec. 8347 and 8461.--These statutes
were amended to improve the portability of retirement
benefits for employees who move between positions with
nonappropriated fund instrumentalities of the
Department of Defense or Coast Guard and civil service
positions.
i. 5 U.S.C. Sec. 3502.--This statute was amended to
provide that certain employees of the Department of
Defense or Coast Guard are entitled to credit for
service in a nonappropriated fund instrumentality of
the Department of Defense or Coast Guard after January
1, 1966.
j. 5 U.S.C. Sec. 5519.--This statute was amended to
provide that pay for Reserve or National Guard service
for the period during which an employee has been
granted military leave shall be credited against his
civilian pay for that period.
k. 5 U.S.C. Sec. 5520a.--This statute was amended to
provide that an agency's cost of garnishing the pay of
an employee or member of a uniformed service shall be
deducted from the amount withheld from the employee's
or member's pay.
The following statutes were reviewed in connection with the
National Defense Authorization Act for Fiscal Year 1997 (Public
Law 104-201):
a. 5 U.S.C. Sec. 2105.--This statute was amended to
restrict the definition of ``employee'' to employees of
certain activities at the U.S. Naval Academy who were
employed in such positions before October 1, 1996 and
whose employment has been uninterrupted in such a
position since that date.
b. 5 U.S.C. Sec. Sec. 2302, 3132, 4301, 4701, 5102,
5342, 6339, 7323, and 6339.--These statutes were
amended to reflect the abolition of the Central Imagery
Office and establishment of the National Imagery and
Mapping Agency.
c. 5 U.S.C. Sec. 2302.--This statute was amended to
apply title 5 procedures and sanctions for prohibited
personnel practices to violations of veterans'
preference within the Department of Defense.
d. Chapter 57 of title 5.--Several statutes within
this chapter were revised and three new ones were added
to improve the efficiency of the Federal Government's
travel practices. Sections revised were: 5722, 5723,
5724a, 5724c, and 5727. Sections added were: 5737,
5738, and 5756. In addition conforming amendments were
made to the following additional sections of title 5:
3375, 5724, 5726, and 5731.
e. 5 U.S.C. Sec. 3502.--This statute was amended to
allow the Secretary of Defense or the Secretary of a
military department to accept volunteers for reductions
in force even though the volunteer would not have been
otherwise subject to separation by the reduction. The
authority to accept volunteers was also extended to
September 30, 2001.
f. 5 U.S.C. Sec. Sec. 5543 and 5544.--These statutes
were amended to allow wage-grade employees to receive
compensatory time off in lieu of overtime payments.
g. 5 U.S.C. Sec. 5551.--This statute was amended to
allow agencies to liquidate restored annual leave that
remains unused upon transfer of a Department of Defense
employee from an installation being closed or
realigned.
h. 5 U.S.C. Sec. 5597.--This statute was amended to
allow agency heads to waive the requirement of repaying
voluntary separation incentives received by former
department of defense employees who are reemployed by
the government without pay.
i. 5 U.S.C. Sec. 6103.--This statute was amended to
simplify rules relating to the observance of certain
holidays by employees on compressed work schedules. The
amendment gives agencies authority to depart from
statutorily prescribed rules governing when such
employees observe a holiday that falls on their
regularly scheduled non-workday in order to avoid an
adverse impact on the agency.
j. 5 U.S.C. Sec. Sec. 7103 and 7511.--These statutes
were amended to reflect changes related to the
establishment of the National Imagery Office and the
abolition of the Central Imagery Office.
k. 5 U.S.C. Sec. Sec. 8332 and 8411.--These statutes
were amended to prevent Members or employees entitled
to military retired pay from circumventing court orders
by waiving retired pay to enhance their civil service
retirement annuity.
Conforming amendments were made to the following title 5
provisions to reflect other revisions to statutes made by the
National Defense Authorization Act of 1997: 3401, 5102, 5342,
5343, 5348, 5373, 5337, 5541, 5924, 6322, and 7901.
11. Statutes reviewed in connection with the Omnibus Consolidated
Rescissions and Appropriations Act of 1996 (Public Law 104-
134).
5 U.S.C. Sec. 5514.--This statute was amended to
improve the Federal Government's ability to collect
debts Federal employees owe it by requiring agencies to
participate in certain computer matching programs.
12. Statutes reviewed in connection with the Intelligence Authorization
Act for Fiscal Year 1997 (Public Law 104-293).
The following laws were reviewed in connection with the
House's consideration of the Intelligence Authorization Act for
Fiscal Year 1997.
a. 5 U.S.C. Sec. Sec. 5314 and 5315.--These statutes
were amended to place various CIA positions in Levels
III and IV of the Executive Schedule.
b. Central Intelligence Agency Voluntary Separation
Pay Act and the Federal Workforce Restructuring Act of
1994.--These statutes were reviewed, and the former
amended, to eliminate a double surcharge on the CIA
relating to employees who retire or resign in fiscal
years 1998 or 1999 and who receive voluntary separation
incentive payments.
13. Transfer of Functions--5 U.S.C. 3503.
This law provides the basic authority for a competing
Federal employee to be eligible for employment in a position
for which he is qualified before the receiving agency may make
an appointment from another source to that position when a
function is transferred from one agency to another.
The subcommittee reviewed this law for the purposes of H.R.
1561, a bill to consolidate State, AID, and USIA. The
subcommittee was concerned that the language in H.R. 1561 would
terminate competing employees who perform transferred work
because the receiving agency has employees already performing
such work. The subcommittee maintained that the acquiring
agency should give the transferred employees who are currently
performing identical work, the opportunity to compete with
employees for positions remaining after the consolidation
associated with that work.
14. Laws Relating to Volunteering, Details, and Part-time Employees in
5 U.S.C.
The subcommittee reviewed provisions in the Senate Defense
Authorization bill relating to civilian employees, with the
following comments.
Details are designed to allow agencies to adjust to
temporary fluctuations in work flow by making temporary
adjustments to the workforce. Where more permanent needs exist,
agencies, already have the flexibility to reassign workers to
meet those needs. An exemption from 5 U.S.C. 3341 for the
Department of Defense was not supported by subcommittee staff.
5 U.S.C. section 3407 requires each agency to prepare and
transmit a report to the Office of Personnel Management on its
part-time and detail employees. Relieving an agency from
reporting on part-time employment policies undercuts the Office
of Personnel Management's ability to function effectively as
the central personnel authority for the executive branch. To
the extent that responsibility for developing sound personnel
systems becomes more diffuse, it becomes that much more
difficult for Congress to effectively oversee executive branch
personnel matters.
A section within the authorization bill would allow
employees to volunteer to substitute for other employees who
are scheduled for reductions in force. Although this authority
is limited in scope to DOD employees and limited in time, the
subcommittee staff raised concerns about without sufficient
safeguards, this program could become counterproductive. The
unintended consequence of such a program could result in more
highly skilled--and therefore more marketable--employees to be
the likely volunteers. The government does not want to
unnecessarily encourage its best employees to leave. Unless
tightly controlled, a volunteer program could seriously hinder
an agency's ability to achieve its mission.
15. Reductions in Force--5 U.S.C. Chapter 35.
Federal agencies must follow specific procedures found in
Chapter 35 of 5 U.S.C. when an agency is faced with separations
or downgrades due to circumstances such as reorganization, lack
of work, shortage of funds, or insufficient personnel ceilings.
The law requires that four retention factors must be
implemented through the Office of Personnel Management's
reduction in force regulations before employees are released.
Although the law does not assign a specific weight to any
individual factor, the relative importance of the four factors
in determining employee's retention standing is in the
following order: (1) tenure; (2) veteran's preference; (3)
length of service; and (4) performance ratings.
The subcommittee learned of irregular reduction in force
procedures in effect at the U.S. Geological Survey, resulting
in ongoing analysis of the situation.
District of Columbia Subcommittee
1. District of Columbia Financial Responsibility and Management
Assistance Act of 1995 as amended. (Public Law 104-8, April 17,
1995).
This law was established to eliminate the financial crisis
caused by budget deficits and management inefficiencies in the
government of the District of Columbia through the
establishment of the District of Columbia Financial
Responsibility and Management Assistance Authority.
2. District of Columbia Emergency Highway Relief Act. (Public Law 104-
21, August 4, 1995).
This law authorizes a delay in the District of Columbia's
payment of its share of the costs of certain transportation
projects in the District of Columbia for fiscal years 1995 and
1996. It was referred to the Transportation and Infrastructure
and in addition to Government Reform and Oversight on July 12,
1995.
3. District of Columbia Convention Center and Sports Arena
Authorization Act (Public Law 104-28, September 6, 1995).
This law permits the Washington Convention Center Authority
to expend revenues for the operations and maintenance of the
existing Washington Convention Center and for preconstruction
activities relating to a new convention center in the District
of Columbia; and to permit a designated authority of the
District of Columbia, to borrow funds for the preconstruction
activities relating to a sports arena in the District of
Columbia and to permit certain revenues to be pledged as
security for the borrowing of such funds.
4. District of Columbia Acts.
Currently 133 acts have been transmitted to the
Subcommittee on the District of Columbia for review during the
2d session of the 104th Congress. Of that total, 84 acts are
now law, and the remaining 49 did not complete the
congressional review due to the adjournment of the 104th
Congress. One council act which amended the D.C. Criminal Code,
required a 60-day layover. H.R. 3845 waived the congressional
review of three acts and H.R. 3610 waived one act.
Government Management, Information, and Technology Subcommittee
1. Government Corporation Control Act, Public Law 248, 79th Congress,
December 6, 1945, 59 Stat. 597.
This law provides basic accountability requirements for
many government corporations. This subcommittee has a
continuing interest in the scope and implementation of this act
and consequently monitors it closely. The subcommittee reviewed
the standards to which government corporations are held
accountable, during a June 6 hearing entitled ``Corporate
Structures for Government Functions,'' see Section II.B.7. In a
subsequent report entitled ``Making Government Work: Fulfilling
the Mandate for Change'' (House Report 104-435, December 21,
1995), the committee recommended that the Government
Corporation Control Act be updated to reflect the increasing
variety of government corporations and changes over the past 50
years since the enactment of the act.
2. The Administrative Expenses Act of 1946, Public Law 600, 79th
Congress, August 2, 1946, 60 Stat. 806.
The subcommittee continues its oversight of this act.
3. The Prompt Payment Act, Public Law 97-177, 96 Stat. 85 (31 U.S.C.
Sec. 3901, et seq.).
The Prompt Payment Act requires every Federal agency to pay
an interest penalty on amounts owed to business concerns for
the acquisition of property or services when the agency does
not pay on time. The subcommittee continues its oversight over
problems with the implementation of this act.
4. Federal Managers' Financial Integrity Act, Public Law 97-255,
September 8, 1992, 96 Stat. 814 (31 U.S.C. Sec. 3512).
The Federal Managers' Financial Integrity Act requires
agency heads to conduct ongoing evaluations and to report on
the adequacy of their respective agency's systems of internal
accounting and administrative controls. Further, it requires
the Comptroller General to prescribe the standards for such
controls, as well as standards to ensure the prompt resolution
of all audit findings; it requires the Director of the Office
of Management and Budget (OMB) to establish guidelines for
agency use in evaluating whether the systems comply with the
standards. Agency heads are required to prepare for the
President and the Congress an annual statement on the status of
the agency's compliance.
The subcommittee has been monitoring implementation of this
act, which became effective September 8, 1982, including
administration proposals for pilot studies to streamline the
reporting under this and other acts.
5. Inspector General Act of 1978 (5 U.S.C. App.).
The subcommittee continued its oversight of the Inspector
General Act of 1978 and the amendments of 1988. These acts
created the Inspectors General [IG's] in 61 Federal entities,
including Cabinet departments and major agencies, as well as at
smaller commissions, corporations, boards, and foundations. The
IG's are charged with: (1) conducting audits and investigations
related to the programs and operations, and to prevent and
detect waste, fraud, and abuse; and (2) keeping the department,
agency or entity head, and the Congress fully informed about
problems and deficiencies.
The subcommittee has worked closely with the IG's on audits
and investigations during this session. The subcommittee paid
particular attention to NPR recommendations to reorient the
IG's to lessen what it considers ``adversarial'' relations that
often develop between managers and IG's. The subcommittee
oversight of this proposal concentrates on whether such changes
might impede the aggressive oversight that is necessary for an
effective agency Inspector General.
6. The Single Audit Act of 1984, Public Law 98-502, October 19, 1984,
98 Stat. 2327 (31 U.S.C. 7501 et seq.).
The Single Audit Act of 1984 requires each State and local
government receiving $100,000 or more per year in Federal
financial assistance to obtain an independent, organization-
wide audit of its operations--usually on an annual basis. The
audit must include a thorough review of the recipient's
internal controls over its Federal funds, and an examination of
its compliance with Federal program requirements. The
subcommittee continues to closely monitor implementation of
this act, and is reviewing current proposals to amend the act
by incorporating the provisions of OMB Circular No. A-133,
Audits of Institutions of Higher Education and Other Non-Profit
Institutions, into the act, raising the thresholds for
requiring organization-wide audits, and allowing a risk-based
approach to selection of major programs. These changes have
been proposed as a result of recent studies by the General
Accounting Office, the President's Council on Integrity and
Efficiency, and the National State Auditors Association.
7. Budget and Accounting Act of 1921, Public Law 13, 67th Congress,
June 10, 1921, 42 Stat. 20-27; Congressional Budget and
Impoundment Control Act of 1974, Public law 344, 93d Congress,
July 12, 1974, 88 Stat. 297-339; Balanced Budget and Emergency
Deficit Control Act of 1985, Title II of Public Law 177, 99th
Congress, December 12, 1985, 99 Stat. 1038-1101; Balanced
Budget and Emergency Deficit Control Reaffirmation Act of 1987,
Title I of Public Law 119, 100th Congress, September 29, 1987,
101 Stat. 754-784; Budget Enforcement Act of 1990, 104 Stat.
1388-573 Through 630; Omnibus Budget Reconciliation Act of
1993, Title XIV of Public Law 66, 103d Congress, 107 Stat. 683-
685, August 10, 1993.
These laws establish the current framework for the
presentation of the President's budget request to Congress, the
consideration of the congressional budget resolution and the
imposition of fiscal discipline through the possible
application of end-of-year sequesters and other deficit
reduction mechanisms. The subcommittee is examining whether
there is a need for comprehensive budget process reform.
8. Debt Collection Act of 1982, 96 Stat. 1749, Public Law 97-365.
The Debt Collection Act of 1982 is intended to facilitate
improved debt collection procedures in the Federal Government.
It includes: (1) referring delinquent debtors to credit bureaus
while providing those debtors the same protection now afforded
the private sector under the Fair Credit Reporting Act; (2)
requiring individuals to supply their Social Security number
when applying for credit or financial assistance that would
result in indebtedness to the Government; (3) offsetting a
Federal employee's salary and certain benefits to satisfy
general debts owed the Government; (4) making it a Federal
penalty to assault Federal employees collecting debts owed the
Government; (5) determining delinquent tax liability and
seeking its resolution before extending Federal credit; (6)
disclosing mailing addresses obtained from the IRS on
delinquent debtors to private contractors for debt collection
purposes; (7) clarifying that administrative set off of
delinquent debts owed the Government exists beyond the 6 year
statute of limitations; (8) assessing interest on debts owed
the Government and penalties on those debts that are
delinquent; (9) easing the requirements for serving summonses
in order to litigate delinquent debt cases; (10) reporting to
Congress on debt collection activities; and (11) allowing
Federal departments and agencies to contract with private
collection agencies for collection services. The subcommittee
continued closely monitoring implementation of this act.
The subcommittee is concerned over rising levels of
delinquent debts. Despite write-offs averaging $10 billion per
year, delinquent non-tax debts equal $49.9 billion, while
delinquent tax debts total $70 billion. The subcommittee held a
hearing on September 8, 1995, to study the problem of
delinquent debts, which built upon earlier hearings related to
financial management and debt collection. In response to the
difficulties agencies have had collecting debts, the
subcommittee considered legislation to improve debt collection
by allowing agencies the following authorities:
Require that agencies refer debts to Treasury for
administrative offset;
Allow payments currently exempt from offset to be
administratively offset (includes Social Security, Railroad
Retirement, Pt. B of Black Lung, and Veterans' benefits);
Allow administrative offset to be conducted for
child support;
Allow States and the Federal Government to offset
each other's payments to collect each other's debts;
Require Electronic Funds Transfers (Direct
Deposit) by 1999 to facilitate offset, improve audit
information and reduce fraud;
Bar delinquent debtors from obtaining Federal
benefits, loans, insurance, and routine services;
Allow agencies to garnish the wages of delinquent
debtors;
Allow agencies to give public notice of
indebtedness in the case of individuals or corporations who
refuse to repay Federal loans, and who have assets or income to
repay the debt;
Require agencies to report current and delinquent
debt to credit reporting agencies (including corporate and
other commercial debts);
Allow agencies to retain some portion of increased
collections to fund improved debt collection efforts (agency
gain sharing); and
Authorize agencies to sell debt prior to
terminating collection action.
This proposal is pending before Congress.
9. Buy American Act, 41 U.S.C. Sec. 10.
This act requires Federal agencies to purchase materials or
articles mined, produced, or manufactured in the United States
and to let contracts for public works on the same basis unless
such purchases are inconsistent with the public interests or
are unreasonably costly. The subcommittee continues its
oversight of the act.
10. Chief Financial Officers Act of 1990 (Public Law 101-576, November
15, 1990; 31 U.S.C. 502(b-f)-504).
The CFO Act had two primary purposes: (1) to strengthen the
general management activities of the OMB by creating a Deputy
Director for Management position and clarifying OMB's general
management statutory authority; and (2) to establish
accountability and a business-like discipline in Federal
financial management. The CFO Act created a new Office of
Federal Financial Management at OMB, headed by a Controller
with extensive experience in financial management and
accounting. The act further requires CFO's to be installed at
23 departments and major agencies. The act requires that
financial statements be prepared for business-like activities
of the Federal Government in order to provide accurate
information about the financial condition of key programs and
to identify fraud, waste, and abuse. The act also places
requirements on Federal agencies for improving financial
information and internal controls, and for upgrading specific
financial management activities such as debt collection and
budget execution.
The CFO Act requirements have been strengthened, made
permanent, and expanded by the Government Management Reform
Act. In October 1994, the Government Management Reform Act
became law. It requires agencies to prepare agency-wide
financial statements and have them audited beginning in fiscal
year 1996, with the report due to Congress by March 1997. By
fiscal year 1997, the General Accounting Office is required to
audit the financial statements of the executive branch, with
the report due to Congress by March 1998.
The subcommittee held a hearing on the status of agency
implementation of the CFO Act and the preparedness for
implementation of the GMRA on July 25, 1995, (see Section
II.B.15.) A subsequent hearing, on Financial Management
Problems in the Department of Defense was held on November 14,
1995, to examine the likelihood that Defense will not be able
to comply with the GMRA by the statutory deadline, see Section
II.B.16.
The subcommittee continues its monitoring of the act,
conducts ongoing investigations into OMB's leadership of the
agencies in financial management through the Office of Federal
Financial Management, set up in OMB as a result of the act, and
will continue to evaluate agencies' ability to comply with the
requirements of both acts, and their progress in obtaining
clean opinions on their audited financial statements.
11. Government Performance and Results Act of 1993, Public Law 103-62.
On August 3, 1993, the Government Performance and Results
Act of 1993 was signed into law by the President. The act
provides for the establishment, testing, and evaluation of
strategic planning and performance measurement in the Federal
Government, and for other purposes. It will improve the
efficiency and effectiveness of Federal programs by
establishing a system to set goals for program performance and
to measure results. After a series of pilot projects
implementing a strategic planning and performance system in
volunteer agencies, the requirements are to be applied
governmentwide eventually leading to a performance-based
budgeting system.
Beginning in 1994, this act requires the OMB to select 10
agencies to perform pilot projects for 3 years on developing
strategic plans. OMB has designated some 71 individual pilot
programs which include all Cabinet departments and most of the
major agencies. They also represent nearly every significant
type of government function or activity, from the very large,
to the very small. The 5-year strategic plans must outline an
agency's mission, general goals, and objectives, and include a
description of how the goals and objectives are to be achieved.
OMB will also select five agencies to perform pilot
projects for 2 years on managerial flexibility. The pilots will
assess the benefits, costs, and usefulness of increasing
managerial flexibility and organizational flexibility,
discretion, and authority. The OMB was required to designate
pilots for 1995 and 1996, and has not yet done so.
Strategic plans and annual performance plans are to be
submitted to Congress and OMB not later than September 30,
1997. At the same time, five agencies will be selected to begin
pilot projects on performance-based budgeting. By the year
2000, all agencies will submit annual performance reports with
the budget.
OMB is seeking to increase the use and value of performance
information in the preparation and submission of the
President's budget. OMB expects to increase substantially the
use of performance information in fiscal years 1997 and 1998
budgets, and to work with all the agencies on defining
performance goals that agencies will include in their annual
performance plans for fiscal year 1999.
12. Government Management Reform Act of 1994; Public Law 103-356.
On June 9, 1994, the Senate Governmental Affairs Committee
incorporated provisions of related measures of H.R. 3400, the
Government Reform and Savings Act, into S. 2170, as introduced.
S. 2170 was signed by the President on October 13, 1994. The
legislation incorporated portions of H.R. 3400, specifically
the sections on streamlining management controls and improving
financial management. It contained the first round of the
administration's recommendations from the Vice President's
initiative to reform Government operations, the National
Performance Review (NPR). The subcommittee held a hearing on
the NPR.
This legislation strengthens the ability of Federal
agencies to expand conversion to electronic delivery of
payments to Federal employees and retirees. Each recipient of a
Federal wage, salary, or retirement payment, who begins to
receive payments on or after January 1, 1995, will be required
to receive payments by direct deposit. This provision does
allow agency heads to waive the requirements through a written
request by recipients.
Second, an authorization of six pilot franchise funds to
help lower costs and share common administrative services is
provided by this legislation. An offshoot of the Vice
President's National Performance Review, it would increase
funds available to executive branch agencies for shared
administrative services for different departments within an
agency or among different agencies of the Federal Government.
OMB would create six franchise funds within the executive
branch, in consultation with the Appropriations and Government
Reform and Oversight Committees. The funds can be used to
support ``common administrative support services.'' The fund
may receive an initial appropriation, but must charge fees for
the services it provides. Fees can be used only to carry out
the purposes of the fund. The fund ``sunsets'' after fiscal
year 1999. OMB must report by March 1998 to the Government
Reform and Oversight and Appropriations Committees on the
operation of the fund.
The fund seeks to improve efficiency in the agencies in
delivering administrative support services by centralizing
activities and creating competition to deliver the services. An
agency in which the franchise fund was created would be free to
solicit business for these services from other Federal
departments and agencies, streamlining Federal management by
increasing efficiency through the elimination of duplicative,
inefficient service providers. As different agencies develop
strengths in different areas, they can contract out for those
areas where an agency is weak and sell services to other
agencies where an agency is strong. The U.S. Department of
Agriculture does this with its National Finance Center which
provides financial services to other agencies.
Third, this legislation directs the OMB to work with the
House Government Reform and Oversight and the Senate
Governmental Affairs Committees to streamline and consolidate
financial management reports from the agencies to OMB and from
OMB to Congress.
Last, beginning in 1997, all 24 agencies covered under the
Chief Financial Officers Act are required to produce audited
financial statements for all activities. Starting in 1998, the
Government will produce audited consolidated financial
statements of all 24 CFO Act agencies. See Section II.B.15. for
descriptions of hearings on the status of agency preparations
to comply with the GMRA.
13. Laws Relating to Official Travel, Transportation, and Subsistence
of Federal Employees.
The subcommittee has oversight responsibility with respect
to chapter 57 of title 5, U.S.C., which relates to travel,
transportation, and subsistence allowances and payments to
Federal employees performing official travel or relocating
pursuant to transfer. The President has delegated most
administrative function under chapter 57 to the Administrator
of General Services. (See Executive Order 11609.) The Office of
Management and Budget has developed new protocols for senior
Federal travel and new reporting requirements in OMB Circular
No. A-126, Improving the Management and Use of Government
Aircraft, and OMB Bulletin 93-11, Fiscal Responsibility and
Reducing Perquisites. The subcommittee held a hearing on
December 29, 1995, to examine the Senior Executive Federal
Travel Reports. These requirements have been supplemented by a
White House Memorandum, dated February 10, 1993.
14. Freedom of Information Act (Public Law 89-487, as Amended by Public
Laws 90-23, 93-502, 94-409, and 99-570; 5 U.S.C. 552).
The passage of the Freedom of Information Act of 1966
remains as the most important recent development in public
access to government documents. The subcommittee continued its
oversight of the implementation of amendments to the act. The
subcommittee also continued its longstanding practice of
reviewing legislation from other committees that affects the
availability of Government information. The subcommittee also
continued to provide assistance to Members of Congress and to
other committees on matters concerning the availability of
information. The Government Reform and Oversight Committee has
reissued ``A Citizen's Guide on Using the Freedom of
Information Act and the Privacy Act of 1974 to request
Government Records'' (First Report by the Committee on
Government Reform and Oversight, 104th Congress, 1st Session,
originally issued June 22, 1995). The subcommittee is currently
reviewing proposed amendments to the act.
15. Privacy Act of 1974 (Public Law 93-579, as Amended by Public Laws
100-503 and 101-56; 5 U.S.C. 552a).
The passage of the Computer Matching and Privacy Protection
Act of 1988 (Public Law 100-56) marked the biggest change to
the Privacy Act since its passage in 1974. Review of the
effectiveness of the matching law was undertaken by the GAO and
is discussed elsewhere in this report.
The subcommittee is also continuing its routine oversight
of the Privacy Act by reviewing agency proposals to create new
systems of records and proposals to modify existing systems of
records. The Privacy Act requires each agency to file a report
with the Congress whenever a system is changed or established.
About 100 such reports are filed annually.
The subcommittee raised questions about system notices
filed by Department of Commerce, Department of State, GSA, and
OPM. In addition, general Privacy Act matters have been
discussed with the OMB.
16. Federal Advisory Committee Act (Public Law 93-463, as amended by
Public Law 94-409; 5 U.S.C. App. 1).
The Federal Advisory Committee Act (a) requires each
standing congressional committee to make continuing reviews of
advisory committees under its jurisdiction; (b) gives the
Director of the OMB responsibility for reviewing advisory
committees and prescribing administrative guidelines and
management controls; (c) sets forth reporting requirements by
the President; (d) provides for phasing out advisory committees
every 2 years unless positive actions are taken to retain them;
(e) prescribes open meetings, balanced representation, and
other procedural requirements for advisory committees; and
requires GSA to provide guidance and assistance to advisory
committees as well as to review annually their activities and
responsibilities. The subcommittee continues to monitor
implementation of the act.
17. Government in the Sunshine Act (Public Law 94-409, 5 U.S.C. 552b).
The Government in the Sunshine Act provides that meetings
of Federal agencies must be open to the public if a majority of
the members were appointed by the President with the consent of
the Senate. The act includes 10 permissive exemptions to the
open meeting requirement. The subcommittee is monitoring the
implementation of the act.
18. The Cash Management Improvement Act of 1990, as amended (Public Law
101-453, 31 U.S.C. 3335, 6501, 6503).
This act focuses on promoting equity in the exchange of
funds between the Federal Government and the States. It
requires the Secretary of the Treasury, along with the States,
to establish equitable funds transfer procedures, and provided
that States would pay interest to the Federal Government if
they draw funds in advance of need and that the Federal
Government would pay interest to the States if the Federal
program agency does not reimburse the States in a timely manner
when States use their own funds. The first year of
implementation of the act was 1994. During fiscal year 1994
(which for the majority of the States included 9 months of the
first fiscal year under the act), the Federal Government
obligated over a reported $150 billion in Federal funds to the
States for programs covered under the act. The first year of
implementation resulted in a cumulative net State interest
liability due to the Federal Government of approximately $34
million--over $41 million owed by the States offset by $4.7
million and $2.5 million owed the States by the Federal
Government for interest and reimbursable costs, respectively.
Prior to the CMIA, the timing of Federal funds transfers to
the States was governed by the Intergovernmental Cooperation
Act, Public Law 90-577. That law allowed a State to retain for
its own purposes any interest earned on Federal funds
transferred to it ``pending its disbursement for program
purposes. The subcommittee, when considering the CMIA
legislation in 1990, noted that the Intergovernmental
Cooperation Act had been a source of continuing friction
between the States and the Federal Government.'' CMIA requires
the Federal Government to schedule transfers of funds to States
``so as to minimize the time elapsing between transfer of funds
from the United States Treasury and the issuance or redemption
of checks, warrants, or payments by other means by a State,''
and expects States to ``minimize the time elapsing between
transfer of funds from the United States Treasury and the
issuance or redemption of checks, warrants, or payments by
other means for program purposes.'' The subcommittee continues
to monitor the implementation of the CMIA.
Human Resources and Intergovernmental Relations Subcommittee
1. Unfunded Mandates Reform Act of 1995, Public Law 104-4, 104th
Congress, March 22, 1995, 109 Stat. 67.
The Unfunded Mandates Reform Act of 1995 requires the
legislative and executive branches to identify and quantify
implementation costs of Federal statutory and regulatory
mandates on State and local governments. The Human Resources
and Intergovernmental Relations Subcommittee has been
monitoring Federal agencies' compliance with the requirements
of Title II of the act regarding analysis of mandates in
proposed and final regulations. Specifically, Title II requires
Federal agencies to review such regulations for mandate impacts
and consider less onerous alternatives.
The subcommittee has also been monitoring the design and
implementation of the study of existing mandates required under
Title III of the act. Title III required the Advisory
Commission on Intergovernmental Relations (ACIR) to (a) study
issues involving the calculation of costs and benefits of
mandates on State and local governments, (b) conduct a study
and make recommendations to the President and Congress
concerning the impact of existing mandates on intergovernmental
(Federal-State/local) relations, and (c) monitor and evaluate
the implementation of the act.
On March 22, 1996, exactly 1 year after the bill was signed
into law, Representative Christopher Shays, chairman of the
subcommittee, convened a hearing that focused on the
implementation and impact of the act. Testimony was received
from representatives from Federal departments and agencies,
State and local governments, community organizations, and
Members of Congress.
In January 1996, the ACIR released a preliminary report
entitled, ``The Role of Federal Mandates in Intergovernmental
Relations--A Preliminary ACIR Report for Public Review and
Comment,'' U.S. Advisory Commission on Intergovernmental
Relations, January 1996. In response to public comments and
those received at an ACIR hearing, the preliminary report was
revised and a draft final report was considered by the
Commission in July 1996. The Commission voted to reject the
draft final report, and no subsequent version of the report was
considered.
On September 30, 1996, appropriations for ACIR expired and
the Commission closed down operations, no longer remaining as
the independent, bipartisan commission created by Congress in
1959 to monitor the operation of the American Federal system
and to recommend improvements in intergovernmental relations.
National Economic Growth, Natural Resources and Regulatory Affairs
Subcommittee
The Subcommittee on National Economic Growth, Natural
Resources, and Regulatory Affairs concentrated on the review of
three broad areas of law. The subcommittee reviewed
effectiveness of various administrative procedure laws and
related regulatory reform Executive orders and the need to
amend or enact new regulatory reform laws. The subcommittee
reviewed the adequacy and effectiveness of various grant
statutes, anti-lobbying statutes, and tax laws and the need to
amend or enact new laws in this area. The subcommittee also
reviewed the adequacy of various laws relating to official
travel, transportation, and subsistence of Federal employees.
The subcommittee devoted particular attention to the following
laws:
1. The Paperwork Reduction Act of 1980, as amended October 18, 1986,
100 Stat. 1783-307 (the act) (44 U.S.C.A. and 3501 et seq.;
Public Laws 500 and 591, 99th Congress).
The Paperwork Reduction Act is intended to: (1) reauthorize
appropriations for the Office of Management and Budget's (OMB)
Office of Information and Regulatory Affairs (OIRA) to carry
out the provisions of the Paperwork Reduction Act of 1980 as
amended by Public Laws 500 and 591 of the 99th Congress; (2)
strengthen OIRA and agency responsibilities for the reduction
of paperwork burdens on the public, particularly through the
inclusion of all Federally sponsored collections of information
in a clearance process involving public notice and comment,
public protection, and OIRA review; (3) establish policies to
promote the dissemination of public information on a timely and
equitable basis, and in useful forms and formats; (4)
strengthen agency accountability for managing information
resources in support of efficient and effective accomplishment
of agency missions and programs; and (5) improve OIRA and other
central management agency oversight of agency information
resources management (IRM) policies and practices.
All of the legislation's amendments to the 1980 act, as
amended in 1986, are intended to further its original
purposes--to strengthen OMB and agency paperwork reduction
efforts, to improve OMB and agency information resources
management, including in specific functional areas such as
information dissemination, and to encourage and provide for
more meaningful public participation in paperwork reduction and
broader information resources management decisions.
2. The Congressional Review Act (Public Law No. 104-121, title II,
subtitle E, March 19, 1996, 5 U.S.C. chapter 8).
The Congressional Review Act (CRA) was passed as part of
the ``Small Business Regulatory Enforcement Fairness Act of
1996.'' Among the important provisions, the CRA requires
executive branch agencies to submit their new rules to Congress
before they go into effect. The CRA allows Congress to review
each new rule and consider a joint resolution of disapproval
under expedited House and Senate procedures to overrule it. The
term ``rule'' is defined very broadly to include all general
agency statements that affect the public, including
``interpretive'' rules, agency ``policy statements,''
``guidelines,'' and ``staff manuals.'' Although the CRA applies
to almost all rules, ``major rules'' are delayed in their
effectiveness for 60 calender days to provide Congress with a
chance to reject problematic rules before they have an adverse
impact. In addition to submitting the rules themselves,
agencies must submit a report to Congress on each rule stating
whether they have complied with the Unfunded Mandates Reform
Act, the Regulatory Flexibility Act, and whether they have
conducted a valid cost-benefit analysis, takings analysis, and
federalism assessment as set forth in the Reagan, Bush, and
Clinton Executive orders. If a resolution of disapproval is
introduced to overturn a problematic regulation, Congress may
reject the rule using expedited procedures that eliminate the
Senate filibuster and require only a simple majority in each
House for passage. If Congress does reject a rule, the rule may
not be reissued in substantially the same form without
congressional authorization.
The subcommittee monitored compliance with the new law,
including whether the regulatory agencies submitted the
required rules, reports, and analyses, whether the agencies
were providing the appropriate guidance regarding compliance
with the CRA, and whether the OMB Office of Information and
Regulatory Affairs was adequately overseeing implementation of
the act. The subcommittee will continue to conduct careful
oversight over implementation of the act in the 105th Congress
to determine whether amendments are necessary to ensure full
compliance with its provisions.
3. The Energy Policy Act of 1992 (Public Law 102-486).
The Energy Policy Act of 1992 comprises a wide variety of
mandates that are intended to enhance U.S. energy security,
reduce energy-related environmental effects, and encourage
long-term economic growth. Major provisions establish energy
efficiency standards, allow greater competition in electricity
generation, establish new licensing procedures for nuclear
plants and waste repositories, and provide tax incentives for
domestic production and conservation. To increase U.S. energy
efficiency, the act establishes new statutory standards for
electric motors and lighting, requirements for State and
Federal action, and incentives for voluntary efficiency
improvements. Greater competition in the electricity industry
is encouraged by exempting certain suppliers of wholesale
electricity from regulation under the Public Utilities Holding
Company Act of 1935. The act also provides incentives for the
development of alternative fueled vehicles and commuting by
mass transit.
The principal agencies involved in implementing the act are
the Federal Energy Regulatory Commission and the Department of
Energy. The subcommittee monitored agency and industry actions
authorized or encouraged by the act. In particular, the
Subcommittee monitored the agency regulatory actions and policy
initiatives undertaken pursuant to the act, and sought the
views of industry and consumer groups regarding these
regulatory actions and the need for additional legislation.
National Security, International Affairs, and Criminal Justice
Subcommittee
1. National Aeronautics and Space Act of 1958, as Amended (42 U.S.C.
2451 et seq).
This law governs NASA and its operation. The subcommittee
has a keen interest in the operation and efficiency of the
Nation's space program and monitors the legislation closely.
2. Executive Order 12127 of March 31, 1979.
This Executive order consolidated the Nation's emergency
related programs into the Federal Emergency Management Agency.
The fast response to national disasters is a crucial function
of the Federal Government. As a result, this legislation
garners the keen interest of the subcommittee.
3. National Narcotics Leadership Act of 1988 (21 U.S.C. 1501 et seq.).
This law established the Office of National Drug Control
Policy in 1988. Because drug policy is a primary focus of this
subcommittee, the subcommittee gives a great deal of attention
to this legislation. To fulfill its oversight responsibility of
the Office of National Drug Control Policy, the subcommittee
held an extensive investigation into the effectiveness of the
Nation's drug control strategy. Those investigations brought
about three major hearings: (1) The Effectiveness of the
National Drug Control Strategy and the Status of the Drug War,
on March 9 and April 6, 1995. (2) Illicit Drug Availability:
Are Interdiction Efforts Hampered by a Lack of Agency
Resources?, on June 27 & 28, 1995. (3) The Drug Problem in New
Hampshire: A Microcosm of America--on September 25, 1995, the
subcommittee held an oversight hearing.
4. The Sentencing Reform Act of 1984 (28 U.S.C. et seq. and 18 U.S.C.
3551 et seq.).
This law established the U.S. Sentencing Commission as an
independent commission in the judicial branch of the Federal
Government. As the commission determines the effectiveness of
Federal sentencing policy, the subcommittee takes an active
role in studying and guiding this legislation.
5. Treasury Department Order No. 221.
This Treasury order established the Bureau of Alcohol,
Tobacco and Firearms. In connection with the subcommittee's
oversight of the executive branch activities at Waco, TX, the
subcommittee has monitored the bureau and its organization to
develop ways to maximize the Bureau's efficiency in enforcing
the laws over which it has jurisdiction.
6. Title 13 of the U.S.C.
This law governs the Bureau of the Census and taking of the
Census 2000. As Census 2000 draws near, and preparations are
underway, the subcommittee makes a routine study of this
legislation and how it governs the taking of the Census.
7. Defense Base Closure and Realignment Act of 1990, Public Law 101-
510.
This law created the Defense Base Closure and Realignment
Commission, the commission which recommends, on a bipartisan
basis, the most efficient and least intrusive way to eliminate
Department of Defense facilities throughout the country. The
subcommittee has followed this legislation with interest.
Postal Service Subcommittee
1. The Postal Reorganization Act of 1970, Public Law 91-375, August 12,
1970, 84 Stat. 719.
The Subcommittee on the Postal Service has legislative
jurisdiction and oversight over the U.S. Postal Service, U.S.
Postal Rate Commission and the U.S. Postal Inspection Service.
These entities operate under the authority granted pursuant to
the Postal Reorganization Act of 1970 (PRA) which traces
congressional authority for postal services to Article I,
Section 8 of the U.S. Constitution, which direct Congress
``(t)o establish Post Offices and Post Roads.''
The U.S. Postal Service is governed by an 11 member Board
of Governors; 9 of whom are appointed by the President and
confirmed by the Senate who in turn employ a Postmaster General
and Deputy Postmaster General who also become members of the
Board. The U.S. Postal Service handles 40 percent of the
world's mail volume; it had total revenues in 1995 of $54.3
billion; it employs 1 out of every 170 Americans; and processed
181 billion pieces of mail or about 580 million pieces per day
and delivered to 128 million addresses in 1995.
The U.S. Postal Rate Commission, independent of the U.S.
Postal Service, is governed by five, full-time, Presidentially-
appointed and Senate-confirmed Commissioners. It is responsible
by hearing a request of the U.S. Postal Service for an increase
in postage rates, reclassification of its postage schedule and
for making a recommended decision upon such a request. The
Commission also hears complaints from outside parties regarding
postal rates or services.
The Postal Inspection Service is the law enforcement branch
of the U.S. Postal Service and is responsible for enforcing the
Mail Fraud Act, Mail Order Consumer Protection Amendments of
1983, Drug and Household Substance Mailing Act of 1990, and for
enforcing the Private Express Statutes which give the Postal
Service its letter-mail monopoly. It is also entrusted with
insuring the security and safety of postal facilities and
employees and for serving in the dual role of Inspector General
for the agency.
The subcommittee continued its in-depth oversight of the
operations of these entities. During the first session, the
subcommittee conducted a series of in-depth oversight hearings
which highlighted the need for reform of postal operations.
These hearings laid the foundation for the reforms contained in
H.R. 3717, the Postal Reform Act of 1996, the first
comprehensive postal reform legislation in a quarter century.
H.R. 3717 focused constructive debate in the postal community
on the future of the Postal Service in meeting its statutory
mandate of provision of universal mail service. The
subcommittee believes that shifting mail volumes and stagnant
postal revenue growth requires an examination of the statutory
structure under which our current postal system now operates if
the Service is to maintain this important public service
mission.
The oversight hearings identified several weaknesses in the
current statutory structure of the Postal Service. One weakness
highlighted is the Postal Service's inability to compete under
the procedures required by the current, 25 year old ratemaking
structure. According to the General Accounting Office, the U.S.
Postal Service controlled virtually all of the Express Mail
market in the early 1970's; by 1995 its share had dropped to
approximately 13 percent. Similarly, the Postal Service is
moving considerably fewer parcels today than 25 years ago. In
1971 the Postal Service handled 536 million parcel pieces and
enjoyed a 65 percent share of the ground surface delivery
market. This is in comparison to 1990 when the Postal Service
parcel volume had dropped to 122 million pieces with a
resulting market share of about 6 percent.
Even first-class financial transactions and personal
correspondence mail--monopoly protected areas under the Private
Express statutes--are showing the effect of electronic
communications competition. Financial institutions are
promoting computer software to consumers as a method of
conducting their bill-paying and general banking, while
Internet service providers and online subscription services are
offering consumers the ability to send electronic messages to
anyone in the world or around the corner. Similarly, many
postal users have become accustomed to the immediacy of the
facsimile machine. These new communication technologies all
carry correspondence that formerly flowed through the Postal
Service. These former sources of revenues supported a postal
infrastructure dedicated to the mission of universal service.
This shift in postal revenues will have a negative long-
term effect on the financial well being of the Postal Service.
The subcommittee believes that should the Service continue to
labor under the restrictions established by the 1970 act, its
inability to compete, develop new products and respond to
changing market conditions jeopardizes its ability to continue
to provide universal service to the diverse geographic areas of
our Nation. Congress must review reforms to the current postal
statutory structure which will provide the Postal Service more
competitive flexibility while assuring all postal customers of
a continued universal mail service at reasonable and affordable
rates. H.R. 3717 meets this goal by replacing the zero-sum game
of the current ratemaking structure with a system that insures
reasonable postal rates while allowing the Postal Service the
flexibility it needs to compete in today's changing
communication markets.
As evidenced in our review of data quality, the act has
fostered an entrenched distrust between the Postal Service and
the Postal Rate Commission and allowed the two agencies to
develop an inter-agency antagonism which fosters a sense of
favoritism between postal customers. This problem is
exacerbated by the existing cost-based ratemaking process.
The subcommittee will continue to study, monitor and report
on the effectiveness of the Postal Reorganization Act and will
continue to seek needed reforms to improve the overall
performance of the Postal Service and provide better service to
all postal customers.
IV. Other Current Activities
A. GENERAL ACCOUNTING OFFICE REPORTS
Civil Service Subcommittee
1. ``Public-Private Mix: Extent of Contracting Out for Real Property
Management Services in GSA,'' May 16, 1994, GAO/GGD-94-126BR.
a. Summary.--At the request of Representative Jim Inhofe,
then-ranking minority member of the Committee on Public Works
and Transportation's Subcommittee on Investigations and
Oversight, GAO reviewed the General Service Administration's
(GSA) experience with contracting for real property management
services (for example, cleaning and general maintenance of
Federal facilities) between 1982 and 1992.
During these years, GSA's Public Buildings Service (PBS)
reviewed 731 functions for contracting. GSA contracted for
services at 73 percent of the facilities, retained 24 percent
in-house, and closed the remaining 3 percent of the functions.
PBS estimated the savings from these reviews at $45.7 million
(about 60 percent of GSA's $75.8 million savings from
contracting). These reviews resulted in the reduction of 3,227
full-time equivalent employees (FTE), with about 10 percent of
these savings achieved by reorganizing functions retained in-
house. Low contractor bids averaged 39 percent less than the
government's bid where functions were contracted out. Where
functions were retained, the government's bid averaged 33
percent less than competing contractors' bids. On custodial
services, contractors' bids averaged over 50 percent less than
government bids. Government proved more competitive in
maintenance services, where contractors averaged only 2 percent
lower than government bids. Contractors were most competitive
when functions involved more than 10 FTE.
At the end of the period, 3,525 of the 8,086 commercial
positions included in the PBS inventory of commercial
activities remained unstudied. The ``Edgar Amendment'' to GSA's
appropriations laws had, since 1982, restricted GSA from
contracting for guard, elevator operator, messenger, and
custodial activities unless such contracts are awarded to
``sheltered workshops employing the severely handicapped.'' The
amendment obstructed GSA's ability to compete 1,181 positions.
Despite the savings reported from analysis of current
contracts, and GSA's efforts to repeal this arbitrary
restriction, GAO made no recommendation.
GAO reported that 78 percent of these contracts had
occurred before 1987. Data in figure I.17 of the report
indicate that, in the first 2 years of the study period,
savings for all contracted activities averaged well above 50
percent. Government agencies became more effective competitors
in studies conducted during 1985 and 1986. Most contracting
done, even during this period, was through direct conversions
rather than the competitive procedures described in Circular A-
76. Indeed, 71 percent of contracted activities and 74 percent
of contracted FTE's were attributable to direct conversions,
and 586 of the activities reviewed by PBS were functions
involving fewer than 10 FTE, where direct conversion does not
require competitive bids.
b. Benefits.--This report is cited by both GAO and the
Office of Management and Budget as the most comprehensive
effort to assess contracting by Federal agencies. It takes a
longer-term perspective than most GAO reports, and reviews
similar functions involving a range of facilities. This report
assesses the extent of such contracting, and a subsequent
report was slated to address the effectiveness of GAO's
contracting. The report reveals deficiencies in procurement
data collection systems. It also implies that the benefits of
contracting can be identified by managers who have the
discretion to move directly to contract. At the same time, the
report prompts the inference that managers are reluctant to
utilize competitive procedures required by Circular A-76,
raising the possibility that those procedures constitute an
obstacle to contracting when comparisons might be close.
2. ``Workforce Reductions: Downsizing Strategies Used in Selected
Organizations,'' March 13, 1995, GAO/GGD-95-54.
a. Summary.--In response to the Workforce Restructuring Act
of 1994, GAO provided the chairs and ranking minority members
of committees and subcommittees having jurisdiction over
Federal employment issues information about downsizing
strategies used by 17 private companies, 5 States, and 3
foreign governments. The act mandated a reduction of 272,900
positions (roughly 12 percent of the Federal workforce) between
1994 and 1999. Other organizations have reduced workforces by
as much as 40 to 50 percent over comparable periods, but this
long-term commitment to reduction was unique in Federal
experience. Congress authorized payment of separation
incentives of up to $25,000 to Federal employees who agreed to
resign or retire, and the administration adopted other
downsizing strategies.
Private organizations reported that their downsizing
decisions resulted from corporate restructurings or decisions
to eliminate unprofitable product lines. That is, downsizing
was the consequence of business objectives rather than
independent objectives. Corporate officials stressed the
importance of identifying desirable structural changes and
revising methods of operation. Two-thirds of the private sector
organizations emphasized planning to retain a viable workforce,
and those that did not plan effectively conceded that
downsizing resulted in skills imbalances that resulted in
rehiring separated employees or costly retraining programs for
new employees. Attrition and hiring freezes were not
consistently effective measures for achieving short-term
reductions. Most organizations used incentives to encourage
``at risk'' employees to resign or retire, including buyouts
much larger than authorized by Congress, credit of additional
years of service for retirement purposes, allowance for
retirement with no reduction in pensions, and lump-sum
severance payments of as much as 1 year's salary. Involuntary
terminations were a last resort, and were coordinated with
decisions to terminate product lines. Where firms needed more
than one round of incentive payments to achieve staff
reductions, subsequent incentives tended to be smaller than
payments to the first round of terminated personnel.
Management of effective downsizing required attention to
morale issues, including strong communication programs
addressed to remaining employees. These programs were
supplemented by career counseling, outplacement assistance, and
retraining for all employees. These programs would convey the
revised mission of the organization and help employees to
understand why they were retained and their expected
contributions to the new organization.
Rather than a result of strategic planning processes,
government reductions tend to be a response to budget
constraints. Where organizations reduced staff without reducing
workload or revising work procedures, incremental staff
increases tended to follow the downsizing, within the limits of
available funds.
Foreign nations included in the study reduced government
operations because of declining economic conditions and changed
public attitudes toward government services. Corporate
decisions tended to be responses to market forces, either
competition in current product lines or decisions to change
product offerings. Objectives ranged from decisions to enter
new markets, redesign work systems, or ``flatten the
organization.'' Tactics used included the identification and
elimination of unnecessary work, automation or comparable
technology innovations, and plant closings where product lines
were terminated. The Wyatt Co. reported, however, that only 17
percent of private sector organizations were able to reduce
staff without replacing at least 10 percent of the workforce.
Private organizations identified statutory constraints as
they designed workforce reduction programs. One company
considered it excessively costly to provide both separation
incentives and retirement benefits to the same employees, but
terminated a program that limited buyouts to people younger
than retirement age because of the Older Workers Benefit
Protection Act of 1990. Another company wanted to offer single
mothers more generous separation packages than other employees,
but concluded that the Employee Retirement Income Security Act
of 1974 required that all ``at-risk'' employees be offered the
same incentives. States reported that their options for
structuring separations were constrained by ``bumping'' rights
of public employees. These ``bumping'' rights prolonged staff
uncertainty related to the separation process approximately 2-
months longer than planned. The State, however, admitted the
``bumping'' ensured that remaining workers had experience
beyond those who wound up separated. States also were
constrained by collective bargaining agreements that required
separation of covered employees on seniority, rather than
performance, skills, or knowledge, criteria.
b. Benefits.--This report highlights the importance of
linking workforce reduction plans to larger strategic
objectives, and demonstrates that separation incentives can be
of limited effectiveness, depending upon the objectives of
workforce restructuring. Buyouts can rarely be targeted to
specific positions, are frequently preceded by a reduction of
normal attrition rates, and thus seldom result in the
elimination of one position for each buyout. It provides a
useful information resource for agencies and for Congress
assessing options for the elimination of functions to
facilitate further workforce reductions.
3. ``Managing for Results: Experiences Abroad Suggest Insights for
Federal Management Reforms,'' May 2, 1995, GAO/GGD-95-120.
a. Summary.--At the request of the chairmen and ranking
minority members of House and Senate oversight committees, GAO
reviewed government management reforms in Canada, Australia,
New Zealand, and the United Kingdom to anticipate methods of
implementing the conversion to an ``inputs'' focus of policy
analysis to the results orientation mandated by the Government
Performance and Results Act of 1993 (GPRA). GPRA directs
Federal agencies to establish strategic planning processes and
objectives, to measure annually progress toward those
objectives, and to report publicly on the effectiveness of
programs.
In each of the countries, managers learned that greater
flexibility of administrative rules and budgeting restrictions
were necessary to shift agencies' focus toward strategic goals.
Much of the flexibility was achieved by adopting performance
contracts and oversight based upon process factors, generally
providing executives more room to operate within budget
ceilings. Despite the intention to focus on results, GAO
reported that most measures used in each country focused on
outputs rather than results, although Canada and Australia
realized more progress toward ``outcomes'' measures. Officials
also recognized that external factors, such as economic
conditions, could influence the results in spite of
government's program activities.
Experiences with performance measures indicate that they
should flow from a program's objectives and reflect managers'
ability to influence the intended results. Program staff should
have a role in developing performance measures, which should
focus on a few key elements and assess different dimensions of
performance, including quantity, quality, efficiency, and cost.
Effective performance measures should enable qualitative
assessment of program results, and provide aggregated
information to upper management while giving detailed data to
program managers. Although these nations reported providing
program objective measurement data to Members of Parliament, it
is used in a limited, but increasing, manner in evaluating
programs.
The four governments reported that investments in
information systems and training were critical to program
success. Managers need advanced systems to collect, analyze,
and report program information, manage resources, and implement
commercial reforms. Staff typically requires additional
training to develop, collect, and analyze results-oriented
information, exercise spending flexibility, and improve human
resources management.
b. Benefits.--GAO's presentation of the reports asserts
that caution should be used in attempts to apply the results to
the United States, but the reasons cited for caution in
application seem irrelevant to the conclusion. GAO has
previously argued that ``maintaining a clear and continuing
commitment to performance improvement can be extremely
difficult in the U.S. Government due to turnover in political
appointees.'' This formulation of the issue evades the
question: ``Who has authority to establish program goals and
objectives?'' An implicit answer serves as GAO's premise for
the conclusion: objectives should be established by Congress
and should remain constant through political transitions. The
establishment of performance objectives, however, is a
political function. In a parliamentary system, that function is
purely legislative and one should expect consistency unless
there is a change of parliament. In a Presidential system,
appointed leadership should and must be involved in evaluating
and changing program objectives. The related accountability,
after all, rests with the appointed leadership, not the career
civil service. Among other factors, Presidents appoint agency
heads to achieve program changes. Congress, of course, has
responsibility to oversee those measures, and to impose
accountability when changes in priorities are inconsistent with
duly enacted laws. GAO's working premise that there should be
continuity in measures and evaluation criteria is itself a
political decision. That decision, however, is unsupported by
the electorate when made by career civil servants. The call for
``flexibility'' for line managers might serve the interests of
career civil servants, but would impede accountability in the
executive if elected leadership favored substantial reform or
abolition. The report indicates, albeit inadvertently, that
Federal managers are adept at linking their agencies' inability
to achieve performance objectives to factors beyond their
programs' control.
The report provides some examples of output measures, but
demonstrates that few nations have achieved genuine
``outcomes'' measures for program evaluations. The report
provides little evidence to demonstrate that measures developed
to reflect ``customer'' satisfaction that is, the desires of
citizen beneficiaries of programs will coincide with the
evaluation criteria that authorizing committees might apply
which is usually interpreted to be the public interest. It
indicates that market mechanisms (e.g., user fees, asset sales,
and contracting for support services) improve the efficiency of
agencies, but reaches no assessment of effectiveness.
Similarly, performance-focussed evaluations provide
incentives for human resources managers to focus on the
recruitment, training, and development requirements of line
management. Again, the result appears to be improved
efficiency, because GAO cites no measures of the organization's
effectiveness.
4. ``Federal Hiring: Reconciling Flexibility With Veterans'
Preference,'' June 16, 1995, GAO/GGD-95-102.
a. Summary.--At the request of the former chairman of the
Subcommittee on Civil Service of the Committee on Post Office
and Civil Service, GAO initiated a review of Federal hiring
procedures to identify those that are working, those that are
not, and to assess whether proposals to reform hiring
procedures address the needs of agencies and applicants.
Previous GAO studies alleged that the Federal hiring process
has impeded managers from hiring quality people when they were
needed at the same time that it has frustrated applicants.
Federal hiring procedures include recruitment, application,
referral, and selection phases, and provide managers twelve
different authorities under which they can hire personnel. In
making selections, managers are required to comply with legal
principles including merit principles, veterans' preference,
and equal opportunity laws. Managers must select from among the
three highest ranking candidates, but are prohibited from
selecting a nonveteran over a higher ranking veteran. In
response to National Performance Review recommendations, the
Office of Personnel Management (OPM) granted agencies
additional flexibility in recruitment and selection by
abandoning centralized hiring registers. OPM has also automated
application, rating, ranking, referral, and employment
information processes.
Nonetheless, Federal managers informed GAO that although
managers have greater flexibility, they believe that the legal
requirement to give veterans preference in hiring can conflict
with their desire to hire the people whom they feel are best
qualified for open positions. Veterans' preference appears to
be an obstacle to hiring the highest qualified candidates in a
demonstration project currently being run by the Department of
Agriculture. GAO's subsequent interviews with veterans' groups
revealed that the hiring procedures were not serving veterans
well, either. Veterans' organizations report that agencies
appear to favor using noncompetitive hiring procedures when
available because these are not restricted by veterans'
preference and the rule of three. GAO confirmed that agencies
are less likely to hire from a selection certificate when a
veteran is rated highest.
Applicants for Federal employment who also applied for
private sector positions tended to find private sector
procedures faster. Median times between submitting an
application and receiving a job offer varied between 8 and 14
weeks. One-third of the new hires responding to GAO interviews
claimed that waiting time became excessive after 6 weeks. GAO,
it should be noted, interviewed only those who accepted Federal
positions, and did not sample applicants who accepted private
employment during the interval between application and
selection. Personnel officials agreed that OPM's automation and
procedural flexibility might alleviate some of their timeliness
concerns, but would not resolve the difficulties in Federal
hiring that they identified with veterans' preference and the
rule of three.
GAO recommended that OPM use its authority for
demonstration projects to recruit agencies that would attempt
alternative methods of implementing veterans' preference. These
demonstrations would be conducted in conjunction with labor
unions, veterans' organizations, and other interested parties.
b. Benefits.--This report continues GAO's monitoring of the
personnel system, and raises important questions about
potential conflicts between merit principles and veterans'
preference. The report has serious conceptual flaws. It's
concept of ``quality'' seems to center on whom managers would
like to hire, rather than relative ranking scores. The
potential conflict between veterans' preference and ``merit''
identified in this report, in the absence of objective
measures, could be nothing more than a preference for hiring
within the current system. Similarly, the absence of analysis
of the applicant pool undoubtedly skews the sample used to
evaluate the acceptance of employment offers. Thus, although
the report opens questions, the limits of survey data restrict
its usefulness in providing guidance for answering them.
5. ``Federal Personnel Management: Views on Selected NPR Human Resource
Recommendations,'' September 18, 1995, GAO/GGD-95-221BR.
a. Summary.--At the request of the ranking minority member
of the Civil Service Subcommittee, GAO reviewed recommendations
made by the National Performance Review (NPR) in the area of
human resource management. The Workforce Restructuring Act of
1994 requires the reduction of 272,900 positions from the
Federal workforce by 1999, and the administration has targeted
administrative positions, such as human resource management
functions, for many of the necessary reductions. NPR has also
recommended a decentralized hiring system, where agencies would
have more authority to hire persons based upon the needs of
program managers. This report surveyed human resource managers
to ascertain their level of agreement with the NPR
recommendations, to gain their impression about the adequacy of
their resources to meet their new responsibilities, and to
report on OPM's plans for oversight to ensure accountability
for merit system principles.
Human resource managers generally favored increased
delegation of authority in their areas of responsibility, but
they were reluctant to embrace the abolition of the standard
Federal job application, the SF-171. They believed that the NPR
recommendations leading to a decentralized system would
increase their workload, although some of the associated
automation and simplification of procedures might save some
time. They expressed reservations about their ability to
accomplish the increased workload with the planned workforce
reductions.
Although NPR recommended adoption of new oversight systems
to ensure that greater delegation did not result in violations
of merit principles, OPM had not completed its plans for
greater oversight when this report was written. Most human
resource managers agreed that they did not have performance
measures to evaluate their systems. Implementation of such
systems will be necessary to comply with requirements of the
Government Performance and Results Act.
GAO used a sample of personnel officers selected to provide
geographic diversity among agencies with substantial personnel
workloads, so the results might not be generalizable to all
agencies. The surveys were conducted during a period of change,
both in terms of implementing NPR recommendations for new
procedures and reducing the workforces at several of the
agencies involved in the survey.
NPR recommendations in the human resources management area
include 14 recommendations and 46 action items, and the GAO
focussed upon the areas of recruitment and examinations, the
classification system, performance management, alternative
dispute resolution, the standard application form, and the
Federal Personnel Manual (FPM). Managers favored
recommendations related to the abolition of centralized
registers and increased hiring authority within agencies. Most
recruitment and examination is already handled by agencies,
rather than OPM, although there is a statutory requirement that
OPM conduct examinations for common positions.
Agency officials favor simplification of the classification
system, especially implementation of ``paybanding.'' Officials
in 33 of 37 offices in the survey favored opportunities to
develop their own performance management programs, including
such concepts as ``pass/fail'' and ``group/team'' performance
evaluations. Alternative dispute resolution and informal
grievance procedures also enjoy wide support among human
resource managers.
Agency officials believe that abolition of the SF-171 will
add to their workloads because obtaining all of the information
needed to evaluate applications will require more time. They
also were reluctant to accept information in nonstandard
resumes, and feared that different agencies might adopt
distinct application forms. Those supporting abolition of the
SF-171 recognized that it was cumbersome for applicants and
required irrelevant job experience information. Although
officials conceded that the FPM was too detailed and
inflexible, only 17 of 37 offices supported abolishing it. Many
reported that, although the FPM lacked official status, nothing
had changed and it remained in use, and personnel officials
would continue to rely upon it until adequate substitutes are
published.
Agencies generally supported OPM's efforts to automate
human resource management procedures, and agreed that many of
these technological changes and procedural simplifications
would reduce workloads. Over time, many human resource
management responsibilities would be shouldered by line
managers, if the NPR recommendations are implemented.
Under the Civil Service Reform Act of 1978, OPM had
responsibility to oversee human resource management in Federal
agencies to ensure compliance with merit principles and other
statutory requirements. If NPR recommendations are implemented,
agencies will have more flexibility in the design of human
resource programs. Although most agency officials believed that
they could manage their own human resource programs, only 16 of
the 37 offices surveyed had performance measurement systems in
place. OPM is assisting agencies to develop performance
management measures for their system in order to facilitate
compliance with GPRA. Agencies will remain responsible for
ensuring that their human resource management programs are
linked effectively to overall agency objectives.
b. Benefits.--This update sustains GAO's role in monitoring
and reporting on the administration's efforts to implement the
NPR recommendations. It highlights areas where agencies are
uncomfortable with recommendations, and points out the need for
strengthened oversight where operational responsibility is
decentralized.
6. ``Worker Protection: Federal Contractors and Violations of Labor
Law,'' October 24, 1995, GAO/HEHS-96-8.
a. Summary.--Senator Paul Simon has proposed legislation
that would debar firms exhibiting a clear ``pattern and
practice'' of violating the National Labor Relations Act (NLRA)
from Federal contracts. Senator Simon asked GAO to review
Federal contractors' violations of the NLRA and to identify
ways to improve Federal contractors' compliance with NLRA. GAO
found that 80 firms with Federal contracts worth $23 billion
had violated the act. Six of the violators had received almost
90 percent of the contracts, which comprise approximately 13
percent of total Federal contracts for the years reviewed
(1993-94). None of these 6 firms were included among the 15
worst violators, as classified by GAO. Remedies imposed by the
National Labor Relations Board in the 88 cases reviewed
affected nearly 1000 employees in twelve bargaining units. The
Department of Labor's Office of Federal Contract Compliance
Programs estimates that 22 percent of the Nation's workforce,
or about 26 million employees, are hired by Federal contractors
or subcontractors.
Federal laws and an Executive order place greater
responsibilities on Federal contractors than other employers.
Executive Order 11246 requires Federal contractors to develop
and maintain an affirmative action program. The Davis-Bacon Act
and the Service Contract Act require contractors to pay
prevailing area wages and benefits. GAO found that most of the
violations involved interference with workers' rights to
organize, to bargain collectively, and discriminating against
union members in hiring or conditions of employment. These
offenses are violations of Section 8(a) of the act.
GAO noted that enforcement could be enhanced by collecting
violators' penalties from Federal contract awards, but did not
make a recommendation to do so. This measure would require
coordinating contract awards reported to GSA with NLRB actions.
The report did not discuss methods of implementing Federal
contract debarment.
b. Benefits.--This report documents, with summary reports
of violations in all 88 cases reviewed, that labor law
violations are not widespread among Federal contractors, and
that serious violators have only a minuscule portion of Federal
contracts. The NLRB already has extensive enforcement authority
in these areas. The lack of recommendation indicates that the
remedy proposed by Senator Simon would have limited utility in
enforcing Federal labor laws against Federal contractors.
7. ``Government Contractors: Selected Agencies' Efforts To Identify
Organizational Conflicts of Interest,'' October 25, 1995, GAO/
GGD-96-15.
a. Summary.--In response to a legislative requirement, GAO
reviewed agency implementation of OMB Policy Letter 89-1,
(Public Law 89-1), ``Conflict of Interest Policies Dealing with
Consultants,'' GAO attempted to determine whether agencies have
complied with requirements to identify and evaluate potential
organizational conflicts of interest (OCI) and to identify ways
that agencies might improve their screening for OCI's. GAO
reviewed contractors at the Environmental Protection Agency,
the Department of Energy, and the Department of the Navy, three
agencies that use especially large amounts of consultant and
advisory service contracts.
Under the Policy Letter, agencies are required to obtain
certifications that no conflict exists. If a conflict is found,
agencies are required to evaluate the conflict before awarding
contracts. EPA and DOE were found to have obtained
certifications from contractors in nearly all cases, but a DOD
Inspector General reported that the Navy was obtaining
certifications in so few cases that the IG concluded that the
Navy was not requesting the submissions. The Navy is
implementing new procedures.
An April 1993 study by the President's Council on Integrity
and Efficiency (PCIE) reported that certifications were being
requested in only 9 of 19 civilian agencies. The PCIE contended
that self-certifications would do little to deter dishonest
contractors. GAO agreed, and cited the evaluations conducted by
EPA and DOE as important elements of the Public Law 89-1
implementation process. Fully one-third of the 66 contracting
officials contacted by GAO, however, had received no training
on identifying conflicts of interest covered by the letter.
GAO observed that proper training might enhance supervision
of potential conflicts of interest in contractor organizations.
GAO also determined that, if agencies are receiving
certifications from contractors, duplicative information should
not be required in other formats.
b. Benefits.--This report responds to continuing
congressional concerns about integrity in government
contracting. It demonstrates the need for agencies to implement
regulations that are in place, and confirms that additional
safeguards might not be necessary if existing ones are
adequately implemented.
8. ``Federal Quality Management: Strategies for Involving Employees,''
April 19, 1995, GAO/GGD-95-79.
a. Summary.--The General Accounting Office initiated a
study in June 1992 to examine Quality Management (QM)--a
management approach that emphasizes improving product quality
while decreasing production costs by increasing the efficiency
of work processes.
This report describes the human resource management
approaches used to implement QM by 10 Federal organizations
that have won governmental awards for the advanced level of
their quality initiatives. Although no two of the QM programs
GAO looked at were the same, all 10 of the award-winning
organizations embraced the same four Human Resource Management
strategies: (1) a comprehensive training program; (2) an
increase in organizational communication; (3) promoting and
rewarding teamwork; and (4) involving employees in the
management of work processes.
GAO concluded that the process of changing to a quality
culture was driven by the synergism that resulted from the four
HRM strategies concurrently. In doing so, these organizations
increased the levels of employee involvement in quality
improvement activities.
b. Benefits.--This study may be of use to the Office of
Personnel Management in its role assisting Federal agencies
with QM through the Federal Quality Institute.
9. ``Personnel Practices: Career Appointments of Legislative, White
House, and Political Appointees,'' October 10, 1995, GAO/GGD-
96-2.
a. Summary.--At the request of Representative Schroeder,
GAO reviewed the pattern of political appointees at Federal
departments and agencies and employees of the White House and
Congress receiving career appointments in the competitive Civil
Service or the Senior Executive Service. GAO examined such
appointments made between October 1, 1984, and June 30, 1994.
During this period, GAO found a total of 1,090 former
political and congressional/judicial branch employees received
career appointments. Of these, 552 individuals received
noncompetitive appointments under the Ramspeck authority, and
502 individuals converted from Schedule C and noncareer SES
positions to competitive appointments. Another 36 received
White House service appointments. The median grade received for
Ramspeck and White House appointments was at the GS-12 level.
The median grade received for conversions was at the GS-13
level.
GAO found that Ramspeck appointments have followed a
cyclical trend over the 10-year period, increasing
significantly during those years immediately following Federal
elections, GAO analysis indicates that this cycle can generally
be associated with turnover in congressional membership and the
consequent involuntary separation of congressional employees.
The pattern of Schedule C and noncareer SES conversions and
White House service appointments is less distinctive.
b. Benefits.--This report provided useful information to
the subcommittee in its oversight of Federal career
appointments and the merit system selection process.
Additionally, the clarification of the White House employee
conversion process was very useful.
10. ``Employment Discrimination: Most Private Sector Employers Use
Alternative Dispute Resolution,'' July 1995, GAO/HEHS-95-150.
a. Summary.--At the request of Congressman William L. Clay
(D-MO) and Major Owens (D-NY), GAO reviewed the extent to which
private-sector employers use alternative dispute resolution
(ADR) approaches, especially arbitration, to resolve
discrimination complaints of employees not covered by
collective bargaining agreements and the fairness of employers'
arbitration policies. The study examined whether employers use
one or more of the following alternative dispute resolution
techniques: negotiation, fact finding, peer review, internal
mediation, external mediation, and arbitration.
GAO found that almost all employers with 100 or more
employees use one or more ADR approaches. Arbitration is one of
the least common approaches reported, but some employers using
arbitration make it mandatory for all workers. According to
GAO, some of the arbitration techniques used by employers would
not meet fairness standards proposed by the Commission of the
Future of Worker-Management Relations, established by Labor
Secretary Robert Reich.
b. Benefits.--This study will be useful in examining
whether to encourage the use of alternative dispute resolution
mechanisms to resolve Federal employment disputes.
11. ``Congressional Retirement Costs,'' October 12, 1995, GAO/GGD-96-
24R.
a. Summary.--At the request of Congressman Dan Miller (R-
FL) the GAO gathered information relating to the retirement
system available to Members of Congress and congressional
staff. Specifically, the GAO reviewed the following: (1) the
cost of retirement benefits afforded to Members; (2) the cost
of retirement benefits afforded to congressional staff; (3) the
potential savings available from H.R. 804, introduced by
Representative Miller; (4) how retirement systems in the
private sector compare with the congressional retirement
program; and (5) the extent to which nonFederal employers may
be replacing their defined benefit pension plans with defined
contribution pension plans.
The GAO found that the total cost to the government of
providing the future retirement benefits earned by House
Members during calendar year 1994 was about $14.3 million. At
this annual amount, the 5-year total for House Members would be
about $71.5 million. The GAO also found that the total cost to
the government of providing future retirement benefits earned
by House staff during 1994 was about $116.5 million. The Senate
Disbursing Office refused to provide the GAO with information
on staff payroll and retirement program coverage that is
essential for accurate estimates. The GAO did not attempt to
estimate the potential savings of H.R. 804 but stated that the
bill, if enacted, would significantly reduce the cost of Member
retirement programs. The GAO is currently working on a report
that examines nonFederal retirement programs. The GAO expects
the comparison to show that general Federal employees under
CSRS receive greater benefit amounts at the same salary levels
and years of service than nonFederal employees when they retire
before age 62 but smaller amounts at age 62 and older when
Social Security benefits are available to nonFederal employees.
The disparity between nonFederal retirement programs and
retirement for Members of Congress will be much greater. The
GAO also found in the private sector there does not appear to
be a discernable trend toward replacing defined-benefit plans
with defined contribution plans.
b. Benefits.--This information will assist the subcommittee
as it continues its oversight and legislative activities
regarding the Federal retirement programs. It has been the goal
of the subcommittee to examine the full magnitude and cost of
the taxpayer financed retirement systems for all Federal
employees, including Members of Congress and congressional
staff. The Balanced Budget Act of 1995, also known as
``Reconciliation,'' dramatically cut the accrual rates for
Members and congressional staff and equalized the contribution
rates with those of executive branch employees.
12. ``Federal Retirement Benefits for Members of Congress,
Congressional Staff, and Other Employees,'' May 1995, GAO/GGD-
95-78.
a. Summary.--At the request of the chairman of the House
Subcommittee on Civil Service, Representative John Mica (R-FL),
and the chairman of the Senate Subcommittee on Post Office and
Civil Service, Senator Ted Stevens (R-AL), the GAO reviewed the
retirement benefits available to Members of Congress and
congressional staff with those available to other groups of
employees under the Civil Service Retirement System (CSRS) and
the Federal Employees Retirement System (FERS). The GAO found
that the CSRS provisions for Members of Congress are generally
more beneficial than the provisions for other employee groups,
particularly general employees. The major differences are found
in the eligibility requirements for retirement and the formulas
used to calculate benefit amounts. The Member benefit formula
applies to congressional staff; however, congressional staffs
are covered by the general employees' retirement eligibility
requirements. Law enforcement officers and firefighters may
retire earlier and are covered by a more generous benefit
formula than general employees. Under CSRS, the provisions for
air traffic controllers fall between those for law enforcement
officers and firefighters and general employees.
The GAO also found that many of the relative advantages
afforded to Members of Congress and congressional staff over
general employees in CSRS were continued under the FERS pension
plan. However, provisions for law enforcement officers,
firefighters, and air traffic controllers are very similar to
the Member provisions under FERS.
b. Benefits.--This information will assist the subcommittee
as it continues its oversight and legislative activities
regarding the Federal retirement programs. It has been the goal
of the subcommittee to examine the full magnitude and cost of
the taxpayer financed retirement systems for all Federal
employees, including Members of Congress and congressional
staff. The report was a useful resource in drafting the section
of the Balanced Budget Act of 1995, also known as
``Reconciliation,'' which dramatically cut the accrual rates
for Members and congressional staff and equalized the
contribution rates with those of executive branch employees.
13. ``Private Pension Plans, Efforts To Encourage Infrastructure
Investment,'' September 1995, GAO/HEHS-95-173.
a. Summary.--At the request of Representatives Bud Shuster
(R-PA), chairman, and Norman Mineta (D-CA), ranking minority
member, of the Committee on Transportation and Infrastructure,
GAO gathered information on the role that pension plans might
play in expanding public investment in infrastructure projects,
in particular, by implementing the proposals addressed in the
1993 report of the Commission to Promote Investment in
America's Infrastructure.
In its 1993 report, the Infrastructure Commission proposed
creating two new entities to provide credit assistance to
States and localities that would make infrastructure projects
more attractive to private investors. One entity--the National
Infrastructure Corp. (NIC)--would support projects by
purchasing debt securities of selected projects. NIC could
expand investment by creating securities backed by projects it
had supported. Another entity--the Infrastructure Insurance
Corp. (IIC)--would ensure projects that could not obtain bond
insurance from the private sector. The Infrastructure
Commission also proposed expanding tax incentives, including
the creation of a public benefit bond that would distribute
earnings tax free to participants in certain pension plans.
Establishing NIC and IIC would demand additional Federal
subsidies (the Commission proposed that the NIC and IIC be
capitalized through a Federal grant of $1 billion over 5
years). Under current budget rules, these new costs would have
to be offset with spending cuts or additional revenues.
The Infrastructure Commission identified three ways that
pension plans could participate in infrastructure projects
generally through NIC and IIC: (1) Pension plans could invest
in the equity of the proposed bond insurer, IIC; (2) Pension
plans could buy taxable project debt insured by IIC or purchase
securities directly issued by NIC; and (3) Pension plans could
act as lenders directly funding project debt through purchasing
public benefit bonds.
GAO reviewed the economic analysis and held discussions
with market participants in evaluating the Infrastructure
Commission's proposals. While discussions with some market
participants indicated some of the Infrastructure Commission's
proposals might attract pension plan investment, many
economists and participants were skeptical. They raised
questions about the goal of reallocating pension capital as
well as the need for Federal entities and incentives that the
Infrastructure Commission proposed.
Experts and market participants noted that alternative
mechanisms, not specifically targeted to pension plans, may
increase infrastructure investment. One proposed approach is to
amend the ISTEA to allow States to create transportation
revolving funds similar to those established under the Clean
Water Act. While this approach has limitations that require
study, it may be an alternative way of attracting new sources
of capital to infrastructure projects.
b. Benefits.--This information will assist the subcommittee
as it continues its oversight and legislative activities
regarding Federal retirement programs. While the Infrastructure
Commission's proposals concerned private pensions, this study
highlights concerns which are relevant to any future
consideration of investing Federal pension funds in instruments
other than those currently used. Unfortunately, this report
limited its criticism of the Infrastructure Commission's
proposals to those concerns of market experts who noted that
the rates paid by bonds issued by infrastructure projects
usually were not competitive with other instruments which
pension managers have available to them. The report failed to
note the primary objection to the Commission's proposals, or
any other proposals which would argue for so-called
economically targeted investments: they threaten to undermine
the integrity of pension programs and conflict with ERISA.
Under ERISA a pension fund manager is required to ``discharge
his duties with respect to a plan solely in the interest of the
participants and the beneficiaries for the exclusive purpose of
(i) providing benefits to participants and their beneficiaries;
and (ii) defraying reasonable expenses of administering the
plan.''
14. ``Federal Employees Compensation Act, Redefining Continuation of
Pay Could Result in Additional Refunds to the Government,''
June 1995, GAO/GGD-95-135.
a. Summary.--At the request of Senators Joseph Leiberman
(D-CT) and Thad Cochran (R-MS), GAO gathered information
relating to Continuation of Pay under Federal Employees
Compensation Act (FECA) and how it is administered by the
Department of Labor (DOL) Office of Worker's Compensation
Programs (OWCP). FECA authorizes Federal agencies to continue
paying employees their regular salaries for up to 45 days
(called the Continuation of Pay or COP period) when they are
absent from work due to work-related traumatic injuries.
Because of current interpretations of FECA by the
Employees' Compensation Appeals Board (ECAB) and a Federal
appeals court, the Federal Government has no legal basis to
obtain refunds of COP paid to injured employees when those
employees recover damages from third parties who are liable for
their on-the-job injuries. A basis could be provided, however,
by amending FECA. As a result of current interpretations,
employees can receive regular salary payment from their
agencies and reimbursement from third parties--in effect, a
double recovery of income for their first 45 days of absence
from work due to injury. In contrast, employees may not receive
double recoveries for compensation benefits, such as medical
expenses whenever they are incurred or compensation in lieu of
pay after 45 days, because FECA provides that the government
can recoup funds for these expenditures from employees
receiving third-party recoveries.
GAO determined that the government could recover up to an
estimated $2 million per year if it were to obtain funds of
continuation of pay (COP) in third-party cases. The Postal
Service would realize about 70 percent of these recoveries.
This could be accomplished if Congress were to amend FECA to
require that COP payments in third-party cases be treated like
compensation benefits for the purpose of refunds to the
government from third-party recoveries. Thus, injured employees
could not receive double recoveries for COP periods because the
government could also recoup funds for COP expenditures from
employees receiving third-party recoveries. According to Labor
and Postal Service officials, the amount of COP that could be
refunded to the government would greatly exceed the
administrative costs to recover it.
b. Benefits.--This information will assist the subcommittee
as it continues its oversight and legislative activities
regarding Federal employee compensation and benefit programs
despite the fact that the study limited itself to a discussion
of recovering damages from third-parties held liable in injury
cases. Not considered by the report was the elimination of COP.
FECA is far more generous than any of the State workers'
compensation programs. Only FECA offers a 45-day COP which,
some observers claim, may act as an incentive to file
disability claims. One proposed solution to this problem is to
eliminate COP and immediately place claimants on disability
pay, as do most States.
15. ``Veteran's Benefits, Effective Interaction Needed Within VA To
Address Appeals Backlog,'' September 1995, GAO/HEHS-95-190.
a. Summary.--At the request of Senators John D. Rockefeller
(D-WV) and Ben Nighthorse Campbell (R-CO), GAO gathered
information on the untimely processing of veteran's
compensation and pension claims by the Veterans Administration
(VA).
Veterans often wait many months for the VA to process
claims and for the 40,000 vets who annually appeal the VA's
decisions, the wait may be extended to as much as 2 years.
Since 1990 different groups have studied the problems of the
untimely processing, including the GAO, VA's Inspector General,
and VA special task forces. A frequently cited recommendation
is the need for the autonomous organizations within the VA to
work together to resolve problems.
GAO found that the VA's appeals process is increasingly
bogged-down. The 1988 Veteran's Judicial Review Act and Court
of Veteran's Appeals rulings expanded veteran's rights, but
also expanded the VA's adjudication responsibilities. VA is
having difficulty integrating these responsibilities into its
already complex and unwieldy adjudication process. Since 1991
the number of appeals awaiting action by the Board of Veteran's
Appeals has increased by 175 percent and average processing
time has increased by 50 percent.
The current legal and organizational framework--which
involves several autonomous VA organizations in claims
adjudication--makes effective interaction among those
organizations essential to fair and efficient claims
processing. Many study recommendations underscore the need for
VA organizations to work together. VA officials have not
implemented many study recommendations believing that other
formal and informal mechanisms are effective.
GAO found that many problems are going undetected and
unresolved despite the VA preferred mechanisms. Unless VA
clearly defines its adjudication responsibilities it will not
be able to determine whether it has the resources to meet those
responsibilities and whether some new solutions may be needed,
including amending laws defining VA's responsibilities, or
reconfiguring the agency.
b. Benefits.--This information will assist the subcommittee
as it continues its oversight and legislative activities
regarding Federal compensation and benefit programs as it
highlights problems shared by other agencies which may be
analyzed in the future.
16. ``Sunday Premium Pay, Millions of Dollars in Sunday Premium Pay Are
Paid to Employees on Leave,'' May 1995, GAO/GGD-95-144.
a. Summary.--This report responds to the direction in the
Conference Report accompanying the Treasury, Postal Service,
and General Government Appropriations Act of 1995. The report
was directed to the conferees: Senators Richard Shelby (R-AL),
chairman, and J. Robert Kerry (D-NE), ranking minority member,
Senate Appropriations Committee, Treasury and Postal
Subcommittee, and Representative Jim Lightfoot (R-IA),
chairman, and Steny Hoyer (D-MD), ranking minority member of
the corresponding House subcommittee. The objectives of the
report were to determine: (1) the agencies that pay the most
Sunday premium pay and the amounts paid; (2) to the extent
possible, the amounts of Sunday premium pay paid to employees
on leave at selected agencies; and (3) whether employees'
Sunday leave usage at these agencies increased after issuance
of the OPM letter stating that agencies must pay Sunday premium
pay to full-time employees who are regularly scheduled to work
on a Sunday, but who take paid leave during the tour of duty.
This report provides the Sunday pay information for fiscal
1994 and, where possible, compares Sunday leave usage for
comparable pay periods both before and after issuance of the
OPM letter.
A 1993 court decision interpreting the leave provisions in
Title 5 U.S.C. held that Federal employees who took leave on a
Sunday for which they were scheduled to work were entitled to
Sunday premium pay even though they did not work. Accordingly,
Federal agencies began paying Sunday premium pay to employees
who were on leave. Subsequently, Congress, in the 1995 DOT
appropriation, nullified the court's decision with respect to
FAA employees. Extending a similar prohibition on paying Sunday
pay to employees on leave would reduce Federal payroll costs by
millions of dollars.
b. Benefits.--This information will assist the subcommittee
as it continues its oversight and legislative activities
regarding Federal compensation and benefit programs. Premium
pay is pay for work performed on a weekend, hours in excess of
a defined period per day, or hours in excess of a defined
standard work week. These definitions of a standard work day or
week (the 8-hour day or the 40-hour week for example) grew from
``definitions'' of the work week negotiated between labor
organizations and industry, child labor and protective laws
developed around the turn of the century, and, in the case of
work performed on Sunday, special recognition of labor
performed on a day which prevailing cultural norms regarded as
``a day of rest.''
In all cases, the idea of premium pay is predicated upon
the notion that the individual works a longer than normal work-
day or work-week. In the particular case of Sunday premium pay,
the individual is being remunerated above standard rates
because he or she is sacrificing a day normally reserved by
societal practice as a day for personal use rather than work.
The policy of paying Sunday premium pay to an employee on
leave posits the notion that premium pay is an ``entitlement''
rather than something received for services rendered.
Compensation policy must reflect the underlying notion that Pay
is tied to work performed or services rendered. The practice of
Sunday premium pay for individuals on leave should be
eliminated.
17. ``Review of Compensation Comparability Report,'' October 30, 1995,
GAO/GGD-96-34R.
a. Summary.--At the request of Congressman James P. Moran
(D-VA) the GAO reviewed a report published by the American
Legislative Exchange Council (ALEC) entitled ``America's
Protected Class: The Excess Value of Public Employment'' (June
1994). The authors of this report, Messrs. Wendell Cox and
Samuel A. Brunelli, conclude that Federal civilian employees
receive about 51 percent more in total compensation (salaries,
wages, and benefits) over their careers than employees in the
private sector. The methodology used by the authors of the ALEC
report estimate the ``excess value'' by measuring the extent to
which average Federal compensation exceeds average private
sector compensation. (``Excess value'' is defined as the extent
to which Federal employees' compensation exceeds the market
rate for comparable employees.) The methodology quantifies five
factors, which represent areas of possible advantages for
Federal compensation. The GAO states that ``the methodological
assumptions which drive the conclusions are not well
supported.'' The GAO also suggests that the authors' approach
seemed questionable on conceptual and factual grounds.
Prior to the publication of the GAO report Wendell Cox was
given the opportunity to respond in writing to the GAO
findings. Following publication Mr. Cox stated that ``GAO
dismissed our response out of hand, despite the fact that we
directly refuted the most important points in their analysis.
The GAO analysis includes constructive criticisms. But, in sum,
incorporation of the recommendations would produce little
difference from our original estimate that Federal non-military
employment has an inherent excess value of 50.8 percent. As
indicated in our GAO published response, a downward adjustment
of 2.6 percent would be required. GAO's analysis is not
balanced. . . .''
b. Benefits.--The conclusions of the GAO do not suggest a
fair and objective analysis of the ALEC report. Although the
GAO admits that their ``review is not exhaustive,'' the
language used to characterize the methodology used by ALEC
suggest an institutional bias. The report has serious
conceptual flaws. The subcommittee staff communicated these
concerns to the GAO when the letter to the ranking member was
published, and GAO has not resolved the concerns.
18. ``Transforming the Civil Service: Building the Workforce of the
Future. Results of a GAO-Sponsored Symposium,'' December 26,
1995, GAO/GGD-96-35.
a. Summary.--At the request of the Senate Committee on
Government Affairs, GAO convened a symposium to address options
for civil service reform. The 2-day session, conducted in April
1995, reflected the experiences of selected Federal agencies,
respected practices of State and local governments, governments
of other nations, including Canada, Australia, and New Zealand.
Participants included public administrators and scholars as
well as management officials who could discuss innovations in
progress in some of the Nation's leading corporations. From
these presentations, GAO discerned eight principles that
described current management thinking, essentially adopting a
Total Quality Management perspective based on an expectation of
continuous efforts to provide services ``cheaper, faster, and
better.'' Privatizing or outsourcing of numerous functions
would play a prominent role in future revision of Federal human
resource management. The public is interested in greater
accountability from public employees, and current thinking
indicates that managers require additional flexibility, rather
than extensive regulations, to achieve that accountability.
Flexibility would have to be included in the design of
organizations, rather than rely primarily on large
organizations as governments have traditionally done. Despite
the call for flexibility, participants seemed to agree on more
integrated systems of information management, and more
extensive ``investment'' perspectives with regard to the
resources allocated to government institutions.
b. Benefits.--Although the conference provided a broad
exchange related to currently-favored practices, the summary
reflects the difficulties of initiating a course of reform
where participants are uncertain about, or disagree about,
future directions. Many of the concerns expressed by
participants reflect continued commitment to existing
government services (the symposium made no reference to
eliminating or abolishing functions) while acknowledging that
many of government's operational problems derive from internal
regulations rather than laws imposed by Congress. These
discussions proved of limited utility as the Civil Service
Subcommittee considered the Omnibus Civil Service Reform Act.
19. ``Retention Allowances: Usage and Compliance Vary Among Federal
Agencies,'' December 11, 1995, GAO/GGD-96-32.
a. Summary.--Senator David Pryor requested GAO to review
agencies' use of retention bonuses as a means of keeping the
services of valued employees. GAO found that only 354 of 2.1
million Federal civilian employees were receiving retention
bonuses as of September 30, 1994, with 334 of them awarded at
five agencies: the Departments of Defense, Energy, and
Agriculture, the Securities and Exchange Commission, and the
Export-Import Bank. The Export-Import Bank stood out because
21.7 percent of its employees were receiving retention
allowances. GAO's review confirmed that the Export-Import Bank
was not complying with relevant statutes in the administration
of these awards.
b. Benefits.--This report enabled the Office of Personnel
Management to intervene and require the Export-Import Bank to
take corrective measures, in part by temporarily withdrawing
its delegation of authority to award retention allowances. The
Civil Service Subcommittee linked this research with its own
oversight of buyout programs, and subsequently documented that
the Export-Import Bank had paid buyouts to several employees
who were also receiving retention bonuses. This oversight
resulted in modification of buyout authority subsequently
provided to other Federal agencies.
20. ``Veterans' Preference: Data on Employment of Veterans.'' February
1, 1996, GAO/GGD-96-13.
a. Summary.--At the request of Representative Bob Stump,
chairman of the House Committee on Veterans' Affairs, GAO
reviewed the veterans' preference practices of executive branch
agencies. GAO specifically examined whether statistics
indicated that the Office of Personnel Management (OPM) and
other Federal agencies have given veteran hiring preference;
whether the Merit Systems Protection Board's (MSPB) authority
over veterans' preference was weakened by the Civil Service
Reform Act of 1978; and how reductions-in-force (RIFs) have
affected women and minorities.
GAO found that in recent years, veterans' preference
represented an increasing share of the new hires in executive
branch agencies. The percentage of new hires with veterans'
preference increased form 12 percent in Fiscal Year 1990 to
14.8 percent in Fiscal Year 1994, among all agencies. Prior GAO
work found that veterans' preference procedures were being
properly applied in virtually all of the hiring instances that
were examined. However, GAO did not examine whether agencies
were correctly applying veterans' preference during reductions-
in-force and could report no findings on whether agencies have
properly, or improperly, administered veterans' preference
rules during reductions-in-force.
With regard to the Merit Systems Protection Board's
authority over veterans' preference appeals, GAO believes the
current framework to protect veterans' rights was not weakened
by the Civil Service Reform Act of 1978. In prior work on how
women and minorities were affected during RIFs, GAO found that
women and minorities were disproportionately separated in RIFs
at three Department of Defense installations because they
ranked lower than white males in one of three retention
factors, including veterans' preference.
b. Benefits.--This report provided some useful background
information on the issue of veterans' preference and suggested
areas for closer examination in connection with the
subcommittee's examination of veterans' preference in the
executive branch.
21. ``Public Pensions: Summary of Federal Pension Plan Data,'' February
16, 1996, GAO/AIMD-96-6.
a. Summary.--At the request of Representative Nancy L.
Johnson (R-CN), chairman of the Ways and Means Subcommittee on
Oversight, and Representative Sam M. Gibbons (D-FL), GAO
reviewed the status of public pension funding.
The GAO found that more than 10 million individuals were
enrolled in 34 defined benefit plans, and 2.2 million
individuals were enrolled in 17 defined contribution plans.
Participants in the defined benefit plans had accumulated more
than $1.2 million in total retirement benefits.
Differences exist in the funding of Federal Government
defined benefit plans. Most agency plans have trust funds to
account for government and employee contributions, investments,
and benefits paid. Most agency plans are underfunded, that is,
the estimated obligation for benefits exceeds plan assets. The
agency trust funds, with one exception, invest in special issue
Treasury securities, which are nonmarketable. The Treasury must
obtain the necessary money through tax receipts or borrowing to
pay plan benefits to annuitants when those benefits are due.
This financing approach enables the Federal Government to defer
obtaining the money until it is needed to pay the benefits.
Because the plan assets are invested in this way, GAO concludes
that whether this obligation is funded or unfunded has no
effect on current budget outlays.
The GAO found the 17 defined contribution plans had
investment balances totaling more than $28 billion, of which
$26 billion was held by the Thrift Savings Plan (TSP). Employee
designated contributions to the government securities fund (G-
Fund) of the TSP are invested in special-issue Treasury
securities under the same financing approach used for agency
defined benefit plans. Therefore, to pay the benefits of G-Fund
investments when they come due the Treasury must obtain the
necessary money through tax receipts or by borrowing.
b. Benefits.--This report serves as an invaluable resource
in tracking, the benefit design and funding characteristics, of
the multitude of Federal retirement systems. However, the
discussion of retirement system financing, including investing,
does not clearly present the real obligations these systems
place on the taxpayer.
Current Federal retirement systems are simply accounting
devices and not repositories of funds available to pay future
obligations. Without benefit of retirement funds invested in
instruments that generate a market rate of return, the U.S.
taxpayer bears the full burden of the annual shortfalls between
employee retirement contributions and annuity payments.
22. ``Intelligence Agencies: Personnel Practices at CIA, NSA, and DIA
Compared With Those of Other Agencies,'' March 11, 1996, GAO/
NSIAD-96-6.
a. Summary.--While chairing the Civil Service Subcommittee
of the Post Office and Civil Service Committee of the 103d
Congress, Representative Schroeder observed that employees of
the Central Intelligence Agency, the Defense Intelligence
Agency, and the National Security Agency (and a few selected
smaller organizations) are not within the jurisdiction of the
Merit Systems Protection Board or the Equal Employment
Opportunity Commission if they wish to appeal adverse
employment actions. This exemption was granted for national
security reasons. She requested that GAO compare personnel
practices in these three major intelligence agencies with
appeal rights available to other Federal employees. GAO
concluded that, although the Directors of all these agencies
retain summary removal authority in cases of national security
concern, the agencies all provide procedures that protect
employees' basic rights. These procedures are not necessarily
identical to those provided by MSPB or EEOC, but GAO noted that
it has reported difficulties with both appeals agencies. GAO
observed that, when compared with other Federal agencies, these
agencies have fewer discrimination or prohibited personnel
practice complaints, but their rates are increasing more
rapidly. The report concluded that, with the exception of a
limited number of sensitive national security cases, GAO sees
no justification for treating employees at these intelligence
agencies differently from employees at other Federal agencies.
b. Benefits.--This report provides one of the few avenues
in Federal service for comparing agencies that are subject to
EEOC and MSPB procedures to those that are not. GAO's
conclusions that basic rights of employees can be protected
through methods other than EEOC and MSPB procedures reinforced
testimony at the Civil Service Subcommittee's November 29, 1995
hearing. That hearing identified several administrative
shortcomings in current appeals procedures and provided a
foundation for reforms of the appeals processes drafted for
inclusion in the Omnibus Civil Service Reform Act of 1996.
23. ``Public Pensions: State and Local Government Contributions to
Underfunded Plans,'' March 14, 1996, GAO/HEHS-96-56.
a. Summary.--At the request of Representative Nancy L.
Johnson (R-CN), chairman of the Ways and Means Subcommittee on
Oversight, and Representative Sam M. Gibbons (D-FL), GAO
reviewed the status of public pension funding of State and
local governments. Although Federal pension laws impose funding
requirements on private pension plans, they impose no such
requirements on State and local plans.
GAO found that 75 percent of State and local government
pensions surveyed were underfunded; 38 percent were less than
80 percent funded. State and local governments with underfunded
pensions plans may face difficult budget choices in the future
if they do not work toward full funding. Their future taxpayers
will face a liability for benefits earned by current and former
government workers, leaving these governments to choose between
reducing future pension benefits or raising revenues.
b. Benefits.--This report begins to identify the danger of
unfunded pensions for State and local governments.
Unfortunately, the GAO does not definitively refute the myth
that government entities (be they Federal, State, or local)
need not fully fund their pension systems since they will not
become insolvent or cease to operate. GAO also erroneously
attempts to differentiate the implications of Federal
retirement underfunding from that of State and local government
underfunding. The consequences of underfunding Federal, State
and local government employee pensions are the same. The
practice simply shifts the full cost of government payrolls
from one generation of taxpayers to another. The GAO report
therefore fails to provide an objective analysis of the true
problem of underfunding of governmental pension plans.
24. ``U.S. Geological Survey and Office of Personnel Management RIFs,''
March 21, 1996, GAO/GGD-96-83R.
a. Summary.--The U.S. Geological Survey (USGS) conducted an
extensive reduction in force (RIF) in its Geologic Division in
October 1995. This RIF was the culmination of an extensive
planning period during which the Geologic Division had reviewed
and revised the competitive levels of potentially-affected
organizations, revised position descriptions of employees,
assigned 97.2 percent of the scientific positions within the
Division to single-person competitive levels, ostensibly based
upon the unique skills and qualifications of these employees.
The Office of Personnel Management (OPM) had also conducted a
RIF which was preceded by a reorganization of its Headquarters'
components. This reorganization was related to a decision to
``privatize'' OPM's Workforce Training Services as part of the
``Reinventing Government'' proposals in the President's 1996
budget. Chairman Mica asked GAO to review both of these RIFs
and to ascertain their consistency with civil service
procedures.
USGS officials informed GAO that their need for workforce
reductions was related to funding shortages rather than
workforce reduction initiatives. OPM regulations permit single-
person competitive levels, and the Merit Systems Protection
Board has upheld their use in previous cases. USGS officials
began to anticipate RIF requirements in 1994, and they
contended that their previous classifications were no longer
consistent with OPM regulations. Even the old system had
resulted in 66 percent of the Division's employees being placed
in single-person competitive levels. USGS had consulted with
OPM on the extensive use of single-person competitive levels,
and reported to GAO that OPM had voiced no concerns about the
procedures.
OPM informed GAO that its reorganization responded to
administrative and operational concerns expressed by Director
James King prior to the President's budget decisions. The
administrative reorganization became effective in February
1995, and the transfer of the training function to the U.S.
Department of Agriculture Graduate School was not completed
until June 1995. The loss of revenues that would be associated
with the separation of the training function was claimed to be
the primary reason for this RIF.
b. Benefits.--This review of RIF procedures enabled the
Civil Service Subcommittee to identify a range of concerns
related to workforce reductions, and officials from the
agencies were subsequently invited to testify at a May 23,
1996, hearing on downsizing strategies involved in the
Administration's efforts to ``reinvent'' government.
25. ``Civilian Downsizing: Unit Readiness Not Adversely Affected, But
Future Reductions a Concern,'' April 22, 1996, GAO/NSIAD-96-
143BR.
a. Summary.--At the request of Representative Herbert H.
Bateman, chairman of the Committee on National Security's
Subcommittee on Military Readiness, GAO reviewed civilian
workforce reductions in the Department of Defense to ascertain
their impact on the Nation's military readiness. GAO reported
that between fiscal years 1987 and 1995, the Department of
Defense (DOD) reduced its civilian workforce by approximately
284,000 personnel, or about 25 percent. During the same period,
its active and reserve military components were reduced by
about 26 percent, or 861,000 military personnel. After visiting
installations, reviewing unit readiness reports, and
interviewing civilian and military officials, GAO concluded
that civilian downsizing had little impact on military
readiness, but some unit leaders expressed concerns about the
impact of future downsizing on operational readiness. GAO noted
that downsizing decisions were not guided by comprehensive,
service-wide strategies, and observed that service commands do
not have a long-term road map to guide future civilian
workforce requirements.
b. Benefits.--This report demonstrates, albeit
inadvertently, the limited impact of the National Performance
Review (NPR) on DOD downsizing. Although GAO can trace the
downsizing to its 1987 start, the report notes that the NPR
``bottoms up'' review was not initiated until 1993. Most of the
reduction plans originated with the Base Realignment and
Closure Commission. The NPR recommendations include adding
``reinventing government'' initiatives (such as doubling the
supervisor/worker ratio from 1:7 to 1:14) are among the future
recommendations that, GAO observes, cause some concern among
base commanders. The report, however, is merely a compilation
of views of DOD officials, civilian and military, and has no
independent assessment of future operational (hence, staffing
and other support) requirements.
26. ``Public Pensions: Section 457 Plans Pose Greater Risk Than Other
Supplemental Plans,'' April 30, 1996, GAO/HEHS-96-38.
a. Summary.--At the request of Representative Nancy L.
Johnson (R-CN), chairman of the Ways and Means Subcommittee on
Oversight, and Representative Sam M. Gibbons (D-FL), GAO
reviewed the financial security of amounts deferred by
participants into State and local government supplemental
pension plans.
Many State and local government employees are taking steps
to increase their future retirement benefits by deferring some
of their wages to supplemental pension plans, known as salary
reduction arrangements or plans. The amounts deferred or
contributed to some of these plans, however, may be at risk.
Due to limitations on 401(k) plans and 403(b) plans, most State
and local government employees have only Section 457 plans
available to augment their regular government pension.
Section 457 plans are unfunded deferred compensation plans.
In order to avoid salary deferrals from being taxed under these
rules the amounts deferred must remain the property of the
sponsoring employer and be available to the general creditors
of the employer. Although 457 plans are considered unfunded
because salary deferrals are not held specifically for
individual employees, most employers invest the salary
deferrals to ensure that funds will be available when the time
comes to pay benefits.
The report's principal conclusion is that a Section 457
plan's assets could be subject to a risk of loss in the event
the government entity sponsoring the plan becomes insolvent or
bankrupt. The report notes that Section 401(k) plan assets, in
contrast, must be placed in trust for the exclusive benefit of
employee participants, and therefore are not subject to this
type of risk. The report suggests that public sector employees
should be afforded the same protections as Section 401(k) plan
participants and, thus, recommends that Congress consider
amending Section 401(k) of the Internal Revenue Code to permit
State and local governments to establish 401(k) plans.
b. Benefits.--The report will, among other things, serve as
an ongoing and important reference tool for the subcommittee in
considering issues regarding Section 457 plans and other
deferred compensation devices. Particularly useful is the
comparison detailed in the report between Section 457 plans,
which are supplemental retirement plans offered to public
employees, and Section 401(k) plans, which serve a similar
purpose for employees in the private sector.
27. ``Federal Personnel: Issues on the Need for the Public Health
Service's Commissioned Corps,'' May 7, 1996, GAO/GGD-96-55.
a. Summary.--Representatives Lamar Smith and John Kasich
requested GAO to assess whether the Public Health Service
required an officer corps, including characteristics similar to
a military-like array of compensation and benefits. GAO
reported that the PHS Corps was established in the late 1800's
with a primary mission to provide medical care to merchant
seamen. Over the years, however, these responsibilities have
expanded, and now include functions such as providing care to
Native American tribes, services in Federal prisons, and health
sciences research. GAO noted that the Corps has not been
incorporated into the military since 1952, and that the
Department of Defense has no specific plans about how the Corps
would be used in the event of future mobilizations. GAO
reviewed differences between comparable civilian employees and
the military-like pay and benefit structure of the PHS Corps
and calculated that the government could save as much as $130
million annually if Corps members were paid as civilian
employees. These savings would accrue primarily from special
pay, allowances, bonuses, Corps officers' advantage of paying
no taxes on their housing and subsistence allowances, and their
differential retirement advantages. The Department of Health
and Human Services contested this report, claiming that
converting to a civilian pay and benefits structure would incur
transition costs of as much as $575 million. GAO countered that
these costs would be incurred as a result of continuing
operations, regardless of the Corps status of PHS officials.
b. Benefits.--The report documents opportunities for
reducing the Federal Government's human resources costs and
demonstrates the willingness of the affected agencies to
protect differential benefits for its employees.
28. ``Federal Downsizing: The Costs and Savings of Buyouts Versus
Reductions-In-Force,'' GAO/GGD-96-63, May 14, 1996.
a. Summary.--As part of the Civil Service Subcommittee's
continuing efforts to monitor workforce reductions affecting
Federal employees, Chairman Mica requested the GAO to compare
the costs and savings of alternative methods of cutting
employment at Federal agencies. This report distinguished the
multitude of cost factors involved in different downsizing
strategies, and estimated the 5-year savings associated with
the different options. GAO argued that buyouts usually result
in greater savings, because retirement-eligible employees who
accepted the buyouts averaged salaries of $48,000, where RIF'd
employees averaged salaries of only $29,495. The accuracy of
this estimate, therefore, would depend upon the agency
eliminating the position that it bought out. GAO concluded
that, where ``bumping and retreating'' occur (the situation
most commonly associated with RIFs), buyouts could generate as
much as $60,000 in additional savings for agencies over a 5
year period. RIFs, however, generate more savings than buyouts
if either the amount of ``bumping and retreating'' is
controlled or the RIFs eliminate positions of retirement-
eligible employees. RIFing retirement-eligible employees helps
to reduce costs because retirement-eligible employees are not
eligible for severance pay.
Although GAO's text emphasized the potential for greater
savings using buyouts rather than RIFs, for each of the
separation techniques compared, buyouts generate lower savings
than RIFs when ``bumping and retreating'' does not take place.
For instances where retirement eligible employees are RIFd, the
absence of ``bump and retreat'' results in almost $22,000 more
savings than the costs of buyouts. For early retirement
eligible employees, a RIF without ``bumps and retreats'' yields
nearly $30,000 additional savings over a 5 year period when
compared to the savings that could be realized through buyouts.
b. Benefits.--This review has spurred several additional
inquiries from the subcommittee in its efforts to evaluate
alternative methods of workforce reduction. The subcommittee
documented, through follow-up research with agencies that had
conducted RIFs, that when RIFs are used to eliminate regional
offices or terminate programs (as occurred at the General
Accounting Office and the Office of Personnel Management),
``bump and retreat'' costs are eliminated from considerations,
and buyouts are unlikely to produce the most effective results.
This study also used the salary of the incumbent accepting the
buyout as the basis for calculating estimated savings. Other
research conducted by the subcommittee, and data and testimony
provided by the Office of Management and Budget and the Office
of Personnel Management have demonstrated that buyouts
implemented under the Federal Workforce Restructuring Act of
1994 were not directly linked to the elimination of positions.
Thus, if senior officials accepted buyouts but positions
eliminated were of lower-graded or lower-salaried employees,
the buyouts could not achieve the savings forecast using GAO's
model. This finding supported efforts to strengthen the
planning requirements that would be involved in any future
buyout authority.
29. ``Commodity Programs: Freedom-to-Farm Approach Will Reduce USDA's
Personnel Costs,'' GAO/RCED-96-116, May 22, 1996.
a. Summary.--The Federal Agricultural Improvement and
Reform Act of 1996 included provisions that would reduce
Federal controls on farmers receiving government support for
their crops. House Budget Committee Chairman John Kasich asked
GAO to review the level of personnel reductions and to estimate
the cost savings associated with this reform legislation. GAO
concluded that this farm bill will result in personnel
reductions at the Department of Agriculture, but probably less
than would have occurred if the original provisions of the bill
had remained in place. Under provisions of H.R. 2195 as
enacted, the Farm Services Agency will reduce staff years by
1,823 and save approximately $332 million between 1997 and
2002. This would represent a 9 percent reduction in staff
years. As introduced, this authorizing legislation would have
resulted in a 13 percent reduction in staff years, most of
which would have resulted from transferring certain functions--
such as enrolling farmers for crop insurance--to the private
sector. GAO estimated that 1,495 of these work years would be
eliminated among county employees performing functions such as
maintenance of farm records, compliance activities, and
payments under commodity programs, while 328 work years would
be reduced from Washington headquarters.
b. Benefits.--This report outlines the personnel reductions
associated with program changes at a single agency, and
identifies personnel consequences of legislative options. The
Agency's comments, however, indicate that it might re-evaluate
the impact of the provisions as it reviews the law after
enactment.
30. ``Federal Downsizing: Delayed Buyout Policy at DOE is
Unauthorized,'' GAO/T-GGD/OGC-96-132, June 11, 1996.
a. Summary.--The Federal Workforce Restructuring Act of
1994 had authorized agencies to pay employees buyouts. Agencies
were allowed to offer such payments through March 31, 1995,
although separation of employees taking the buyouts could be
deferred for as long as 2 years if the head of the agency
certified the need for employees to remain on the payroll. At
the Civil Service Subcommittee's May 23, 1996, hearing on the
administration's implementation of the Federal Workforce
Restructuring Act of 1994, the Office of Management and Budget
admitted that it had relied upon a legal opinion developed by
the Department of Energy to ``reauthorize unused buyouts.'' At
the subcommittee's request, the General Accounting Office
analyzed the Department of Energy's legal opinion and concluded
that the administration's use of it to enable agencies to offer
``delayed buyouts'' was inconsistent with the authority granted
in the law.
b. Benefits.--This testimony supported the Civil Service
Subcommittee's efforts to end the administration's illegal
extension of buyouts and ensured a congressional role in any
further buyout activities.
31. ``Reemployment of Buyout Recipients,'' GAO/GGD-96-102R, June 14,
1996.
a. Summary.--Representative Frank Wolf requested GAO to
investigate allegations that employees at several agencies had
accepted buyouts then returned to work for Federal agencies,
either as direct employees or as contractors. For this study,
GAO reviewed buyouts at the Department of Transportation and
the National Aeronautics and Space Administration. These
agencies awarded nearly 20 percent of buyouts used by
nondefense agencies. The Federal Aviation Administration, which
was already investigating reemployment violations as a result
of a DOT Inspector General's report, was excluded from the
study. Legislation authorizing the Department of Defense buyout
program did not contain the 5-year bar on Federal reemployment
included in the Federal Workforce Restructuring Act of 1994.
GAO's review of the OPM Central Personnel Data File (CPDF)
system revealed 394 buyout recipients who had gained new
employment with a Federal agency, but only 68 of them were
subject to the Restructuring Act's reemployment restrictions.
GAO found that most of the reemployed buyout recipients were
hired under limited term appointments. GAO further found that
only eight agencies had inquired about the waivers of repayment
requirements, and only two waivers had actually been requested
of OPM. Most of the agencies involved had instituted management
controls to implement the reemployment restrictions, and GAO
found little evidence of Federal employees returning to the
payroll after accepting buyouts.
b. Benefits.--This report continued GAO's role monitoring
the implementation of buyouts with sufficient publicity that
both appropriators and authorizing committees of the Congress
become aware of any abuses taking place in the program. This
report indicates that some obvious abuses have been averted in
implementing the law.
32. ``Cost Analysis: Privatizing OPM Investigations,'' GAO/GGD-96-121R,
July 5, 1996.
a. Summary.--The Office of Personnel Management implemented
a recommendation developed by the National Performance Review
to convert its Federal background investigations from a
reimbursable function performed within the agency into a
function performed under contract with a private corporation.
The private corporation would be an employee stock ownership
program formed with former OPM employees. The Civil Service
Subcommittee conducted hearings on this transition on June 14
and 15, 1995, and during the course of those hearings the
Office of Management and Budget conceded that no serious cost
analysis had been done before pursuing this conversion. After
that hearing, OPM's trustee contracted for a professional
estimate of projected savings. At the request of both
authorizing and appropriations subcommittees, GAO reviewed the
consultant's projected costs and savings, and recommended
revision of the allocation of retirement savings associated
with this transition.
b. Benefits.--This analysis provided for an additional
review of the savings projected by the Office of Personnel
Management and the Office of Management and Budget in promoting
this National Performance Review initiative. This report can
serve as a baseline for comparing eventual savings from the
contract.
33. ``USGS Reduction in Force,'' GAO/GGD-96-155R, August 1, 1996.
a. Summary.--Chairman Mica requested GAO to review
reductions in force at the U.S. Geological Survey's Geologic
Division to ascertain the extent to which veterans' preference
was consistent with legal requirements, to review the effect of
changing position descriptions on the definition of single-
person competitive levels and eventual impact on the RIF,
including the number and types of positions that were revised.
GAO's analysis revealed that veterans fared better than
nonveterans in terms of retention or placement into alternative
positions. USGS apparently educated veterans about the
importance of their status in a RIF and provided ample
opportunity for documenting that status. GAO found that the
USGS's development of retention registers appeared to have
complied with statutory requirements. GAO's efforts to review
revisions of official personnel files centered on
administrative changes (correction of pay, grade,
classification series information) rather than modifications of
substantive professional qualifications. GAO's review indicated
that the USGS procedures appeared to be generally consistent
with legal requirements.
b. Benefits.--This review provided the subcommittee with
some insight into the RIF procedures used by the Geological
Survey and the surrounding work influenced provisions of the
Veterans Employment Opportunities Act of 1996 that provide
additional protections for veterans in the event of reductions
in force.
34. ``401(k) Pension Plans: Many Take Advantage of Opportunity to
Ensure Adequate Retirement Income,'' August, 2, 1996, GAO/HEHS-
96-176.
a. Summary.--At the request of Representative Jim Bunning
(R-KY), chairman of the Ways and Means Subcommittee on Social
Security, the GAO reviewed the growth in 401(k) pension plans.
GAO was asked to answer the following questions: (1) What
proportion of workers are covered by pension plans and, in
particular, 401(k) pension plans? (2) How much do workers
covered by 401(k) plans contribute to their pension accounts?
(3) How do workers covered by 401(k) plans allocate their
pension account balances among various investment options?
GAO found that almost half of all workers and nearly two-
thirds of workers nearing retirement age are covered by a
pension plan. One in four workers who have pension coverage
participates in a 401(k) pension plan. On average, workers
covered by a 401(k) plan contribute about 7 percent of their
salary to their account; 80 percent also receive a matching
contribution from their employer, averaging about 5 percent of
their salary.
Many workers are responsible for directing the investment
of their 401(k) pension plan account balances. About 25 percent
of 401(k) participants invest their 401(k) funds in
conservative investments, such as bonds; another 25 percent
invest primarily in stocks; and the rest split their
investments between stocks and bonds.
b. Benefits.--This report demonstrates the importance of
planning for retirement and the role of 401(k) pension plans in
providing adequate post-employment income. Unfortunately, the
report does not address the distinct advantages defined-
contribution plans have over the more traditional defined-
benefit retirement plans. The current era of corporate
downsizing and restructuring enhances the importance of pension
portability and flexibility.
35. ``Federal Employees' Compensation Act: Issues Associated With
Changing Benefits for Older Beneficiaries,'' August 14, 1996,
GAO/GGD-96-138BR.
a. Summary.--At the request of Senator Mark O. Hatfield (R-
OR) and Senator Robert C. Byrd (D-WV), the chairman and ranking
member of the Senate Appropriations Committee, and
Representative Bob Livingston (R-LA) and Representative David
Obey (D-WI), the chairman and ranking member of the House
Appropriations Committee, the GAO reviewed possible changes to
the Federal Employees' Compensation Act (FECA).
Currently, FECA allows the receipt of workers' compensation
benefits by beneficiaries who are at or beyond retirement age;
possible changes could reduce benefits they receive. The GAO
found that older FECA beneficiaries make up a high percentage
of cases on the long-term rolls and account for a substantial
portion of the FECA benefits paid for long-term compensation.
Sixty percent of the approximately 44,000 long-term
beneficiaries receiving compensation benefits in June 1995 were
55 years of age or older; 37 percent were age 65 or older. Of
the $1.28 billion in compensation benefits paid in 1995, $947
million went to long-term beneficiaries who would most likely
be affected by a change in benefits for older beneficiaries.
About $611 million (64 percent) of the compensation benefits
paid to these beneficiaries went to those age 55 and over.
b. Benefits.--The report helps identify the widely
divergent views held by proponents and opponents of changing
benefits for older FECA beneficiaries. The report will serve as
a useful resource to subcommittee staff as we pursue
comprehensive reform to FECA. The FECA program provides a level
of benefit to injured Federal employees that is much more
generous than is available at the in the private sector. The
government's FECA costs are too high, thus putting an added
burden on the taxpayer and agencies' program budgets.
36. ``Private and Public Prisons: Studies Comparing Operational Costs
and/or Quality of Service,'' August 16, 1996, GAO/GGD-96-158.
a. Summary.--The Department of Justice had announced plans
to add two private prisons to the facilities used as part of
the Bureau of Prisons' system, but these plans were deferred
while the Department studied potential cost savings and
operational issues in greater detail. GAO initiated this review
to ascertain changes in the academic and professional studies
of private prisons since 1991, when it had last reported on the
topic. GAO found five major studies that compared private and
public prisons in different States. Three studies showed no
significant difference in costs, where the other two studies
differed about the advantages of private and public prisons.
Although GAO found some benefit from the other studies, it
identified methodological flaws that limited their use for
developing lessons for other jurisdictions. In most cases,
because decisions to privatize prisons are often related to
other policy concerns (for example, low-risk, rather than
maximum security, facilities are most likely to be privatized),
comparisons between similar institutions are difficult, and the
studies usually cannot be generalized. The findings from these
studies were not sufficiently consistent to permit reliable
generalizations from them. Quality measures were very difficult
to develop, and comparison could not be done from the available
materials.
b. Benefits.--GAO's outside reviewers considered the study
to be a valuable contribution to criminology studies, and
suggested that the questions asked should be linked to several
other questions that GAO described as ``philosophical,'' and
beyond the scope of their review. The study did describe
systematic approaches that could make future studies more
comparable for analytical purposes, and thus provide a better
foundation for policy decisions.
37. ``Privatization of OPM's Investigations Service,'' GAO/GGD-96-97R,
August 22, 1996.
a. Summary.--The Civil Service Subcommittee initiated
oversight of the Office of Personnel Management's decision to
privatize its Office of Federal Investigations by creating an
employee stock ownership program. GAO had testified at hearings
on June 14 and 15, 1995, and this report follows up on
deficiencies in OPM's planning process identified during those
oversight hearings. OPM awarded a sole source contract for the
conduct of background investigations to US Investigations
Services, Inc., on April 8, 1996. Although OPM had assured the
Civil Service Subcommittee that full protection would be
provided for files covered by the Privacy Act, to the extent of
pledging to create a ``firewall,'' OPM could not describe
provisions to ensure the privacy of records in July 1996. After
the ESOP was established, the Department of Energy withdrew
security clearances of background investigators because they
were no longer Federal employees. USIS employees were not
guaranteed access to State files on the National Crime
Information Center (NCIC) maintained by the Federal Bureau of
Investigation, and officials in major States had not been
informed about OPM's plans for privatization of this function.
Although OPM had assured the Civil Service Subcommittee that
information gathered to perform work for Federal agencies would
not be used for USIS'' non-federal work, OPM appears to have
allowed this mixture of effort in contract provisions.
b. Benefits.--This report demonstrates continuing
inadequacies in OPM's plans for conversion of this segment of
its workforce. Deficiencies in the planning process have
carried into the initial phases of operations, jeopardizing the
level of service required by Federal agencies that need
background investigations to ensure the suitability, security,
and public trust qualifications of Federal employees.
38. ``Employment and Buyout Incentives,'' GAO/GGD-96-168R, August 22,
1996.
a. Summary.--The Civil Service Subcommittee requested GAO
to review instances where agencies had paid the same employee
both a separation incentive (``buyout'') and an incentive to
remain within government employment, either a retention bonus
or a relocation bonus. Through a review of records in OPM's
Central Personnel Data File, GAO determined that 52 persons at
the Department of Defense and seven other Federal agencies had
received both types of payments. The Department of Justice
reported to GAO that the one person who had received both a
relocation bonus and a buyout had repaid the relocation bonus.
b. Benefits.--Although there would appear to be conflicts
in statutory purposes for an agency to pay the same employee
both a retention bonus and a separation incentive, the Federal
Workforce Restructuring Act of 1994 contained no prohibition on
these contrasting payments. The subcommittee subsequently
learned that the Export-Import Bank had awarded three retention
bonuses after it had approved buyouts for these employees. As a
result of information provided in this report, the subcommittee
chairman was able to write to the Secretary of Defense and
secure modification of management practices to prevent such
payments in the future. The subcommittee has also developed
standard buyout language for future legislative use that
includes prohibition of buyout payments to persons who received
retention incentives.
39. ``Federal Downsizing: Better Workforce and Strategic Planning Could
Have Made Buyouts More Effective,'' GAO/GGD-96-62, August 26,
1996.
a. Summary.--Civil Service Subcommittee Chairman Mica
requested that GAO conduct a comprehensive review of Federal
workforce reductions under the Federal Workforce Restructuring
Act of 1994. This review examined whether the act's objectives
were being achieved, whether the workforce reductions as
implemented were consistent with the administrative and
supervisory targets established by the National Performance
Review, to assess the demographic impact of the buyouts, to
review agencies' perspectives on buyouts as a downsizing tool,
and whether the workforce reductions were having any effects on
agencies' performance. This report documented that most buyouts
came from the Department of Defense, a pattern consistent with
the overall Federal workforce reductions. The administration,
however, did not achieve the targeting of selected
administrative and supervisory occupations recommended by the
NPR. Instead, agencies had reduced the NPR objectives in their
plans, then failed to achieve the level of reductions in these
categories included in their plans. As a result, some of these
administrative and supervisory positions had actually increased
as a portion of the Federal workforce. Although GAO reported
that the portions of the Federal workforce made up of women and
minorities had increased slightly since the enactment of the
law, GAO did not provide details about the impact of the
reductions on the portion of college graduates, the geographic
distribution, or other demographic descriptions of the Federal
workforce that might enable assessment of the effects of these
reductions on the quality of the Federal workforce. GAO
concluded that many of the unintended consequences of
downsizing could have been mitigated had agencies done adequate
strategic and workforce planning.
b. Benefits.--This report provides an extensive review of
Federal agencies' downsizing efforts. It demonstrates that
agencies have failed to achieve NPR workforce reduction targets
in many of the administrative and supervisory areas, and
provides a baseline for further oversight of the Federal
workforce reduction efforts.
40. ``Debt Ceiling: Analysis of Actions During the 1995-1996 Crisis,''
(GAO/AIMD-96-130) August 30, 1996.
a. Summary.--This report reviewed actions taken by the
Department of the Treasury to manage national accounts during
the period from November 1995, through March 1996, when major
Federal accounts were manipulated to evade the restrictions
imposed by the Federal debt ceiling. Among the accounts used by
the Department of the Treasury to facilitate Federal borrowing
that would not be restricted by the legal debt ceiling were the
Civil Service Retirement and Disability Fund (CSRDF) and the
Federal Retirement Thrift Investment Fund's holdings of Federal
nonmarketable securities, commonly known as the ``G Fund.''
After declaring a ``debt suspension period'' on November 15,
1996, Secretary of the Treasury Robert Rubin directed three
measures to enable the Government to continue borrowing money
in ways that would not be subject to the debt ceiling. These
included redeeming nonmarketable securities held by the CSRDF,
suspending further investments in those accounts as receipts
continued to come into the Treasury from employees' payroll
deductions, and suspending further investments in the G Fund.
GAO concluded that the Treasury's actions resulted in the
Government incurring $138.9 billion in obligations that would
normally have been subject to the debt ceiling. GAO reported
that the Treasury had fully restored the CSRDF's $995 million
and the G Fund's $255 million interest losses, but observed
that additional statutory action would be needed to restore
$1.2 million taken from the Exchange Stabilization Fund. GAO
concluded that these actions were consistent with provisions of
Chapters 83 and 84 of Title 5 that were enacted in 1986 to
enable more flexible management of Federal debt.
b. Benefits.--This report demonstrates that the Secretary
of the Treasury has been provided legislative authority that
enables the vitiation of legal restrictions on the national
debt. The Treasury's actions during the debt ceiling
demonstrated ambiguities in the term ``debt suspension period''
that enabled the Secretary of the Treasury to borrow billions
of dollars beyond the legal ceiling. The Secretary's actions
focused public attention on deficiencies in the law, but the
GAO review concentrated on the financial manipulations to the
omission of some of the key legal issues related to enforcing
limitations on the national debt.
41. ``Federal Contracting: Comments on S. 1724, The Freedom From
Government Competition Act,'' September 24, 1996, GAO/T-GGD-96-
169.
a. Summary.--GAO observed that OMB Circular A-76 has been
the policy guidance governing competition related to Federal
contracting since 1967. Primarily because Departments and
agencies created in the past 30 years have consistently relied
upon the private sector for commercially-available goods and
services, Federal agencies now spend about $65 billion to
purchase goods and $116 billion on services, as compared to
personnel costs of approximately $115 billion for the 2 million
person Federal workforce. S. 1724 would have expanded
significantly government's role in purchasing, rather than
providing, any goods and services that were not defined as
``inherently governmental,'' related to national security, or
related to ``unique'' agency needs. GAO testified that S. 1724
would require contractual procurement even when the government
might be able to provide the service cheaper internally, and
opined that in some cases the bill might result in private
procurement in the absence of effective competition. GAO also
expressed concerns about the 6-year transition period during
which agencies would be required to convert to contract,
contending that the deadlines might be unrealistic. GAO remains
concerned that conversion to contract requires more extensive
contract management capabilities than most agencies currently
possess. These contract management positions were targeted in
the National Performance Review's workforce reduction strategy,
and conversion to contract might be more difficult if these
employees no longer serve in agencies.
b. Benefits.--This study reiterates GAO's long concerns
about contracting. It draws from extensive prior testimony on
the topic, and served to remind the committee of these
concerns.
42. ``Social Security: Union Activity at the Social Security
Administration.'' October 2, 1996, GAO/HEHA-97-3.
a. Summary.--Representative Jim Bunning, chairman of the
House Ways and Means Subcommittee on Social Security, asked GAO
to examine union involvement and activity within the Federal
Government. Given the budget constraints facing Federal
agencies, Chairman Bunning expressed concern about the amount
of time and expense devoted to union activities--which is paid
for by the Federal Government, and ultimately, the taxpayer.
Since the early 1960's, Federal agencies have allowed
unions to conduct union-related activities during official duty
hours. Such activities generally include representing employees
in complaints against management; bargaining over changes in
working conditions; and negotiating union contracts with
management. The use of ``official time,'' generally defined as
authorized paid time off from assigned duties for union
activities, has become a routine method of union operation in
the Federal Government.
GAO has determined that the time spent on union activities
at the Social Security Administration (SSA) has grown from
254,000 hours annually, to at least 413,000 hours annually at a
cost of $12.6 million in 1995 alone, largely from SSA's trust
funds. Additionally, SSA has reported to Congress that the
number of full-time union representatives--those devoting 75
percent or more of their work time to union activities--grew
from 80 to 145 between fiscal years 1993 and 1995.
Under the terms of the current SSA union contract, which
will expire in 1999, the selection of union representatives and
the amount of time they spend on union activities is determined
by the union, without the consent of local managers. GAO
determined that over 1,800 designated union representatives in
SSA are authorized to spend time on union activities--although
most of that time is spent by SSA's 145 full-time
representatives. Some SSA field managers told GAO that problems
in managing the day-to-day operations activities are caused by
their having no involvement in deciding how much time is spent
by individuals, or who the individuals are.
The fact that agencies are not required to track official
time government wide is a major impediment in compiling
statistics on the use of official time in the Federal
Government. Hence, the amount of time spent on such activities
cannot be reported accurately, because agencies are not
obligated to capture, or report, ``official time,'' or union
activity charges. SSA reported that the agency paid for 404,000
union-activity hours in fiscal year 1995. GAO found this figure
to be lower than the actual hours spent on ``official time.''
GAO also found that in the private sector, some employers
pay employees for time spent on union activities, while others
do not.
b. Benefits.--The information contained in this report
provides documentation of the significant increase in the use
of official time during recent years. It also demonstrated
serious deficiencies in recordkeeping by some of the agencies
studied, including SSA and VA. Because of these deficiencies,
including the failure to routinely track the use of such time,
the amount of the burden official time imposes upon taxpayers
is generally unknown. This report documents how the Federal
Government pays employees' salaries and expenses for the
considerable amount of time they spend on union activities, as
well as the cost of additional support: space, supplies,
equipment, and some travel expenses.
In the current fiscal climate, the subcommittee believes
this information documenting vast expenses being incurred by
executive branch agencies is of great interest to all Members
of Congress. GAO's findings in this report were also helpful to
the subcommittee in framing issues for its own hearing on
taxpayer subsidies of Federal unions. The report also
reinforced the subcommittee's prior determination to examine
the question of official time more widely by requesting a more
extensive GAO study.
43. ``Hiring of Former IRS Employees By PBGC.'' October 2, 1996, GAO/
GGD-97-9R.
a. Summary.--After receiving several complaints of alleged
improper personnel activities at the Pension Benefit Guaranty
Corporation (PBGC), Representative John L. Mica, chairman of
the House Committee on Government Reform and Oversight
Subcommittee on Civil Service, requested that GAO investigate
whether any instances of improper hiring had occurred.
Specifically, the subcommittee was told that the current
Director of the PBGC improperly hired a number of colleagues
from his former agency, the Internal Revenue Service.
All but one of the former IRS employees had been hired by
the PBGC at the GS-13 level or above. GAO examined the official
personnel folders (OPFs) of 16 of the 17 former IRS employees
hired between March 1993 and July 1996. (The OPF of the 17th
employee, who had retired, was at the Federal Records Center
and its retrieval would have seriously delayed GAO's work.)
Based upon this review, GAO determined that 15 of these 16
employees had been hired noncompetitively. Only one competed
for her new position. In this instance, while serving as a
Visiting Actuary on a term appointment at PBGC, the employee
submitted an application for a newly created position for an
actuary within PBGC's Corporate Finance and Negotiations
Department. GAO examined the procedures followed in making
these appointments and found them in compliance with applicable
civil service rules and regulations.
During fiscal years 1992 through 1996, the number of full-
time equivalent PBGC positions was increased by a total of 25
percent.
b. Benefits.--This GAO investigation assisted the
subcommittee in discharging its oversight function by resolving
concerns that the PBGC Director improperly brought former IRS
employees with him to serve in the PBGC.
44. ``Buyout Recipients Compliance With Reemployment Provisions,''
(GAO/GGD-97-7R) October 3, 1996.
a. Summary.--In response to a request from Representative
Frank Wolf, GAO reviewed the Central Personnel Data File system
to ascertain the numbers of people who had received buyouts and
returned to Federal employment in ways that might conflict with
legislation authorizing the buyouts. GAO found a total of 68
individuals who had regained Federal employment after accepting
a buyout payment. Only 11 of those incidents appeared to
conflict with legal restrictions on post-buyout Federal
employment. In 20 instances, individuals had repaid the buyout
or were doing so through installment payments. More than 25 of
the reports indicated potential data difficulties in the CPDF.
OPM had waived the repayment requirement in only one case.
b. Benefits.--This report reflects personnel records of
more than 87,000 buyouts, indicating that the legal
restrictions upon re-employment after accepting a buyout have
had their intended effect. Very few individuals are returning
to Federal employment after taking the buyouts, and those who
do either enter into repayment programs or secure the waivers
necessary to comply with the law.
45. ``Private Pensions: Most Employers that Offer Pensions Use Defined
Contribution Plans,'' October 3, 1996, GAO/GGD-97-1.
a. Summary.--At the request of Representative John L. Mica
(R-FL), chairman of the Subcommittee on Civil Service, the GAO
reviewed the approaches private employers are using to provide
retirement benefits to their employees and the extent to which
these approaches may be changing.
Employer-sponsored pension plans, in combination with
Social Security and personal savings, provide millions of
retirees and their families with retirement income. Employers
can provide these benefits using two basic types of plans--
defined benefit (DB) or defined contribution (DC) pension
plans.
For a DB plan, the employer determines retirement benefit
amounts for individual employees using specific formulas that
consider certain factors, such as age, years of service, and
salary levels. Employers bear the full responsibility and risk
of providing sufficient funding to guarantee that the benefits
promised by the formulas will be paid. The amount an employer
must contribute to a DB plan can vary from year-to-year
depending on changes in areas such as workforce demographics or
investment earnings.
For a DC plan, the employer establishes an individual
account for each eligible employee and generally promises to
make a specified contribution to that account each year.
Additional employee contributions are also allowed and
sometimes required. The employee's retirement benefits depend
on the total of employer and employee contributions to the
account as well as the investment gains and losses that have
accumulated at the time of retirement. Therefore, the employee
bears the risk of whether the funds available at retirement
will provide a sufficient level of retirement income.
Private employers are not required to provide their
employees with pension benefits; however, those employers that
do so must meet certain minimum legal standards. The Employee
Retirement Income Security Act of 1974 (ERISA) requires that
private employers manage pension plan funds prudently and in
the best interests of participants and their beneficiaries,
that participants be informed of their rights and obligations,
and that there be adequate disclosure of the plan's terms and
activities. For DB plans only, ERISA created a Federal
insurance program financed primarily by employer-paid premiums
to guarantee the payment of pension benefits when an
underfunded DB plan is terminated.
The GAO found that in 1993, 88 percent of private employers
with single-employer pension plans sponsored only DC plans.
This represents a sizable increase over 1984 when 68 percent of
private employers reported they had only DC plans. From 1984 to
1993, the percentage of employers that offered only DB plans
decreased from 24 to 9 percent, and those employers offering
both DC and DB plans decreased from 8 to 3 percent. The growth
in DC plans occurred across all employer sizes and industries.
The GAO reported a variety of possible explanations for why
employers might prefer DC over DB plans. These factors included
increasingly complex and burdensome government regulations for
DB plans, a surge in the number of employers terminating DB
plans to acquire capital assets, and employees' growing
preference for pension benefits that they can retain, when they
change jobs.
b. Benefits.--This report highlights the clear trend
throughout the private sector toward DC retirement plans. The
advantages of the DC plans over the traditional DB retirement
plans are substantial for both employers and employees. The GAO
study will be useful as the committee considers changes to the
structure of Federal employee retirement plans.
The current Federal retirement system suffers from a
history of fiscal practices that relied on the deferral of the
cost of annuities to generations of future taxpayers. In 1997,
the Federal Government will pay $41.3 billion in pension
benefits to Federal annuitants. The government will receive
approximately $10 billion from employee payroll deductions and
from cash contributions from the U.S. Postal Service. The
General Treasury will make up the difference between receipts
and payouts--over $30 billion.
Because of the way Federal pensions are funded, the
Treasury will pay a growing share of annuity costs in the
future. The projections in the Annual Report of the U.S. Office
of Personnel Management indicate that by the year 2000, the
Treasury share of annuities will grow from $40 billion per year
to $60 billion in 2010 and over $150 billion per year by the
year 2030. According to the Budget for fiscal year 1997
submitted by the Clinton administration: ``From 1960 through
1995, CSRDF [Civil Service Retirement and Disability Fund]
payments to the public have exceeded its income from the public
by $408 billion.''
Given the annual funding shortfalls in the retirement
system, it may be necessary to close the current Federal
retirement system to new employees. A new retirement system for
future employees can be created relying on defined
contributions and consistent with private sector practices. By
investing the funds in commercial investments the Federal
Government can provide its employees with an adequate
retirement benefit, while exercising fiscal constraint.
District of Columbia Subcommittee
1. ``District's Workforce, Annual Report Required by the District of
Columbia Retirement Reform Act,'' March 1996, GAO/GGD-96-95.
a. Summary.--This report provides comments on the actuary's
report on the disability retirement rate of District of
Columbia police officers and fire fighters. The act provides
for annual Federal payments to the District of Columbia Police
Officers and Fire Fighters' Retirement Fund. These payments
however, are reduced when the disability retirement rate
exceeds an established limit. This is done to encourage the
District government to control retirement costs.
b. Benefits.--The actuary was engaged by the District of
Columbia Retirement Board (1) to determine the 1995 disability
retirement rate for District police officers and fire fighters
hired before February 15, 1980; (2) to examine if the rate
exceeds eight-tenths of 1 percentage point; and (3) to prepare
the annual report required by the act. Reviews of the actuary
report and other relevant data conclude that no reduction is
required in the fiscal year 1997 Federal payment to the
District's Police Officers and Fire Fighters' Retirement Fund.
2. ``District of Columbia Information on Health Care Costs,'' April
1996, GAO/AIMD-96-42.
a. Summary.--This report provides baseline information on
the District of Columbia's health care system to aid in
evaluation of the various restructuring proposals the District
is considering in light of rising health care costs, limited
resources, and pending legislative changes. Recent studies on
the District's health care system have concluded that the
District's health care peoblems are aggrevated by social
factors, such as high rates of poverty, crime, substance abuse,
and unemployment in the city. The report looks at these factors
in order to analyze the District's health care budget.
b. Benefits.--The report conducts a cost-benefit analysis
of the District's health care system and concludes the
following: (1) the District does not collect much of the
specific cost information, which is considered vital for
managing and measuring Medicaid; (2) many of the District's
hospitals are in disrepair and costs to repair were estimated
at $119 million in 1985; (3) in the fiscal year, 1994, D.C.
General reported nearly $78 million in uncompensated care. As a
result of these factors, the costs of D.C. health care is
increasing. These findings help facilitate the various
reconstructuring propasals of the District's health care
system.
3. Testimony--``District Government Information on its Fiscal
Condition,'' July 19, 1996, GAO/T-AIMD-96-133.
a. Summary.--This testimony reviewed the District of
Columbia's financial condition. The report focuses on the
District's cash position at the end of fiscal year 1995, as
adjusted through March 31, 1996. The report discusses financial
and budget trends in the District's revenue flows and expense
patterns, comparing and contrasting the District's historical
experience through fiscal year 1995 with its enacted and
proposed budgets for fiscal years 1996 and 1997.
Where unusual trends were identified, such as discrepancies
in the amounts of the District's operations, GAO met with
District officials to determine the reasons for these
differences. In addition, GAO conducted reviews detailing
underlying supporting information and documentation to verify
that the explanation provided was supported. GAO also reviewed
expenses reported during the 1996 fiscal year, to ensure that
the trends identified in GAO's analysis through the fiscal year
ended 1995 were still accurate.
b. Benefits.--GAO performed an analysis of the District of
Columbia's cash and overall financial condition. In order to
understand the District's financial predicament, GAO
interviewed several key members of the city's control board and
current and former government officials. In addition, GAO
reviewed what actions New York City and Philadelphia and their
respective boards took to respond to their respective cash
shortages. This information aided the District of Columbia
Financial Responsibility and Management Assistance Authority's
efforts to resolve financial and management problems facing the
District.
Government Management, Information, and Technology Subcommittee
1. ``Status of Open Recommendations: Improving Operations of Federal
Departments and Agencies,'' January 1995, GAO/OP-95-1.
a. Summary.--In fiscal year 1994, the General Accounting
Office (GAO) made 1,450 recommendations. More importantly,
about 4,400 GAO recommendations made during the past 5 years
have been implemented. This report summarizes the status of all
GAO recommendations that have not been fully implemented and
highlights some of the key ones.
b. Benefits.--The report is used for oversight, both of GAO
and other agencies and programs. It provides information about
previous GAO recommendations and a basis for future requests.
2. ``Federal Office Space: More Businesslike Leasing Approach Could
Reduce Costs and Improve Performance,'' GAO/GGD-95-48.
a. Summary.--The GSA has a virtual monopoly over the
provision of Federal office space. GSA now spends $2 billion
annually for leased space and projects. These costs will rise
to $3 billion by 2002 unless the ratio of federally owned to
leased space is increased. Also, Federal agencies have been
dissatisfied with GSA's monopoly and the amount of time GSA
takes to deliver requested space. GAO concludes that a more
businesslike approach to leasing could reduce costs and improve
performance. GAO makes several recommendations to streamline
GSA's leasing process, making it less costly and time
consuming, more responsive to the needs of Federal agencies,
and a better value for taxpayers.
b. Benefits.--The subcommittee has jurisdiction over the
GSA and has a responsibility to monitor its activities.
Implementation of the recommendation could result in savings to
the Government.
3. ``The Chief Financial Officers Act: A Mandate for Federal Financial
Management Reform,'' GAO/AFMD-12.19.4.
a. Summary.--Overall, executive branch agencies are making
progress in implementing the Chief Financial Officers Act
(CFO). This landmark legislation seeks to (1) provide Congress
and agency managers much more reliable financial, cost, and
performance information; (2) dramatically improve financial
management systems and controls to eliminate waste, fraud,
abuse, and mismanagement and to better protect the Government's
assets; and (3) establish effective financial organizational
structures to provide strong leadership into the 21st century.
The remaining problems are difficult, however, and much remains
to successfully implement the act--especially in regard to
improving the quality of financial information and the
underlying financial systems and controls, which are in serious
disrepair today. The Comptroller General's statement outlines
key areas in which progress is being made and discusses
critical implementation issues that need to be fully
confronted.
b. Benefits.--The subcommittee has oversight over the CFO
Act and the GAO report highlights areas that need to be
monitored more closely.
4. ``Information Technology: A Statistical Study of Acquisition Time,''
GAO/AIMD-95-65.
a. Summary.--The Federal Government spends upwards of $25
billion each year on information technology. Too often,
however, this investment falls short in improving service,
increasing efficiency, or lowering costs. This lack of success
can be traced to several factors, including: (1) ineffective
management practices for proposing, selecting, and controlling
technology investments; (2) not defining outcomes in terms of
quality, delivery and cost; and (3) poorly managing the
acquisition process. This report focuses on the third problem
area. GAO discusses how various factors, such as procurement
amount, size, contract type, bid protests, and the acquisition
method, affect the length of time to award a contract.
b. Benefits.--The report will assist the subcommittee in
its oversight responsibilities. The subcommittee is planning a
series of hearings on information technology and the report is
helpful in giving background information for the hearings.
5. ``Comptroller General's 1994 Annual Report,'' Received April 7,
1995.
a. Summary.--In fiscal year 1994, GAO prepared 1,252 audit
and evaluation products, including 901 reports to Congress and
agency officials, 129 congressional briefings, and 222
congressional testimonies delivered by 77 GAO executives. GAO
also issued over 3,000 legal decisions.
The selected reports and testimonies summarized reflect the
broad range of issues GAO addressed during the year. A list of
GAO witnesses is also included in the report.
b. Benefits.--This is very helpful to the subcommittee in
preparing for investigations, selection of witnesses, and the
planning of hearings.
6. ``Comptroller General's 1992 Annual Report''.
a. Summary.--The report provides information similar to the
1994 report described above.
b. Benefits.--This is very helpful to the subcommittee in
preparing for investigations, selection of witnesses, and the
planning of hearings.
7. ``Tax-Exempt Organizations: Information on Selected Types of
Organizations,'' February 1995, GAO/GGD-95-84BR.
a. Summary.--Since the mid-1970's, the number and the size
of organizations that are tax exempt have increased
substantially; more than 1 million of these organizations
existed as of 1992. Press reports and congressional hearings
have recently focused on the activities of charitable groups,
but other kinds of tax-exempt organizations have not received
this level of scrutiny. This briefing report: (1) discusses the
growth in the number, the assets, the revenues, and the
expenses of social welfare organizations, labor and
agricultural groups, and business leagues; (2) documents the
compensation that some of the largest of these tax-exempt
organizations paid their executives in 1992; (3) identifies the
extent to which these organizations are involved in lobbying
and political activities; and (4) identifies IRS efforts to
monitor their activities. Information on charitable
organizations is presented for comparison purposes.
b. Benefits.--The findings of the report were brought to
the subcommittee's attention.
8. ``Federal Management Issue Plan--Fiscal Years 1995-1996,'' March
1995, GAO/IAP-95-9.
a. Summary.--This report is prepared primarily to inform
Members of Congress and key staff of ongoing assignments in the
General Accounting Office. It describes the key issues that GAO
plans to cover in the area of Federal management.
b. Benefits.--The report is helpful in preparing for
hearings and conducting investigations in the areas of the
subcommittee's jurisdiction.
9. IRM/General Government Division Issue Area Plan--Fiscal Years 1994-
1996, March 1995, GAO/IAP-95-8, Date Received: April 20, 1995.
a. Summary.--This report is prepared primarily to inform
Members of Congress and key staff of ongoing assignments in the
General Accounting Office. It describes the key issues that GAO
has planned to cover in the area of Federal management.
b. Benefits.--The report is helpful in preparing for
hearings and conducting investigations in the areas of the
subcommittee's jurisdiction.
10. ``Budget Function Classification: Relating Agency Spending and
Personnel Levels to Budget Functions,'' January 1995, GAO/AIMD/
GGD-95-69FS.
a. Summary.--This fact sheet examines the functions
performed by agencies in the Federal Government, identifying
those that are uniquely associated with each agency and those
done by two or more agencies. It also provides financial
information and civilian personnel levels associated with each
function. GAO provides tabular and graphical presentations
showing (1) a matrix of Federal departments and agencies
according to budget function and subfunction classifications
developed by the Office of Management and Budget; (2) separate
presentations for departments and agencies depicting obligation
and employment levels by budget function; (3) separate
presentations for each budget function showing obligation and
employment levels for departments and agencies, and (4) end-of-
year employment ``head counts'' for each department and agency.
b. Benefits.--This fact sheet is helpful to the
subcommittee in developing proposals to reform the budget and
accounting structure of the Federal Government.
11. ``Following the Federal Dollar--The Strategic Plan of the General
Accounting Office,'' March 1995, GAO/OCG-95-3, March 1995, Date
Received: May 31, 1995.
a. Summary.--This document describes the long-term
strategic plan for GAO, including how the GAO plans to meet its
responsibilities to Congress given its reduced staff and
budget.
b. Benefits.--This report assists the subcommittee in
fulfilling its oversight responsibilities over the U.S. General
Accounting Office.
12. ``Government Corporations: Profiles on Recent Proposals,'' March
1995, GAO/GGD-95-57FS.
a. Summary.--This report profiled seven proposed Government
corporations: (1) Bonneville Power Corp.; (2) National
Petroleum Reserves Corp.; (3) U.S. Air Traffic Services Corp.;
(4) Federal Housing Administration; (5) Presidio Trust; (6)
National Infrastructure Development Corp.; and (7) National
Infrastructure Insurance Corp. It noted that some of the
proposed Government corporations currently exist in
noncorporate form within Federal departments: (1) Bonneville
Power Administration; (2) Naval Petroleum and Oil Shale
Reserves; (3) Federal Housing Administration; and (4) Federal
Aviation Administration. The proposed Presidio Trust, National
Infrastructure Development Corp., and National Infrastructure
Insurance Corp. do not currently exist. To date, no legislation
has been enacted to establish any of the seven proposed
corporations. Any legislation would need to be evaluated to
determine whether offsetting spending or tax increases would be
required to comply with the Budget Enforcement Act.
b. Benefits.--This report is helpful to the subcommittee in
its ongoing investigation into how Government corporations
should be structured.
13. ``Budget Function Classification: Agency Spending and Personnel
Levels for Fiscal Years 1994 and 1995,'' April 1995, GAO/AIMD-
95-115FS.
a. Summary.--This fact sheet examines the functions
performed by Federal agencies. GAO identifies those functions
that are uniquely associated with each agency and those
performed by two or more agencies. This fact sheet also
provides financial information and civilian personnel levels
associated with each function. GAO presents actual fiscal year
1994 and estimated fiscal year 1995 information from the
President's 1996 budget. This fact sheet contains (1) a matrix
of Federal agencies according to budget function
classifications developed by the Office of Management and
Budget; (2) a separate presentation for each agency depicting
obligation and employment levels by budget function; and (3) a
separate presentation for each budget function showing
obligation and employment levels by agency.
b. Benefits.--The subcommittee is conducting an
investigation into whether the budget function classification
and account structure should be reformed. This report is
helpful to the subcommittee in that effort.
14. ``Budget Function Classification: Agency Spending by Subfunction
and Object Category, Fiscal Year 1994,'' May 1995, GAO/AIMD-95-
116FS.
a. Summary.--This fact sheet is the third in a series of
GAO reports examining the functions performed by Federal
agencies. GAO identifies those functions that are uniquely
associated with each agency and those performed by two or more
agencies. In particular, this fact sheet provides an
``accounting of expenditures'' so that both administrative and
mission-oriented operations are identified. GAO describes
fiscal year 1994 obligations by subdepartment and subfunction
and by focusing on objects of expenditure within each
subfunction. This enables GAO to more precisely describe
Federal activities by characterizing obligations according to
the nature of the service or the article procured.
b. Benefits.--This fact sheet is helpful to the
subcommittee in developing proposals to reform the budget
account structure.
15. ``Welfare Benefits: Potential To Recover Hundreds of Millions More
in Overpayments,'' June 1995, GAO/HEHS-95-111.
a. Summary.--Under welfare reform legislation being
considered by Congress, resources for helping poor families may
become increasingly limited, making it critical that only those
who are eligible for benefits receive them. In 1992, benefit
overpayments in three welfare programs, Aid to Families With
Dependent Children, Food Stamps, and Medicaid, totaled $4.7
billion, or about 4 percent of the total benefits paid.
Nationwide recovery of these benefits was relatively low. This
report discusses: (1) what States are doing to recover benefit
overpayments; (2) what the more effective practices are; (3)
what States could do better; and (4) what the Federal
Government could do to help States recover more overpayments.
b. Benefits.--This report is helpful to the subcommittee in
its oversight over management practices and the prevention of
fraud, waste, and abuse in Federal programs.
16. ``Federal Reorganization: Congressional Proposal To Merge
Education, Labor and EEOC,'' June 1995, GAO/HEHS-95-140.
a. Summary.--A congressional proposal to consolidate the
Departments of Labor and Education along with the Equal
Employment Opportunity Commission envisions saving billions of
dollars and creating more efficient services, but savings might
be elusive if downsizing proceeds too quickly or proceeds
without careful planning. The proposal to create a new
Department of Education (DOED) and Employment could yield
savings of about $1.65 billion in administrative costs through
the year 2000. The proposal's cost-saving goal, in addition to
its organizational requirements, would significantly change
DOED's existing structure, program offerings, and processes.
The proposal would also raise program consolidation, workforce,
accountability, implementation, and oversight issues that
Congress, DOED, and other agencies would need to address to
ensure that Federal education and training programs meet the
Nation's needs.
b. Benefits.--This report is helpful to the subcommittee in
its investigation into how to make government work better by
reorganizing departments and agencies.
17. ``Inspector General Act: Activities of the Federal Entities,'' June
1995, GAO/AIMD-95-152FS.
a. Summary.--The Inspectors General (IG) Act of 1978
requires OMB, in consultation with GAO, to identify Federal
entities, including Government corporations and independent
regulatory agencies, without Offices of Inspectors General and
to publish a list of such entities annually in the Federal
Register. The act also requires these entities to report
annually to Congress and to OMB on the audit and investigative
activities of their organizations. This fact sheet provides
information on: (1) whether Federal entities identified by OMB
in fiscal year 1994 reported their audit and investigative
activity as required by law; (2) what audit and investigative
activities these entities reported during the past 3 years; (3)
the status of audit recommendations for seven entities under
the jurisdiction of the Senate Appropriations Subcommittee on
Labor, Health and Human Services, and Education; (4) how these
seven entities process allegations of fraud and mismanagement;
and (5) how these entities obtain administrative services.
b. Benefits.--This report is helpful to the subcommittee in
its continuing oversight over the Inspector General Act.
18. ``Managing for Results: The Department of Justice's Initial Efforts
To Implement GPRA,'' June 1995, GAO/GGD-95-167FS.
a. Summary.--The Government Performance and Results Act of
1993 was intended to improve the effectiveness and efficiency
of Federal programs by establishing a system to set performance
goals and measure results. This fact sheet reviews the Justice
Department's implementation of the act. As GAO was
systematically collecting information from each Justice
component about its implementation of the act, the Department
asked GAO to describe what it had found because this
information had not been consolidated. This fact sheet provides
information that addresses questions from the Department's
components to help them develop performance measures and
discusses the processes used to develop the fiscal year 1996
exhibits, implementation questions and concerns, and
performance measures used in the exhibits.
b. Benefits.--This report is helpful to the subcommittee in
its continuing oversight over the Government Performance and
Results Act.
19. ``National Fine Center: Progress Made But Challenges Remain for
Criminal Debt System,'' May 1995, GAO/AIMD-95-76.
a. Summary.--This report reviews the efforts of the
Administrative Office of U.S. Courts (AOUSC) to centralize
criminal debt accounting and reporting within the National Fine
Center. AOUSC was required to replace the existing fragmented
approach to receiving criminal fine payments with a
centralized, automated criminal-debt processing system for all
94 judicial districts. The new system was intended to alleviate
long-standing weaknesses in accounting for, collecting, and
reporting on monetary penalties imposed on criminals. GAO (1)
provides information on AOUSC's latest efforts to establish the
National Fine Center and centralize criminal debt accounting
and reporting and (2) discusses additional steps AOUSC needs to
take to complete implementation of the National Fine Center.
b. Benefits.--The report's findings were brought to the
subcommittee's attention.
20. ``Performance Measurement: Efforts To Evaluate the Advanced
Technology Program,'' May 1995, GAO/RCED-95-68.
a. Summary.--The Advanced Technology Program seeks to
provide support on a cost-sharing basis to research and
development projects in industry. These projects are intended
to stimulate economic growth and improve the competitiveness of
U.S. industry. Funding for the program has risen from $68
million in fiscal year 1993 to $431 million in fiscal year
1995, more than doubling each year. The President has set a
goal of $750 million in funding for the program by 1997. The
agency has reported short-term results that it claims show the
program is making an impact. This report (1) analyzes these
short-term results and plans for evaluating the program in the
future.
b. Benefits.--This report is helpful to the subcommittee in
its continuing oversight over the Government Performance and
Results Act.
21. ``General Government Information Systems Issue Area,'' Active
Assignments, July 1995, GAO/AA-95-33 (3).
a. Summary.--This report was prepared to inform Members of
Congress and key staff of ongoing assignments in the General
Accounting Office's General Government Information Systems
issue area. This report contains assignments that were ongoing
as of July 6, 1995, and presents a brief background statement
and a list of key questions to be answered on each assignment.
b. Benefits.--This report is helpful to the subcommittee in
preparing for hearings and oversight investigations.
22. ``Federal Management Issues Area,'' Active Assignments, July 1995,
GAO/AA-95-11(3).
a. Summary.--This report was prepared to inform Members of
Congress and key staff of ongoing assignments in the General
Accounting Office, Federal Management issue area. This report
contains assignments that were ongoing as of July 6, 1995, and
presents a brief background statement and a list of key
questions to be answered on each assignment.
b. Benefits.--This report is helpful to the subcommittee in
its oversight of Federal management issues.
23. ``Information Technology Investment: A Governmentwide Overview,''
July 1995, GAO/AIMD-95-208.
a. Summary.--Increasingly, Federal agencies' ability to
improve performance and cut costs depends on automated data
processing systems that give managers critical financial and
programmatic information needed to make good decisions, hold
down costs, and improve service to the public. Major Federal
investments in information technology, however, have often
yielded poor results--costing more than expected, falling
behind schedule, and failing to meet mission needs. To shed
light on where information technology dollars are being spent,
what costs and benefits are anticipated, and what risks must be
managed, this report provides information on overall Federal
information technology obligations, as well as on programs by
GAO, OMB, and GSA to identify information technology
investments that are at risk and in need of corrective action.
b. Benefits.--This report is helpful to the subcommittee in
its continuing oversight of information technology issues.
24. ``Inspectors General: Mandated Studies To Review Costly Bank and
Thrift Failures,'' July 1995, GAO/GGD-95-126.
a. Summary.--GAO reviewed the compliance of the Inspectors
General (IG's) at the Federal Reserve, the Federal Deposit
Insurance Corporation (FDIC), and the Department of the
Treasury with the requirement that they issue reports on banks
or thrifts whose failures result in ``material losses''--those
that exceed $25 million--to the deposit insurance funds. IG's
are required to determine why the problems of a bank or a
thrift result in a material loss to a deposit insurance fund
and to make recommendations for preventing such losses in the
future. This report (1) assesses the adequacy of the
preparation, the procedures, and the audit guidelines that IG's
have established for performing material loss reviews to ensure
compliance with their responsibilities under the FDIC; (2)
verifies the information in the material loss review reports
upon which the IG's based their conclusions; (3) recommends
improvements in bank supervision on the basis of a review of
material loss review reports issued between July 1993 and June
1994; and (4) assesses the economy and the efficiency of the
current material loss review process.
b. Benefits.--This report is helpful to the subcommittee in
its continued oversight over the Inspector General Act.
25. ``Human Resources Information Systems Issue Area,'' Active
Assignments, July 1995, GAO/AA-95-34(3).
a. Summary.--This report was prepared primarily to inform
Members of Congress and key staff of ongoing assignments in the
General Accounting Office's Human Resources Information Systems
issue area. This report contains short summaries of assignments
that were ongoing as of July 1995.
b. Benefits.--These summaries are helpful in giving the
subcommittee information to use in preparation for hearings or
in conducting investigations in the systems area.
26. ``Program Evaluation and Methodology Issue Area Plan, Fiscal Years
1995-1997,'' June 1995, GAO/IAP-95-12.
a. Summary.--This report contains a strategic plan that
describes the significance of the issues it addresses, its
objectives, and the focus of its work. The Program Evaluation
and Methodology issue area is a technical area of work
implemented within GAO to use innovative research methodologies
for evaluating Federal and related programs and activities. The
evaluations are conducted across a number of substantive areas.
They include defense, education, agriculture, aging,
environment, health, public management, transportation, and
welfare.
b. Benefits.--The description of the key issues addressed
in the plan aid the subcommittee in its oversight of management
issues and of acts such as the Government Performance and
Results Act.
27. ``Program Evaluation and Methodology Issue Area,'' Active
Assignments, July 1995, GAO/AA-95-25(3).
a. Summary.--This report was prepared primarily to inform
Members of Congress and key staff of ongoing assignments in the
General Accounting Office's Program Evaluation and Methodology
Information Systems issue area. This report contains short
summaries of assignments that were ongoing as of July 1995.
b. Benefits.--These summaries are helpful in giving the
subcommittee information to use in preparation for hearings or
in conducting investigations.
28. ``Information Resources Management Policy and Issues Issue Area,''
Active Assignments, July 1995, GAO/AA-95-31(3).
a. Summary.--This report was prepared primarily to inform
Members of Congress and key staff of ongoing assignments in the
General Accounting Office's Information Resources Management
Policy and Issues issue area. This report contains short
summaries of assignments that were ongoing as of July 1995.
b. Benefits.--These summaries are helpful in giving the
subcommittee information to use in preparation for hearings or
in conducting investigations.
29. ``Government Business Operations Issue Area,'' Active Assignments,
July 1995, GAO/AA-95-13(3).
a. Summary.--This report was prepared primarily to inform
Members of Congress and key staff of ongoing assignments in the
General Accounting Office's Government Business Operations
issue area. This report contains assignments that were ongoing
as of July 1995, and presents a brief background statement and
a list of key questions to be answered on each assignment.
b. Benefits.--This report is helpful to the subcommittee in
its continuing oversight activities.
30. ``Federal Reorganization: Proposed Merger's Impact on Existing
Department of Education Activities,'' June 29, 1995, GAO/T-
HEHS-95-188.
a. Summary.--This report provides testimony which addresses
a congressional proposal to consolidate the Departments of
Labor and Education along with the Equal Employment Opportunity
Commission. The proposal envisions saving billions of dollars
and creating more efficient services; however, GAO testified
that savings might be elusive if downsizing proceeds too
quickly or proceeds without careful planning.
b. Benefits.--This testimony is helpful to the subcommittee
in its investigation into how to make government work better by
reorganizing departments and agencies.
31. ``Government Reorganization: Issues Relating to International Trade
Responsibilities,'' July 25, 1995, GAO/T-GGD-95-218.
a. Summary.--This report provides testimony which discusses
the potential impact that abolishment of the Commerce
Department would have on managing Federal trade
responsibilities. GAO examines (1) the basis of the Federal
role in international trade; (2) the roles played by Commerce
and other Federal agencies involved in international trade; and
(3) the means by which interagency mechanisms help integrate
Federal trade activities. GAO also examines (1) the
implications of legislation to dismantle the Commerce
Department for Federal implementation of the trade function;
(2) opportunities for cost savings in the international trade
area; and (3) a conceptual framework to help decisionmakers
identify the ramifications and ensure the success of any
restructuring effort.
b. Benefits.--This testimony is helpful to the subcommittee
in its investigation into how to make government work better by
reorganizing departments and agencies.
32. ``National Service Programs: AmeriCorps' USA--Early Program
Resource and Benefit Information,'' August 1995, GAO/HEHS-95-
222.
a. Summary.--In 1993, Congress created AmeriCorps, the
largest national and community service program since the
Civilian Conservation Corps of the 1930's. The program is
administered by the new Federal Corporation for National and
Community Service. In testimony before Congress, Corporation
officials estimated that program costs per participant are
$18,800. That estimate did not include contributions that
AmeriCorps grantees receive from other Federal agencies, State
and local governments, and private sources. For program year
1994-95, GAO estimates that Corporation resources available per
participant averaged $17,600, slightly less than the
Corporation's estimate. More than one-third of the money
available for grantees came from sources outside the
Corporation, mostly from other Federal agencies and State and
local governments. Total resources per program participant
averaged $26,654, of which about $17,600 came from the
Corporation, $3,200 from other Federal sources, and $4,000 from
State and local governments. The remaining amount, roughly
$1,800, came from the private sector. At the seven program
sites it visited, GAO found that projects had been designed to
strengthen communities, develop civic responsibility, and
expand educational opportunities for program participants and
others.
b. Benefits.--The report's findings were brought to the
attention of the subcommittee.
33. ``Public-Private Mix: Effectiveness and Performance of GSA's In-
House and Contracted Services,'' September 1995, GAO/GGD-95-
204.
a. Summary.--GAO reviewed the cost-effectiveness and
performance of the GSA's real property management services,
such as building maintenance and custodial services. The cost
comparison, performance evaluation, and historical tracking
data GAO reviewed for 54 activities indicated that GSA's
decisions to retain activities in-house or contract them out
were sound. Post-decision analyses and evaluations by GSA
showed that the agency generally obtained services at a
reasonable cost and at an acceptable level of performance and
that it made relatively few reversals from its original
decisions. GAO found no evidence of performance problems in the
case files for a majority of the 54 sample activities. For 11
activities, however, GAO found serious problems, such as
defaults or terminations for unsatisfactory performance. All
but one of these activities involved maintenance services. In
general, the files provided evidence of GSA's efforts to
oversee the activities and take appropriate corrective action,
including deductions from payments to contractors, when
necessary. Information on private sector practices that GAO
reviewed and that GSA gathered to support its reinvention
efforts indicated that real estate organizations commonly used
such approaches as performance measurement and benchmarking to
manage and evaluate their operations and activities and to
decide whether to contract them out. The approaches offer an
opportunity for GSA to improve the oversight and evaluation of
its services. Although GSA has begun to implement some
performance measures, such as customer satisfaction surveys,
the specific performance measures that it will use after its
reorganization is completed are still being developed.
b. Benefits.--This report is helpful to the subcommittee in
its oversight responsibilities of the General Services
Administration.
34. ``Health, Education, Employment, Social Security, Welfare,
Veterans,'' September 1995, GAO/HEHS-95-261W.
a. Summary.--This booklet lists GAO documents on Government
programs related to health, education, employment, Social
Security, welfare, and veterans issues, which are administered
by the Departments of Health and Human Services, Labor,
Education, and Veterans Affairs. The report identifies other
reports and testimony issued during the past months and
summarizes key products. It also lists all documents published
during the past year, organized chronologically by subject.
b. Benefits.--This survey document makes available GAO
resources.
35. ``Financial Institutions and Market Issue Area,'' Active
Assignments, October 1995, GAO/AA-95-7(4).
a. Summary.--This report was prepared primarily to inform
Members of Congress and key staff of ongoing assignments in the
General Accounting Office's Financial Institutions and Market
issue area. This report contains short summaries of assignments
that were ongoing as of July 1995.
b. Benefits.--These summaries are helpful in giving the
subcommittee information to use in preparation for hearings or
in conducting investigations.
36. ``Program Evaluation and Methodology Issue Area,'' Active
Assignments, October 1995, GAO/AA-95-25(4).
a. Summary.--This report was prepared primarily to inform
Members of Congress and key staff of ongoing assignments in the
General Accounting Office's Program Evaluation and Methodology
Information Systems issue area. This report contains short
summaries of assignments that were ongoing as of October 1995.
b. Benefits.--These summaries are helpful in giving the
subcommittee information to use in preparation for hearings or
in conducting investigations.
37. ``Federal Management Issue Area: Active Assignments,'' October
1995, GAO/AA-95-11(4).
a. Summary.--This report was prepared to inform Members of
Congress and key staff of ongoing assignments in the General
Accounting Office's Federal Management issue area. This report
contains assignments that were ongoing as of October 2, 1995,
and presents a brief background statement and a list of key
questions to be answered on each assignment.
This report was compiled from information available in
GAO's internal management information system. The information
was downloaded from computerized data bases intended for
internal use.
b. Benefits.--This report is helpful to the subcommittee in
preparing for hearings and oversight investigations.
38. ``Corporate Financial Audits Issue Area: Active Assignments,''
October 1995, GAO/AA-95-27(4).
a. Summary.--This report was prepared to inform Members of
Congress and key staff of ongoing assignments in the General
Accounting Office's Corporate Financial Audits issue area. This
report contains assignments that were ongoing as of October 2,
1995, and presents a brief background statement and a list of
key questions to be answered on each assignment.
This report was compiled from information available in
GAO's internal management information system. It was downloaded
from computerized data bases intended for internal use.
b. Benefits.--This report is helpful to the subcommittee in
preparing for hearings and oversight investigations.
39. ``Information Resources Management Policy and Issues Area,'' Active
Assignments, October 1995, GAO/AA-95 31(4).
a. Summary.--This report was prepared primarily to inform
Members of Congress and key staff of ongoing assignments in the
General Accounting Office's Information Resources Management
Policy and Issues issue area. This report contains short
summaries of assignments that were ongoing as of October 1995.
b. Benefits.--These summaries are helpful in giving the
subcommittee information to use in preparation for hearings or
in conducting investigations.
40. ``Los Angeles Earthquake: Opinions of Officials on Federal
Impediments to Rebuilding,'' June 1994, GAO/RCED-94-193.
a. Summary.--This report summarizes the views of State and
local officials regarding the Federal role in the recovery from
the Northridge earthquake in 1994. Many State and local
officials were pleased with the emergency response immediately
following the earthquake, but were concerned about the long-
term recovery phase, given the problems associated with Federal
laws and regulations that occurred after the 1989 Loma Prieta
earthquake in northern California. They felt encouraged by
recent policy and regulatory changes made by the Federal
Emergency Management Agency (FEMA) and believed that changes
could improve the agency's assistance efforts. At the same
time, some of these officials cited other barriers to recovery.
b. Benefits.--The subcommittee held a field hearing on the
Northridge Earthquake on January 19, 1996. This report was
useful in the preparation for the hearing.
41. ``Government Business Operations Issue Area--Active Assignments,''
October 1995, GAO/AA-95-13 (4).
a. Summary.--This report was prepared to inform Members of
Congress and key staff of ongoing assignments in the General
Accounting Office's Government Business Operations issue area.
This report contains assignments that were ongoing as of
October 2, 1995, and presents a brief background statement and
a list of key questions to be answered on each assignment.
b. Benefits.--This report is helpful to the subcommittee in
its ongoing oversight activities.
42. ``Electronic Benefits Transfer: Use of Biometrics To Deter Fraud in
the Nationwide EBT Program,'' September 1995, GAO/OSI-95-20.
a. Summary.--The National Performance Review recommended in
1993 that the Federal Government consider paying individuals by
using electronic rather than paper means. In 1994, a task force
composed of representatives from various Federal agencies
estimated that more than $110 billion in annual cash benefits
and food assistance could be delivered with EBT, including food
stamps, Social Security payments, and Federal pensions. EBT
systems are already providing the U.S. Department of
Agriculture investigators and program managers with data that
has been used to target retailers illegally trafficking in food
stamps benefits. However, EBT alone has not effectively
deterred fraud in this program. An EBT program without the
enhanced security of biometric verification--an automated
method to measure a physical characteristic or personal trait--
raises a genuine concern about the potential for higher program
costs and losses. GAO believes that fingerprint verification is
the biometric option that offers potential for reducing fraud
in EBT systems. Although development of an EBT system with
biometric safeguards would be more expensive, largely because
of the need to purchase hardware and software, and would take
longer to implement nationwide, such system enhancement is
needed to ensure that the future system is practical and not
beset by fraud.
b. Benefits.--The report is useful to the subcommittee in
its ongoing investigations into the merits of mandatory
electronic benefits transfers.
43. ``Financial Audit: Expenditures by Six Independent Counsels for the
Six Months Ended March 31, 1995,'' September 1995, GAO/AIMD-95-
233.
a. Summary.--This report presents the results of GAO's
audit of expenditures reported by six independent counsels for
the 6 months ended March 31, 1995. GAO found that the
statements of expenditures for independent counsels Arlin M.
Adams, Joseph E. DiGenova, Robert B. Fiske, Jr., Donald C.
Smaltz, Kenneth W. Starr, and Lawrence E. Walsh were reliable
in all material respects. GAO also did limited tests of
internal controls and discovered a material weakness in
internal controls over reporting of expenditures. GAO found no
reportable noncompliance with laws and regulations that it
tested.
b. Benefits.--This report is helpful to the subcommittee in
its oversight of financial management issues.
44. ``Schools and Workplaces: An Overview of Successful and
Unsuccessful Practices,'' August 1995, GAO/PEMD-95-28.
a. Summary.--The Nation's well-being depends on its ability
to create and sustain well-paying jobs and to improve the
performance of U.S. business in an increasingly complex world
economy. For more than a decade, Americans have been concerned
that the Nation is not doing all that is needed to meet these
challenges. In particular, they have raised concerns about the
quality of education provided by elementary and secondary
schools, especially those attended by disadvantaged students,
and about the productivity and performance of workers and their
employers. This report summarizes research findings on what has
and has not been successful in schools and workplaces.
b. Benefits.--The report aids the subcommittee in its
evaluation of training and capacity in the Federal Government.
45. ``Land Management Systems: Progress and Risks in Developing BLM's
Land and Mineral Record System,'' August 1995, GAO/AIMD-95-180.
a. Summary.--The Bureau of Land Management's (BLM)
Automated Land and Mineral Record System/Modernization, which
is estimated to cost $428 million, is intended to improve BLM's
ability to record, maintain, and retrieve land description,
ownership, and use information. To date, the Bureau has
compiled most of the project's tasks according to the schedule
milestones set in 1993. In coming months, the work will become
more difficult as BLM and the primary contractor try to
complete, integrate, and test the new software system and meet
the current schedule. Slippages may yet occur because little
time was allocated to deal with unanticipated problems. BLM
recently sought to obtain independent verification and
validation to ensure that the new system software meets the
Bureau's requirements. A key risk remains, however. BLM's plans
include stress testing only a portion of the Automated Land and
Mineral Record System/Modernization, rather than the entire
project, to ensure that all systems and technology can
successfully process workloads expected during peak operating
periods. By limiting the stress test, BLM cannot be certain
that the system's information technology will perform as
intended during peak workloads.
b. Benefits.--This report is helpful to the subcommittee in
its oversight of the Government's use of information
technology.
46. ``Highway Funding: Alternatives for Distributing Federal Funds,''
November 1995, GAO/RCED-96-6.
a. Summary.--Under the Federal-aid highway program,
billions of dollars are distributed to the States each year for
the construction and repair of highways and related activities.
The Intermodal Surface Transportation Efficiency Act of 1991
authorized about $120 billion for this program for fiscal years
1992 through 1997. This report discusses (1) the way the
formula works and the relevancy of the data used for the
formula and (2) the major funding objectives implicit in the
formula and the implications of alternative formula factors for
achieving them.
b. Benefits.--The report's findings were brought to the
subcommittee's attention.
47. ``Government Contractors: Selected Agencies' Efforts To Identify
Organizational Conflicts of Interest,'' October 1995, GAO/GGD-
96-15.
a. Summary.--This report reviews Federal agencies'
implementation of the Office of Management and Budget's 1989
policy letter entitled ``Conflict of Interest Policies
Applicable to Consultants.'' It also reviews organizational
conflict of interest requirements applicable to advisory and
assistance service contractors, including consultants. GAO (1)
determines whether selected agencies have complied with
requirements to identify and evaluate potential organizational
conflicts of interest and (2) identifies ways that agencies
might improve their screening for such conflicts. GAO focuses
on the Energy Department, the EPA, and the Navy because they
are among the largest users of contracted advisory and
assistance services.
b. Benefits.--This report is helpful to the subcommittee's
oversight and investigations into contracting issues.
48. ``Office of Management and Budget--Changes Resulting From the OMB
2000 Reorganization,'' December 1995, GAO/GGD/AIMD-96-50.
a. Summary.--This report describes the changes that have
occurred as a result of OMB 2000--a major reorganization and
process change at the Office of Management that took place in
1994. The report was requested by the Government Reform and
Oversight Committee and the Senate Governmental Affairs
Committee.
b. Benefits.--The report was helpful to the subcommittee in
preparing for its hearing on OMB reforms.
49. ``Federal Research: Information on Fees for Selected Federally
Funded Research and Development Centers,'' December 1995, GAO/
RCED-96-31FS.
a. Summary.--This report addresses variations in the fees
paid by sponsoring Federal agencies for the management of the
federally Funded Research and Development Centers, the formulas
used to calculate the fees, and the justifications for paying
the fees provided by the sponsoring Federal agencies. It
provides information on Federal policies and practices
concerning the fees paid by the Department of Energy, the
Department of Defense, and the National Aeronautics and Space
Administration (NASA) for managing the Centers. It identifies
the extent to which the three agencies have regulations
governing these fees: the annual amounts and purposes of the
fees provided by Energy, Defense, and NASA during fiscal year
1994; the uses made by Energy's contractors of their total
funds during fiscal year 1994; and the effect of Energy's
February 1994 contract reforms on the fees for the Department's
Centers.
b. Benefits.--This answers congressional questions as to
whether there are Governmentwide guidelines for setting the
fees, and on the reasonableness of the fees. Defense has
specific regulations for its Centers' fees, Energy uses its
regulations covering the development of fees for the
contractors that manage and operate its facilities, and NASA
uses the general Federal and NASA regulations that apply to its
other contracts.
50. ``Federal Research: Preliminary Information on the Small Business
Technology Transfer Program,'' January 1996, GAO/RCED-96-19.
a. Summary.--This report was required by the Small Business
Research and Development Enhancement Act of 1992 and focuses on
the implementation of the Small Business Technology Transfer
Pilot Program which was established by the act. It discusses
the quality and commercial potential of the program's research
as shown by technical evaluations of the winning proposals in
the first year of the program. It also discusses how agencies
addressed potential conflicts of interest resulting from the
involvement of federally funded research and development
centers in the program and agencies' views on the effects of
and need for the program in view of its close similarity to the
Small Business Innovation Research Program.
b. Benefits.--In order to be eligible for a STTR award, a
small business must interact with a nonprofit research entity
such as a university or a Government funded R&D center. This
requirement is unique to STTR, and was established in hopes of
providing a more effective means for transferring new knowledge
from institution to industry. If this requirement does what is
intended, it will increase private-sector commercialization of
new ideas and methods derived from Government R&D, and
stimulate entrepreneurial and technological innovations which
aid slumping markets as well as create new ones.
51. ``Financial Management--Implementation of the Cash Management
Improvement Act,'' January 1996, GAO/AIMD-96-4.
a. Summary.--GAO conducted its review as required by the
Cash Management Improvement Act of 1990 (P.L. 101-453). The act
focuses on promoting equity in the exchange of funds between
the Federal Government and the States. It provides that States
pay interest to the Federal Government if they draw funds in
advance of need and the Federal Government pays interest to the
States if the Federal Government agency does not reimburse the
States in a timely manner when States use their own funds. The
first year of implementation of the act resulted in a
cumulative net State interest liability due to the Federal
Government of approximately $34 million, over $41 million owed
by the States offset by $4.7 million and $2.5 million owed the
States by the Federal Government for interest and reimbursable
costs, respectively.
b. Benefits.--The Cash Management Improvement Act is one of
the laws in the subcommittee's jurisdiction and this report
aided the subcommittee in its oversight of agency and State
compliance with the act. This act has brought cash management
awareness back to the forefront at both State and Federal
levels. Also under this act, the transfer of funds from the
States to Washington and vice-versa would be interest neutral,
with neither entity incurring any interest liability. Finally,
by implementing its plans to begin streamlining the act's
regulations and using the results of single audits as a means
of overseeing State activities as well as enforcing the act's
requirements, the Financial Management Service should be able
to further improve CMIA's effectiveness and ease any concerns
about administrative burden.
52. ``Budget Issues Compliance Report Required by the Budget
Enforcement Act of 1990,'' February 1996, GAO/AIMD-96-41.
a. Summary.--This compliance report was required by the
Budget Enforcement Act of 1990. It covers reports issued by the
Office of Management and Budget (OMB) and the Congressional
Budget Office (CBO) during the session of the Congress ending
January 3, 1996. GAO is required to issue this compliance
report 45 days after the end of a session of the Congress. The
report noted that OMB and CBO differed in making (1)
adjustments to the discretionary spending limits or caps, (2)
estimates of discretionary appropriations, and (3) estimates of
PAYGO legislation.
b. Benefits.--The subcommittee's jurisdiction includes the
Executive Office of the President of which the Office of
Management and Budget is a component part. It also has
jurisdiction over budget and accounting measures generally.
This report was useful to the subcommittee in reviewing
compliance with the Budget Enforcement Act.
53. ``Embedded Computers: B-1B Computers Must be Upgraded to Support
Conventional Requirements,'' February 1996, GAO/AIMD-96-28.
a. Summary.--This report reviews the Air Force's efforts to
upgrade the computers and software for the B-1B Bomber
Conventional Mission Upgrade Program. It discusses recent
decisions the Air Force has made in upgrading the B-1B's
embedded computer systems ranging from a simple memory upgrade,
to installing all new computer processors and Ada Software--a
more modern computer language which offers advantages in
design, coding, and documentation, along with cost-effective
software maintenance and support. However, the only affordable
option was a simple memory upgrade.
b. Benefits.--Initial planned computer improvements did not
go far enough, in the GAO's opinion. The Air Force subsequently
increased funding and plans to convert its outdated software to
Ada Software, an option the GAO agrees with.
54. ``Financial Audit: Federal Family Education Loan Program's
Financial Statements for Fiscal Years 1994 and 1993,'' GAO/
AIMD-96-22.
a. Summary.--This gives the results of the GAO's review of
the Department of Education's Office of Inspector General (OIG)
financial audit of the Federal Family Education Loan Program's
Principal Financial Statements and its internal controls and
compliance with laws and regulations for the fiscal year ended
September 30, 1994. The OIG was unable to express an opinion on
the financial statements taken as a whole because student loan
data on which Education based its costs to be incurred on
outstanding guaranteed loans was not reliable.
b. Benefits.--The subcommittee continues to monitor agency
compliance with the Chief Financial Officers Act of 1990 and
the Government Management Reform Act of 1994. These laws
require the executive branch agencies to prepare and submit to
Congress audited financial statements describing their
financial status. This is one of the required reports and aids
the subcommittee in performing its oversight function.
55. ``Budget Issues Selected GAO Work on Federal Financial Support of
Business,'' March 1996, GAO/AIMD/GGD-96-87.
a. Summary.--This summarizes previously issued GAO work on
spending programs and tax benefits available to businesses. The
Federal Government provides financial benefits to businesses as
a means of fulfilling a wide range of public policy objectives.
Programs involved include areas such as programs in
international affairs, research, energy, natural resources and
environment, agriculture, and transportation. More
specifically, the research and experimentation tax credit is
intended to stimulate additional research spending. It allows
taxpayers to reduce their tax liabilities by 20 percent of
qualified R&D expenditures that go over a base amount. Another
example of a benefit provided by the Government is a 15-percent
tax credit which is available for expenditures related to
enhanced oil recovery techniques. Petroleum production tax
incentives include increasing energy security, rewarding risk
taking, or advocating investments in new technologies.
b. Benefits.--This report is helpful to the subcommittee in
that it reinforces our belief that the Federal policy of giving
incentives to encourage businesses to further Federal
Government policy objectives is working.
56. ``CFO Act Financial Audits--Increased Attention Must be Given to
Preparing Navy's Financial Reports,'' March 1996, GAO/AIMD-96-
7.
a. Summary.--This report was sent to the Secretary and
Under Secretary of Defense and the Secretary and Assistant
Secretary for Financial Management and Comptroller to report on
the reliability of the Navy's fiscal year 1994 consolidated
financial reports so that the Navy and the Defense Finance and
Accounting Service (DFAS) can:
Improve the credibility of the Navy's
financial reports, starting with those prepared for
fiscal year 1995, and
Enhance their ability to prepare required
reliable financial statements for the Navy, beginning
with those for fiscal year 1996.
The Navy accounts for about one-third of the gross budget
authority of the Department of Defense (DOD), controls almost
half of DOD's assets, and employs one-third of all DOD
personnel. The Navy's fiscal year 1994 consolidated financial
reports, which were submitted to the Department of the Treasury
and used to prepare Governmentwide financial reports, showed
$506 billion in assets, $7 billion in liabilities, and $87
billion in operating expenses. Each of these amounts was
substantially misstated. The errors included:
$66 billion of material omissions, including
$31 billion of ammunition, $14 billion of inventories,
and $7 billion of unfunded liabilities for projected
environmental cleanup costs that were omitted
altogether, and
$43 billion of items not recorded such as $24
billion of structures and facilities and $8 billion of
Government-furnished and contractor-acquired material
that were counted twice and $9 billion of understated
revenues due to an erroneous calculation.
The Navy's financial reports also excluded billions of
dollars invested in building aircraft and missiles and
modernizing of weapons systems. However, because of the poor
state of Navy and DFAS financial records, we could not
determine the amounts of these costs and we cannot be sure that
we identified all significant mistakes in the Navy's financial
reports. The GAO stated in the report that the root cause of
the Navy's financial reporting deficiencies is the longstanding
failure to use basic internal controls and to instill
discipline in financial operations.
b. Benefits.--The GAO reports on Department of Defense
financial management and related information management issues
which are extremely helpful to the subcommittee. They have been
used in oversight hearings, and serve as a resource for
continued oversight. The subcommittee plans to continue its
oversight over agency compliance with the requirements for
Governmentwide audited financial statements.
57. ``Financial Audit--Panama Canal Commission's 1995 and 1994
Financial Statements,'' March 1996, GAO/AIMD-96-61.
a. Summary.--The auditors' opinion given was that the
Panama Canal Commission's financial statements present fairly,
in all material respects, its financial position as of
September 30, 1995 and 1994, and the results of its operations,
changes in capital, and cash flows for the years then ended, in
conformity with generally accepted accounting principles.
On February 10, 1996, the Panama Canal Act of 1979 was
amended by Public Law No. 104-106, sections 3521 and 3529, to
make the Panama Canal Commission a wholly owned Government
corporation. The Commission can now hire independent auditors
to conduct the audit in lieu of the Comptroller General. In
addition to conducting the audit of the Commission's financial
statements, the auditor is to examine the Commission's forecast
that it will be in a position to meet its financial liabilities
on December 31, 1999, when the Panama Canal Treaty terminates
and the Republic of Panama will assume full responsibility for
the Canal.
b. Benefits.--This report provided the subcommittee with
ongoing accountability information on the activities of the
Panama Canal Commission, now a wholly owned Government
corporation. The subcommittee also has jurisdiction over the
Government Corporation Control Act.
58. ``Tax Policy and Administration 1995 Annual Report on GAO's Tax-
Related Work,'' March 1996, GAO/GGD-96-61.
a. Summary.--This report is submitted in compliance with 31
U.S.C. 719(d) and summarizes GAO's work on tax policy and
administration in fiscal year 1995. Appendices describe: (1)
agency actions taken on GAO's recommendations, as of December
31, 1995; (2) GAO recommendations made to Congress before and
during fiscal year 1995 that have not been acted upon; and (3)
assignments for which GAO was authorized access to tax
information under 26 U.S.C. 6103(i)(7)(A). At a time when the
Federal Government faces hard choices in spending in order to
continue to reduce the deficit and use resources wisely, all
Federal expenditures need to be carefully reviewed. This report
focused on strengthening and extending expenditure control
techniques now used by congressional tax-writing committees,
integrating tax expenditures further into the budget process,
and reviewing tax expenditures jointly with related Federal
outlay programs.
b. Benefits.--During 1996 the subcommittee held hearings on
management practices at the Internal Revenue Service, in which
IRS management of records was discussed. This report was
helpful in preparing for the hearing. This report also shed
light on the importance for tax-writing committees to explore
opportunities to exercise more scrutiny over indirect spending
through tax expenditures.
59. ``Telecommunication: Initiatives Taken by Three States to Promote
Increased Access and Investment,'' March 1996, GAO/RCED-96-68.
a. Summary.--This report describes how selected States have
encouraged private investment in advanced telecommunications,
how these States have encouraged widespread access, and what
lessons their experiences could provide for others. Three
States, Iowa, Nebraska, and North Carolina, are considered
leaders in the development of statewide advanced
telecommunications.
b. Benefits.--The report provides guidance for Congress in
ensuring that advanced telecommunication programs will be
successful. In the report, GAO stressed the importance of
building and maintaining consensus among telecommunications
companies, anticipated users, State legislators, and State
executive branch officials.
60. ``Management Reform: Status of Agency Reinvention Lab Efforts,''
March 1996, GAO/GGD-96-69.
a. Summary.--Part of the administration's National
Performance Review initiative was the establishment of
reinvention labs in a number of departments and agencies. The
GAO found that the labs addressed a variety of topics. Although
customer service was stated as a goal, the actual customers
were often other Federal agencies, not the general public. The
report stated that the labs' results suggest a number of
promising approaches to improving agency work processes. The
real value will be realized only when the operational
improvements initiated, tested, and validated by the labs
achieve wider adoption. The GAO recommends that the Director of
OMB ensure that a clearinghouse of information about the labs
be established. It should contain information about the
location of each lab, the issues being addressed, points of
contact for further information about the lab, and any
performance information demonstrating the lab's results.
b. Benefits.--The subcommittee has been monitoring the
claims of the National Performance Review (NPR) since its
inception. This report was helpful to the subcommittee and is
used in its evaluation of executive branch claims for NPR
achievements.
61. ``DOE Management--DOE Needs to Improve Its Analysis of Carryover
Balances,'' April 1996, GAO/RCED-96-57.
a. Summary.--This report examines the effectiveness of the
Department of Energy's approach for identifying the funding
balances remaining from prior years' budgets that exceed the
requirements of the Department's programs and thus may be
available to reduce the budget request for the new fiscal year.
The report also examines whether the process for analyzing
these balances, known as carryover balances, could be improved.
It includes a recommendation that the Secretary of Energy
develop a more effective approach to analyzing carryover
balances. It would involve developing standard goals for all
programs' carryover balances that represent the minimum needed
to meet the programs' requirements, projecting what the
carryover balances will be for all programs at the beginning of
the fiscal year for which new obligational authority is being
requested, and comparing the programs' goals and projected
balances to identify the balances that exceed requirements.
Under 31 U.S.C. 720 the Secretary must submit a written
statement of the actions taken on the recommendation to the
Senate Governmental Affairs Committee and the House Committee
on Government Reform and Oversight not later than 60 days after
the date of the letter accompanying the report, April 12, 1996.
b. Benefits.--This report is of help to the subcommittee in
its examination of management practices in the agencies. The
subcommittee now knows that the DOE does not use a standard
approach for identifying surplus carryover balances. Because of
this DOE cannot be positive that it has reduced its balances to
the proper level to operate its programs. The current DOE
approach of making broad estimates has caused some programs to
receive too much, and others too little. This report has got
the DOE to start to formulate a more structured system to abide
by which in return will yield more accurate estimates.
62. ``Financial Audit: U.S. Government Printing Office's Financial
Statements for Fiscal Year 1995,'' GAO/AIMD-96-52.
a. Summary.--This report presents the results of the audit
of the U.S. Government Printing Office's (GPO) financial
statements for the fiscal year ended September 30, 1995. The
firm of Arthur Andersen LLP was hired to do the audit. Arthur
Andersen found that GPO does operate an effective internal
control structure to oversee financial reporting. In addition,
Arthur Andersen found that GPO should tighten up security over
computer access by programmers and systems application
personnel to the financial management and electronic data
processing systems (EDP), strengthen backup planning for the
financial management and EDP systems, and begin to reconcile
ledgers for accounts payable and receivable on a more regular
basis.
b. Benefits.--This helps the subcommittee in its continued
oversight of financial management in the executive branch. This
report disclosed that GPO's consolidated financial statements
are prepared in accordance with generally accepted accounting
principles (GAAP). GPO's accounting system includes internal
controls designed to provide reasonable assurance that assets
are safeguarded against loss from unauthorized use, and that
transactions are properly recorded. This report enabled the
subcommittee to examine a very solid accounting system in which
it could pass on information about to other agencies with
accounting problems.
63. ``Overseas Real Estate: Millions of Dollars Could be Generated by
Selling Unneeded Real Estate,'' GAO/NSIAD-96-36.
a. Summary.--The Department of State owns more than $10
billion in real estate at 200 locations overseas. The report
reviewed the Department's efforts to identify and sell excess
or underutilized real estate and to use the proceeds for other
high-priority real property needs. In 1995, GAO reported on the
potential budget savings that selling high-value properties in
Tokyo could have and on the problems in State's management of
overseas real property. This report: (1) identifies real estate
at other locations that could possibly be sold to provide funds
for other real estate needs, (2) sets forth the problems State
has in deciding what properties to dispose of, and (3)
discusses how State uses the proceeds from properties it does
sell.
b. Benefits.--The report will assist the subcommittee with
its oversight responsibilities and its jurisdiction relating to
excess and surplus real property under the Federal Property and
Administrative Services Act of 1949.
64. ``Telecommunications Network: NASA Could Better Manage Its Planned
Consolidation,'' April 1996, GAO/AIMD-96-33.
a. Summary.--This is an assessment of the National
Aeronautics and Space Administration's plans to consolidate the
management and operations of its wide area telecommunications
networks. The report assessed whether consolidation would
result in savings and whether NASA considered a full range of
approaches to consolidation so as to ensure maximum savings.
The GAO reviewed reports prepared by NASA teams who are
responsible for evaluating the agencies activities and
recommending ways to save money in addition to interviewing
selected members of the teams, officials from NASA
headquarters, and officials from NASA's five networks at three
centers.
b. Benefits.--The report assessed whether savings would
result from the consolidation, and whether NASA planned to
maximize such savings. This aids the subcommittee in its
oversight of telecommunications issues.
65. ``USDA Telecommunications: More Effort Needed to Address Telephone
Abuse and Fraud,'' April 1996, GAO/AIMD-96-59.
a. Summary.--This report stated that the Department of
Agriculture does not cost-effectively manage and plan its
telecommunications resources. In addition the report discusses
problems identified involving fraud and abuse of the
Department's telephone resources and provides an update on
USDA's efforts to address recommendations from our past report.
b. Benefits.--USDA does not have adequate controls for
ensuring that its telephones are used properly. Telephone bills
are generally not reviewed. USDA is, accordingly, at risk to
telephone abuse and fraud. Since the issuance of the report,
USDA has begun to correct some of the telecommunications
management weaknesses.
66. ``Customs Service Modernization: Strategic Information Management
Must Be Improved for National Automation Program to Succeed,''
May 1996, GAO/AIMD-96-57.
a. Summary.--This report was completed for Hon. Philip M.
Carne, chair, Subcommittee on Trade, Committee on Ways and
Means, House of Representatives and assesses the U.S. Customs
Service's efforts to modernize its automated systems. GAO in
the report recommends that, prior to additional Customs
Distributed Computing for the Year 2000 (CDC-2000) equipment
purchases (except for those for office automation needs) and
before beginning to develop any applications software that will
run on this equipment, the Commissioner of Customs should:
Assign accountability and responsibility for
implementing National Customs Automation Program
(NCAP).
Ensure that the export and passenger business
processes are completed and the requirements generated
from these two tasks, along with those of the import
process requirements, are used to determine how Customs
should accomplish its mission in the future, including
who will perform operations and where they will be
performed; what functions must be performed as part of
these operations, what information is needed to perform
these functions, and where data should be created and
processed to produce such information; what alternative
processing approaches could be used to satisfy Customs'
requirements, and what are the costs, benefits, and
risks of each approach; and what processing approach is
optimal, and not resume CDC-2000 purchases unless CDC-
2000 is determined to be the optimal approach.
Complete the agency's effort to redefine the
role of the systems steering committee to include
managing systems as investments as required by the
Office of Management and Budget's Circular A-130 and
information technology investment guide. This effort
should include developing and using explicit criteria
to guide system development decision and using the
criteria to revisit whether Custom's planned
investments, including Automated Commercial Environment
(ACE) and Automated Commercial System enhancements, are
appropriate.
Direct the steering committee to ensure that
systems strictly adhere to Customs' system development
steps. As part of this oversight, we recommend that
before applications are developed for ACE, the steering
committee ensure that Customs resolves how to
incorporate NCAP-mandated functions into ACE and
prepares a security plan.
b. Benefits.--The subcommittee will monitor whether the
recommendations are acted upon. This is part of the
subcommittee's effort to encourage improvement in management
practices, including information technology management, in the
executive branch.
67. ``Defense Procurement: E-Systems' Reporting of Alleged Wrongdoing
to Army's Fraud Division,'' May 1996, GAO/OSI-96-6.
a. Summary.--The Memcor Agreement between the Department of
the Army and E-Systems, Inc., requires E-Systems to report all
hotline allegations to the Army's Procurement Fraud Division.
This report discusses whether E-Systems violated the agreement,
and whether the Government experienced any loss as a result of
E-Systems' actions.
b. Benefits.--A potential loss to the Government occurred
in one hotline case that the GAO examined. E-Systems actions
may have cost the Government about $228,000, resulting from
mischarged labor hours. As of April 1996, the resolution of
this issue was still in process.
68. ``Financial Management: BIA's Tribal Trust Fund Account
Reconciliation Results,'' GAO/AIMD-96-63.
a. Summary.--This report was produced at the request of
Hon. John McCain, chair, and Hon. Daniel K. Inouye, vice chair,
Committee on Indian Affairs, U.S. Senate. It reviews the Bureau
of Indian Affairs' efforts to reconcile and certify tribal
trust fund accounts. GAO provides its evaluation if the results
of the reconciliation effort, including (1) whether the
reconciliation report clearly communicated the results of the
reconciliation and fully disclosed known limitations, (2)
whether the certification contract addressed the extent to
which the reconciliation provided as complete an accounting as
possible, and (3) the tribes' responses to BIA's reconciliation
report.
Tribal accounts could not be fully reconciled or audited
due to missing records and the lack of an audit trail in BIA's
systems. Tribes have expressed concerns about the scope and
results of the reconciliation process. BIA may be unable to
resolve those concerns. Tribes have claimed that BIA has not
consistently provided them with statements on their account
balances, that their trust fund accounts have never been
reconciled, and that BIA planned to contact with a third party
for management of trust fund accounts. Accordingly, Congress
required BIA to reconcile trust fund accounts before they can
be transferred to any third party.
b. Benefits.--This report shows the BIA's effort to
reconciliate Tribal Trust Fund Accounts. The report addresses
several areas of reconciliation limitations and inadequacies of
the BIA including: lack of a known universe of transactions and
leases and the use of issue papers to approve changes in
reconciliation scope due to unforseen circumstances that could
not be completed or performed. The report acknowledges these
tribal accounts could be included in a settlement process, for
any attempt to reconcile these accounts would be costly and
limited.
69. ``Weather Forecasting--Recommendations to Address New Weather
Processing System Development Risks,'' May 1996, GAO/AIMD-96-
74.
a. Summary.--The report describes recommendations made by
GAO in testimony provided on February 29, 1996 to the
Subcommittee on Energy and Environment, House Committee on
Science. The testimony dealt with the National Weather
Service's (NWS) Advanced Weather Interactive Processing System
(AWIPS). The recommendations, if implemented, will strengthen
NWS's ability to achieve a fair return on its AWIPS investment.
b. Benefits.--This aids the subcommittee in its oversight
of technology issues.
70. ``The Federal Judiciary: Reviews of Court Operations Should Adhere
to Oversight Standards,'' June 1996, GAO/GGD-96-114.
a. Summary.--The report examines how the Administrative
Court of the U.S. Courts assessed the efficiency of local court
operations and promoted the use of efficient administrative
practices within the judiciary. Since November 1995, the AOUSC
Office of Audit has chosen to follow generally accepted
Government auditing standards although not required by statute
to do so.
b. Benefits.--This report aided the subcommittee in its
oversight of Federal financial management issues. Legislation
was proposed by Senator Hank Brown that would have required the
Judiciary to conduct studies of whether the CFO Act should
apply to it. The information in this report helped the
subcommittee arrange for that requirement to be dropped from
the final legislation.
71. ``Financial Management--DOD Needs to Lower the Disbursement
Prevalidation Threshold,'' June 1996, GAO/AIMD-96-82.
a. Summary.--This report was requested by the chairman of
the Subcommittee on National Security, Committee on
Appropriations, the chairman of the Subcommittee on Government
Management, Information, and Technology, Committee on
Government Reform and Oversight, (both House committees) the
ranking minority member, Senate Committee on Governmental
Affairs and three members of the Senate, Barbara Boxer, Charles
Grassley and William Roth.
The report assessed the Department of Defense's efforts to
reduce problem disbursements and its implementation of section
8137 of Public Law 103-335, Department of Defense
Appropriations Act, 1995, which required that each disbursement
exceeding $5 million be matched to the appropriate obligations
in DOD's official accounting records before the disbursement is
made.
The Congress thinks it important that DOD prematch, or
prevalidate, disbursements with recorded obligations, which is
an important control for ensuring that agency funds are used as
authorized by the Congress and the DOD. Without such matching,
there is a substantial risk that fraudulent or erroneous
payments may be made without being detected and that cumulative
amounts of disbursements may exceed appropriated amounts and
other legal limits. In reducing these risks, the provisions of
the act are intended to strengthen accountability over DOD's
disbursement process, which has been plagued by longstanding
problems.
The DOD IG participated in the review and has issued a
separate report, ``Implementation of the DOD Plan to Match
Disbursements to Obligations Prior to Payment,'' DOD IG Project
No. 5FI-2031, draft report.
The GAO recommended in the report that the Secretary of
Defense direct the DOD Comptroller to develop a plan to
prevalidate all disbursements. As a first step, the DOD
Comptroller should reduce the threshold at the DFAS Columbus
Center to $4 million and continuously lower the threshold in
accordance with the plan to prevalidate all disbursements.
Similar plans should be developed to prevalidate all
disbursements at all the other DOD disbursing activities. These
plans should incorporate the DOD IG's recommendations. Further,
the GAO recommended that the Secretary of Defense should direct
the Comptroller to ensure that existing accounting policies and
procedures are followed in recording obligations, detecting and
correcting errors, and posting complete and accurate accounting
information in systems supporting the disbursement process.
b. Benefits.--The subcommittee held a hearing on DOD
financial management at which the problem of disbursements was
discussed. This report is of value to the subcommittee as part
of its continued monitoring of the problem, and the manner in
which the DOD is attempting to resolve it.
72. ``Management Reform--Completion Status of Agency Actions Under the
National Performance Review,'' June 1996, GAO/GGD-96-94.
a. Summary.--This report is addressed to Hon. Ted Stevens
and John Glenn, chairman and ranking minority member of the
Committee on Governmental Affairs, U.S. Senate; Hon. William F.
Clinger, Jr., and Cardiss Collins, chairman and ranking
minority member of the Committee on Government Reform and
Oversight respectively; and Hon. John R. Kasich, chairman,
Committee on the Budget, House of Representatives.
The report reviews the completion status of the 380 NPR
action items that NPR says are completed. NPR had identified a
series of 1,203 action items necessary to implement the NPR
Phase I recommendations. So NPR claimed that 380 out of 1,203
items had been completed, or 32 percent. The GAO found that out
of the 380,294 were actually completed, that is 294 out of
1,203 or 24 percent. So 76 percent of the initial NPR
recommendations have not been implemented as of the date of
this report, June 12, 1996.
The NPR reported 20 out of 33 items in the intelligence
area as completed but the CIA refused to provide the GAO with
information to independently verify the status of the 20 items.
The CIA claimed that they had given the NPR staff the
information.
b. Benefits.--It is of the upmost importance for Congress
to be kept aware of fraud, abuse, and mismanagement in the
executive branch. A ``National Performance Review'' is a step
in the right direction, but because it is an internal
investigation by the executive branch, it still needs oversight
from an outside source. This report helped the subcommittee in
its continuing monitoring of the National Performance Review's
actual and claimed achievements.
73. ``National Park Service--Information on Special Account Funds at
Selected Park Units,'' May 1996, GAO/RCED-96-90.
a. Summary.--GAO was requested to determine the sources and
amounts of special account funds available to the Park Service
and the amount of special account funds that were available to
each of them and whether the expenditure of funds in special
accounts were consistent with the purposes for which those
accounts were established. The Park Service has eight special
accounts with a total value of $45 million in fiscal year 1994.
Of the eight accounts, five are authorized to recover costs of
particular in-park activities. The other three accounts are not
designed to recover costs, but to provide the parks with cash
and noncash benefits.
b. Benefits.--This aids the subcommittee in its oversight
responsibilities by identifying eight special accounts and
providing financial data for these accounts and reviewing the
available documentation for expenditures from special accounts
at six park units, showing that the expenditures were for
authorized purposes.
74. ``Public Timber: Federal and State Programs Differ Significantly in
Pacific Northwest,'' May 1996, GAO/RCED-96-108.
a. Summary.--This is a report to the chairman of the House
Committee on Resources. Recent studies and testimony before
congressional committees have suggested that some States
operate their timber sales programs at less cost than the
Federal agencies. This compares timber sales programs of two
Federal agencies with those of the States. It identifies (1)
the major differences among the timber programs of the Forest
Service's Pacific Northwest Region, the Bureau of Land
Management, and the States of Washington and Oregon and (2) the
effect of these differences on the agencies' planning
processes.
The States' legislative guidance emphasizes timber
production and maximizing revenues over the long-term. The
States fund their timber sales programs with a percentage of
timber sales receipts, which provides built-in incentives to
promote cost efficiency.
b. Benefits.--This report aids the subcommittee in
oversight of Federal timber sale programs and why when volumes
of timber sold and harvested from Federal timberlands have
decreased in recent years, the costs of Federal timber sales
programs have not decreased proportionately. The report
identifies reasons for the States timber sale programs to be
less costly compared to Federal timber sale programs in the
Pacific Northwest.
75. ``Rural Development--Steps Towards Realizing the Potential of
Telecommunications Technologies,'' June 1996, GAO/RCED-96-155.
a. Summary.--GAO was asked by the chairman and ranking
minority member of the Senate Committee on Agriculture,
Nutrition, and Forestry to identify Federal programs that rural
areas can use to fund telecommunications projects; identify
lessons learned by rural areas that have used these programs to
establish such projects; and obtain the views of experts,
public and private officials, and program users on whether
changes to these programs are needed.
b. Benefits.--This report suggests ideas for overcoming the
remoteness from urban centers for many rural farmers. While
improved roads was previously seen as the solution to such
dilemmas, the GAO uncovers the suggestion that the advancement
of, or the better accessability of telecommunications
technology including the Internet, video conferencing, and
high-speed data transmission to name a few are the key to
bringing the farmers closer to the city.
Aspects of the Federal Agriculture Improvement and Reform
Act of 1996, as well as changes to guidelines proposed by the
Economic Development Administration should help address these
problems.
76. ``Software Capability Evaluation: VA's Software Development Process
is Immature,'' GAO/AIMD-96-90.
a. Summary.--The GAO report reviewed software development
processes at the Veterans Benefits Administration (VBA) and
VA's Office of Information Resources Management's Austin
Automation Center. The sites and projects were selected by VBA
and VA, respectively, as those that represent their best
software development processes and practices. VA has reportedly
spent an estimated $294 million on these activities between
October 1, 1986 and February 29, 1996. The modernization
program can have a major impact on the efficiency and accuracy
with which over $20 billion in benefits and other services is
paid to veterans and their dependents. Software development is
a critical component of this major modernization initiative.
VBA, with the assistance of contractors, will be developing
software for the veterans Services Network (VETSNET)
initiative, a replacement for the existing Benefit Delivery
Network. For effort like VETSNET to succeed, it is crucial that
VBA have in place a disciplined set of software development
processes to produce high-quality software within budget and on
schedule. In fiscal year 1995, VBA had 314 full-time
equivalents, with payroll expenses of $20.8 million, devoted to
developing and maintaining software throughout the
organization. It also spent $17.7 million in contract services
in these areas.
The GAO found that VBA is extremely weak in the
requirements management, software project planning, and
software subcontract management criteria. It cannot reliably
develop and maintain high-quality software on any major project
within existing cost and schedule constraints, placing the VBA
modernization program at risk.
b. Benefits.--This report is part of a series of reports
the GAO has completed on software development and management of
the development process in the agencies. It is helpful to the
subcommittee in its oversight of the technology area and of
management capability in the agencies.
77. ``Tax Systems Modernization: Actions Underway But IRS Has Not Yet
Corrected Management and Technical Weaknesses,'' June 1996,
GAO/AIMD-96-106.
a. Summary.--Reflecting continuing concern with TSM, the
Treasury, Postal Service, and General Government Appropriations
Act of 1996 required that the Department of the Treasury
provide a report to the House and Senate Committees on
Appropriations identifying, evaluating, and prioritizing all
IRS systems investments planned for fiscal year 1996, using
explicit decision criteria; providing a schedule for
successfully correcting weaknesses that were identified in
April 1995; presenting a milestone schedule for developing and
implementing all projects included in the tax systems
modernization program; and presenting a plan to expand the
utilization of external expertise for systems development and
total program integration. The GAO report states that the IRS
has not made adequate progress in correcting its management and
technical weaknesses, and none of GAO's recommendations have
been fully implemented. Additionally, the GAO report stated
that the IRS does not now have the capability to manage all of
its current contractors successfully. The report recommends
that Congress limit IRS TSM spending to only cost-effective
modernization efforts that meet specified criteria.
b. Benefits.--The subcommittee held two hearings on the
Internal Revenue Service during 1996, at both of which the
problem of tax system modernization costs and lack of results
was discussed. The GAO reports formed the basis for much of the
subcommittee preparation for the hearings.
78. ``Budget Issues: Inventory of Accounts With Spending Authority and
Permanent Appropriations, 1996,'' May 1996, GAO/AIMD-96-79.
a. Summary.--This report updates the GAO's 1987 inventory
of accounts with spending authority and permanent
appropriations (commonly referred to as ``backdoor
authority''). It provides specific information on such accounts
and analyzes the changes in the number and dollar amounts of
accounts with backdoor authority. Spending authority is
authority provided in laws other than appropriation acts to
obligate the U.S. Government to make payments. It includes
contract authority, authority to borrow, authority to forgo the
collection of proprietary offsetting receipts (the use of
monetary credits or bartering), and authority to make other
payments for which the budget authority is not provided in
advance by appropriation acts. A permanent appropriation is an
appropriation that is available as the result of previously
enacted legislation, remains so until repealed, and does not
require current appropriations action by Congress.
b. Benefits.--This report helps the subcommittee in
oversight of Federal management practice by updating the 1987
report discovering some accounts no longer have backdoor
authority and discovering that new ones exist. We analyzed
material by comparing the old inventory data with the new in
terms of number of accounts and dollar amounts. The oversight
conducted was over a broad spectrum of over 80 departments and
agencies. The report uncovers that the use of backdoor
authority continues to be widespread and both it and the number
of accounts has increased since 1987.
79. ``CFO Act Financial Audits--Navy Plant Property Accounting and
Reporting is Unreliable,'' July 1996, GAO/AIMD-96-65.
a. Summary.--This report describes in detail the areas
contributing to inaccurate financial reporting of the Navy's
plant property account balance. It recommends additional
actions needed to ensure that the Navy has reliable information
to effectively manage and adequately control the billions of
dollars the Government has invested in the Navy's plant
property.
The report cites four primary weaknesses:
In preparing the Navy fiscal year 1994
financial reports on general fund operations, $24.6
billion of real property was counted twice;
the Navy had no assurance that all plant
property from only general fund activities was included
in its fiscal year 1994 financial reports on general
fund operations;
the $291 million reported as Navy plant
property work-in-progress was highly questionable, and
the Navy's logistics, custodial, and
accounting records of real property were often not
reconciled on a timely basis, or in some cases were
never reconciled. For example, for over 20 years the
Navy's financial reports overstated the real property
account balance by millions of dollars because plant
property at a shipyard closed in the 1970's had not
been removed from the Navy's accounting records.
Because this property was no longer carried in the
Navy's logistics records, a reconciliation between
these records and the Navy's accounting records would
have identified this error.
The GAO recommended that:
By September 30, 1996, the Navy Comptroller
Manual provision that lists the Navy's activities
engaged in general fund operations and DBOF operations
should be updated and accurately maintained;
the Navy and DFAS, Cleveland Center should use
this listing as part of their analytical procedure
testing to help ensure that the plant property account
balances reported in the Navy's financial reports are
complete and include information from only general fund
activities;
Navy activities and DFAS should routinely
monitor plant property work-in-progress accounts and
promptly review and resolve large balances;
Navy activities should promptly request, and
DFAS expeditiously provide, information to assist in
transferring plant property work-in-progress items to
on-hand accounts and in correcting errors; and
Navy activities and DFAS personnel should be
trained to identify and resolve work-in-progress and
other plant property problems.
b. Benefits.--This report was of great help to the
subcommittee in its oversight of DOD financial management
issues. DOD agreed with the findings of the report and groups
have been established to fix problems involving the consistency
of report information and establish and monitor a plan of
action and milestones for improving property reporting and
accounting. DOD has said that corrective actions will be
accomplished within the next year; this shows that the
committee's oversight is paying off by getting cabinet
departments thinking in terms of downsizing and cutting down on
fraud and waste.
80. ``Financial Audit: Examination of IRS' Fiscal Year 1995 Financial
Statements,'' July 1996, GAO/AIMD-96-101.
a. Summary.--As in prior years, no opinion could be
provided on the financial statements. The reasons given were:
Amounts of total revenue ($1.4 trillion) and
tax refunds ($122 billion) cannot be verified or
reconciled to accounting records maintained for
individual taxpayers in the aggregate;
the amounts reported for various types of
taxes collected (social security, income, and excise
taxes, for example, cannot be substantiated;
the reliability of reported estimates of $113
billion for valid accounts receivable and $46 billion
of collectible accounts receivable cannot be
determined;
a significant portion of IRS' reported $3
billion in nonpayroll operating expenses cannot be
verified; and
the amounts the IRS reported as appropriations
available for expenditure for operations cannot be
reconciled fully with Treasury's central accounting
records showing these amounts, and hundreds of millions
of dollars in differences have been identified.
The overriding problem in providing an opinion on the IRS'
financial statements, reporting on its internal controls, and
reporting on its compliance with laws and regulations is that
the IRS has not yet been able to provide support for major
portions of the information presented in its financial
statements, and in some cases where it was able to do so, the
information was found to be in error.
The core financial management control weaknesses that
contribute greatly to these problems are that the IRS does not
have comprehensive documentation on how its financial
management system works nor has it put in place procedures to
routinely reconcile activity in summary accounts records with
that maintained in its detailed masterfile records of
taxpayers' accounts. Another weakness was that the IRS did not
provide support as to whether and when it received goods and
services for significant portions of its nonpayroll operating
expenses.
b. Benefits.--This is one of the reports that the
subcommittee reviews as part of its oversight responsibility
for CFO Act implementation by the agencies. It was used
extensively in the two hearings the subcommittee held on the
Internal Revenue Service.
81. ``Financial Audit: Resolution Trust Corporation's 1995 and 1994
Financial Statements,'' July 1996, GAO/AIMD-96-123.
a. Summary.--The Resolution Trust Corporation (RTC) opinion
was analyzed by the GAO in this report for the years ended
December 31, 1995 and 1994. The report presents GAO's opinion
on RTC management's assertions of the quality of its system of
internal controls. The report also discusses (1) internal
control weakness, (2) the savings and loan crisis and creation
of RTC, (3) the completion of RTC's mission, (4) RTC's cost and
allocations, (5) RTC's contracting, (6) how much resolving the
savings and loan crisis costed, and (7) fiscal implications
which still exist.
b. Benefits.--This report reviews as part of its oversight
responsibility for the CFO Act implementation by the agencies.
The report was a benefit for the finding of internal control
weaknesses over RTC's computerized information systems and the
status of RTC and FDIC actions to correct them. This report in
turn will lead to the evaluation of the adequacy and
effectiveness of those corrective actions as part of the GAO
audit of FDIC's 1996 financial statements.
82. ``Fire-Safe Accommodations: Information on Federal Agencies'
Compliance with Public Law 101-391 Lodging Requirements,'' July
1996, GAO/GGD-96-135.
a. Summary.--After the death of 400 Americans over 5 years
from multistory hotel fires, Congress passed the Hotel and
Motel Fire Safety Act of 1990 to save lives and property by
promoting fire safety. The act requires that GAO review
annually Federal agency compliance with the provisions which
require that a certain percentage of Federal travelers stay in
hotels or motels meeting fire safety requirements. This report
fulfills that requirement.
b. Benefits.--The report will assist the subcommittee with
its oversight of the Hotel and Motel Fire Safety Act of 1990
and also with its oversight over GSA, which arranges contracts
on behalf of Federal travelers for hotels.
83. ``Information Management: Energy Lacks Data to Support Its
Information System Streamlining Effort,'' GAO/AIMD-96-70(3).
a. Summary.--The Department of Energy developed a standard
inventory of data on specific systems used by the Department
and its management and operating contractors. It planned to use
this inventory in streamlining its information systems.
However, the inventory is substantially incomplete and lacks
sufficient information describing systems' functional
capabilities. As a result, the inventory will not be adequate
to help eliminate duplicate information systems as part of the
streamlining effort.
b. Benefits.--This aids the subcommittee in its oversight
of information management. In order to begin to streamline
information, it is essential that the DOE and its contractors
are able to assess the capabilities of existing systems before
implementing new systems. This report has illustrated the fact
that the DOE does not have adequate reporting methods for
software inventory. Much money can be saved by having an
accurate procedure for information systems because it will
greatly cut down on duplication and waste when purchasing new
systems.
84. ``Statistical Agencies: Statutory Requirements Affecting Government
Policies and Programs,'' July 1996, GAO/GGD-96-106.
a. Summary.--The Federal Government is the largest single
producer, consumer, custodian and disseminator of statistical
information in the United States. This report provides a list
of the legislatively mandated reports that statistical agencies
are to produce for Congress on a regular basis, the statutory
authority for the reports and the authorizing statutes for the
agencies.
b. Benefits.--This report is one of three examining aspects
of the U.S. statistical system. This project was undertaken to
gather background information for a potential consolidation of
parts, if not all, of the U.S. statistical system.
85. ``Telecommunications Costs Reported by Federal Organizations for
Fiscal Year 1995,'' GAO/AIMD-96-105.
a. Summary.--This report provides information on
Governmentwide telecommunications costs. Forty-two executive
branch departments and Government agencies were surveyed to
identify total fiscal year 1995 telecommunications costs,
divided into five categories: (1) FTS 2000 services, (2) non-
FTS 2000 long-distance services, (3) local telecommunications
services, (4) wireless services, and (5) telecommunications
support contract services. Also provided in this report is
information on reported local access costs associated with FTS
2000 telephone calls and the Government's reported fiscal year
1995 costs for the Purchase of Telecommunications and Services
(POTS).
b. Benefits.--This report aids the subcommittee in
oversight by an extension of the analysis of the costs of
certain Federal agency telecommunications services which is
required under Section 629(c) of Public Law 104-52, the Fiscal
Year 1996 Treasury, Postal Service, and General Government
Appropriations Act. Though this report analyzed detailed
information dealing with the Federal telecommunications world,
due to time constraints, GAO did not independently verify the
accuracy of the cost information provided by Federal
organizations during the review.
86. ``Acquisition Reform: Purchase Card Use Cuts Procurement Costs,
Improves Efficiency,'' August 1996, GAO/NSIAD-96-138.
a. Summary.--The Federal Acquisition Streamlining Act of
1994 (FASA) eliminated some requirements for purchases of
$2,500 or less, called micropurchases. Previously, the National
Performance Review had recommended that agencies increase their
use of Government commercial credit cards, called purchase
cards, for small purchases to cut the red tape normally
associated with the procurement process. As of fiscal year
1995, cards were used at most Federal agencies for over 4
million purchases worth more than $1.6 billion. This GAO report
was a legislatively mandated review of FASA implementation. It
reviewed the nature and extent of progress in using the
purchase card, whether card use had led to savings, potential
increase in card use, and controls in place at the program
level.
b. Benefits.--The GAO report shows that use of purchase
cards increases agency efficiency. Purchase card use reduces
labor and payment processing costs, sometimes by more than
half. Reviews of controls in place to monitor card use indicate
no significant patterns of misuse of the cards. The report
suggests that there is a need for greater interagency
communication to share improvements in card programs to sustain
growth in card use.
87. ``Aviation Acquisition: A Comprehensive Strategy is Needed for
Cultural Change at FAA,'' August 1996, GAO/RCED-96-159.
a. Summary.--This claims that the persistent acquisition
problems at the Federal Aviation Administration (FAA) are a
result of its organizational culture. It includes suggestions
as to how the culture can be changed. Over the past 15 years,
the FAA's modernization program has experienced substantial
cost overruns, lengthy schedule delays, and shortfalls in
performance. Concerned about these recurring problems, the
chairman, Subcommittee on Transportation and Related Agencies,
House Committee on Appropriations, asked GAO to review the
agency's management of the acquisition process to determine
whether organizational culture was contributing to the FAA's
acquisition problems.
The GAO found that FAA's organizational culture has been an
underlying cause of the agency's acquisition problems. Its
acquisitions were impaired because employees acted in ways that
did not reflect a strong commitment to mission focus,
accountability, coordination, and adaptability. The GAO reports
that research has shown that organizations with more
constructive cultures perform better and are more effective. In
organizations with a more constructive culture, employees
exhibit a stronger commitment to mission focus, accountability,
coordination, and adaptability. At the FAA, insufficient
mission focus; weak accountability; poor internal coordination;
and inadequate adaptability have all hampered acquisitions.
The GAO recommends that the Secretary of Transportation
direct the FAA administrator to develop a comprehensive
strategy for cultural change.
b. Benefits.--This report aids the subcommittee in its
oversight of management practices by Federal agencies.
Discovered in this report are the widespread inadequacies and
inefficiencies displayed by the FAA ranging in areas of mission
focus, accountability, coordination, and adaptability. The GAO
displays the need for the organization to adapt more
constructive cultures. The GAO recommends that the Secretary of
Transportation direct the FAA administrator to develop a
comprehensive strategy for cultural change.
88. ``Defense Management: Information on Selected Aspects of DOD's Jet
Fuel Programs,'' July 1996, GAO/NSIAD-96-188.
a. Summary.--This was done as a result of House Report 104-
208. The GAO reviewed the DOD's reimbursement pricing policies
for the Defense Logistics Agency's bulk and into-plane jet fuel
programs. The bulk fuel program refers to jet fuel that the
agency's Defense Fuel Supply Center (DFSC) purchases from major
commercial suppliers and transports directly (via trucks,
pipelines, barges, and railroads) to military installations for
use by military and other authorized aircraft. The into-plane
program consists of individual contracts between DFSC and
fixed-base operators who provide jet fuel to authorized
aircraft at contractually established prices. The policies and
procedures of the Defense Business Operations Fund (DBOF)
govern the setting of standard prices for jet fuel.
The report discusses:
Pricing policies, rules, and regulations used
to establish standard prices for both fuel programs and
whether the cost factors used for each are consistent
with applicable policies;
whether bulk fuel usage and into-plane sales
have changed in recent years and our assessment of the
reasons for any changes; and
the significance and validity of questions and
complaints raised by into-plane contractors and the
National Air Transportation Association about the
effect on their businesses of DOD changes in the
pricing of into-plane jet fuel.
b. Benefits.--This report aids the committee in oversight
of the DOD's Jet Fuel Programs, ranging from the pricing of the
bulk fuel program, the pricing of the into-plane program, and
general analysis of the comparisons between rises in prices of
the two fuels. The report displays that the standard jet fuel
prices are consistent with current DBOF policies and procedures
and that individual contractor's concerns of the disparity of
rising prices of jet fuel between bulk fuel and into-plane fuel
are unwarranted and not widespread.
89. ``NASA Chief Information Officer: Opportunities to Strengthen
Information Resources Management,'' GAO/AIMD-96-78(2).
a. Summary.--The GAO was asked to assess the effectiveness
of the National Aeronautics and Space Administration's (NASA)
initiative to implement a chief information officer (CIO)
position. NASA appointed its CIO in February 1995 as a senior
manager within the Office of the Administrator to strengthen
IRM leadership.
The GAO concluded that NASA has gained some initial IRM
improvements through its appointment of a CIO. By establishing
a CIO Council to help select, control, and evaluate its system
investments, NASA is beginning to conform to the Paperwork
Reduction Act and the Information Technology Management Reform
Act and should be in a position to better manage its
information resources in the future. Additional improvements,
such as instituting effective mechanisms for information
technology inventorying and accounting, will also be critical.
b. Benefits.--This report aids the subcommittee in its
oversight of information resource management issues. The report
assessed NASA's: effectiveness of implementing a Chief
Information Officer position, while evaluating CIO initiatives,
and identifying opportunities for NASA to strengthen its CIO
position and improve its IRM program. GAO also felt additional
improvements, such as instituting effective mechanisms for it
inventory and accounting, will also be critical.
90. ``Navy Financial Management--Improved Management of Operating
Materials and Supplies Could Yield Significant Savings,''
August 1996, GAO/AIMD-96-94.
a. Summary.--This report provides the results of GAO's
detailed assessment of the Navy's financial reporting on and
management of operating materials and supplies that are not
part of DBOF inventories. Specifically, it provides the results
of our assessment of: (1) the adequacy of the Navy's
accountability and visibility over its approximately $5.7
billion in operating materials and supplies on board vessels
and at the redistribution sites; (2) the Navy's management of
excess items of this type; and (3) the accuracy of operating
unit records for operating materials and supplies that we
tested. This report also contains recommendations that are
directed at improving financial reporting and inventory
management.
b. Benefits.--A report beneficial to the subcommittee in
its oversight of financial management. The report reviews
various aspects of the Department of Navy's financial
management operations and its ability to meet the management
and reporting requirements of the Chief Financial Officers Act
of 1990, as amended by the Government Management Reform Act of
1994, examining the Navy reporting on and management of
operation materials and supplies.
91. ``The Accounting Profession: Major Issues Progress and Concerns,''
GAO/AIMD-96-98 and ``The Accounting Profession: Appendices to
Major Issues: Progress and Concerns,'' GAO/AIMD-96-98A.
a. Summary.--This two-volume report identifies
recommendations made from 1972 through 1995 to improve
accounting and auditing standards and the performance of
independent audits under the Federal securities laws and the
actions taken on these recommendations. It further examined
unresolved issues and made recommendations for further
congressional review.
b. Benefits.--Helpful to the subcommittee in its oversight
of accounting measures, the Inspector General Act and the Chief
Financial Officers Act. Analysis of accounting profession's
responsiveness in making changes to improve financial reporting
and auditing of public companies and analysis of statistical
data on the results of peer reviews of accounting firms showing
that most firms have effective quality control programs to
ensure adherence with professional standards. However, the
report also shed light of shortcomings within certain major
issues: (1) auditor independence, (2) auditor responsibility
for detecting fraud and reporting on internal controls, and (3)
maintaining the independence of FASB.
92. ``Debt Ceiling: Analysis of Actions During the 1995-1996 Crisis,''
August 1996, GAO/AIMD-96-130.
a. Summary.--This report was requested by the chairmen of
the Senate Committee on Finance and the House Committee on Ways
and Means. It addresses the actions taken by the Department of
the Treasury when Treasury reached the statutory debt limit
ceiling of $4.9 trillion established in 1993. It analyses
Treasury's actions relating to investments and redemptions in
Federal trust funds and the restoration of losses incurred.
The public debt is composed of Treasury securities, which
include bills, notes, and bonds that Treasury issues to raise
cash to finance Government operations and invest trust fund
receipts. On October 31, 1995, about 75 percent of the $4.9
trillion public debt was Treasury securities held by the
public. The remainder, about $1.3 trillion, was held by Federal
trust funds. The GAO concluded that, during the 1995-96 debt
ceiling crisis, Treasury acted in accordance with statutory
authorities when it suspended some investments of the G-fund,
exercised its discretion in not reinvesting some of the
Exchange Stabilization Fund's maturing Treasury securities, and
issued certain securities to Government trust funds without
counting them toward the debt ceiling.
b. Benefits.--During the 1995-96 debt ceiling crisis, the
Federal Government's debt increased from $4.9 trillion to $5.5
trillion. Treasury took several actions during this period to
raise funds to meet Federal obligations without exceeding the
debt ceiling. The subcommittee learned the chronology of these
actions along with a financial and legal analyses of them.
93. ``Military Family Housing--Opportunities Exist to Reduce Costs and
Mitigate Inequities,'' September 13, 1996, GAO/NSIAD-96-203.
a. Summary.--The Defense Department's policy of relying
primarily on private-sector housing to meet military family
housing needs is cost-effective. Studies by the Congressional
Budget Office and DOD have shown that compared to the cost of
providing military housing, the Government's cost is
significantly less when military families are paid housing
allowances and live in private housing. These studies and GAO's
analysis estimate that the cost difference to the Government
for each family that lives in private housing ranges from about
$3,200 to $5,500 annually. The Government's cost is less
primarily because families living in private housing pay a
portion of their housing costs and the Government pays
significantly less Federal school impact aid for military
dependents that live in private housing, which is subject to
local property taxes.
Although the DOD housing policy is cost-effective, DOD and
the services have not taken full advantage of this policy. Data
reported by the services and GAO's analysis show that the
communities surrounding many military installations could meet
thousands of additional family housing needs. Yet, the services
continue to operate old housing that does not meet suitability
standards and, in some cases, improve or replace Government
housing at such installations. As a result, opportunities for
reducing housing costs have been lost because DOD has not taken
advantage of the significant savings available from use of
private housing.
b. Benefits.--This report helped the subcommittee conclude
that the DOD's policy of relying on private-sector housing to
meet military family housing needs is saving the Government
money. In the post cold war age of shrinking defense budgets,
the short-term flexibility yielded by housing allowances seems
preferable to the long-term, costly commitments that come with
military construction. In the current environment of the 104th
Congress working to make the Government a smarter shopper, this
is a prime example.
94. ``NASA Infrastructure--Challenges to Achieving Reductions and
Efficiencies,'' September 1996, GAO/NSIAD-96-187.
a. Summary.--This reviews the status of NASA's efforts to
achieve reductions and efficiencies in key areas of its
infrastructure, principally facilities, and the challenges it
faces. NASA's current facility closure and consolidation plans
will not fully achieve the agency's goal of decreasing the
current replacement value of its facilities by about 25 percent
(about $4 billion in 1994 dollars) by the end of fiscal year
2000. More importantly, these plans will not result in
substantial cost reductions by that date. NASA has had problems
in evaluating some cost-reduction opportunities; environmental
cleanup costs could affect future facility disposition efforts;
and its efforts to share facilities with DOD have progressed
slowly.
GAO suggested that, ultimately, a process that uses an
external independent group similar to the Defense Base Closure
and Realignment Commission may be needed. To help determine the
need for an independent group to facilitate closures and
consolidations of NASA facilities, Congress may wish to
consider requiring NASA to submit a plan outlining how it
intends to meet its reduction goals.
b. Benefits.--This aids the subcommittee in conducting
oversight of agency downsizing, infrastructure, and facilities
management. The report compelled NASA to a response that it was
committed to streamlining its work force and supporting
infrastructure and is in the process of making further changes
in the way it operates. NASA has heard the mandate from the
104th Congress for less waste through better management and is
taking the proper steps in addressing its problems.
95. ``Surface Transportation: Research Funding, Federal Role, and
Emerging Issues,'' September 1996, GAO/RCED-96-233.
a. Summary.--This report provides information on the public
and private funding for surface transportation research, the
transportation community's views on the Federal role for such
research, the Department of Transportation's ability to fulfill
that role, and the issues that the transportation community
believes the Congress and the Department should consider during
the reauthorization of the Intermodal Surface Transportation
Efficiency Act of 1991.
b. Benefits.--The report looked in detail at Surface
Transportation to analyze research for the knowledge, products,
and technologies needed to make transportation more efficient,
effective, and safe. GAO felt that the department funds
insufficient basic, long-term, high-risk research.
96. ``Tax Systems Modernization: Cyberfile Project Was Poorly Planned
and Managed,'' GAO/AIMD-96-140.
a. Summary.--Cyberfile is an electronic filing system being
developed for the Internal Revenue Service (IRS) by the
Department of Commerce's National Technical Information Service
(NTIS). The GAO concluded that the IRS's selection of NTIS to
develop Cyberfile was not based on sound analysis.
The IRS did not adequately analyze requirements, consider
alternatives, or assess NTIS's capabilities to develop and
operate an electronic filing system, even though the need for
these critical prerequisites was brought to management's
attention as early as July 1995. Instead, the IRS selected NTIS
because it was expedient, and because NTIS promised the IRS,
without any objective support, that it could develop Cyberfile
in less than 6 months and have it operating by February 1996.
Development and acquisition were undisciplined, and
Cyberfile was poorly managed and overseen. As a result it was
not delivered on time, and after advancing $17.1 million to
NTIS, the IRS has suspended Cyberfile's development and is
reevaluating the project.
b. Benefits.--This report is part of the GAO's ongoing
review of management practices at the IRS, and as such, it is
very helpful to the subcommittee in the oversight of the IRS's
management functions, including financial management and
procurement.
97. ``USIA Options for Addressing Possible Budget Reductions,'' GAO/
NSIAD-96-179.
a. Summary.--This report discusses streamlining efforts at
the U.S. Information Agency and identifies options that could
enable USIA to include additional budget reductions. To respond
to the potential that USIA might have to withstand cuts of the
magnitude suggested by the OMB or congressional budget
projections, GAO analyzed each of the major components within
USIA for potential areas of reduction. Though USIA officials
believe that further significant reductions could greatly
hamper USIA's mission, new fiscal realities may force the
agency to make additional choices about resource priorities for
the number and size of its locations and its wide range of
programs and activities.
b. Benefits.--This report aids the subcommittee on
oversight of budget reductions and possibility of more budget
reductions by the U.S. Information Agency. GAO is not making
recommendations in this report rather it is shedding light in
areas in which budget reductions could be made to deal with
potential cuts in appropriations. The USIA in reaction to the
report has complied that changes will occur and that
alterations will be instituted to cut costs while preserving
the essential missions. USIA also acknowledges that it
understands that the intrinsic value of many traditional
programs is no longer enough to justify their continuation;
there must be direct benefit to U.S. policy interests.
Human Resources and Intergovernmental Relations Subcommittee
1. ``Multiple Employment Training Programs: Information Crosswalks on
163 Employment Training Programs,'' February 14, 1995, GAO/
HEHS-95-85FS.
a. Summary.--The General Accounting Office compiled a list
of 163 programs and funding streams that provide about $20
billion in employment training assistance. During recent
testimony before Congress, GAO indicated that the number of
employment training programs had risen to 193 since 1991 and
that this fragmented ``system'' wasted resources, and confused
and frustrated clients, employers, and administrators. To help
Congress make choices about overhauling and consolidating
employment training programs, this fact sheet provides
information for each program, including (1) fiscal year 1995
appropriation; (2) summary of the program's purpose as it
relates to employment training activities; (3) authorizing
legislation and the U.S. citation; (4) Catalog of Federal
Domestic Assistance program number; (5) budget account number;
(6) target group; and (7) type of employment training
assistance provided.
b. Benefits.--By continuing to document the growing number
of employment training programs, GAO provides important
information to help Congress and the executive branch evaluate
and consolidate these programs.
2. ``Community Development: Comprehensive Approaches Address Multiple
Needs but Are Challenging To Implement,'' February 8, 1995,
GAO/RCED/HEHS-95-69.
a. Summary.--The aspirations of people in distressed
neighborhoods are familiar--to have a home and a job, to live
in a safe area, and to have hope for their children's future.
Isolated by poverty, residents of distressed neighborhoods may
never realize their dreams. Some community-based nonprofit
groups are using a multifaceted, or comprehensive, approach to
community development that relies on residents' participation
to address housing, economic, and social service needs in
distressed neighborhoods. This report examines (1) why
community development experts and practitioners advocate this
approach; (2) what challenges they see to its implementation;
and (3) how the Federal Government might support comprehensive
approaches. GAO reviewed four groups, located in Boston,
Detroit, Pasadena, and Washington, DC, that have used
comprehensive approaches in their communities.
b. Benefits.--By approaching the subject of multiple needs
in community development, GAO has demonstrated that different
communities have both different needs and different approaches
to these needs. Furthermore, the report also suggest that
comprehensive approaches are more effective but are difficult
to implement.
3. ``School Facilities: Condition of America's Schools,'' February 1,
1995, GAO/HEHS-95-61.
a. Summary.--The General Accounting Office surveyed school
officials across the country on the physical condition of their
facilities. The survey projects that the Nation's elementary
and secondary schools need about $112 billion in repairs and
upgrades to restore them to good condition. About 14 million
students attend schools needing extensive repair or
replacement. Also, problems with major building features, such
as plumbing, are widespread even among schools said to be in
adequate shape. Nearly 60 percent of America's schools reported
at least one major building element in disrepair; most of these
schools had multiple problems. In addition, about half the
school officials reported at least one environmental problem in
their schools, such as inadequate ventilation or poor heating
and lighting; most of these schools had multiple environmental
problems. Some school officials attributed the physical decline
of the Nation's schools to decisions by school districts to
defer vital maintenance and repair expenditures from year to
year due to lack of money.
b. Benefits.--This survey describes some of the problems
facing the basic infrastructure of our Nation's schools. The
information in the report documents these concerns to both the
American people and the Congress.
4. ``Welfare Reform: Implications of Proposals on Legal Immigrants'
Benefits,'' February 2, 1995, GAO/HEHS-95-58.
a. Summary.--The General Accounting Office found that the
percentage of immigrants receiving public assistance--
specifically Supplemental Security Income (SSI) or Aid to
Families With Dependent Children (AFDC)--is higher than the
percentage of citizens receiving these benefits. Six percent of
all immigrants receive benefits compared with 3.4 percent of
all citizens. Most immigrant recipients live four States:
California, New York, Florida, and Texas; more than one-half of
all immigrant recipients live in California. Between 1983 and
1993, the number of immigrants receiving SSI more than
quadrupled, increasing from 151,000 to 683,000. During this
period, immigrants grew from about 4 percent of all SSI
recipients to more than 11 percent. As a percentage of all
adult AFDC recipients, immigrants grew from about 5 percent to
8 percent. In all, immigrants received an estimated $3.3
billion in SSI benefits and $1.2 billion in AFDC benefits in
1993. Most immigrant recipients are lawful permanent residents
or refugees, but other characteristics of immigrants receiving
SSI and AFDC vary. For example, the number of immigrants
receiving SSI aged benefits--available to those 65 years and
older--has increased dramatically. According to the
Congressional Budget Office, a welfare reform proposal now
before Congress (H.R. 4) would save $9.2 billion from the SSI
program and $1 billion from the AFDC program over 4 years. GAO
estimates that 522,000 SSI recipients and 492,000 AFDC
recipients would become ineligible for benefits under H.R. 4.
b. Benefits.--This report gives the Congress valuable
information as it debates H.R. 4 and other welfare reform
proposals, as well as many immigration reform proposals.
5. ``Block Grants: Characteristics, Experience, and Lessons Learned,''
February 9, 1995, GAO/HEHS-95-74.
a. Summary.--The 15 block grant programs in effect today,
with funding of $32 billion, constitute a small portion of the
overall Federal aid to States, which totaled $206 billion for
593 programs in fiscal year 1993. In 1981, as part of the
Omnibus Reconciliation Act, nine block grants were created from
about 50 of the 534 categorical programs in effect at the time.
In general, the transition from categorical programs to block
grants was smooth. Experience with the 1981 block grants
teaches three lessons. First, accountability for results is
clearly needed, and the Government Performance and Results Act
may provide the appropriate framework. Second, funding
allocation based on distributions under prior categorical
programs may be inequitable because they do not reflect need,
ability to pay, and variations in the cost of providing
services. Finally, the transition to block grants may be more
challenging today than in 1981 because the programs being
considered for inclusion in block grants are much larger and,
in some cases, fundamentally different from programs included
in the 1981 block grants.
b. Benefits.--As the Congress considers placing more
programs into block grants, this report provides an important
historical perspective on past efforts to transform categorical
grants into block grants.
6. ``Social Security Administration: Leadership Challenges Accompany
Transition to an Independent Agency,'' February 15, 1995, GAO/
HEHS-95-59.
a. Summary.--In 1994 Congress passed legislation making the
Social Security Administration (SSA) an independent agency. As
part of the transition, GAO was required to evaluate the
interagency agreement for transferring personnel and resources
from the Department of Health and Human Service (HHS) to SSA.
GAO concludes that the two agencies have developed an
acceptable methodology for identifying the functions,
personnel, and other resources, such as furniture and computer
equipment, to be transferred to an independent SSA. They have
also made good progress toward completing the initiatives
necessary for SSA to be a fully functional independent agency
by March 31, 1995. However, SSA will continue to face serious
policy and management challenges, including long-range
shortfall in funds to pay future Social Security benefits.
Also, questions have been raised by GAO and others about the
future growth of the Disability Insurance program and recent
increases in Supplemental Security Income benefits.
b. Benefits.--GAO's report has helped give the Congress
some direction in the oversight of the SSA. In addition, the
questions raised about the growth of entitlement programs are
important for both the American people and the Congress.
7. ``Public Housing: Funding and Other Constraints Limit Housing
Authorities' Ability To Comply With One-for-One Rule,'' March
3, 1995, GAO/RCED-95-78.
a. Summary.--The overall vacancy rate in public housing is
about 8 percent. This average, however, masks the conditions at
many large housing authorities where uninhabitable buildings
cause the rate to be close to 22 percent. At some authorities,
whole projects are vacant and hundreds of run-down buildings
stand idle. If housing authorities tear down or sell any of
these buildings, they are required to replace the housing units
on a one-for-one basis with new or other inhabitable housing or
provide equivalent rental assistance to the tenants. Because
some authorities believe that they lack enough money or
appropriate sites to replace demolished housing, they leave the
deteriorated buildings in place. This report provides
information on (1) housing authorities with the highest number
of vacant units; (2) the impact of the one-for-one requirements
on housing authorities' ability to deal with their
uninhabitable housing units; and (3) housing officials' views
on the proposed waiver of the one-for-one replacement law.
b. Benefits.--The GAO report provides the Congress with
evidence to support repeal of the one-for-one rule.
8. ``Social Security: New Functional Assessments for Children Raise
Eligibility Questions,'' March 1, 1995, GAO/HEHS-95-66.
a. Summary.--More than 200,000 children have been awarded
Federal disability benefits for mental or behavioral problems
using new subjective criteria that allow benefits in cases that
previously would have been rejected. GAO found fundamental
flaws in the new process for assessing children's impairments.
Specifically, each step of the process relies heavily on
adjudicators' judgments, rather than on objective criteria from
the Social Security Administration (SSA), to assess children's
behavior. This calls into question SSA's ability to guarantee
consistency in administering the program. At the same time, GAO
discovered little evidence that parents are coaching their
children to fake mental problems by misbehaving or faring
poorly in school so that they can qualify for cash benefits.
b. Benefits.--This study has called into question SSA's
ability to successfully monitor behavioral problems in children
when assessing disability benefits. In the current environment,
acknowledging the need for entitlement reform, this information
demonstrates some of the limitations of a large Federal
entitlement program.
9. ``Poverty Measurement: Adjusting for Geographic Cost-of-Living
Difference,'' March 9, 1995, GAO/GGD-95-64.
a. Summary.--This report provides information on the
statistical data requirements that would be needed to construct
a cost of living index that could be used, at the Federal
level, to adjust for geographic differences in living costs.
Concerns had been raised in Congress that current measures do
not recognize that residents of high-cost areas may need higher
incomes to meet their basic needs. The report (1) describes the
function of market baskets in determining a cost-of-living
index, including both a uniform national market basket and
market baskets that reflect regional differences in
consumption; (2) identifies methodologies that might be used to
calculate a cost-of-living adjustment, including, methodologies
that researchers and private industry use for comparing costs
by geographic areas; and (3) presents expert opinions on the
ability of these methodologies to adjust the poverty
measurements for geographic differences in cost of living.
b. Benefits.--As the Congress works through welfare reform
proposals, especially through discussions of how to equitably
distribute funds to the States, this report will help establish
benefit formulas that account for regional differences.
10. ``Higher Education: Restructuring Student Aid Could Reduce Low-
Income Student Dropout Rate,'' March 23, 1995, GAO/HEHS-95-48.
a. Summary.--Loans and grants do not have equivalent
effects on low-income students' staying in college. Grant aid
lowers the probability of low-income students' dropping out,
while loans have no statistically significant impact on their
dropping out. Furthermore, the timing of grant aid influences a
student's probability of dropping out. For example, grant aid
is more effective for low-income students during the first
school year than in subsequent years. Given that the dropout
rate is higher in students' first 2 years, front loading grants
would appear to provide low-income students with the most
effective means of financial support when they are most likely
to benefit from it. Restructuring Federal grant programs to
feature front loading could improve low-income students'
dropout rates with little or no changes to students' overall 4-
year allocation of grants and loans. GAO supports the creation
of a pilot program to evaluate the effects and costs of front
loading.
b. Benefits.--This report suggests the student aid system
can be changed to lower the probability of low-income students
dropping out of school.
11. ``Veterans' Benefits: Basing Survivors' Compensation on Veterans'
Disability Is a Viable Option,'' March 6, 1995, GAO/HEHS-95-30.
a. Summary.--In 1993, the Department of Veterans Affairs'
Dependency and Indemnity Compensation (DIC) program paid
benefits totaling $2.7 billion to about 276,000 surviving
spouses of service members who had died on active duty and
surviving spouses of some disabled veterans. These benefits
were paid under the Veterans' Benefits Act of 1992, which
changed the basis for DIC benefits from the military rank of
the deceased service member or veteran to a flat rate for all
surviving spouses. This report (1) estimates DIC recipients'
total income and determines the kind and the amount of benefits
received from other programs; (2) determines the financial
impact on surviving spouses of the deaths of totally disabled
veterans and of veterans who were receiving supplemental
payments because they had multiple severe disabilities and
could not care for themselves; and (3) assesses alternative
ways to set DIC benefits.
b. Benefits.--With the acknowledgment that entitlements
must be reformed, this report lays out a plan for a more
equitable formula to fund compensation rates for spouses of
deceased veterans.
12. ``Early Childhood Centers: Services To Prepare Children for School
Often Limited,'' March 21, 1995, GAO/HEHS-95-21.
a. Summary.--More than a third--2.8 million--of the
Nation's children aged 3 and 4 were from poor families in 1990,
a growth of 17 percent since 1980. This trend continues. These
disadvantaged youngsters often live in homes that provide
little intellectual stimulation, as well as inadequate health
care and nutrition. Lagging behind their middle- and upper-
income peers when they enter school, many disadvantaged
children never catch up. Early childhood centers funded by
Federal and State governments prepare children for school and
help them to overcome their disadvantages. This report answers
the following questions: What services do disadvantaged
children need to be prepared for school? To what extent do
these children receive these services from early childhood
centers? If disadvantaged children do not receive these
services from early childhood centers, why not?
b. Benefits.--This report gives real information on the
problems and needs of disadvantaged children. The report
provides Congress with critical information for education and
welfare reforms.
13. ``Medicare: Tighter Rules Needed To Curtail Overcharges for Therapy
in Nursing Homes,'' March 30, 1995, GAO/HEHS-95-23.
a. Summary.--Nursing homes and rehabilitation centers are
taking advantage of ambiguous payment rules and lack of
guidelines to bill Medicare at inflated rates for therapy
services. State averages for physical, occupational, and speech
therapists' salaries range from about $12 to $25 per hour, but
Medicare has been charged upwards of $600 per hour. The extent
of overcharging and its precise impact on Medicare outlays are
unclear; however, billing schemes uncovered in recent years
suggest that the problem is nationwide and is growing in
magnitude. Extraordinary markups on therapy can result from
providers exploiting regulatory ambiguity and weaknesses in
Medicare payment rules. Payment rules and procedures developed
when the therapy industry was much smaller and less
sophisticated have proved no match for increasingly complex
business practices designed to generate increased Medicare
revenue and skirt program controls. Although the over billing
problem has been known since 1990, no action has been taken to
close loopholes that allow payment for these overcharges.
b. Benefits.--The need to achieve savings in Medicare is
paramount to any efforts to balance the budget. This report
informs Congress about another type of waste, fraud, and abuse
within the system, and thus, arms Congress with the knowledge
to prevent it.
14. ``Multifamily Housing: Better Direction and Oversight by HUD Needed
for Properties Sold With Rent Restrictions,'' March 22, 1995,
GAO/RCED-95-72.
a. Summary.--Between 1990 and 1993, the Department of
Housing and Urban Development (HUD) began foreclosure on many
insured mortgages on multifamily properties with financial,
physical, or operating problems. However, HUD was unable to
sell many of the properties promptly because of long-term rent
subsidies the agency had attached to some properties.
Purchasers of 62 properties agreed to restrict rents charged to
low-income households to the same rent that they would have
paid under the HUD rent subsidy program--usually 30 percent of
the household income. GAO found that HUD had not (1) provided
its field offices or purchasers of HUD multifamily properties
with clear instructions on the procedures owners must follow in
managing properties subject to rent restrictions or (2)
established long-term requirements specifying how field offices
should oversee owners' compliance with agreed upon use
restrictions. As a result, HUD has placed inconsistent
requirements on property owners and, until recently, did not
require field offices to oversee owner compliance.
b. Benefits.--The report documents HUD's failure to
properly oversee multifamily properties sold with rent
restrictions.
15. ``School Facilities: America's Schools Not Designed or Equipped for
21st Century,'' April 4, 1995, GAO/HEHS-95-95.
a. Summary.--To educate America's children for an
increasingly technological world, schools must have the
equipment and the infrastructure, such as computers, in place
before technology can be fully integrated into the curriculum.
GAO surveyed about 10,000 schools across the country and
visited 10 school districts. GAO found that overall the
Nation's schools were not even close to meeting their basic
technology needs. Most schools do not use modern technology,
and not all students--even those attending schools in the same
district--have equal access to facilities that can support
education into the 21st century. Schools with 50 percent or
more minority students were found to be more likely to have
unsatisfactory environmental conditions such as poor lighting
and little physical security, and were found less likely to
have technology elements.
b. Benefits.--The report documents the failure of schools
to integrate technology into the curriculum and prepare
students for the future.
16. ``Medicaid: Spending Pressures Drive States Toward Program
Reinvention,'' April 4, 1995, GAO/HEHS-95-122.
a. Summary.--The $131 billion Medicaid program is at a
crossroads. Between 1985 and 1993, Medicaid costs tripled and
the number of beneficiaries rose by more than 50 percent.
Medicaid costs are projected to rise to $260 billion, according
to the Congressional Budget Office. Despite Federal and State
budgetary constraints, several States are seeking to expand the
program and enroll hundreds of thousands of new beneficiaries.
The cost of expanded coverage, they believe, will be offset by
the reallocation of Medicaid funds and the wholesale movement
of beneficiaries into some type of managed care arrangement.
This report examines (1) Federal and State Medicaid spending;
(2) some States' efforts to contain Medicaid costs and expand
coverage through waiver of Federal requirements; and (3) the
potential impact of these waivers on Federal spending and on
Medicaid's program structure overall.
b. Benefits.--With rapidly increasing costs, the report
shows the need for reform of the Medicaid program.
17. ``Medicaid: Restructuring Approaches Leave Many Questions,'' April
4, 1995, GAO/HEHS-95-103.
a. Summary.--Over the years, various proposals have been
made to restructure the Medicaid program. One approach calls
for providing Federal block grants to the States and giving
them increased responsibility for running the program. Under
another proposal, Medicaid would be entirely funded and
administered by the Federal Government. Yet another would split
Medicaid into two programs, one encompassing acute and primary
care and the other long-term care. This report compares the
different restructuring approaches and discusses their
implications for Federal-State financing and program
administration. GAO also provides information on the need to
establish a Federal ``rainy day'' fund if restrictions, such as
block grants, were placed on Federal revenues paid to States.
GAO also provides the most recent data on the amount of Federal
Medicaid funds provided to each State.
b. Benefits.--Both major political parties agree on the
need for Medicaid reform. This report examines the advantages
and disadvantages of each of the proposals. It is an invaluable
tool in analyzing the best way to save Medicaid.
18. ``Veterans Compensation: Offset of DOD Separation Pay and VA
Disability Compensation,'' April 3, 1995.
a. Summary.--The Defense Department (DOD) uses separation
pay to induce people to serve in the military despite the risk
of involuntary separation. Congress authorized special
separation pay to minimize the use of involuntary separations
in the ongoing force drawdown. Pay offsets prevent service
members from receiving dual compensation for a single period of
service. Repealing offsets for separation and disability pay
would cost the Federal Government an estimated $435 million for
those service members who separated during fiscal years 1995-
1999. A repeal would cost about $799 million if it was made
retroactive to fiscal year 1992, when the special separation
pay program began. Separation and disability pay offsets have
not significantly undermined the voluntary separation
incentive. According to DOD, the bulk of the drawdown since
fiscal year 1992 has been accomplished through voluntary
separations. DOD requires the services to inform separating
service members about the offset.
b. Benefits.--As Congress considers repealing offsets for
separation, it must consider the cost to the U.S. taxpayer and
the impact on prospect of balancing the budget. This report
gives the Congress the data it needs to discuss whether or not
to repeal the offsets and to form payment formulas if offsets
are repealed.
19. ``VA Health Care: Retargeting Needed To Better Meet Veterans'
Changing Needs,'' April 21, 1995, GAO/HEHS-95-39.
a. Summary.--Many veterans have health care needs that are
not adequately met through current health care programs,
including the health care system run by the Department of
Veterans Affairs (VA). About one-third of the Nation's homeless
are veterans, nearly one-half of whom have serious mental
problems, suffer from substance abuse, or both. The homeless
have limited access to health care services and may not seek
medical treatment. About 38 percent of male and 25 percent of
female Vietnam veterans with Post Traumatic Stress Disorder
have not sought treatment. About 91,000 low-income, uninsured
veterans with no apparent health care options indicated in a
1987 VA survey that they had never used VA health facilities
because they were unaware that they were eligible or they had
concerns about the quality or the accessibility of VA health
care. VA cannot adequately address many of these health care
needs because (1) it relies primarily on direct delivery of
health services in VA facilities; (2) its complex eligibility
and entitlement provisions limit the services that veterans may
obtain from VA facilities; and (3) space and resource
limitations prevent eligible veterans from obtaining covered
services. This report presents several options for
restructuring VA's health care system to enable it to better
meet the health care needs of veterans.
b. Benefits.--The number of veterans in the country has
decreased and VA hospitals are underutilized, and yet, the VA
wants to spend its resources on building more hospitals and
medical centers. This report makes it clear that the VA could
better spend its resources on outreach to the homeless,
mentally ill, and substance abusing populations and on making
access to non-VA medical centers easier.
20. ``Veterans' Benefits: VA Can Prevent Millions in Compensation and
Pension Overpayments,'' April 28, 1995, GAO/HEHS-95-88.
a. Summary.--Despite its responsibility to ensure accurate
benefit payments, the Department of Veterans Affairs (VA)
continues to overpay veterans and their survivors hundreds of
millions of dollars in compensation and pension benefits each
year. VA has the ability to prevent millions of dollars in
overpayments but has not done so because it has not focused on
prevention. For example, VA does not use available data, such
as information on when beneficiaries will become eligible for
social security benefits, to prevent the overpayments.
Furthermore, VA does not systematically collect, analyze, and
use information on the specific causes of overpayments that
will help it target preventive efforts.
b. Benefits.--At a time when the VA is seeking more
resources, this report highlights an example of gross
mismanagement at the Department. The report points out simple
and easy methods for preventing waste and mismanagement of
millions of dollars, which could be redirected elsewhere.
21. ``School Safety: Promising Initiatives for Addressing School
Violence,'' April 25, 1995, GAO/HEHS-95-106.
a. Summary.--Many schools throughout the United States are
struggling with rising levels of youth violence. Schools have
adopted a broad range of solutions to curb violence. The four
programs GAO visited--in California, Ohio, and New York--are
examples of some of the promising approaches schools have
initiated to address violence. Research suggests that the most
promising school-based violence prevention programs involve at
least some of seven key characteristics, including a
comprehensive approach, starting early, and involving parents.
Although few prevention programs have been evaluated, some
Federal agencies are now funding evaluations to examine various
violence prevention program approaches. The results, which
should be available in 3 to 5 years, will help determine which
programs work best at cubing violence.
b. Benefits.--This report helps Congress craft more
effective legislation to address the growing problem of
violence in our schools.
22. ``Long-Term Care: Current Issues and Future Directions,'' April 13,
1995, GAO/HEHS-95-109.
a. Summary.--Today, an increasing number of Americans need
long-term care. Unprecedented growth in the elderly population
is projected for the 21st century, and the population age 85
and older--those most in need of long-term care--is expected to
outpace the rate of growth for the entire elderly population.
In addition to the dramatic rise in the elderly population, a
large portion of the long-term care population consists of
younger people with disabilities. The importance of long-term
care was underscored by the 1994 congressional debate over
health care reform and, more recently, by the ``Contract with
America,'' which proposed assistance such as tax deductions for
long-term care insurance and tax credits for family care
giving. This report (1) defines what is meant by ``long-term
care'' and discusses the conditions that give rise to long-term
care need, how such need is measured, and which groups require
long-term care; (2) examines the long-term care costs that are
born by Federal and State governments as well as by families;
(3) addresses strategies that States and foreign countries are
pursuing to contain public long-term-care costs; and (4)
discusses predictions by experts on the future demand for long-
term care.
b. Benefits.--Long-term care is proving to be one of the
fastest growing areas of health care. A thorough understanding
of who receives the care and who pays for the care are
invaluable as strategies are initiated to slow the increase of
medical costs, especially in entitlement programs like Medicaid
and Medicare.
23. ``Prescription Drug Prices: Official Index Overstates Producer
Price Inflation,'' April 28, 1995, GAO/HEHS-95-90.
a. Summary.--During the 1980's and 1990's, the prices of
prescription drugs rose on average at triple the rate of
inflation, according to U.S. Government statistics. As Congress
debated whether to curb drug price increases, research
questioning the accuracy of the price statistics--especially
the producer price index for prescription drugs published by
the Bureau of Labor Statistics--was in its early stages. Today,
a body of research urges the reexamination of the accuracy of
the producer price index for prescription drugs. This report
(1) reviews the accuracy of the producer price index as a
measure of drug price inflation; (2) describes whether the
index could be changed to more accurately measure changes in
the cost of buying drugs; and (3) provides guidance on
appropriate uses and common misuses of price indexes.
b. Benefits.--One of the fastest growing costs in health
care is the price of drugs. It is important to have a clear
understanding of the price movements in the drug industry to
have a credible plan to control the costs of drugs.
24. ``Medicaid Managed Care: More Competition and Oversight Would
Improve California's Expansion Plan,'' April 28, 1995, GAO/
HEHS-95-87.
a. Summary.--The Medicaid program was established to make
health care more accessible to the poor. In many communities,
however, beneficiaries' access to quality care is far from
guaranteed. Too few doctors and other health care providers
choose to participate in Medicaid because of low payment rates
and administrative burdens. To address the access problem, as
well as rising costs and enrollment in its $15 billion Medi-Cal
program (which serves about 5.4 million beneficiaries),
California intends to increase its reliance on managed-care
delivery systems. This report (1) describes California's
current Medicaid managed-care program; (2) reviews the State's
oversight of managed-care contractors with a focus on financial
incentive arrangements and the provision of preventive care for
children; (3) describes the State's plans for expansion; and
(4) identifies key issues the State will face as it implements
the expanded program.
b. Benefits.--Both Republican and Democrat health care
reform plans rely heavily on managed care to better control
costs. As the largest State in the country, California offers
the most similar example of how managed care issues can be
addressed in any reform proposals.
25. ``Community Health Centers: Challenges in Transitioning to Prepaid
Managed Care,'' May 4, 1995, GAO/HEHS-95-138.
a. Summary.--As States move to prepaid managed care to
control costs and improve access for their Medicaid clients,
the number of participating community health centers continues
to grow. Medicaid prepaid managed care is not incompatible with
health centers' mission of delivering health care to the
medically underserved population. However, health centers face
substantial risks and challenges as they move into these
arrangements. Such challenges require new knowledge, skills,
and information systems. Centers lacking expertise and systems
face an uncertain future, and those in a vulnerable financial
position are at even greater risk. Today's debate over possible
changes in Federal and State health programs heightens the
concern over the financial vulnerability of centers
participating in prepaid managed care. If this funding source
continues to grow as a percentage of total health center
revenues, centers must face building larger cash reserves while
not compromising services to vulnerable populations.
b. Benefits.--Both Republican and Democrat health care
reform plans rely heavily on managed care to better control
costs. This report gives the Congress the information to help
it avert many of the difficulties the health care industry
faces as it transitions to managed care.
26. ``Medicare Claims: Commercial Technology Could Save Billions Lost
to Billing Abuse,'' May 5, 1995, GAO/AIMD-95-135.
a. Summary.--With an investment of only $20 million in off-
the-shelf commercial software, Medicare could save nearly $4
billion over 5 years by detecting fraudulent claims by
physicians--primarily manipulation of billing codes. On the
basis of a test in which four commercial firms reprocessed a
sample of more than 20,000 paid Medicare claims, GAO estimates
that the software could have saved $603 million in 1993 and
$640 million in 1994. In addition, GAO estimates that because
beneficiaries are responsible for about 22 percent of the
payment amounts--mainly in the form of deductibles and
copayments--Medicare could have saved an additional $134
million in 1993 and $142 million in 1994. The test results
indicate that only a small proportion of providers are
responsible for most of the abuses: less than 10 percent of
providers in the sample had miscoded claims.
b. Benefits.--This report begins to quantify the savings
available from the application of computer technology to
Medicare claims processing. The Health Care Financing
Administration has been developing a computer system, the
Medicare Transaction System (MTS), to unify and standardize
claims review. It is estimated that hundreds of millions of
dollars in improper or ineligible Medicare claims are paid each
year. This report indicates that significant savings could be
accomplished if Medicare contractors used off-the-shelf
commercial software while the MTS system is being deployed.
27. ``Welfare Dependency: Coordinated Community Efforts Can Better
Serve At-Risk Teen Girls,'' May 10, 1995, GAO/HEHS/RCED-95-108.
a. Summary.--Although poverty and the erosion of families
and neighborhoods have put many teenage girls at risk of
pregnancy, school failure, and substance abuse, programs aimed
at helping them are often too little, too late. However, GAO
found that some communities are organizing coalitions with
private and public agencies to integrate services and reach
more young women at risk. This report (1) describes the health
and the well-being of young at-risk teen girls and their
families and the condition of the urban neighborhoods where
they live; (2) presents local service providers' views on what
the needs of these girls are, how they are addressing those
needs, and what obstacles service providers may face in working
with the girls, their families, and their communities; and (3)
describes how the communities where these girls live are
responding to the service needs of this group.
b. Benefits.--The problems of at-risk teen girls are
increasingly becoming an issue of national importance.
Unfortunately, credible solutions are often ``too little, too
late.'' This report provides information on some successful
alternatives to assist at-risk teen girls.
28. ``Welfare to Work: Participants' Characteristics and Services
Provided in JOBS,'' May 2, 1995, GAO/HEHS-95-93.
a. Summary.--The General Accounting Office found that most
adult welfare recipients do not participate in the Job
Opportunities and Basic Skills (JOBS) training program because
of allowable exemptions and minimum participation standards.
JOBS still reached only about 13 percent of single-female-
headed households receiving welfare each month in 1992; about
60 percent were exempt from participation. Most of the 1.95
million exempt adult welfare recipients were excused from
participation because they were caring for children under 3
years old. The low level of participation raises questions as
to whether a program serving relatively few participants can
bring about a widespread transformation of the welfare culture.
In addition to discussing who is and is not being served under
the JOBS training program, this report discusses (1) the range
of services that JOBS participants are receiving and the extent
to which participant needs are being met and (2) the
implication of servicing participants in a system of time-
limited benefits.
b. Benefits.--According to this report the JOBS program
does not help most welfare recipients and a different approach
is needed if the Congress wants to reform the welfare system.
29. ``Welfare to Work: Most AFDC Training Programs Not Emphasizing Job
Placement,'' May 19, 1995, GAO/HEHS-95-113.
a. Summary.--In 1988, Congress strengthened the work
requirements for welfare recipients by creating the Job
Opportunities and Basic Skills Training (JOBS) program.
Although, the JOBS program is designed to move welfare
recipients from dependence to work, GAO found that a majority
of JOBS programs lacked a strong employment focus. However,
five welfare-to-work programs visited by GAO show promise
because they focus on the importance of employment and forge
links with employers. This report (1) provides examples of
county or local JOBS or JOBS-like programs that emphasize job
placement, subsidized employment, or work-experience positions
for welfare recipients; (2) discusses the extent to which
county JOBS programs nationwide use these employment-focused
activities; and (3) examines factors that hinder program
administrators' efforts to move welfare recipients into jobs.
b. Benefits.--A previous GAO report indicated that the JOBS
program is not reaching a significant portion of its target
audience. This report will help the Congress change the current
system to make it more effective.
30. ``Welfare Programs: Opportunities To Consolidate and Increase
Program Efficiencies,'' May 31, 1995, GAO/HEHS-95-139.
a. Summary.--The Federal Government provides billions of
dollars in public assistance each year through an inefficient
welfare system that is increasingly cumbersome for program
administrators to manage and difficult for eligible clients to
access. Program consolidation may be one strategy to reduce
inefficiency of the current system of overlapping and
fragmented programs. This report (1) describes low-income
families' participation in multiple welfare program; (2)
examines program inefficiencies such as program overlap and
fragmentation, and (3) identifies issues to consider in
deciding whether, and to what extent, to consolidate welfare
issues. Regardless of how the welfare system is restructured,
ensuring that Federal funds are used efficiently and that
programs focus on outcomes remains important. Without a focus
on outcome, concerns and the effectiveness of welfare programs
will not be adequately addressed.
b. Benefits.--Both the administration and the Congress have
suggested major reforms to the current welfare system involving
consolidations. This report provides Congress with an indepth
examination of how services are delivered and where likely
inefficiencies and duplications can be found. This in turn,
points to many areas where consolidation may be effective.
31. ``Federal Reorganization: Congressional Proposal To Merge
Education, Labor, and EEOC,'' June 7, 1995, GAO/HEHS-95-140.
a. Summary.--A congressional proposal to consolidate the
Departments of Labor and Education along with the Equal
Employment Opportunity Commission (EEOC) envisions saving
billions of dollars and creating more efficient services, but
savings might be elusive if downsizing proceeds too quickly or
proceeds without careful planning. The proposal to create a new
Department of Education and Employment could yield savings of
about $1.65 billion in administrative costs through the year
2000. The proposal significantly changes Education's existing
structure, program offerings, and processes. The proposal would
also raise program consolidation, workforce, accountability,
implementation, and oversight issues that Congress, Education,
and other agencies would need to address to ensure that Federal
education and training programs meet the Nation's needs.
b. Benefits.--Currently, the Departments of Labor and
Education offer many programs which duplicate or overlap.
Furthermore, education and labor issues are becoming
increasingly intertwined. This report concludes that the
proposal to combine these two departments and the Equal
Employment Opportunity Commission could result in significant
savings.
32. ``Nutrition Monitoring: Data Serve Many Purposes; Users Recommend
Improvements,'' June 20, 1995, GAO/PEMD-95-15.
a. Summary.--The National Nutrition Monitoring and Related
Research Program consists of a network of surveys, surveillance
systems, and research activities that serve various purposes.
It provides researchers and decisionmakers with data for
assessing the safety of the Nation's food supply, targeting
food assistance to low-income families, and studying the
relationship between diet and disease. The program has been
criticized, however, for the lack of coordination among the
various activities and its poor coverage of populations at risk
of nutritional problems. GAO surveyed users of nutrition-
monitoring data. This report (1) describes the users and the
major uses of nutrition-monitoring data and (2) summarizes user
satisfaction with nutrition-monitoring activities and the
changes that users believe are likely to increase their use of,
or confidence in, the data.
b. Benefits.--Increasingly, scientists are discovering more
connections between diet and the incidence of disease or
illness. In order to reduce both the human and dollar costs of
illness, nutritional standards must be considered by
decisionmakers. This report will help improve the collection
and coordination of this data.
33. ``HUD Management: FHA's Multifamily Loan Loss Reserves and Default
Prevention Efforts,'' June 5, 1995, GAO/RCED/AIMD-95-100.
a. Summary.--In recent years, the number of defaults on
Federal Housing Administration (FHA) insured loans for
multifamily housing has soared. In 1994, FHA established loan
loss reserves of $103 billion for its multifamily portfolio.
This represents the amount that HUD expects to lose from future
defaults on FHA-insured loans. This report evaluates (1) the
methodology that FHA used to set loan loss reserves for its
fiscal year 1993 multifamily portfolio; (2) the relative
benefit of creating a new, actuarially sound insurance fund for
all new multifamily housing insurance commitments; and (3)
HUD's current initiatives for preventing future defaults on
FHA's multifamily housing loans.
b. Benefits.--The report documents the FHA's handling of
defaults within its multifamily portfolio and the FHA's
establishment of loan loss reserves. The report will assist the
Congress in any efforts to restructure either FHA or the
agency's multifamily portfolio.
34. ``Housing Finance: Improving the Federal Home Loan Bank System's
Affordable Housing Program,'' June 9, 1995, GAO/RCED-95-82.
a. Summary.--Decent and affordable housing for every
American family has been a goal of national housing policy
since 1949. A shortage of affordable housing has prompted
Congress to expand the capital available to finance such
housing. The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 required that the Federal Home Loan
Bank System establish an Affordable Housing Program to help
finance housing for households with very low, low, and moderate
incomes and directed GAO to evaluate this program. This report
examines (1) how program funds have been used to support
affordable housing initiatives; (2) how the program has been
run; and (3) whether opportunities exist to improve the program
as a source of housing finance.
b. Benefits.--The report provides a generally positive
evaluation of the Federal Home Loan Bank System's Affordable
Housing Program and highlights the program's role in promoting
affordable housing. GAO's report indicates that the program is
continuing to institute improvements. The report also suggests
that the Congress should continue funding upon adoption of some
small changes.
35. ``Public Housing: Converting to Housing Certificates Raises Major
Questions About Cost,'' June 20, 1995, GAO/RCED-95-195.
a. Summary.--Proposed legislation submitted to Congress by
the Department of Housing and Urban Development (HUD) would
change how the United States has traditionally funded public
housing. Federal aid would no longer flow to public housing
authorities but instead would go to households in the form of
housing certificates, giving these families the choice of
remaining in public housing or moving to rental apartments. HUD
believes that this shift in policy would save money and solve
several basic problems with public housing, including
residents' lack of choice in housing, the concentration of very
poor people in very poor neighborhoods, and a lack of
discipline in management of public housing because of its
insulation from the marketplace. This report analyzes the
proposed legislation and (1) describes the cost implications
and issues raised by switching from the current public housing
program to one using housing certificates and (2) identifies
key factors that may affect HUD's plan to provide greater
housing choice for public housing residents.
b. Benefits.--Both the administration and the Congress have
called for major changes in national housing policy. This
report provides an indepth analysis of the voucher conversion
proposal offered by the administration.
36. ``Federal Family Education Loan Information System: Weak Computer
Controls Increase Risk of Unauthorized Access to Sensitive
Data,'' June 12, 1995, GAO/AIMD-95-117.
a. Summary.--Controls over the Federal Education Loan
Program information system, which is operated by a contractor
for the Education Department, are critical to safeguarding
assets, maintaining sensitive loan data, and ensuring the
reliability of financial management information. GAO found that
Education's general controls over the system failed to
adequately protect sensitive files, applications programs, and
systems software from unauthorized access, changes, or
disclosure.
b. Benefits.--This report makes it clear that the
Department of Education could significantly improve their
information systems thereby, improving the efficiency of data
collection and preventing loan defaults.
37. ``Foreign Housing Guaranty Program: Financial Condition Is Poor and
Goals Are Not Achieved,'' June 2, 1995, GAO/NSIAD-95-108.
a. Summary.--Since 1961, the Agency for International
Development's (USAID) housing Guaranty Program has guarantied
more than $2.7 billion in loans in 44 countries for home
construction, mortgages, home improvements, urban
infrastructure, and other shelter projects. A fundamental
program goal is to increase housing for low-income families in
developing countries by motivating local institutions to
provide investment capital and other resources. However,
Congress should consider terminating the program because it has
failed to spur private-sector investment in low-income housing
in developing countries, its benefits often go to higher-income
persons, and its loan defaults may ultimately cost the U.S.
Government as much as $1 billion. Moreover, program assistance
has gone increasingly to creditworthy developing nations that
have ready access to international financing.
b. Benefits.--This report suggests the failure of a program
which does not fulfill its mission and is proving financially
unsound. The report presents information that questions the
continued need for the Foreign Housing Guaranty Program.
38. ``Food Aid: Competing Goals and Requirements Hinder Title I Program
Results,'' June 26, 1995, GAO/GGD-95-68.
a. Summary.--During the past 40 years, the United States
has allocated more than $88 billion in food assistance to
developing countries under Title I of the 1954 Agriculture
Trade Development and Assistance Act. Under the Title I
program, run by the Agriculture Department, U.S. agricultural
commodities are sold on long-term credit terms at below-market-
rate interest. Although the United States remains a world
leader in providing food aid, Title I's share of both U.S. food
aid and overall U.S. agricultural exports has declined
dramatically since the program's inception. This report
evaluates the impact of Title I assistance on (1) broad-based,
sustainable economic development in recipient countries and (2)
long-term market development for U.S. agricultural goods in
those countries. GAO also reviews the effect of 1990
legislation on restructuring title I program management and the
program's ability to sustain economic and market development.
b. Benefits.--Congress must continually evaluate the
effectiveness of programs. This report gives Congress the tools
needed to candidly evaluate the effectiveness of the Title I
food assistance program and the effects of the 1990
restructuring.
39. ``Child Welfare: Opportunities to Further Enhance Family
Preservation and Support Activities,'' June 15, 1995, GAO/HEHS-
95-112.
a. Summary.--During the past 20 years, social, cultural,
and economic changes--such as increases in drug abuse,
community violence, and poverty--have increased the severity of
problems plaguing American families and the number of families
that have come to the attention of child welfare agencies. From
1976 to 1992, the rates of child abuse and neglect increased
fourfold. And from 1988 to 1993, the number of foster children
increased nearly one-third, to 450,000. States have struggled
to keep up with the increased demand for child welfare
services, but worsening State fiscal difficulties have further
strained the child welfare system's ability to serve vulnerable
children and their families. As part of the Omnibus Budget
Reconciliation Act of 1993, Congress authorized new funding for
family preservation and family support services. More recently,
Congress has considered proposals to incorporate these funds,
along with other child welfare programs, into a block grant
program for States. This report (1) describes the condition of
child welfare in America that precipitated the 1993 act; (2)
assesses Federal and State efforts to implement its provisions;
and (3) highlights areas in which these efforts could be
enhanced.
b. Benefits.--This report highlights the deteriorating
state of many American families and the effects on children and
provides information useful in the evaluation of Federal
assistance efforts.
40. ``Community Development: Reuse of Urban Industrial Sites,'' June
30, 1995, GAO/RCED-95-172.
a. Summary.--Thousands of former industrial sites, known as
``brownfields,'' are abandoned and possibly contaminated. Many
offer potential for redevelopment, but developers have been
reluctant to get involved because of far-reaching and uncertain
liability imposed by Federal and State liability laws. This
report (1) determines what is known about the extent and the
nature of abandoned industrial sites in distressed urban areas
and the barriers that brownfields present to redevelopment and
(2) provides information on Federal initiatives aimed at
helping communities overcome obstacles to reusing brownfield
sites.
b. Benefits.--Former industrial sites often have great
potential for redevelopment possibilities, but as the report
shows, these possibilities are frustrated by potential
liabilities from Federal and State liability laws. The report
indicates a need for further investigation into how the
redevelopment of ``brownfields'' can be encouraged.
41. ``Welfare Benefits: Potential To Recover Hundreds of Millions More
in Overpayments,'' June 20, 1995, GAO/HEHS-95-111.
a. Summary.--Under welfare reform legislation being
considered by Congress, resources for helping poor families may
become increasingly limited--making it critical that only those
who are eligible for benefits receive them. In 1992, benefit
overpayments in three welfare programs--Aid to Families With
Dependent Children, Food Stamps, and Medicaid--totaled $4.7
billion, or about 4 percent of the total benefits paid.
Nationwide recovery of these benefits was relatively low. This
report discusses (1) what States are doing to recover benefit
overpayments; (2) what the more effective practices are; (3)
what States could do better; and (4) what the Federal
Government could do to help States recover more overpayments.
b. Benefits.--Overpayments in welfare programs are a large
drain on resources that could be better used to help other
people, expand benefits, or be put to different uses. The
report reinforces the need for welfare reform and stronger
oversight of welfare programs to reduce overpayments and other
wasteful practices.
42. ``Employment Discrimination: Most Private-Sector Employers Use
Alternative Dispute Resolution,'' July 5, 1995, GAO/HEHS-95-
150.
a. Summary.--The number of discrimination lawsuits filed in
Federal courts has increased dramatically in recent years.
Employers have become more and more concerned about the costs
involved in resolving these complaints--in time, money, and
good employee relationships. Some employers have turned to
internal alternative dispute resolution approaches, including
arbitration, which requires submitting disputes to a neutral
third person for resolution. Some require their employees to
agree to binding arbitration of discrimination complaints as a
condition of their employment, forcing employees to waive the
right to sue. GAO estimates, on the basis of a survey of 2,000
businesses, that almost all employers with 100 or more
employees use one or more alternative dispute resolution
approaches. Arbitration is one of the least common approaches
reported. Employer policies on arbitrating discrimination
complaints vary considerably. Some of these policies, such as
those for employees obtaining information and empowering the
arbitrator to use remedies equal to those under law, would not
meet standards of fairness proposed recently by a commission
established by the Secretary of Labor and the Secretary of
Commerce.
b. Benefits.--The use of alternative dispute resolution
reduces costs for businesses resolving discrimination
complaints. Some of the methods might be used by the Federal
Government.
43. ``Supplemental Security Income: Growth and Changes in Recipient
Population Call for Reexamining Program,'' July 7, 1995, GAO/
HEHS-95-137.
a. Summary.--The Supplemental Security Income (SSI) program
is the largest cash assistance program for the poor and one of
the fastest-growing entitlement programs. Program costs have
risen 20 percent annually during the last 4 years. SSI provides
means-tested income support payment to aged, blind, or disabled
persons. Last year, more than 6 million persons received about
$25 billion in Federal and State benefits. In response to SSI's
rapid growth, Congress passed legislation limiting drug
addicts' benefits, and this year it is considering further
restrictions for these recipients, as well as for children and
noncitizens. This report provides an overview of the SSI
program and its recent history. Specifically, it examines
factors contributing to caseload growth and changes in the
characteristics of SSI recipients.
b. Benefits.--This report gives Congress and the American
people background and reasons for the rapid growth in SSI. This
report provides important information in the debate over
welfare and entitlement reform.
44. ``Health Insurance for Children: Many Remain Uninsured Despite
Medicaid Expansion,'' July 19, 1995, GAO/HEHS-95-175.
a. Summary.--Expanding children's Medicaid eligibility has
significantly increased the number of children who rely on
Medicaid for health coverage. It has also cushioned the effect
of declining employment-based health insurance coverage for
children. Because of expanded eligibility, the proportion of
children on Medicaid in working and in two-parent families has
grown. Congress is considering welfare reform proposals that
would encourage low-income mothers to work. Yet many low-income
jobs do not offer health insurance as a benefit. Even children
who have full-time working parents and are part of two-parent
households may lack health insurance. Although Medicaid has
begun to help close that gap for some families, many more
uninsured children are eligible for Medicaid than have been
enrolled. Changes to Medicaid that remove guaranteed
eligibility and change the financing and responsibilities of
Federal and State government may strongly affect health
insurance coverage for children in the future. Children account
for only a small portion of Medicaid costs. Because they
represent almost half the participants, however, any changes to
Medicaid disproportionately affect children. Changes to
Medicaid that reduce the number of children covered, without
any corresponding changes to encourage employers to provide
dependent health insurance coverage or to provide other
coverage options for children, could significantly increase the
number of uninsured children in the future.
b. Benefits.--This report demonstrates the need to be
careful in deciding how reforms are implemented so that
children are not unfairly affected.
45. ``Property Disposition: Information on HUD's Acquisition and
Disposition of Single-Family Properties,'' July 24, 1995, GAO/
RCED-95-144FS.
a. Summary.--Each year, lenders foreclose on thousands of
defaulted mortgages on single-family properties insured by the
Department of Housing and Urban Development's (HUD) Federal
Housing Administration (FHA). With few exceptions, HUD then
takes ownership of, and later resells, these properties. FHA
almost always loses money on the sale of foreclosed properties.
In response to congressional concerns about the costs that HUD
incurs in acquiring, managing, and selling the foreclosed
properties, this fact sheet provides information on (1) the
losses on such properties sold during the 3 fiscal years ending
September 20, 1994, and the breakdown of the costs associated
with these losses; (2) the number of properties that HUD
acquired and sold during the 3-year period; and (3) the length
of time that the properties remained in HUD's inventory before
being sold.
b. Benefits.--At the request of the Congress, GAO has
compiled comprehensive data on HUD's acquisition and
disposition of single-family properties. This report provides
the Congress with necessary information for reform efforts
aimed at improving single-family acquisition and disposition
policy.
46. ``College Savings: Information on State Tuition Prepayment
Programs,'' August 3, 1995, GAO/HEHS-95-131.
a. Summary.--A handful of States have adopted tuition
prepayment programs, which allow parents to pay in advance for
tuition at participating colleges on behalf of a designated
child, thereby ensuring full coverage of the child's future
tuition bill at one of these colleges regardless of how much
costs rise. By allowing purchasers to ``lock in'' today's
prices, these programs are intended to ease families' concerns
about whether they will have enough money in the future to pay
for their children's' college expenses. This report (1)
describes how these programs operate and the participation
rates they have achieved; (2) assesses participants' income
levels and options for increasing the participation of lower-
income families; and (3) discusses the key issues surrounding
these programs.
b. Benefits.--States are using innovative means to address
the cost of college. This report will help the Federal
Government decide if it can learn from those experiences and
improve Federal loan programs.
47. ``Medicare: Increased HMO Oversight Could Improve Quality and
Access to Care,'' August 3, 1995, GAO/HEHS-95-155.
a. Summary.--This report discusses problems that the Health
Care Financing Administration (HCFA) has had in (1) monitoring
health maintenance organizations (HMO) it contracts with to
provide services to Medicare beneficiaries and (2) ensuring
that they comply with Medicare's performance standards. GAO
found weaknesses in HCFA's quality assurance monitoring,
enforcement measures, and appeal processes. Although HCFA
routinely reviews HMO operations for quality, these reviews are
generally perfunctory and do not consider the financial risks
that HMO's transfer to providers. Moreover, HCFA collects
virtually no data on services received through HMO's that would
enable HCFA to identify providers who may be under serving
beneficiaries. In addition, HCFA's HMO oversight has two other
major limitations: enforcement actions are weak, and the
beneficiary appeal process is slow. HCFA's current regulatory
approach to ensuring good HMO performance appears to GAO to lag
behind the private sector.
b. Benefits.--As both the administration and Congress
promote HMO's, it is critical that HCFA have the systems in
place to deal with the increased use of HMO's. This report
makes it clear that HCFA must place more emphasis on handling
this emerging form of health care.
48. ``Medigap Insurance: Insurers' Compliance With Federal Minimum Loss
Ratio Standards, 1988-1993,'' August 23, 1995, GAO/HEHS-95-151.
a. Summary.--The Medigap market grew steadily from 1988 to
1993, from $7.3 billion to $12.1 billion. Medigap insurers'
aggregate loss ratios were relatively stable during the first 4
years of that period. During the next 2 years, however, these
ratios fell about 10 percentage points, to an aggregate 75
percent for individual policies and 85 percent for group
policies. In 1991, 19 percent of Medigap policies failed to
meet loss ration standards; this rose to 38 percent by 1993.
The premium dollars spent on such policies increased from $320
million in 1991 to $1.2 billion in 1993. If insurers had been
required to give refunds or credits on substandard policies, as
they will in the future, policyholders would have been due
about $124 million during 1992 and 1993.
b. Benefits.--This report shows that despite some minor
concerns the Medigap program is one reform that is working to
standardize coverages, improve underwriting standards and
prevent abuses.
49. ``Nonprescription Drugs: Value of a Pharmacist-Controlled Class Has
Yet To Be Demonstrated,'' August 24, 1995, GAO/PEMD-95-12.
a. Summary.--The drug classification system in the United
States, under which drugs are classified as either prescription
or nonprescription, is unique. Other countries have a class of
drugs that is available without a prescription but can be
obtained only at a pharmacy and sometimes can be dispensed only
by a pharmacist. This report reviews the drug distribution
systems in 10 countries and the European Union. GAO also
reviews the practice of pharmacists' counseling patients on the
use of nonprescription drugs. GAO found that little evidence
exits to support the establishment of a pharmacy or a
pharmacist class of drugs in the United States at this time,
either as a fixed or a transition class. Available evidence
tends to undermine the argument that countries with such a
class obtain major benefits. This report discusses in detail
the facts supporting this conclusion.
b. Benefits.--This report demonstrates the need to assess
the way other nations determine pharmaceutical classifications.
In reviewing the classification systems of other nations, the
GAO has shown no appreciable gains to be made by changing the
U.S. classification system.
50. ``Medicare: Antifraud Technology Offers Significant Opportunity To
Reduce Health Care Fraud,'' August 11, 1995, GAO/AIMD-95-77.
a. Summary.--Medicare continues to suffer large losses each
year due to fraud. Existing risks are sharply increased by the
continual growth in Medicare claims--both in number and
percentage processes electronically. Existing Medicare payment
safeguards can be bypassed and apparently do not deter
fraudulent activities. The Health Care Financing Administration
should be able to benefit by taking full advantage of emerging
antifraud technology to better identify and prevent Medicare
fraud. The number and types of Medicare fraud schemes
perpetrated in South Florida may make that area the best place
to test antifraud systems before nationwide use.
b. Benefits.--Previous GAO reports have shown that HCFA
lacks comprehensive and sometimes common sense ways to combat
waste, fraud, and abuse in Medicare and Medicaid, resulting in
the loss of billions of dollars each year. This report
reinforces that view and cautions Congress once again that it
must take steps to ensure better accounting and accountability
at the agency.
51. ``VA Health Care: Need for Brevard Hospital Not Justified,'' August
29, 1995, GAO/HEHS-95-192.
a. Summary.--The Department of Veterans Affairs (VA)
assumed control of a former naval hospital in Orlando, FL, in
June 1995. VA plans to convert the hospital into a nursing home
while continuing to operate an existing outpatient clinic. VA
also plans to build a new hospital and nursing home in Brevard
County, 50 miles from Orlando. GAO concludes that VA's
conversion of the former Orlando Naval Hospital into a nursing
home and construction of a new hospital and nursing home in
Brevard County is not the most prudent and economical use of
its resources. These construction projects are based on
questionable planning assumptions that may result in an
unneeded expenditure of Federal dollars. Specifically, VA did
not adequately consider hundreds of nursing home beds available
in nearby communities, unused VA hospital beds, and the
potential for decreasing demand for VA hospital beds. VA could
achieve its goals in central Florida by using existing
capacity.
b. Benefits.--The report provides useful information
regarding flaws in the VA criteria and process used to allocate
construction funds.
52. ``Medicare: Excessive Payments for Medical Supplies Continue
Despite Improvements,'' August 8, 1995, GAO/HEHS-95-171.
a. Summary.--In fiscal year 1994 alone, Medicare was billed
more than $6.8 billion for medical supplies. Congressional
hearings and government studies have shown that Medicare has
been extremely vulnerable to fraud and abuse in its payments
for medical supplies, especially surgical dressings. In one
case, Medicare paid more than $15,000 in claims for a month's
supply of surgical dressings for a single patient, apparently
without reviewing the reasonableness of the claims before
payment. Until recently, medical suppliers had considerable
freedom in choosing the Medicare contractors that would process
and pay their claims. Some exploited this freedom by
``shopping'' for contractors with the weakest controls and
highest payment rates. This report discusses (1) the
circumstances allowing payment for unusually high claims for
surgical dressing and (2) the adequacy of Medicare's internal
controls to prevent payments for excessive claims.
b. Benefits.--As previous GAO reports have concluded, HCFA
lacks proper controls within Medicare and Medicaid to prevent
large scale waste, fraud, and abuse. This report points to the
need for significant reforms to assure program integrity.
53. ``Block Grants: Issues in Designing Accountability Provisions,''
September 1, 1995, GAO/AIMD-95-226.
a. Summary.--Congress has shown strong interest in
consolidating narrowly defined categorical grant programs into
broader purpose block grants. A total of 15 block grant
programs with funding of $35 billion were in effect in fiscal
year 1994, constituting a small portion of the total Federal
aid to States. If Medicare and Aid to Families With Dependent
Children are added, however, block grant spending could rise
substantially--to as much as $138 billion or about 58 percent
of the total Federal aid to States. This report summarized
information on how accountability for program financial
management can be designed to fit a block grant approach and
the potential consequences of such provisions. To provide an
overview and summary of GAO's evaluations of past block grant
programs, GAO reviewed nearly two decades of reports,
testimony, and other documents on accountability issues related
to intergovernmental programs. GAO also consulted with experts
on block grants, performance budgeting, and financial
accountability.
b. Benefits.--In order to give States more flexibility, the
Congress has supported converting categorical grant programs
into block grants. The GAO report will help the Congress
establish effective management and accountability systems in
block grants.
54. ``Adult Education: Measuring Program Results Has Been
Challenging,'' September 8, 1995, GAO/HEHS-95-153.
a. Summary.--According to a recent national survey, nearly
90 million adults in the United States have difficulty writing
a letter explaining an error on a credit card bill, using a bus
schedule, or calculating the difference between the regular and
sale price of an item. To address these deficient skills,
Congress passed the Adult Education Act, which funds State
programs to help adults acquire the basic skills needed for
literacy, benefit from job training, and continue their
education at least through high school. The most common types
of instruction funded under the act's largest program--the
State Grant Program--are basic education (for adults
functioning below the eighth grade level), secondary education,
and English as a second language. Because many clients of
Federal employment training programs need instruction provided
by the State Grant Program, coordination among these programs
is essential. Although the State Grant Program funds programs
that address the educational needs of millions of adults, it
has had difficulty ensuring accountability for results because
of a lack of clearly defined program objectives, questionable
validity of adult student assessments, and poor student data.
b. Benefits.--The GAO report demonstrates that there is a
great need for literacy training. However, the report also
suggests that the current system used to evaluate the
illiteracy rate cannot ascertain the success of the program.
The report will aid Congress in considering legislation to
target literacy programs to achieve measurable goals.
55. ``School Finance: Trends in U.S. Education Spending,'' September
15, 1995, GAO/HEHS-95-235.
a. Summary.--Recent trends in financing U.S. education show
a leveling off of per pupil spending for education combined
with increasing enrollment in public elementary and secondary
schools. Meanwhile, the schools face an increasing number of
poor children and others at high risk of school failure--
students whose education costs are generally greater than
average. Moreover, education's share of State budgets has
declined, and Federal funding for education faces tight fiscal
constraints. If these trends continue, America may be less able
to provide adequate educational services for many school-age
children or make needed improvements in the educational system.
b. Benefits.--This report examines trends in per pupil
funding for education. The information provides a thorough and
useful overview of the issues Congress and the American people
must consider in order to ensure adequate education funding in
the future.
56. ``Medicare Spending: Modern Management Strategies Needed To Curb
Billions in Unnecessary Payments,'' September 19, 1995, GAO/
HEHS-95-210.
a. Summary.--Medicare's vulnerability to billions of
dollars in unnecessary payments stems from a combination of
factors. First, Medicare pays higher than market rates for some
services and supplies. For example, Medicare pays more than the
lowest suggested retail price for more than 40 types of
surgical dressings. Second, Medicare's anti-fraud-and-abuse
controls do not prevent the unquestioned payment of claims for
improbably high charges or manipulated billing codes. Third,
Medicare's checks on the legitimacy of providers are too
superficial to detect the potential for scams. Various health
care management strategies help private payers avoid these
problems, but Medicare generally does not use these strategies.
The program's pricing methods and controls over utilization,
consistent with health care financing and delivery 30 years
ago, have not kept pace with major financing and delivery
changes. GAO believes that a viable strategy to remedy the
program's weaknesses would involve adapting the health care
management approach of private payers to Medicare's public
payer role. This strategy would include (1) more competitively
developed payment rates; (2) enhanced fraud and abuse detection
efforts through modernized information systems; and (3) more
rigorous criteria for granting authorization to bill the
program.
b. Benefits.--Previous GAO reports have shown that HCFA
lacks comprehensive and common sense ways to combat waste,
fraud, and abuse in Medicare and Medicaid, resulting in the
loss of billions of dollars each year. This report reinforces
that view and points out successful practices from the private
sector that can help prevent fraud and abuse in Medicare.
57. ``Medicaid: Tennessee's Program Broadens Coverage but Faces
Uncertain Future,'' September 1, 1995, GAO/HEHS-95-186.
a. Summary.--In early 1993, Tennessee predicted that
increases in State Medicaid expenditures and the loss of tax
revenues used to finance Medicaid would produce a financial
crisis. To control Medicaid expenditures, and extend health
insurance coverage to most State residents, Tennessee converted
its Medicaid program into a managed-care health program--
TennCare--to serve both Medicaid recipients and uninsured
persons. GAO found that although TennCare met its objective of
providing health coverage to many uninsured persons while
controlling costs, concerns remain with respect to access to
quality care and managed care performance. In addition, the
soundness of the methodology for determining and the resulting
adequacy of the program's capitation rates have been
questioned. This report discusses (1) TennCare's basic design
and objectives; (2) the degree to which the program is meeting
these objectives; and (3) the experiences of TennCare's
insurers and medical providers and their implications for
TennCare's future.
b. Benefits.--While the report highlights some concerns
with TennCare, GAO makes clear that flexibility is paying off,
giving the State more control over costs and expanding health
coverage. The report makes the case to Congress that while
giving States more flexibility in Medicaid eligibility and
service delivery is not without its difficulties, it can be
successful.
58. ``Health Care Shortage Areas: Designations Not a Useful Tool for
Directing Resources to the Underserved,'' September 8, 1995,
GAO/HEHS-95-200.
a. Summary.--Many Americans live in places where barriers
exist to obtaining basic health care. These areas range from
isolated rural locations to inner-city neighborhoods. In fiscal
year 1994, the Federal Government spent about $1 billion on
programs to overcome access problems in such locales. To be
effective, these programs need a sound method of identifying
the type of access problems that exist and focusing services on
the people who need them. The Department of Health and Human
Services uses two main systems to identify such sites. One
designates Health Professional Shortage Areas (HPSA), the other
Medically Underserved Areas (MUA). More than half of all U.S.
counties fall into these two categories. GAO reviewed the two
systems to determine (1) how well they identify areas with
primary care shortages; (2) how well they help target Federal
funding to benefit those who are underserved; and (3) whether
they are likely to be improved under proposals to combine them.
b. Benefits.--The GAO report indicates that the HPSA and
MUA systems do not effectively identify areas with primary care
shortages or help target Federal resources to benefit those who
are underserved. Furthermore, the GAO offers alternative reform
initiatives for Congress and HHS to consider.
59. ``Cancer Drug Research: Contrary to Allegation, NIH Hydrazine
Sulfate Studies Were Not Flawed,'' September 13, 1995, GAO/
HEHS-95-141.
a. Summary.--Despite advances in treating cancer, some
forms of the disease remain resistant to all therapies and are
often fatal. Because of findings suggesting that hydrazine
sulfate may improve survival for some patients with advanced
cancers, the National Cancer Institute sponsored three studies
of the drug. All three studies failed to show any benefit from
it. The developer of hydrazine therapy alleged that the
National Cancer Institute compromised its studies by allowing
study patients to take tranquilizers, barbiturates, and
alcohol, which they contend are incompatible with hydrazine
sulfate. GAO confirmed that all three trials allowed the use of
tranquilizers to varying degrees and one trial allowed the use
of barbiturates and alcohol. Retrospective analyses, however,
found no evidence that the use of these allegedly incompatible
agents adversely affected the results of the clinical trials.
Although GAO's work did not support the allegation that the
studies were flawed, the National Cancer Institute should have
ensured that complete and accurate records were kept on
concurrent medications and possible alcohol use. Furthermore,
the National Cancer Institute's investigators did not analyze
this issue until recently, and the published results did not
accurately describe the use of tranquilizers during one of
these clinical trials.
b. Benefits.--The GAO report demonstrates that the National
Cancer Institute studies concerning hydrazine sulfate for
cancer patients were not compromised by the use of
tranquilizers, barbiturates, and alcohol. The report cautions
the Institute about the accuracy of some recordkeeping and
provides valuable insights to Congress on health care research
procedures.
60. ``Health Insurance Portability: Reform Could Ensure Continued
Coverage for up to 25 Million Americans,'' September 19, 1995,
GAO/HEHS-95-257.
a. Summary.--Although Federal and State laws have improved
the portability of health insurance, an individual's health
care coverage could still be reduced when changing jobs.
Between 1990 and 1994, 40 States enacted small group insurance
regulations that include portability standards, but the Federal
Employee Retirement Income Security Act of 1974 prevents States
from applying these standards to the health plans of employers
who self-fund. As a result, Members of Congress have proposed
broader national portability standards. GAO estimates that as
many as 21 million Americans each year would benefit from
Federal legislation to ensure that workers who change jobs
would not be subject to new health insurance plans that impose
waiting periods or exclude ``preexisting conditions.'' In
addition, as many as 4 million Americans who at some point have
been unwilling to leave their jobs because they feared losing
their health care coverage would benefit from national
portability standards. Such a change, however, could possibly
boost premiums, according to insurers.
b. Benefits.--With both the administration and the Congress
agreeing on the need for greater health insurance portability,
it is important that any legislation achieve that goal while
avoiding unintended or market-distorting consequences in this
complex area. This report provides Congress with important
information on insurance portability issues.
61. ``Durable Medical Equipment: Regional Carrier's Coverage Criteria
Are Consistent With Medicare Law,'' September 19, 1995, GAO/
HEHS-95-185.
a. Summary.--In November 1993, the Health Care Financing
Administration began consolidating the work of processing and
paying claims for durable medical equipment, prostheses,
orthoses, and supplies at four regional carriers. Claims for
such items had previously been processed and paid by local
Medicare carriers. As part of the transition to regional
processing, the four regional carriers developed coverage
criteria for the items. GAO found that the final criteria
adopted by the regional carriers are consistent with Medicare's
policies on national coverage and the law. GAO does not believe
that the criteria have impeded access by disabled beneficiaries
to needed durable medical equipment and other items. Also, the
regional carriers approved a similar percentage of service for
durable medical equipment and other items for disabled and aged
Medicare beneficiaries in 1994, so there was no significant
difference in access to durable medical equipment and other
items between the two groups of beneficiaries.
b. Benefits.--This report assists Congress in the discharge
of its oversight responsibilities and provides useful analysis
of a successful HCFA initiative.
62. ``Medical Liability: Impact on Hospital and Physician Costs Extend
Beyond Insurance,'' September 29, 1995, GAO/AIMD-95-169.
a. Summary.--As Congress considers proposals to reduce the
tort liability in the health care industry, little consensus
exists on the extent to which medical liability-related
spending boosts hospital and physician expenditures, a central
issue in the debate over health care reform. GAO found that
hospitals and physicians incur a variety of medical liability
costs. Studies attempting to measure such costs have focused on
the cost of purchased malpractice insurance, which is readily
quantifiable because of State reporting requirements. Other
hospitals and physician liability costs, however, are
impractical and methodologically difficult to measure with any
precision. Such costs include defensive medicine, liability-
related administrative expenses, and medical device and drug
company liability expenses that are passed on to hospitals and
doctors in the price of products. However, a broader
understanding of such costs and their implications is useful to
the ongoing medical liability reform debate.
b. Benefits.--This report gives the Congress a greater
understanding of liability related expenses in health care.
63. ``Health Care: Employers and Individual Consumers Want Additional
Information on Quality,'' September 29, 1995, GAO/HEHS-95-201.
a. Summary.--Both employers who purchase health care and
individual consumers have demanded more information on quality.
In response to these demands, some States, large employers, and
health plans have been publishing performance reports
describing the quality of health care providers. These ``report
cards'' provide such information as the frequency with which
preventive services are provided and the degree of success in
treating certain diseases. Data comparing health care plans and
providers helped the consumers GAO surveyed make their health
care purchasing decisions. However, performance reports have
yet to achieve their fullest potential. Consumers said that
they needed more reliable and valid data, more readily
available and standardized information, and more emphasis on
outcome measures. Meeting the information needs of individual
consumers continues to lag behind meeting employer needs.
Attention must be paid to ensuring that individual consumers
have access to health care data. Although employers themselves
have begun to cooperate with one another, few of those GAO
interviewed are making complete health care data available to
help individual consumers make purchasing decisions. Relevant
stakeholders have not yet addressed the issues of disseminating
performance data to individual consumers so that they can make
responsive, informed decisions about their health care
coverage.
b. Benefits.--The movement toward managed health care has
created a stronger need for quality of care information. This
report provides information on performance measures and quality
surveys used by States and private purchasers of health
coverage.
64. ``Welfare to Work: Child Care Assistance Limited; Welfare Reform
May Expand Needs,'' September 21, 1995, GAO/HEHS-95-220.
a. Summary.--From 1991 through 1993, Federal and State
spending on child care subsidies to help welfare recipients
work or go to school grew from about $460 million to more than
$1 billion. As Congress and the States consider various
approaches to restricting the length of time that mothers stay
on welfare, questions have arisen about the child care needs
that will arise as more and more welfare mothers participate in
training activities or return to work. In particular, concerns
have been raised about the capacity of State child care
resources to handle the rise in the number of children needing
care under such proposals. This report examines (1) the extent
to which child care needs of welfare recipients in an education
program--the Job Opportunities and Basic Skills Training
program--are being met; (2) whether any barriers exist to
meeting the child care needs of program participants; (3) the
effects of child care subsidies on former welfare recipients'
progress toward self-sufficiency; and (4) the potential
implications of welfare reform for child care availability and
continuity.
b. Benefits.--This report provides Congress with useful
information on the relationships between likely demand for
welfare, health care and training programs.
65. ``Child Welfare: Complex Needs Strain Capacity To Provide
Services,'' September 26, 1995, GAO/HEHS-95-208.
a. Summary.--Between 1983 and 1993, sharp increases in the
number of foster children combined with unprecedented service
needs led to a crisis in foster care. Reports of child abuse
and neglect nearly doubled, and foster care caseloads grew by
two-thirds. Demands for child welfare services grew not only
because the number of foster children increased but also
because families and children were more troubled and had more
complex needs than in the past. Large numbers of preschool-age
foster children, for example, are at risk for health problems
due to prenatal drug exposure. Meanwhile, resources for child
welfare services failed to keep pace with the needs of troubled
children and their parents. Although foster care funding has
increased dramatically at all levels of government, Federal
funding for child welfare services has lagged. State and
localities have found it hard to meet the demand, despite the
fact that they have more than tripled expenditures in some
cases. As a result, States have adopted various measures to
meet the needs of troubled children and their families while
maintaining child safety. Many States now offer family
preservation services or place children with relatives to
maintain family ties and save money. States are also
increasingly considering the use of specialized foster homes
for children with unique problems, including emotionally
disturbed and medically fragile youngsters, to provide more
family like care at lower costs than institutions.
b. Benefits.--This report provides useful information on
the complex and dynamic relationships between public assistance
programs, particularly programs directed to children.
66. ``FDA Import Automation: Serious Management and Systems Development
Problems Persist,'' September 28, 1995, GAO/AIMD-95-188.
a. Summary.--The Food and Drug Administration (FDA)
oversees imports of food, drugs, cosmetics, medical devices,
and other products to ensure that the public is protected from
goods of questionable quality or that make misleading claims.
In 1987, FDA began developing an automated system to improve
its import entry clearance process, which required extensive
paperwork. Despite an investment of 8 years and $13.8 million
to automate its process for inspecting imported goods, the new
system contains major deficiencies. This is due mainly to
inadequate top management oversight and a management team that
lacked expertise and skill in system development. FDA has
implemented a portion of the system--the Operational and
Administrative System for Import Support (OASIS)--to enhance
its ability to regulate imports and to relieve importers and
FDA personnel of some of the paperwork burdens associated with
import processing. In developing OASIS, FDA did not follow
generally accepted systems development practices for validating
software; conducting user acceptance testing; developing a
security plan to safeguard its computer facilities, equipment,
and data; and conducting a cost-benefit analysis. The resulting
shortcomings mean that OASIS may not perform as needed and that
unsafe products could enter the country.
b. Benefits.--This GAO report indicates that the FDA's
OASIS system has been poorly managed and coordinated. The
report gives the Congress information needed to conduct
thorough oversight and to evaluate FDA reform proposals.
67. ``Welfare to Work: Approaches That Help Teenage Mothers Complete
High School,'' September 29, 1995, GAO/HEHS/PEMD-95-202.
a. Summary.--A variety of local programs seek to help
teenage mothers complete their secondary education and thereby
avoid welfare dependency. GAO found that close monitoring of
teenage mothers' educational activities coupled with follow-up
when their attendance drops increases the likelihood that they
will complete their education. Leveraging the welfare benefit
as a sanction or reward for attendance has contributed to the
completion of high school by teenage mothers. Providing support
services to overcome barriers to continued attendance, with or
without financial incentives, also seems to work, especially
for dropouts. Assistance in meeting child care or
transportation needs may be particularly helpful but did not
appear to be enough, in the absence of attendance monitoring,
to motivate these young mothers to complete their secondary
education. Although current Federal Aid to Families With
Dependent Children policy stresses the importance of teenage
mothers' participation in the JOBS program, it does not require
States to serve all teenage mothers in JOBS, nor does it
require States to monitor the school attendance of all teenage
mothers on welfare. Congress is now deliberating several
reforms to the welfare system, including whether to provide
benefits to teenage mothers. Although GAO found that several
approaches can succeed in helping teenage mothers complete high
school, the final form of any reform legislation will likely
influence each State's use of these approaches.
b. Benefits.--As Congress addresses welfare reform, aid to
teenage mothers is one of the most contentious areas of
concern. This report points to several ways which have proven
effective in assisting teenage mothers.
68. ``VA Student Financial Aid: Opportunity To Reduce Overlap in
Approving Education and Training Programs,'' October 30, 1995,
GAO/HEHS-96-22.
a. Summary.--Since the 1940's, the Department of Veterans
Affairs (VA) and its predecessor agencies have contracted with
State approving agencies to assess whether schools and training
programs offer classes of sufficient quality to merit VA
education assistance benefits. GAO estimates that $10.5 million
of the $12 million paid to these agencies in 1994 was spent on
assessments that overlapped those of the Department of
Education. These assessments involved reviews of academic and
vocational schools that were already accredited by Education-
approved agencies. State approving agency efforts costing
another $400,000 in 1994 may have overlapped assessments of
apprenticeship programs done by the Department of Labor. The
continued use of State approving agencies to do assessments
that overlap other assessments does not appear to be a good use
of scarce Federal dollars. GAO suggests restricting State
approving agency activity solely to those schools and programs
not subject to ``gatekeeping'' by the Department of Education.
b. Benefits.--This report provides additional evidence that
Departments of Education, Labor and the VA operate duplicative
education, training and school assessment programs.
69. ``Worker Protection: Federal Contractors and Violations of Labor
Law,'' October 24, 1995, GAO/HEHS-96-8.
a. Summary.--Private sector firms receive billions of
dollars each year in Federal Government contracts for goods and
services. Although these firms generally profit from their
business with the Federal Government, some also violate Federal
laws that protect the rights of employees to bargain
collectively. Legislation is pending before Congress that would
debar firms showing ``a clear pattern and practice'' of
violating the National Labor Relations Act from being awarded
Federal contracts. This report identifies the extent to which
violators of the act include employers that have contracts with
the government. More specifically, GAO identifies
characteristics associated with these Federal contractors and
their violations of the act and identifies ways to improve
compliance of Federal contractors with the act.
b. Benefits.--This report gives Congress information needed
in oversight and legislative deliberations regarding better
enforcement and compliance with labor laws by Federal
contractors.
70. ``Arizona Medicaid: Competition Among Managed Care Plans Lowers
Program Costs,'' October 4, 1995, GAO/HEHS-96-2.
a. Summary.--Many States are converting their traditional
fee-for-service Medicaid programs to managed care delivery
systems. Arizona's Medicaid program offers valuable insights--
especially in fostering competition and monitoring plan
performance. Since 1982, Arizona has operated a statewide
Medicaid program that mandates enrollment in managed care and
pays health plans a capitated fee for each beneficiary served.
Although the program had problems in its early years, such as
the dismissal of the program administrator and the State's
takeover of the administration, it has successfully contained
health care costs while maintaining beneficiaries' access to
mainstream medical care. Arizona's recent cost containment
record is noteworthy. According to one estimate, Arizona's
Medicaid program saved the Federal Government $37 million and
the State $15 million in acute care costs during fiscal year
1991 alone. Arizona succeeded in containing costs by developing
a competitive Medicaid health care market. Health plans that
submit capitation rates higher than their competitors' bids
risk not winning Medicaid contracts. Other States considering
managed care programs can benefit from Arizona's experience.
GAO concludes that key conditions for holding down Medicaid
costs without compromising beneficiaries' access to appropriate
medical care include freedom from some Federal managed care
regulations, development and use of market forces, controls to
protect beneficiaries from inadequate care, and investment in
data collection and analysis capabilities.
b. Benefits.--The report makes it clear that the
flexibility afforded Arizona is paying off under Section III
Medicaid waivers. Furthermore, it makes the case to Congress
that while giving States more flexibility in Medicaid
eligibility and service delivery is not without difficulties,
it can prove successful and should be pursued.
71. ``Mammography Services: Initial Impact of New Federal Law Has Been
Positive,'' October 27, 1995, GAO/HEHS-96-17.
a. Summary.--The Mammography Quality Standards Act of 1992
imposed uniform standards for mammography in all States,
requiring certification and annual inspection of mammography
facilities. GAO found that the act has resulted in higher
quality equipment, personnel, and practices. Although
mammography quality standards are now in place in all States,
they do not appear to have hampered access to services. To
avoid large-scale closure of facilities, however, the Food and
Drug Administration settled on an approach that allowed some
delay in meeting certification requirements. For this and other
reasons, such as the availability of outcome data, more time
will be needed before the act's full impact can be determined.
GAO is required to assess the effects of the act again in 2
years and to issue a report in 1997.
b. Benefits.--This report provides valuable oversight
feedback about the Mammography Quality Standards Act to the
Congress.
72. ``Homeownership: Mixed Results and High Costs Raise Concerns About
HUD's Mortgage Assignment Program,'' October 18, 1995, GAO/
RCED-96-2.
a. Summary.--During the 19-year period that ended in
September 1993, the Department of Housing and Urban Development
(HUD) incurred losses totaling $12.8 billion as a result of
foreclosures on homes that the Federal Housing Administration
(FHA) had insured. As an alternative to foreclosure on such
properties, HUD operates a mortgage assignment program. For
borrowers accepted into the program, FHA pays the mortgage
debt, takes assignment of the mortgage from the lenders, and
develops a new repayment plan for the borrower under which
monthly mortgage payments can be reduced or suspended for up to
36 months. HUD collects mortgage payments from the borrowers
while allowing them to live in their homes. The number of FHA
borrowers participating in the program has tripled during the
past 6 years, reaching 71,500 at the end of fiscal year 1994.
Their unpaid principle balances total $3.7 billion. GAO found
that program has helped borrowers avoid immediate foreclosure,
but it has not been fully successful in helping borrowers avoid
foreclosure and retain their homes on a long-term basis. GAO
estimates that 52 percent of the nearly 69,000 borrowers who
have entered the program since fiscal year 1989 will eventually
lose their homes through foreclosure. Moreover, program losses
have exceeded those that would have been incurred had loans
gone immediately to foreclosure without assignment. Options to
reduce program losses include reducing the 3-year relief period
provided to borrowers, setting a time limit on eliminating
delinquencies, and accepting only those borrowers into the
program who can afford to pay at least half of their mortgage
payments.
b. Benefits.--This report gives the Congress suggestions on
how to reform HUD's Mortgage Assignment Program.
73. ``FDA Drug Approval: Review Time Has Decreased in Recent Years,''
October 20, 1995, GAO/PEMD-96-1.
a. Summary.--New drugs marketed in the United States must
be approved first by the Food and Drug Administration (FDA).
FDA grants its approval after it has determined from data
submitted by a drug's sponsor that the drug is safe and
effective and that the manufacturer can guarantee its quality.
GAO found a considerable reduction in approval time for new
drug applications between 1987 and 1992. It took an average of
33 months for new drug applications submitted in 1987 to be
approved but only 19 months on average to approve new drug
applications submitted in 1992. The priority that FDA assigns
to new drug application and the experience of its sponsors
significantly affect the likelihood of a quick decision. FDA
assigns priority status to drugs that are expected to provide
therapeutic benefit to consumers beyond that of drugs already
marketed. Priority status and sponsor experience are also the
two factors that predict the likelihood of drug approval.
Finally, the limited data available on review time for FDA and
its counterpart in the United Kingdom paint a more ambiguous
picture than presented in many recent reports. In fact, the
latest data published by the regulatory agency in the United
Kingdom show that it does not have faster approval times than
FDA.
b. Benefits.--This report documents better FDA performance
in drug reviews and approvals, but also demonstrates that
statutory deadlines are still missed. This information should
be useful in congressional oversight and legislative
considerations of FDA reform.
74. ``Medical Devices: FDA Review Time,'' October 30, 1995, GAO/PEMD-
96-2.
a. Summary.--The Food and Drug Administration (FDA)
regulates the manufacture and marketing of medical devices in
the United States. Some critics have argued that FDA's review
of medical devices is excessively lengthy and can impose
inordinate delays in the introduction of new devices into the
marketplace. GAO found that FDA review times and trends for
medical device applications varied widely between October 1988
through May 1995. For 510(k) applications submitted, the review
time remained stable from 1989 to 1991, then rose sharply in
1992 and 1993, before dropping in 1994. For 1994, the median
was 152 days. The mean time to a decision was higher--166
days--and this mean will continue to grow as the remaining open
cases (13 percent) are completed. The review time trend for
original premarket approvals was less clear, in part because a
large proportion of applications had yet to be completed. Not
all the time that elapsed between an application's submission
and its final determination was spent under FDA's review
process. In many cases, FDA had to wait for additional
information.
b. Benefits.--This report documents that medical device
reviews and approvals at the FDA are slow, inconsistent and
often miss statutory deadlines. This information should be
useful in congressional oversight and legislative
considerations of FDA reform.
75. ``Higher Education: Selected Information on Student Financial Aid
Received by Legal Immigrants,'' November 24, 1995, GAO/HEHS-96-
7.
a. Summary.--According to records at the Department of
Education of about 390,000 legal immigrant students received
Pell grant aid in academic year 1992-93. This was about 10
percent of all students receiving Pell grants. In total,
immigrants received $662 million, or about 11 percent, of Pell
grant aid in that year. GAO was unable to determine the total
number of legal immigrants who received Stafford loans because
citizenship data are not maintained in the Education
Department's loan files. Some immigrants who received Pell
grants, however, also received Stafford loans totaling $257
million. About 82 percent of the immigrants who received
student aid lived in seven States, led by California and New
York. Sixty-one percent attended public colleges, 19 percent
attended private colleges, and 21 percent attended for-profit
vocational schools. The 100 schools with the most immigrant
Pell grant recipients accounted for about half of all such
students, and 91 percent of these schools were located in the
seven States with the highest concentration of immigrant
students.
b. Benefits.--As the Congress considers welfare, education
and immigration reforms, this report offers useful information
on the extent to which ineligible non-citizens obtain
assistance.
76. ``Ryan White Care Act of 1990: Opportunities To Enhance Funding
Equity,'' November 13, 1995, GAO/HEHS-96-26.
a. Summary.--GAO's analysis of existing funding formulas
demonstrates that Federal funding under the Ryan White Care Act
can be made more equitable. An important goal of the act was to
target emergency funding to areas of greatest need. At the time
the law was enacted, high rates of human immunodeficiency virus
(HIV) infection were found in fewer areas of the country,
service delivery networks were just beginning to form, and
these service delivery systems had to rely primarily on private
and volunteer resources. During the past 5 years, however, the
HIV epidemic has become more widespread and less localized.
Hence, areas where the AIDS caseload had burgeoned recently
need per-case funding levels comparable to those in areas where
AIDS was initially concentrated.
b. Benefits.--This report should prove useful in
consideration of legislation to reauthorize the Ryan White Care
Act.
77. ``Medicare: Enrollment Growth and Payment Practices for Kidney
Dialysis Services,'' November 22, 1995, GAO/HEHS-96-33.
a. Summary.--Medicare is the predominant health care payer
for people with end-stage renal disease--permanent and
irreversible loss of kidney function. Medicare's costs for this
program have increased, mainly because of the substantial
increase in new beneficiaries being enrolled in the program.
The average annual rate of increase averaged 11.6 percent
between 1978 and 1991. In addition to the rise in enrollment,
the mortality rate for new patients decreased. For example,
deaths among beneficiaries during their first year in the
program fell from 28 percent to 24 percent between 1982 and
1991. Since the program began in 1973, technological advances
and greater availability of kidney dialysis machines have meant
that persons who were not considered good candidates for kidney
dialysis in 1973--those 65 years old or older and those whose
kidney failure was caused by diabetes and hypertension--are now
routinely placed on dialysis. GAO's review of medical services
and supplies provided to all Medicare end-stage renal disease
patients in 1991 shows that no separately billable service or
supply was provided often enough to make it a good candidate to
be considered part of the standard dialysis treatment and thus
included in a future composite rate.
b. Benefits.--This report will assist congressional
oversight and authorizing committees in reviewing appropriate
Medicare payment rates and reimbursement policies.
78. ``National Health Service Corps: Opportunities To Stretch Scarce
Dollars and Improve Provider Placement,'' November 24, 1995,
GAO/HEHS-96-28.
a. Summary.--The National Health Service Corps (NHSC) is
the Federal Government's main program for placing physicians
and other health care providers in locations with identified
shortages of health professionals. For many years, NHSC
recruited health care providers primarily by awarding
scholarships to students who agreed to serve in shortage areas
after their health professions training was completed--
generally several years later. In the late 1980's, the Congress
authorized an additional approach--a loan repayment program for
health care providers who had completed their training and
could begin serving in a shortage area immediately. Under this
second approach, the government repaid a set amount of
educational loan debt for each year of service in a shortage
area. In recent years, funding for NHSC scholarships and loan
repayments has increased nearly ten-fold, from about $8 million
in fiscal year 1989 to nearly $80 million in fiscal year 1994.
This report (1) compares the costs and benefits of the NHSC
scholarships and loan repayment programs and (2) determines
whether NHSC has distributed available providers to as many
eligible areas as possible.
b. Benefits.--This report will assist Congress in better
targeting and matching health professional training funds to
areas of need.
79. ``School Facilities: States' Financial and Technical Support
Varies,'' November 28, 1995, GAO/HEHS-96-27.
a. Summary.--This report is one in a series addressing the
condition of America's school facilities. While the
construction of school buildings has traditionally been a local
responsibility, nearly all States now have some role in school
facilities construction, renovation, and major maintenance, and
13 States have established comprehensive facilities programs.
As a group, States reported providing about $3.5 billion for
school facilities construction during fiscal year 1994.
However, State involvement in facilities matters varied
greatly. For example, State financial assistance for school
facilities in the 40 States with ongoing assistance programs
ranged from $6 per student to more than $2,000 per student.
States' technical assistance and compliance review activities
also varied greatly, as did the amount and type of data that
States collected and maintained on school facilities. Forty
States collected some type of building inventories or building
condition data. Overall, the data on State involvement suggest
that while most States are providing facilities support to
school districts, many States do not currently play a major
role in addressing school facilities issues.
b. Benefits.--As the Congress considers major education
reforms, this report will help better focus the Federal role in
the Nation's school systems.
80. ``Head Start: Information on Federal Funds Unspent by Program
Grantees,'' December 29, 1995, GAO/HEHS-96-64.
a. Summary.--In fiscal year 1995, Head Start was
appropriated $3.5 billion to provide a range of service to
eligible, preschool-aged children from low-income families.
Currently, about 1,400 local agencies, known as grantees,
sponsor these programs and serve 752,000 children. Local
programs provide education, nutrition, health, and social
services to low-income children and opportunities for parental
involvement and enrichment. Since 1990, the Congress has
increased funding for Head Start 135 percent to allow more
children the opportunity to participate and to improve the
quality of Head Start services. During this period of growth,
virtually all program funds were awarded to grantees. However,
some Head Start grantees did not spend all of the program funds
awarded them each year to conduct local program activities and
carried these unspent funds forward for use in subsequent
years. This report determines (1) the amount of Head Start
funding unspent by program grantees at the end of grantee
budget years 1992, 1993, and 1994 and the reasons for these
unspent funds; (2) the proportion of carryover funds that were
added to grantee awards or that offset grantee awards in
subsequent years; (3) the proportion of carryover funds that
are one or more grantee budget years old; and (4) the grantees'
intended use of carryover funds.
b. Benefits.--This report provides Congress and the public
with one measure to evaluate the efficiency and effectiveness
of Head Start programs.
81. ``Department of Education: Efforts by the Office for Civil Rights
To Resolve Asian-American Complaints,'' December 11, 1995, GAO/
HEHS-96-23.
a. Summary.--As with many other Federal agencies and
departments responsible for enforcing civil rights and equal
employment opportunity laws, over the last several years the
discrimination complaint workload of the U.S. Department of
Education's Office for Civil Rights (OCR) has increased, but
its staffing has remained level. In the early 1990's, compared
with the 1980's, generally, the number of compliance reviews
decreased and the average time to resolve complaint
investigations and complete compliance reviews increased.
Because of this, concerns have been raised about how
effectively OCR carries out its responsibilities. The GAO has
examined OCR's complaint investigations and compliance reviews
of discrimination cases involving Asian-Americans who applied
for or were enrolled in postsecondary schools, such as colleges
and universities. This report determines: (1) for 13 specific
cases, did Education's OCR follow established policies and
procedures, particularly with respect to timeliness and
recordkeeping, in conducting complaint investigations and
compliance reviews involving Asian-Americans; (2) for fiscal
years 1988-1995, how did the timeliness and outcomes of
complaint investigations and compliance reviews involving
Asian-Americans compare with the timeliness and outcomes of
those involving other minority groups; and (3) have recent
administrative changes implemented by OCR improved its
operations in conducting and resolving complaint investigations
and completing compliance reviews?
b. Benefits.--This oversight report of the Department of
Education's OCR provides the Congress with important
information necessary to evaluate the office.
82. ``Medicare: Millions Can Be Saved by Screening Claims for Overused
Services,'' January 30, 1996, GAO/HEHS-96-49.
a. Summary.--Medicare contractors routinely pay hundreds of
millions of dollars in Medicare claims without first
determining if the services provided are necessary. GAO
reviewed payments to doctors for six groups of high-volume
medical procedures--ranging from eye examinations to chest x-
rays--that accounted for nearly $3 billion in Medicare payments
in 1994. GAO also surveyed 17 contractors to determine if they
had used medical necessity criteria in their claims processing
to screen for these six groups of procedures. For each of the
six groups, more than half of the 17 contractors failed to use
automated screens to flag claims for unnecessary,
inappropriate, or overused treatments. These prepayment screens
could have saved millions of taxpayer dollars now wasted on
questionable services. Problems with controlling payments for
widely overused procedures continue because the Health Care
Financing Administration (HCFA) lacks a national strategy to
control these payments. HCFA now relies on contractors to focus
on procedures where local use exceeds the national average.
Although this approach helps reduce local overuse of some
procedures, it is not designed to control overuse of a
procedure nationwide.
b. Benefits.--The GAO report suggests that the
implementation of compulsory national screening criteria for
Medicaid could save millions of tax dollars from being wasted
on unnecessary medical procedures.
83. ``Health Insurance for Children: State and Private Programs Create
New Strategies to Insure Children,'' January 18, 1996, GAO/
HEHS-96-35.
a. Summary.--In the mid-1980's, State and private groups
began developing health insurance programs to increase health
care coverage for children. By 1995, 14 States and upward of 24
private-sector organizations offered such programs. The number
of children enrolled in the six programs GAO visited ranged
from 5,000 to more than 10,000. Unlike State Medicaid programs,
which operate as open-ended entitlements funded partly by the
Federal Government, these programs operated within fixed and
often limited budgets and were funded by various sources, such
as dedicated State taxes and private donations. Limited budgets
forced five of the six programs to cap enrollment at times and
to place eligible children on waiting lists. The programs used
several strategies to control costs. Some limited the services
covered, while others resorted to patient cost-sharing through
premiums and copayments or enrolled children in managed care.
Most of the programs operated through nonprofit or private
insurers, which allowed the programs to use existing provider
payment systems and physician networks and to offer near-market
reimbursement rates--features that appealed to insurers and
providers. For patients, the programs guaranteed access to a
provider network, had simple enrollment procedures, and tried
to avoid the appearance of a welfare program. Moreover,
children in these programs appeared to gain greater access to
health care.
b. Benefits.--The report highlights successful State and
private sector initiatives to provide health insurance to
uninsured children. These initiatives can serve as a model to
Congress and other States interested in creating similar
programs.
84. ``Fraud and Abuse: Providers Target Medicare Patients in Nursing
Facilities,'' January 24, 1996, GAO/HEHS-96-18.
a. Summary.--Nursing home patients are an attractive target
for fraudulent and abusive health care providers that bill
Medicare for undelivered or unnecessary services. A wide
variety of providers, including medical equipment suppliers,
laboratories, optometrists and doctors, have been involved in
fraudulent and abusive Medicare billing schemes. Several
features make nursing home patients attractive targets. First,
because a nursing facility houses many Medicare beneficiaries
under one roof, unscrupulous billers of services can operate
their schemes in volume. Second, nursing homes sometimes make
patient records available to outsiders, contrary to Federal
regulations. Third, providers are permitted to bill Medicare
directly, without certification from the nursing home or the
attending physician that the items are necessary or have been
provided as claimed. In addition, Medicare's automated systems
do not collect data to flag improbably high charges or levels
of services. Finally, even when Medicare spots abusive billings
and seeks recovery of unwarranted payments, it often collects
little money from wrongdoers, which either go out of business
or deplete their resources so that they cannot repay the funds.
b. Benefits.--This report highlights the seriousness of the
problem of fraud and abuse in nursing homes and calls attention
to the fact that nursing homes are failing to monitor providers
they contract with to provide services to nursing residents. It
makes clear Medicare's automated anti-fraud systems are lacking
and that Congress and the Health Care Financing Administration
need to address the problem.
85. ``Medicare HMO's: Rapid Enrollment Growth Concentrated in Selected
States,'' January 18, GAO/HEHS-96-63.
a. Summary.--Private-sector insurers cite extensive use of
health maintenance organizations (HMO) and other managed care
approaches as a key factor in slowing the growth of their
insurance premiums. As a result, part of the current interest
in controlling Medicare costs has centered on ways to increase
HMO use among Medicare beneficiaries. This report provides
information on trends in the number of (1) Medicare
beneficiaries enrolling in HMO's and (2) HMO's enrolling
beneficiaries. GAO analyzes this data for factors that might be
influencing decisions by HMO's to enroll Medicare beneficiaries
and decisions by beneficiaries to enroll in HMO's. GAO found
approximately 2.8 million Medicare beneficiaries--about 7
percent of the total--were enrolled in risk-contract HMO's as
of August 1995. This was double the percentage enrolled in
1987. The growth has been particularly rapid during the past 4
years and has centered on certain States. California and
Florida, for example, have more than half of all enrollees.
b. Benefits.--The report serves as a focal point for
Congress to look further at the growth of HMO's and the
marketing tools they are using in States with large percentages
of Medicare beneficiaries.
86. ``Job Training Partnership Act: Long-Term Earnings and Employment
Outcomes,'' March 4, 1996, GAO/HEHS-96-40.
a. Summary.--The Federal Government spends billions of
dollars annually to support employment training programs, but
little is known about their long-term effect on participants'
earnings and employment rates. GAO's analysis found some
positive effects of the Job Training Partnership Act--the
cornerstone of the Federal employment training effort--in the
years immediately following training. However, neither
employment rates nor earnings were significantly higher for
participants than for nonparticipants 5 years after training.
In some earlier years, adults (but not youth) who received
training had earnings or employment rates significantly higher
than those of the control group. Because none of the fifth-year
differences were statistically significant, however, GAO could
not attribute the higher earnings to training provided under
the act rather than to chance alone.
b. Benefits.--The information found in this report can be
used to either improve the long-term effectiveness of the JTPA
program or redirect funds to more effective programs. The
report will lead to greater financial accountability with
Federal job training funds.
87. ``Food Safety: New Initiatives Would Fundamentally Alter the
Existing System,'' March 27, 1996, GAO/RCED-96-81.
a. Summary.--In response to continuing outbreaks of food
poisoning, Congress and Federal agencies are considering new
approaches to ensuring food safety. This report discusses the
Federal food safety system, particularly the current
responsibilities, budgets, staffing, and workloads of the
Federal agencies involved and the changes in these areas since
1989, when GAO issued a two-volume report on this subject (GAO/
RCED-91-19a and 19b). The Food and Drug Administration (FDA)
and the Food Safety Inspection Service (FSIS), the lead
agencies responsible for food safety, rely heavily on physical
inspections to prevent unsafe food from leaving processing
plants. Current proposals, however, would shift the
Government's oversight role. Private industry would become
responsible for identifying and controlling potential hazards
before they affected food products, while the Government would
assess the effectiveness of each plant's safety system. Such
systems, known as Hazard Analysis and Critical Control Point
(HACCP) systems, are intended to identify the critical points
in food processing and establish controls to prevent
adulteration caused by microbes, chemicals, or physical
hazards. Under the FDA and FSIS initiatives, such systems are
to be up and running by 1997. Because of FDA's resources
constraints and FSIS' regulatory restrictions, however, the
agencies are unlikely to inspect plants on the basis of the
risk they pose--even though this was recommended by the
National Academy of Sciences.
b. Benefits.--A fundamental change in food safety
inspection programs is required due to changes in food
processing and the increasing virulence of food borne
pathogens. This report addresses the importance of HACCP
inspection programs in reforming the food safety inspection
system to reflect current industry and pathogen containment
requirements.
88. ``FDA Laboratories: Magnitude of Benefits Associated With
Consolidation Is Questionable,'' March 19, 1996, GAO/HEHS-96-
30.
a. Summary.--Many of the Food and Drug Administration's
(FDA) 18 testing laboratories across the country are old and
need repair, the agency plans to replace the old labs with five
``megalabs'' and four special-purpose facilities. GAO found,
however, that projected cost savings of about $91 million may
be based on assumptions that inflate the cost of replacing
medium-sized labs--those having about 50 analysts per lab--are
more efficient and effective than existing larger labs. In
selecting sites for its megalabs, FDA did little analysis of
the relative efficiency of alternative sites. FDA placed little
emphasis on such factors as proximity to ports of entry and
quantity of nearby food and other relevant businesses. Instead,
the agency's site selections were based mainly on where FDA
thought it would receive congressional funding approval.
b. Benefits.--This information can be used to assess FDA's
current and future laboratory needs. In view of the current
budget climate and limited resources, FDA's lab consolidation
plans should reflect accurate administrative planning to ensure
safe food and drug inspections for the Nation.
89. ``Public Pensions: State and Local Government Contributions to
Underfunded Plans,'' March 14, 1996, GAO/HEHS-96-56.
a. Summary.--State and local governments with underfunded
pension plans risk tough budget choices in the future if they
do not make progress toward full funding. Their taxpayers will
face a liability for benefits earned by current and former
Government workers, forcing these governments to choose between
reducing future pensions or raising taxes. Funding of State and
local pension plans has improved significantly since the
1970's. After adjusting for inflation, the amount of the
unfunded liability has been cut in half. Still, in 1992, 75
percent of State and local government pension plans in the
Public Pension Coordinating Council survey were underfunded; 38
percent were less than 80 percent funded. Sponsors of slightly
more than half of the plans in the survey made contributions on
schedule to pay off any unfunded liability. One-third of the
pension plans, however, were underfunded in 1992, and were not
receiving the actuarially required sponsor contributions. Of
all plans with complete data, one-fifth were underfunded and
were not receiving full contributions in both 1990 and 1992.
b. Benefits.--This report provided detailed data on the
extent of public pension under funding. It gives a look at the
progress that State and local governments are making toward
full funding of their pension plans.
90. ``Medicare: Home Health Utilization Expands While Program Controls
Deteriorate,'' March 27, 1996, GAO/HEHS-96-16.
a. Summary.--Use of the Medicare home health benefit has
increased dramatically, with spending rising from $2.7 billion
in 1989 to $12.7 billion in 1994. Costs are projected to reach
$21 billion by the year 2000. In earlier reports (GAO/HRD-81-
155 and GAO/HRD-87-9), GAO cited lax controls over the use of
the home health benefit and recommended measures to improve
Medicare's ability to detect claims that were not medically
necessary or did not meet the coverage criteria. Medicare's
escalating home health outlays continue to raise concerns about
the extent of benefit abuse. This report examines the factors
underlying the growth in the use of the home health benefit.
GAO discusses: (1) changes in the composition of the home
health industry; (2) changes in the composition of Medicare
home health users; (3) differences in utilization patterns
across geographic areas; (4) incentives to overuse services;
and (5) the effectiveness of payment controls in preventing
payments for services not covered by Medicare.
b. Benefits.--The report serves as the basis for Congress
to require the Health Care Financing Administration (HCFA) to
better implement existing anti-fraud controls in the home
health program. This will allow HCFA to better detect billing
improprieties and remove fraudulent providers from the Medicare
program.
91. ``At-Risk and Delinquent Youth: Multiple Federal Programs Raise
Efficiency Questions,'' March 6, 1996, GAO/HEHS-96-34.
a. Summary.--The Federal Government now runs 131 programs
in 16 agencies to benefit delinquent youth. Many of the
programs GAO has examined provide a range of services--from
counseling to job training to research and evaluation. The
services most commonly authorized are substance abuse
intervention and training and technical assistance. Many
programs also have multiple target groups, ranging from poor
and neglected youth to abused and neglected youth to school
dropouts. The current system of Federal programs for at-risk or
delinquent youth creates the potential for overlap of services.
GAO identifies many instances of two or more programs' offering
similar services to the same target groups, raising questions
about the overall efficiency of Federal efforts to help these
youngsters.
b. Benefits.--The information provided by GAO can be used
as a starting point for an evaluation and determination by
Congress of which services are most helpful to the target
groups. Inefficient and duplicative programs could be
eliminated and the funds from such programs used to strengthen
the remaining programs or for other purposes.
92. ``Veterans' Health Care: VA's Approaches to Meeting Veterans' Home
Health Care Needs,'' March 15, 1996, GAO/HEHS-96-68.
a. Summary.--In fiscal year 1994, the Department of
Veterans Affairs (VA) provided home health care to more than
40,000 veterans at a cost of $64 million to VA and millions
more to Medicare. By providing them with home health care for
various reasons. Some veterans may have chronic health
problems, such as heart disease, and require periodic visits,
while others may be discharged from VA medical centers
following surgery and need dressings changed or medications
administered. The number of veterans needing home health care
is expected to grow as the veteran population ages and as VA
discharges patients from its hospitals to reduce the costs of
hospitalization. This report provides information on: (1) the
characteristics and the services of the home health care
programs that VA uses; (2) the available data on program costs;
and (3) the way in which VA ensures that veterans receive
quality service.
b. Benefits.--The report will help Congress determine if
the growing home health care service for veterans is cost
effective and provide quality medical care.
93. ``Mortgage Financing: FHA Has Achieved Its Home Mortgage Capital
Reserve Target,'' April 12, 1996, GAO/RCED-96-50.
a. Summary.--Borrowers with mortgage loans insured by the
Federal Housing Administration (FHA) pay insurance premiums,
which are deposited into the Department of Housing and Urban
Development's Mutual Mortgage Insurance Fund. FHA-insured Fund
mortgages were valued $305 billion as of September 1994.
Although the Fund has traditionally been self-sufficient, it
began to suffer substantial losses during the 1980's, mainly
because foreclosures on single-family homes supported by the
Fund were high in areas experiencing difficult times
economically. To help place the Fund on a financially sound
basis, legislative reforms, such as requiring FHA borrowers to
pay more in premiums, were made in November 1990. This report:
(1) estimates, under different economic scenarios, the Fund's
economic net worth as of the end of fiscal year 1994; (2)
assesses the Fund's progress in achieving the legislatively
mandated capital reserve ratio that expresses economic net
worth as a percentage of insurance-in-force; and (3) compares
GAO's estimate of the Fund's economic net worth with the
estimate prepared for FHA by Price Waterhouse.
b. Benefits.--HUD's Mutual Mortgage Insurance Fund had
begun to suffer substantial losses during the 1980's. This
report tells Congress whether the reforms were effective and
the program is sound, giving Congress the ability to assess
whether or not further reforms are necessary.
94. ``Workers' Compensation: Selected Comparisons of Federal and State
Laws,'' April 3, 1996, GAO/GGD-96-76.
a. Summary.--Concerns have been raised that workers'
compensation benefits authorized under the Federal Employees'
Compensation Act may provide Federal workers having job-related
injuries with more generous benefits than other Federal or
State workers' compensation programs. This report compares: (1)
monetary benefits authorized by the act with those authorized
by other workers' compensation laws, and (2) other significant
benefit provisions of Federal and State workers' compensation
laws, such as those involving waiting periods, physician
choice, and coverage of occupational diseases.
b. Benefits.--This report answers the questions about the
extent of Federal employee benefits. In addition, the reports
gives Congress the ability to determine fair compensation
benefits should Congress decide to reform the benefits of
Federal employees.
95. ``Medicare: Federal Efforts to Enhance Patient Quality of Care,''
April 10, 1996, GAO/HEHS-96-20.
a. Summary.--In the past decade, Medicare costs have risen
on average more than 10 percent per year. Expanding managed
care options for Medicare patients has been proposed as a way
to contain costs. Concerns have been raised, however, that such
changes may undermine the quality of care provided to Medicare
beneficiaries. Currently, Medicare reimburses only for care
provided in health maintenance organizations and by the fee-
for-service sector. This report (1) discusses the present and
future strategies of the Health Care Financing Administration
(HCFA), which administers the Medicare program, to ensure that
Medicare providers furnish quality health care, in both fee-
for-service and health maintenance organization arrangements,
and (2) provides the views of experts on attributes a quality
assurance program should have if more managed care options are
made available to Medicare beneficiaries.
b. Benefits.--With the ongoing shift of some Medicare
beneficiaries into health maintenance organizations (HMO), HCFA
needs to carefully monitor and ensure Medicare dollars are
being spent wisely on HMO services and that the beneficiaries
enrolled are receiving needed and quality care. The report
makes it clear that Congress should continue to assess HCFA's
progress on this issue.
96. ``Medicaid Long-Term Care: State Use of Assessment Instruments in
Care Planning,'' April 2, 1996, GAO/PEMD-96-4.
a. Summary.--GAO examined how publicly funded programs
assess the need for home and community based long-term care for
the elderly with disabilities. This care is provided to persons
living at home who, because of a chronic condition or illness,
cannot care for themselves. Services range from skilled nursing
to assistance with day-to-day activities, such as bathing and
housekeeping. Under the Medicaid program, 49 States have
obtained waivers to provide home and community-based services
to low-income elderly persons who could otherwise need
institutional care paid for by Medicaid. These States are
responsible for developing a care plan tailored to a client's
specific needs. A well-designed assessment instrument helps
identify all appropriate needs--increasing the likelihood that
important aspects of the client's situation will not be
overlooked in care planning. Standardized administration of the
assessment instrument increases the likelihood that the needs
of all clients will be determined in the same way. This report
provides information on the following: (1) comprehensiveness of
assessment instruments; (2) uniformity of their administration;
and (3) training for staff who do the assessments.
b. Benefits.--This report serves as a basis for Congress to
ensure that Federal Medicaid programs take additional steps to
develop patient plans for each beneficiary receiving services.
97. ``Job Training: Small Business Participation in Selected Training
Programs,'' April 29, 1996, GAO/HEHS-96-106.
a. Summary.--Both Government and the private sector spend
considerable sums to train the Nation's work force. In 1995,
the Federal Government alone spent about $20 billion on 163
programs that included some aspect of worker training. GAO
found that large employers were about twice as likely to take
advantage of several types of training programs as were small
employers. Training programs that require employers to comply
with detailed administrative or other paperwork requirements
present economic barriers. Small employers may find it too
costly to devote the time needed to focus on workers' general
needs rather than on employers' specific skill needs present
institutional barriers. Finally, informational barriers may
also exist because small employers often know less about the
training programs available to them than do larger employers.
In GAO's case studies, those programs that focused mainly on
employer needs used or actively encouraged consortia which are
organizations of employers, unions, or other interested
parties. These consortia provide employment training to
employers and, in these particular programs, overcame many of
the barriers cited above.
b. Benefits.--The information in this report will aid in
the creation of a new Federal job training system that avoids
costly economic barriers which reduce the appeal and
effectiveness of job training programs to States, localities,
and trainees.
98. ``Supplemental Security Income: Some Recipients Transfer Valuable
Resources to Qualify for Benefits,'' April 30, 1996, GAO/HEHS-
96-79.
a. Summary.--Existing law does not prohibit people from
transferring resources to qualify for benefits under the
Supplemental Security Income program--the largest cash
assistance program for the poor and one of the fastest growing
entitlement programs. Between 1990 and 1994, 3,500 Supplemental
Security Income recipients transferred assets, including cash,
houses, land, and other items, valued at $74 million. Transfer
values ranged as high as $800,000; most transfers fell between
$10,000 and $25,000. The total amount of resources transferred,
however, is likely to be larger than GAO's estimate because the
Social Security Administration (SSA) is not required to verify
the accuracy of resource transfer information, which is self-
reported by individuals. Moreover, because the information is
self-reported, SSA is unlikely to detect unreported transfers.
Without a transfer-of-resource restriction, Supplemental
Security Income recipients who transferred assets to qualify
for benefits would receive nearly $8 million in benefits in the
24 months after they transferred resources. Many of these
recipients could also have received Medicaid acute-care
benefits at an annual value of between $2,800 and $5,300 per
recipient. GAO estimates that from 1990 through 1995, SSA could
have saved $14.6 million with a transfer-of-income restriction
similar to that used for Medicaid. Such a restriction could
also boost the public's confidence in the program's integrity.
b. Benefits.--The statistics provided by the GAO report, in
terms of cost to the Social Security Program, indicated SSA
should be required by Congress to implement the transfer-of-
income restriction that is presently used in the Medicaid
program so as to reduce losses to the SSA program.
99. ``Employment and Training: Successful Projects Share Common
Strategy,'' April 18, 1996, GAO/T-HEHS-96-127.
a. Summary.--Strong foreign competition has underscored the
need for a skilled U.S. labor force. It has also focused
attention on the many Americans who are unprepared for
employment. The Federal Government earmarked about $20 billion
in fiscal year 1995 for 163 different training programs. GAO
visited six projects that had outstanding results, as indicated
by project completion rates, job placement and retention rates,
and wages. The projects GAO visited differed in many ways, but
they shared a common strategy that has four key elements: (1)
ensuring that clients were committed to training and getting
jobs; (2) removing barriers, such as a lack of child care, that
might hinder clients' ability to finish training and get and
keep jobs; (3) improving clients' employability skills, such as
getting to jobs regularly and on time, working well with
others, and dressing and behaving appropriately; and (4)
linking occupational skills training with the local labor
market. The upshot is that clients are ready, willing, and able
to benefit from training and employment programs and move
toward self-sufficiency.
b. Benefits.--The identification of the key elements of
successful job training programs provides a framework for
Congress and the Department of Labor to redesign the current
system of Federal job training programs. The information is
especially important to redesign job training to reach the
hardest to serve populations.
100. ``Property Disposition: HUD's Illinois State Office Incurred
Unnecessary Management Expenses,'' April 22, 1996, GAO/RCED-96-
52.
a. Summary.--Although the Department of Housing and Urban
Development (HUD) cannot control all the costs associated with
buying and selling foreclosed single-family properties, it can
avoid or minimize some of the costs of managing them. GAO
reviewed HUD's Single-Family Property Disposition Program in
the Illinois State Office and found that the Illinois State
Office had spent thousands of dollars unnecessarily on water
and sewer services, as well as for tax penalties, lost
properties, and increased costs to recover properties from the
new owners. Nationwide, HUD could be wasting large amounts of
money. GAO supports efforts by the Illinois State Office to
better track unpaid taxes, which would help avoid future tax
liens and lost properties.
b. Benefits.--The work identifies weaknesses in the
management of a HUD program by a State field office. With this
information and efforts to correct the problems, further waste
and unnecessary expenditures can be prevented.
101. ``SSA Disability: Program Redesign Necessary to Encourage Return
to Work,'' April 24, 1996, GAO/HEHS-96-62.
a. Summary.--During the past decade, the number of persons
receiving benefits from Social Security's Disability and
Supplemental Security income programs increased 70 percent
because of program changes and economic and demographic
factors. These programs, which provide assistance to persons
with disabilities until they return to work, if that is
possible, provided $53 million in cash benefits to 7.2 million
people in 1994. Advances in technology, such as standing
wheelchairs and synthetic voice systems, and the medical
management of some physical and mental disabilities have
allowed some persons to work. Moreover, there has been a
greater trend toward inclusion of and participation by people
with disabilities in the mainstream of society. Yet both
programs have done little to identify recipients who might
benefit from rehabilitation and employment assistance and
ultimately return to work.
b. Benefits.--GAO identifies the waste and failure of the
SSA disability program and suggests further review and reform
are needed to better identify beneficiaries who could return to
work with some training and assistance.
102. ``Public Housing: HUD Takes Over the Housing Authority of New
Orleans,'' May 3, 1996, GAO/RCED-96-67.
a. Summary.--Operating more than 13,000 housing units and
providing homes to nearly 25,000 people, the Housing Authority
of New Orleans is one of the largest public housing authorities
in the country. For nearly two decades, however, New Orleans
has been one of the Nation's poorest performing housing
authorities. Moreover, its performance has improved only
marginally in recent years, despite Federal grants, hands-on
management assistance from professional property managers, and
the personal involvement of the Secretary of the Department of
Housing and Urban Development (HUD). This report discusses the
following: (1) major operational problems at the Housing
Authority of New Orleans; (2) underlying causes of these
problems; and (3) steps HUD has taken to improve the
performance of the Housing Authority of New Orleans and what
success these measures have had.
b. Benefits.--The report helps explain the persistent
problems facing one of the poorest performing public housing
authorities, and is a case study on what actions are affective
in dealing with this type of problem. The report will help HUD
avoid making similar mistakes with other public housing
authorities.
103. ``Health Care Fraud: Information-Sharing Proposals to Improve
Enforcement Efforts,'' May 1, 1996, GAO/GGD-96-101.
a. Summary.--Estimates of health care fraud range from
between 3 and 10 percent of all health care expenditures--as
much as $100 billion based on estimated 1995 expenditures. In
late 1993, the Attorney General designated health care fraud as
an enforcement priority second only to violent crime
initiatives. This report discusses: (1) the extent of Federal
and State immunity laws protecting persons who report
information on health care fraud; and (2) the advantages and
disadvantages of establishing a centralized health care fraud
data base to strengthen information-sharing and support
enforcement efforts.
b. Benefits.--Given the seriousness of health care fraud as
further highlighted by the GAO report, more must be done by
everyone involved to prevent fraud, including greater
coordination and cooperation among law enforcement and the
Federal health care programs. In addition, as this report
suggests, Congress must continue to monitor waste, fraud, and
abuse in Federal health care programs.
104. ``Food Safety: Information on Foodborne Illnesses,'' May 8, 1996,
GAO/RCED-96-96.
a. Summary.--Since most cases of foodborne illness go
unreported, existing data may understate the extent of the
problem. However, the best estimates indicate that millions of
Americans become sick and thousands die each year because of
contaminated food. Moreover, public health officials believe
that the risk of foodborne illnesses has been on the rise
during the past 20 years. The precise cost of foodborne
illnesses is unknown, but recent estimates place the cost as
high as $22 billion annually. According to Department of
Agriculture estimates, the cost of medical treatment and lost
productivity related to foodborne illnesses from seven of the
most harmful bacteria approached $10 billion in 1993. Public
health and safety officials believe that current data on
foodborne illnesses do not provide a complete picture of the
risk level and do not sufficiently describe the sources of
contamination and the populations at greatest risk. In 1995,
Federal and State agencies began to collect more uniform and
comprehensive data across the country. Due to budget
constraints, Federal officials are concerned that they may not
be able to continue this effort long enough to collect
meaningful trend data. GAO summarized this report in testimony
before Congress.
b. Benefits.--This report identifies the lack of reliable
foodborne illness data as a major impediment to accurate
determination of the extent of foodborne illness in this
country. Accurate information is essential to addressing the
growing problem of foodborne illnesses.
105. ``Federal Personnel: Issues on the Need for the Public Health
Service's Commissioned Corps,'' May 7, 1996, GAO/GGD-96-55.
a. Summary.--This report reviews the operations of the
Public Health Service's (PHS) Commissioned Corps, whose
officers carry out various public health functions. GAO
addresses why the corps exists; Corps officers' duties; the
rationale for their receiving military-like pay, allowances,
and benefits; and any savings that might accrue from not using
uniformed personnel to carry out the Corps' duties.
b. Benefits.--This comprehensive report documents
substantial cost savings if the Government eliminates the PHS
Commissioned Corps, an uniformed service whose mission to
protect merchant seamen long ago expired.
106. ``Veterans' Compensation: Evidence Considered in Persian Gulf War
Undiagnosed Illness Claims,'' May 28, 1996, GAO/HEHS-96-112.
a. Summary.--More than 700,000 men and women served in the
Middle East during the Persian Gulf War. Some of these veterans
began experiencing symptoms, such as fatigue, weight loss, and
skin conditions, that could not be diagnosed or associated with
a specific illness. Congress passed legislation in 1994
allowing the Department of Veterans Affairs (VA) to pay
compensation to veterans for undiagnosed illnesses connected to
their service during the Persian Gulf War. As of July 1995, VA
had denied nearly 95 percent of the 4,144 claims that it had
processed for Persian Gulf veterans claiming such disabilities.
In response to congressional concerns about the high denial
rate, GAO reviewed the procedures VA used to process Persian
Gulf War undiagnosed illness claims. This report discusses: (1)
the evidence standards that VA has established to process
Persian Gulf claims; (2) the evidence in the claim files that
VA considered in reaching its decisions; and (3) VA's reporting
of the reasons for denial.
b. Benefits.--This report will help Congress ascertain the
accuracy and fairness of VA's compensation system for Gulf
veterans; however, since the issuance of this report, the
Department of Defense admissions that thousands of troops were
exposed to chemical agents should directly impact the VA's past
compensation decisions.
107. ``Cholesterol Treatment: A Review of the Clinical Trials
Evidence,'' May 14, 1996, GAO/PEMD-96-7.
a. Summary.--Clinical trials and other scientific studies
have consistently shown that cholesterol-lowering treatment
benefits middle-aged white men with high cholesterol levels and
a history of heart disease. Medical research also shows that
men with moderate-to-high cholesterol levels and no history of
heart disease have lower rates of nonfatal heart attacks but no
statistically significant reductions in death rates as a result
of cholesterol-lowering treatment. Clinical trials generally
have not evaluated the value of cholesterol-lowering treatment
for several important groups, including women, the elderly, and
minorities. Thus, they provide little or no evidence of
benefits or possible risks for these groups. Two recent trials
using a new drug class--the statins--show greater reductions in
heart problems with their greater reductions in cholesterol and
no increase in fatalities from coronary heart disease. One
trial studied men and women with coronary heart disease and
found a significant reduction in total fatalities; the other,
which studied only men who did not have coronary heart disease,
showed encouraging but not statistically significant reductions
in fatalities from coronary heart disease.
b. Benefits.--Heart disease is the leading cause of death
in America. This report assesses the benefits of cholesterol-
lowering treatment regimens to reduce morbidity and mortality.
108. ``Cocaine Treatment: Early Results From Various Approaches,'' June
7, 1996, GAO/HEHS-96-80.
a. Summary.--Three cognitive/behavioral approaches--relapse
prevention, community reinforcement/contingency management, and
neurobehavioral therapy--have shown positive results in the
treatment of cocaine addiction. Preliminary findings show that
clients treated with these therapies remained abstinent and in
treatment for long periods. These findings are particularly
encouraging because initial treatments used during the early
1980's were not very successful. Although too few studies have
been done to draw definite conclusions about the utility or the
generalizability of any of these treatments, more research
should be completed within the next several years. Research
experts agree that continued research and study are needed to
enhance and confirm--or deny--these early results.
b. Benefits.--The information provided by GAO can help
researchers and Congress eliminate unsuccessful drug programs
and allow them to focus on, and narrow their studies to,
programs that seem the most effective and the most promising.
109. ``School Facilities: America's Changing Schools Report Differing
Conditions,'' June 14, 1996, GAO/HEHS-96-103.
a. Summary.--Schools in unsatisfactory condition can be
found in every part of the country. However, a GAO survey of
schools nationwide found that schools needing relatively
greater repairs were those in inner cities, schools in the
West, schools with 50.5 percent or more minority students, and
schools with 70 percent or more poor students. More than 14
million children are being taught in school buildings needing
significant repairs to restore them to good overall condition.
At the same time, GAO found that new a school in excellent
shape, conforming to all Federal, State, and local mandates,
might be located only a few blocks from an operating but
deteriorated school building. GAO found the greatest variations
at the State level. For example, 62 percent of schools in
Georgia compared with 97 percent of schools in Delaware needed
repairs to restore them to good overall condition. Virtually
all communities, even some of the wealthiest, are wondering how
to balance school infrastructure needs with other community
priorities.
b. Benefits.--Communities at socioeconomic levels are
struggling to meet their school infrastructure needs. This
report discusses State variations, provides regional
comparisons, and discusses facility condition relative to
community income levels and minority representation.
110. ``Health Insurance for Children: Private Insurance for Children:
Private Insurance Coverage Continues to Deteriorate,'' June 17,
1996, GAO/HEHS-96-129.
a. Summary.--Despite larger numbers of parents who work
full-time, private health insurance coverage for children is
declining. The number of children without health insurance
coverage reached 10 million in 1994--the largest number since
1987. In comparison, the number of adults who have lost their
health insurance coverage appears to have stabilized during the
past 2 years. Meanwhile, although Medicaid provided health
coverage for 16 million children in 1994, more than 60 percent
of those children had a working parent. This trend is straining
public resources: Taxpayers end up paying either for Medicaid
coverage or for hospital subsidies to provide acute care for
uninsured. In response to rising Medicaid costs, State and
local governments are considering various program changes, some
of which have profound implications for health care coverage
for children, such as proposals to remove guaranteed
eligibility. Other changes that strengthen the private
insurance market may also significantly affect children's
future coverage.
b. Benefits.--The report serves as a basis for States
arguing that the guaranteed eligibility of certain child
populations must be changed in order for States to meet the
cost of such a demand. Congress should continue to look into
this issue and allow States to work with private insurers to
become part of a nongovernmental solution.
111. ``VA Health Care: Opportunities for Service Delivery Efficiencies
Within Existing Resources,'' July 25, 1996, GAO/HEHS-96-121.
a. Summary.--The Department of Veteran Affairs (VA), which
operates one of the Nation's largest health care systems, faces
increasing pressure to contain or reduce spending as part of
governmentwide efforts to balance the budget. This report
discusses ways VA could operate more efficiently and reduce the
resources needed to meet the needs of veterans in what is
commonly referred to as the mandatory care category. GAO
addresses: (1) VA's forecasts of future resource needs; (2)
opportunities to run VA's system more efficiently; (3)
differences between VA and the private sector in efficiency
incentives; and (4) recent VA efforts to reorganize its health
care system and create efficiency incentives. GAO concludes
that successful implementation of a range of reforms, coupled
with reduced demand for services, could save the VA health care
system billions of dollars during the next 7 years. The success
of these efforts, however, depends on introducing efficiency
incentives at VA that have long existed in the private sector.
b. Benefits.--The report identifies ways to operate VA's
hospital and out-patient system more efficiently and save
billions of dollars. While recent changes by VA management are
starting to provide incentives for greater efficiency, this
report demonstrates that much more needs to be done.
112. ``Medicaid Managed Care: Serving the Disabled Challenges State
Programs,'' July 31, 1996, GAO/HEHS-96-136.
a. Summary.--With its emphasis on primary care, restricted
access to specialists, and control of services, managed care is
seen as a way to control spiraling Medicaid costs, which
totaled $159 billion in fiscal year 1995. So far, States have
extended prepaid care largely to low-income families--about 30
million persons--but to few of the additional 6 million
Medicaid beneficiaries who are mentally or physically disabled.
Managed care's emphasis on primary care and control of services
is seemingly at odds with the care requirements of disabled
beneficiaries, many of whom need extensive services and access
to highly specialized providers. However, because more than
one-third of all Medicaid payments go for the care of the
disabled, policymakers have been exploring the possibility of
enrolling disabled persons in managed care plans. These efforts
affect three key groups: disabled beneficiaries, who include a
small number of very vulnerable persons who may be less able to
effectively advocate on their own behalf for access to needed
services; prepaid care plans, which are concerned about the
degree of financial risk in treating persons with extensive
medical needs; and the State and Federal Governments, which run
Medicaid. This report examines: (1) the extent to which States
are implementing Medicaid prepaid managed care programs for
disabled beneficiaries; and (2) the steps that have been taken
to safeguard the interests of all three groups. GAO's review of
safeguards focuses on two areas: efforts to ensure quality of
care and strategies for setting rates and sharing financial
risk.
b. Benefits.--A large portion of Medicaid dollars go to a
small portion of the Medicaid population. This in turn requires
States to look for innovative ways to provide care in managed
care environments. The report suggest there are workable
alternatives if safeguards are in place to protect quality for
those in managed care programs.
113. ``School Lunch Program: Cafeteria Managers' View on Food Wasted by
Students,'' July 18, 1996, GAO/RCED-96-191.
a. Summary.--Under the National School Lunch Program, about
26 million students nationwide were served lunches daily during
fiscal year 1995. Federal costs for the program totaled more
than $5 billion that year--about $4.5 billion in cash
reimbursements and more than $600 million in commodity foods,
such as beef patties, flour, and canned vegetables. Although
most cafeteria managers GAO surveyed reported that plate waste
in the public schools was not a concern, about one-quarter of
the managers characterized plate waste as at least a ``moderate
problem''--particularly at the elementary school level.
Cafeteria managers strongly agreed on some of the reasons for
and ways to reduce plate waste. For example, 78 percent cited
students' attention on recess, free time, or socializing rather
than eating as a reason for waste. Almost 80 percent believed
that allowing students to select only what they want to eat
would reduce plate waste. Most cafeteria managers were
satisfied with the Federal commodities they received for use in
the school lunch program.
b. Benefits.--The Federal Government devotes significant
cash and commodity resources to the National School Lunch
Program. This report states that most cafeteria managers are
satisfied with the commodities provided them and feel that
greater student choice would reduce plate waste.
114. ``Welfare Waivers Implementation: States Work to Change Welfare
Culture, Community Involvement, and Service Delivery,'' July 2,
1996, GAO/HEHS-96-105.
a. Summary.--In the wake of growing dissatisfaction with
the welfare system, Congress and the President have been
considering welfare reform on a national level. Meanwhile, many
States have undertaken far-reaching reforms through waivers of
Federal provisions governing the program most Americans think
of as welfare--Aid to Families With Dependent Children. For
example, States have required welfare recipients to work; set
limits on lifetime benefits; and denied cash benefits for
additional children born to families already receiving welfare.
Believing that the findings would be useful to States dealing
with the challenge of welfare reform, Congress asked GAO to
review some States' early experiences with implementing
reforms. This report examines efforts by Florida, Indiana, New
Jersey, Virginia and Wisconsin to implement three key reforms:
time-limited benefits, work requirements, and family caps.
b. Benefits.--In order to keep abreast of additional
welfare reform measures and to evaluate current reform
mechanisms, this report clearly suggests, Congress must
continue to study and examine early experiences with current
reform measures.
115. ``NIH Extramural Research: Internal Controls Are Key to
Safeguarding Phase III Trials Against Misconduct,'' July 11,
1996, GAO/HEHS-96-117.
a. Summary.--In fiscal year 1995, the National Institutes
of Health (NIH) sponsored about $9 billion in extramural
research--research done by groups outside of NIH. About $1.2
billion was spent on phase III clinical trials, which usually
involve hundreds of human participants to evaluate experimental
treatments. In the early 1990's, disclosure that falsified data
had been used in a large phase III trial looking at alternative
treatments for breast cancer raised concern that the results of
this multimillion dollar trial had been compromised. This
report discusses NIH's oversight responsibilities and internal
controls used to prevent and detect misconduct in phase III
clinical trial research. GAO also reviews NIH's approach to
monitoring performance of its institutes that sponsor clinical
trials and efforts to implement agencywide policy on misconduct
in research.
b. Benefits.--NIH clinical research involves billions of
taxpayer dollars and affects tens of thousands of Americans.
The integrity of clinical trial processes at NIH are crucial to
the health of the American people. This report identifies
important improvements needed in NIH oversight of clinical
research.
116. ``Medicaid: Waiver Program for Developmentally Disabled Is
Promising But Poses Some Risks,'' July 22, 1996, GAO/HEHS-96-
120.
a. Summary.--More than 300,000 adults with developmental
disabilities--typically mental retardation--receive long-term
care paid for by Medicaid or, to a lesser extent, State and
local programs. Such long-term care often involves supervision
and assistance with everyday activities, such as dressing or
managing money. Persons with developmental disabilities receive
more than $13 billion annually in public funding for long-term
care, second only to the elderly. Recently, States have begun
to significantly expand the use of the Medicaid waiver program,
which seeks to provide alternatives to institutional care for
persons with developmental disabilities. The waiver program has
two advantages. First, it helps States to control costs by
allowing them to limit the number of recipients being served.
In contrast, States must serve all eligible persons in the
regular Medicaid program. Second, it permits States to meet the
needs of many persons with developmental disabilities by
offering them a broader range of services in less restrictive
settings, such as group or family homes, rather than in an
institutional setting. This report examines: (1) expanded State
use of the waiver program; (2) the growth in long-term care
costs for individuals with developmental disabilities; (3) how
costs are controlled; and (4) strengths and limitations in
States' approaches to ensuring quality in community settings.
b. Benefits.--GAO highlights the success of waiver programs
and suggest they can be a cost effective alternative if quality
controls are in place to protect the developmentally disabled
served. The report will give Congress the tools it needs to
assess how to adapt the GAO findings to future programs.
117. ``Job Corps: Where Participants are Recruited, Trained, and Placed
in Jobs,'' July 17, 1996, GAO/HEHS-96-140.
a. Summary.--The Job Corps, a national employment training
program run by the Labor Department, serves about 66,000
participants at 112 centers in 46 States, the District of
Columbia, and Puerto Rico. GAO found that the Job Corps has the
capacity to serve 81 percent of program participants in their
home States--52,000 of 64,000 participants from States with Job
Corps centers could have been assigned to a center in their
State of residence. About 59 percent of participants were
assigned to centers in their home State; the remaining
participants were sent to centers outside their home State and
traveled an average of more than four times as far as they
would have had they been assigned to the closest center in
their State of residence. Regardless of where they were
trained, however, about 83 percent of those participants who
got jobs were employed in their home State.
b. Benefits.--The report helped address the feasibility of
making the Job Corps program a State run program, rather than a
federally run program. The information also identifies a
potential area for cost savings if participants can be served
equally well in their home State as they can in another.
118. ``Consumer Health Informatics: Emerging Issues,'' July 26, 1996,
GAO/AIMD-96-86.
a. Summary.--Technology has increased the amount of health
information available to the public, allowing consumers to
become better educated and more involved in their own health
care. Government and private health care organizations rely on
a variety of technologies to disseminate health information on
preventive care, illness and injury management, treatment
options, post-treatment care, and other topics. This report
discusses consumer health informatics--the use of computers and
telecommunications to help consumers obtain information,
analyze their health needs, and make decisions about their own
health. GAO provides information on: (1) the demand for health
information and the expanding capabilities of technology; (2)
users' and developers' views on potential systems advantages
and issues surrounding systems development and use; (3)
government involvement--Federal, State, and local--in
developing these technologies; and (4) the status of related
efforts by the Department of Health and Human Services. As part
of this review, GAO surveyed consumer health informatics
experts and presents their views on issues that need to be
addressed when developing consumer health information systems.
b. Benefits.--The report provides information on the risks
and potential cost savings of health informatics, and will
allow Congress and the executive branch to make more informed
decisions as they consider what actions are appropriate with
regard to this growing aspect of health care.
119. ``SSA Disability: Return-to-Work Strategies From Other Systems May
Improve Federal Programs,'' July 11, 1996, GAO/HEHS-96-133.
a. Summary.--Between 1985 and 1994, the number of working-
age people in the Social Security Administration's (SSA)
disability insurance and supplemental security income programs
rose 59 percent, from 4 million to 6.3 million. Concern about
such growth has been compounded by the fact that less than half
of 1 percent of disability insurance beneficiaries ever leave
the disability rolls and return to work. A recent GAO report
(GAO/HEHS-96-62) urged SSA to place more emphasis on return-to-
work efforts. If an additional 1 percent of the 6.3 million
beneficiaries were to leave SSA's disability rolls and return
to work, lifetime cash benefits would be reduced by nearly $3
billion. The magnitude of disability costs in the workplace has
spurred companies to develop strategies to return disabled
employees to the workplace--an effort that can help businesses
reduce costs, such as disability benefit payments and
disability insurance premiums. This report discusses: (1) key
practices used in the U.S. private sector to return disabled
employees to the workplace; and (2) examples of how other
countries implement return-to-work strategies for disabled
persons.
b. Benefits.--The report highlights the seriousness of the
huge increase in the growth of the SSA disability and SSI
programs. In discussing the low numbers of people who leave the
rolls to return to work, the report calls attention to the
failure of SSA's efforts to return people to work and the need
for Congress to involve itself in reforming the program.
120. ``Readjustment Counseling Service: Vet Centers Address Multiple
Client Problems, but Improvement Is Needed,'' July 17, 1996,
GAO/HEHS-96-113.
a. Summary.--The Department of Veterans Affairs (VA)
operates 205 community-based facilities known as Vet Centers to
help veterans make a successful transition from military to
civilian life. Vet Center counselors reported visiting with
about 138,000 veterans during fiscal year 1995, 84,000 of whom
were new to Vet Centers. Most veterans do not establish long-
term relationships with Vet Center counselors; however, those
who do, represent a core group who use services over extended
periods for serious psychological problems, such as post-
traumatic stress disorder. Other veterans usually visit Vet
Center counselors only once or twice for social concerns, such
as employment or benefit needs.
b. Benefits.--The report cites problems in documenting
client records and the need to develop a systematic approach
for measuring the effectiveness of Vet Center services. Such
improvements would increase service results and offer
opportunities for cost savings.
121. ``Social Security Disability: Backlog Reduction Efforts Under Way;
Significant Challenges Remain,'' July 11, 1996, GAO/HEHS-96-87.
a. Summary.--The Social Security Administration (SSA) runs
the Nation's largest programs providing cash benefits to people
with severe long-term disabilities. The number of persons
receiving either disability insurance or supplemental security
income benefits has soared during the past decade. At the same
time, SSA has struggled to deal with unprecedented growth in
appeals of its disability decisions and the resulting backlog
of cases awaiting hearing decisions. Processing delays stemming
from a backlog of more than half a million appealed cases have
created hardships for disability claimants, who often wait more
than a year for final disability decisions. This report
discusses: (1) factors contributing to the growth in appealed
cases; (2) SSA initiatives to reduce the backlog; and (3) steps
that need to be taken in the long-term to make the disability
appeals process more timely and efficient.
b. Benefits.--For those denied program benefits the current
appeals process has overloaded the system, causing a 12-month
wait for decisions. The report adds to the view that the
appeals process needs to be reviewed and modified by Congress.
122. ``Homeownership: FHA's Role in Helping People Obtain Home
Mortgages,'' August 13, 1996, GAO/RCED-96-123.
a. Summary.--Many changes have occurred in the single-
family housing finance system since the Federal Housing
Administration (FHA) was established in the 1930's to insure
housing loans made by private lenders. These changes include
the advent of modern private mortgage insurance, the emergence
of a secondary mortgage market, and various public- and
private-sector initiatives to expand affordable housing for
home buyers. Critics of FHA argue that other housing finance
entities, such as private mortgage insurers, are filling the
role FHA once filled exclusively. Supporters of FHA contend
that its single-family program, which has insured about 24
million home mortgages since its inception, remains the only
way for some families to become homeowners and should be
expanded. This report discusses: (1) the terms of the mortgage
insurance offered by FHA, private mortgage insurers, and the
U.S. Department of Veteran's Affairs; (2) the characteristics
of borrowers of insured mortgages and the overlap between FHA-
insured mortgages and privately insured mortgages; and (3)
other methods used by the Federal Government to promote
affordable homeownership.
b. Benefits.--The report provides information necessary for
Congress to consider what role, if any, the FHA should continue
to have given the growth of private mortgage insurance.
123. ``Higher Education: Tuition Increasing Faster Than Household
Income and Public Colleges' Costs,'' August 15, 1996, GAO/HEHS-
96-154.
a. Summary.--During the past 15 years, tuition at 4-year
public colleges and universities rose 234 percent. In contrast,
median household income rose only 82 percent. This increase in
tuition also substantially exceeded the 74-percent increase in
the cost of consumer goods--as measured by the Consumer Price
Index. The two factors most responsible for the rise in tuition
were increases in schools' expenditures and schools' greater
dependency on tuition as a source of revenue. Increases in
instruction, administration, and research expenditures
accounted for much of the increase. The increased spending for
instruction was driven largely by increases in faculty
salaries, which rose 97 percent during the period. At the same
time, the share of schools' revenue provided by tuition rose
from 16 percent to 23 percent, as the share of revenue derived
from State appropriations fell by 14 percentage points. GAO
found wide variation in tuition charges among States in school
year 1995-96. These variations are explained partly by States'
levels of support. Colleges have tried to deal with students'
increasing financial burden in several ways, including holding
down tuition increases, making paying for college easier, and
streamlining students' progress to graduation to keep their
total charges lower. Because some of the efforts are in the
early stages of implementation, little has been done to
evaluate their effectiveness.
b. Benefits.--The report details State variations in
college tuition charges for school year 1995-96 and relates
them to the level of State support. It notes that evaluation of
tuition cost control measures will be needed when data becomes
available.
124. ``Supplemental Security Income: Administrative and Program Savings
by Directly Accessing State Data,'' August 29, 1996, GAO-HEHS-
96-163.
a. Summary.--The Supplemental Security Income program,
which provides cash benefits to the aged, the blind, and the
disabled, could be run more efficiently. More importantly,
millions of dollars in overpayments could be prevented or
detected quickly if information were available on-line during
eligibility assessments. GAO estimates that direct on-line
access to State computerized income information could have
prevented or quickly detected more than $131 million in
overpayments caused by unreported or underreported income
nationwide in one 12-month period. However, in Social Security
Administration (SSA) field offices where direct access to
computerized State information has been implemented, SSA claims
representatives did not use it to detect overpayments. The
claims representatives did use it to process claims more
efficiently, and SSA's preliminary results have shown that its
use has reduced administrative expenses. Establishing on-line
access between SSA field offices and State agency databases
would require only minimal computer programming in most States;
some States would need additional hardware, such as computer
lines.
b. Benefits.--Management of the SSI program is lacking and
as a result, millions of dollars are lost annually in
overpayment. The study highlights the effectiveness of
coordination efforts and calls attention to the fact SSA should
and must do more to stop overpayments. The report provides
Congress with tools to help fight waste, fraud, and abuse in
SSI.
125. ``School Lunch Program: Role and Impacts of Food Service
Companies,'' August 26, 1996, GAO/RCED-96-217.
a. Summary.--Under the National School Lunch Program, local
school districts receive Federal funds for lunches that meet
the programs' requirements for nutritious, well-balanced meals.
Although these school districts have traditionally run their
own school meals programs, several have contracted with private
food service management companies to plan, prepare, and serve
school meals. Also, some school districts have purchased brand-
name fast foods to serve as part of their school meals or as a
la carte items. This report: (1) discusses the extent to which
food authorities use food service companies to operate their
school lunch program and the impact that the use of food
service companies has had on the National School Lunch Program;
(2) describes the terms and the conditions in the contracts
between food authorities and food service companies; (3)
discusses the extent to which fast foods and snack foods in
vending machines are available in participating schools; and
(4) describes the types, the brands, and the nutritional
content of the fast foods most commonly offered.
b. Benefits.--This Congress conducted an extensive debate
over the future of the National School Lunch Program. The
information in this report will provide Congress with the
ability to more accurately debate the program and convert its
ideas for reform into a reality.
126. ``Supplemental Security Income: SSA Efforts Fall Short in
Correcting Erroneous Payments to Prisoners,'' August 30, 1996,
GAO/HEHS-96-152.
a. Summary.--Despite Social Security Administration (SSA)
procedures to detect supplemental security income recipients in
county and local jails, GAO found that $5 million had been
erroneously paid to prisoners in the jail systems it reviewed.
SSA had been unaware of many of these payments and, therefore,
had made no attempt to recover them. Various factors
contributed to these payments. First, SSA field offices have
not been compiling information regularly on prisoners in
country and local jails. Second, the supplemental security
recipient--or the person or organization designated to receive
payments on the recipients' behalf--has not been reporting the
incarceration, as required. Third, SSA sometimes falls short in
periodically reviewing--either by mail or interview--a
recipient's continues financial eligibility for supplemental
security income. Under a new SSA initiative, field offices will
be required to obtain prisoner information from country and
local jails, and SSA plans to monitor field office compliance
with this requirement. It is too early to tell, however,
whether this initiative will be successful.
b. Benefits.--GAO highlights the serious oversight and
failure on the part of SSA. A further review of the problem,
possibly by Congress, will likely be required to curtail this
area of Government waste.
127. ``School Finance: Options for Improving Measures of Effort and
Equity in Title I,'' August 30, 1996, GAO/HEHS-96-142.
a. Summary.--Disparities in per pupil funding for
elementary and secondary education within each State have long
been a concern of parents, teachers, State officials, and
Federal officials. Since the early 1970's, these disparities
have prompted poor districts in more than 40 States to
challenge the constitutionality of their States' school finance
systems. Under Title I's Education Finance Incentive Program,
States with high levels of ``fiscal effort'' for education--
that is, high State spending relative to the State's ability to
pay--and equity in per pupil spending would receive additional
funds. In June 1994, GAO cited weaknesses in the proposed
measures of effort and equity used in the title I program.
Members of Congress have also called for these measures to be
improved. This report: (1) examines the measures now included
in Title I's Education Finance Incentive Program to reflect
State fiscal effort for education and equity in per pupil
spending; (2) proposes several options for improving these
measures; (3) describes the characteristics of States with
higher levels of effort and equity under both the current
definitions and the options GAO developed; and (4) suggests
alternative ways the options GAO developed could be used in
allocating funds under the Education Finance and Incentive
Program.
b. Benefits.--Long-term background of the issue is provided
in this report on per pupil funding for disadvantaged school
districts. It provides suggestions for improving measures of
Title I Equity and Effort.
National Economic Growth, Natural Resources, and Regulatory Affairs
Subcommittee
1. ``Nuclear Regulation: Weaknesses in NRC's Inspection Program at a
South Texas Nuclear Power Plant,'' October 3, 1995, GAO/RCED-
96-10.
a. Summary.--At the request of Congressman John Dingell,
ranking minority member of the Committee on Commerce, the
General Accounting Office (GAO) conducted a study of the
circumstances surrounding the shutdown of the South Texas
Project Electric Generating Station, a nuclear plant located in
Matagorda County, TX, and the effectiveness of the Nuclear
Regulatory Commission's (NRC) inspection program at the plant.
This report attempts to: (1) identify the circumstances
surrounding the shutdown of the plant and the seriousness of
the event; (2) determine whether the NRC was aware of problems
at the plant before the shutdown; and (3) identify any factors
that may have prevented NRC from having complete and timely
information about the licensee's performance.
The NRC found several safety violations but considered an
accident unlikely. The licensee shut down both reactors because
of continuing problems with their emergency pumps. NRC requires
the reactor to be shut down if its pump is inoperable for more
than 3 days. NRC later found that one reactor's pump had been
inoperable for about 40 days. Two of the reactor's three
generators had also been inoperable during portions of this
period. The risk of damaging the reactor's core increased from
about 1 chance in 5 million to about 1 chance in 83,000 during
the period when two or more of the reactor's emergency systems
were not working.
The NRC was aware of long-standing malfunctions with the
reactor's pumps, including problems with one reactor's pump in
the 3-day period preceding the shutdown. However, it was not
until after the shutdown that NRC found, among other things,
that the licensee had not conducted a valid test of the
reactor's pump since December 26, 1992. NRC also knew that the
licensee was performing maintenance on the reactor's
generators. However, the agency did not know that, in addition
to the problems with the pump, (1) painting had immobilized one
generator for 24 days, and (2) the licensee had removed another
generator from service for 61 hours--conditions that
substantially increased the likelihood of a core-damaging event
at the plant.
Although one purpose of NRC's inspection program is to
prevent significant events at plants, in practice, NRC rarely
detects such events before its licensees do. All 16 significant
events that NRC reported for 1993, including the event in South
Texas, were initially identified by the licensees rather than
by NRC.
According to the NRC, a major purpose of its reactor
inspection program is to identify and resolve underlying
problems at nuclear plants and, by so doing, anticipate and
prevent significant safety events--events with the potential to
both damage a reactor's core and release radioactive material.
In the case of the South Texas plant, this goal was not
achieved.
Furthermore, the GAO concluded that the NRC did not
identify the underlying safety problems that contributed to the
event at the South Texas plant--another stated purpose of the
inspection program--until after the plant's shutdown.
Specifically, while NRC's inspection program identified long-
standing problems at the plant, NRC did not adequately use its
inspection to determine if the problems were indicative of
systemic, or underlying problems in the licensee's operation of
the plant. As a result, it was not until after the plant's
shutdown that the agency identified the areas as underlying
safety concerns at the plant. By then, the problems had become
so acute that it took the licensee more than a year to address
the concerns.
b. Benefits.--NRC's March 1995 report on the effectiveness
of its inspection effort at the South Texas plant presents a
candid overview of weakness in the agency's inspection program,
including NRC's failure to (1) assess the significance of
identified problems and (2) ensure that long-standing problems
at the plant had been corrected. NRC has taken several actions,
and planned others, to address the program's weaknesses. The
effectiveness of NRC's corrective actions will depend, to a
great extent, on NRC's ongoing initiatives to rely more heavily
on licensees to identify problems at nuclear facilities.
Overall, this report will help to identify the ways in which
the NRC can improve its inspection program and can alert
nuclear plants to potential problems concerning the safety of
their facility.
2. ``Tax Administration: Information on IRS' Taxpayer Compliance
Measurement Program,'' October 6, 1995, GAO/GGD-96-21.
a. Summary.--At the request of Congressman Joseph
Knollenberg, the General Accounting Office (GAO) prepared a
report on the Internal Revenue Service's Taxpayer Compliance
Measurement Program (TCMP) for tax year 1994. The report
focuses on how the IRS addressed the problems discussed in
GAO's December 1994 report on the status of the program and, if
the problems persist, how they would affect final TCMP results;
(2) informational sources other than TCMP that IRS could use to
target its audits more effectively; and (3) the relevancy of
TCMP data for alternative tax system proposals.
The GAO found that the IRS has generally taken appropriate
action in the concerns raised in GAO's 1994 report that dealt
with meeting milestones for starting TCMP audits, testing TCMP
data base components, developing data collection systems, and
collecting and analyzing data. The IRS plans to collect data on
partners, shareholders, and misclassified workers as suggested
in GAO's 1994 report. This additional data should allow IRS to
better measure compliance levels, which could increase the
value of TCMP audit results. Also, IRS plans to have auditors
computerize some of their comments on audit findings, which
should make it easier for researchers to analyze TCMP results.
GAO's overall conclusion is that TCMP could be very useful
not only for improving compliance in the existing tax system,
but also as a tool for designing and administering a new
system. While types of income and deductions included in each
new proposed tax system vary, TCMP could still provide data on
compliance issues that would have to be addressed in any of the
new system proposals that GAO reviewed. To the extent that new
tax systems are proposed and adopted, TCMP data could alert tax
system designers and administrators to potential areas of
noncompliance and provide data on which to base rules and
regulations. The longer it takes to implement a new tax system,
the more useful TCMP data could be for helping design and
administer the new system.
b. Benefits.--This report provides an update on the
progress being made with respect to reforming the Internal
Revenue Service's Taxpayer Compliance Measurement Program.
3. ``Tax Administration: IRS Faces Challenges in Reorganizing for
Customer Service,'' October 10, 1995, GAO/GGD-96-3.
a. Summary.--At the request of Sens. Orrin Hatch, Bill
Bradley, Richard Shelby, Robert Kerrey, Representatives Nancy
Johnson, Robert Matsui, Jim Lightfoot, and Steny Hoyer, the
General Accounting Office (GAO) prepared a report on the
Internal Revenue Service's effort to modernize its information
systems and restructure its organization. The report discusses:
(1) IRS' goal for customer service and its plans to achieve
them; (2) the gap between current performance and these goals;
(3) its progress to date; (4) current management concerns; and
(5) several important challenges IRS faces. The IRS has as its
goals for its customer service to: (1) provide better service
to taxpayers; (2) use its staff and facilities more
efficiently; and (3) raise the level of compliance with the tax
laws. IRS plans to better serve taxpayers by improving their
accessibility to telephone service and resolving most problems
with a single contact.
The GAO has concluded that the gap between IRS' current
operations and its customer service vision is very great. As an
example, the GAO points to IRS plans to improve telephone
accessibility by greatly reducing busy signals on its new
customer service telephone system. In fiscal year 1994,
taxpayers who called the IRS Taxpayer Services toll-free sites
got busy signals 73 percent of the time.
The IRS has made some progress toward its customer service
vision, including selecting sites for the new centers,
experimenting with two prototype sites, and beginning
operations at five more customer service centers. However,
implementation still has far to go. For example, as of June 30,
1995, only 925 of an eventual 22,240 staff had been reassigned
to customer service centers. The new computer and telephone
systems planned to support customer service were still in an
early stage of development and testing. IRS officials recently
acknowledged that the transition would last longer than the
original goal of full operation in 2001.
The GAO recommends that the IRS: (1) clarify the criteria
for assigning process owners responsibility for TSM projects
when they involve more than one core business system; (2)
define process owners' roles and responsibilities for TSM
projects involving more than one core business system; and (3)
emphasize to those designated as process owners the need for
them to provide the business requirements necessary to develop,
test, and implement new customer service products and services.
b. Benefits.--This report helps to highlight the problems
the IRS is facing in its attempt to improve customer service.
The GAO has made several suggestions in this report to the IRS
on how the agency might proceed with improving its operations.
4. ``Bank Regulatory Structure--Canada,'' September 28, 1995, GAO/GGD-
95-223 ``Tax Administration: IRS Faces Challenges in
Reorganizing for Customer Service,'' October 10, 1995, GAO/GGD-
96-3.
a. Summary.--At the request of Representative Charles
Schumer, the General Accounting Office (GAO) conducted a study
of the structure and operations of regulatory activities in
several countries. This particular study focuses on the
regulatory structure of Canada.
GAO's objectives were to describe: (1) the Canadian bank
Federal regulatory and supervisory structure, and its key
participants; (2) how that structure functions, particularly
with respect to bank authorization or chartering, regulation,
and supervision; (3) how banks are examined; and (4) how
participants handle other financial system responsibilities.
The Office of the Superintendent of Financial Institutions
(OSFI) has primary responsibility for overseeing the safety and
soundness of financial institutions in Canada. OSFI administers
the appliciation process for incorporating financial
institutions, issues financial institution regulations and
guidelines: taking both formal and informal enforcement actions
relying mostly on informal actions, such as recommendations;
and taking the lead in resolving problem institutions.
OSFI conducts full-scope, onsite examinations of financial
institutions with a staff of full-time examiners. OSFI relies
on a financial institution's external auditors for an
assessment of the fairness of an institution's annual financial
statement. External auditors also have a responsibility to
report to OSFI anything that they discover during the course of
their work that might affect the well-being of an institution,
and OSFI advises external auditors about anything material that
has come to its attention concerning a financial institution.
b. Benefits.--This report will provide interested parties
with a comprehensive overview of the Canadian financial
regulatory system. The information contained within this report
will assist in the formulation of proposals to consolidate U.S.
bank regulatory agencies.
5. ``Tax Administration--IRS' Partnership Compliance Activities Could
Be Improved,'' June 16, 1995, GAO/GGD-95-151.
a. Summary.--At the request of Chairman Bill Archer and
Vice-Chairman Robert Packwood, the General Accounting Office
produced a report to determine: (1) the extent of partnership
compliance with Federal tax laws; (2) any steps IRS is taking
to improve partnership compliance; and (3) any additional
efforts that IRS could take to improve partnership compliance.
The extent of partnership tax compliance is unknown. IRS'
most current partnership compliance data were collected under
its tax year 1982 partnership Taxpayer Compliance Measurement
Program (TCMP). This data showed that partnerships under
reported their net income by $13 billion in 1982 which the GAO
estimates resulted in an underpayment of taxes by partners
approaching $3.6 billion. Even when partnerships reported all
of their income, partners sometimes failed to include it in
their own tax returns. Thus, IRS estimated that individual
partners owed an additional $2.4 billion in taxes in 1982. But
significant tax law changes in the intervening years make these
data unreliable indicators of the present situation. IRS will
not have more current partnership compliance data until October
1998 when its TCMP audits of tax year 1994 partnership returns
are scheduled to be completed.
GAO has concluded that the IRS is taking some steps to
address partnership compliance issues. For example, it is
planning to conduct partnership TCMP audits to determine the
level of partnership compliance and to develop audit selection
formulas. However, the results of these audits will not be
available until late 1998. IRS is also in the process of
modernizing the tax system with plans such as developing an
integrated case-processing system that would allow IRS to more
effectively and efficiently identify noncompliant taxpayers.
This system is scheduled to be in place by 2001.
b. Benefits.--This report examines IRS' attempts to
increase partnerships' compliance with tax laws. It suggests
several steps that could be taken by the IRS to improve
compliance rates in this area.
6. ``Financial Audit: Examination of IRS' Fiscal Year 1994 Financial
Statements,'' August 4, 1995, GAO/AIMD-95-141.
a. Summary.--In accordance with the Chief Financial
Officers Act of 1990, this report presents the results of the
General Accounting Office's (GAO) efforts to audit the
Principal Financial Statements of the Internal Revenue Service
for fiscal years 1994 and 1993 and an assessment of its
internal controls and compliance with laws and regulations. IRS
continues to face major challenges in developing meaningful and
reliable financial management information and in providing
adequate internal controls that are essential to effectively
manage and report on its operations. Overcoming these
challenges is difficult because of the long-standing nature and
depth of IRS financial management problems and the antiquated
state of its systems. IRS has expressed its commitment to
resolving the problems GAO reported.
This report discusses the scope and severity of IRS
financial management and control problems, the adverse impact
of these problems on IRS ability to effectively carry out its
mission, and IRS' actions to remedy the problems. The report
also contains recommendations to help IRS continue its efforts
to resolve these long-standing problems and strengthen its
financial management operations.
b. Benefits.--This report will provide interested parties
with an assessment of changes that need to be made within the
IRS to improve the agency's financial operations.
7. ``Government Corporations: Profiles of Existing Government
Corporations,'' December 13, 1995, GAO/GGD-96-14.
a. Summary.--At the request of Senator David Pryor, ranking
minority member of the Senate Subcommittee on Post Office and
Civil Service, the General Accounting Office (GAO) conducted a
review of government corporations (GC's) to determine the
number of these corporations presently in operation and their
adherence to 15 Federal statutes.
The GAO surveyed 58 entities that were potential government
corporations to identify their legal status and adherence to 15
Federal statutes. The GAO identified these 58 entities by
including: (1) all government corporations listed in the
Government Corporation Control Act; (2) entities that were
listed in at least three of five major government corporation
studies done in the last 15 years; and (3) additional entities
the GAO identified during the course of our work.
No comprehensive descriptive definition of criteria for
creating GC's exist, and counts of the number of government
corporations have varied widely. Using self-reported responses,
the GAO identified 22 GC's. In addition to the 22 government
corporations, the GAO also profiles five other entities that
reported that they were not GC's. The GAO decided to profile
these other five entities for two reasons. First, although
these entities reported that they were not government
corporations, they are frequently considered to be GC's by
others and were previously identified in several major GC
studies done over the last 15 years. Second, each of these
entities receives at least some of its operating funds from
yearly Federal appropriations.
Congress sometimes exempts GC's from several key management
laws to provide them with greater flexibility than Federal
Government departments and agencies typically have in hiring
employees, paying these employees competitive salaries/
benefits, disclosing information publicly, and procuring goods
and services. Because of these exemptions, the government
corporations did not report uniform compliance with the 15
selected Federal statutes. For example, one GC--the Federal
Housing Administration--reported full adherence to 14 of the 15
statutes, while another--Amtrak--reported full adherence to
only 2 statutes.
b. Benefits.--This report helps to create a greater
understanding of what constitutes a government corporation and
how they are similar to, or differ from, government agencies,
government sponsored enterprises, and private corporations.
8. ``Forest Service: Distribution of Timber Sales Receipts Fiscal Years
1992-94,'' September 8, 1995, GAO/RCED-95-237FS.
a. Summary.--At the request of Congressman Sidney R. Yates,
ranking minority member of the Subcommittee on Interior and
Related Agencies of the Committee on Appropriations, the
General Accounting Office (GAO) conducted a study to provide
information on the receipts collected for the timber sales
program in fiscal years 1992-94. This study includes the amount
of the receipts the Forest Service distributed for specific
purposes and the receipts deposited in the General Fund of the
Treasury compared with the Forest Service's outlays for the
preparation and administration of timber sales for that same
period. During fiscal years 1992-94, the Forest Service
collected nearly $3 billion in timber sales receipts and
distributed about $2.7 billion, or 90 percent, to various
Forest Service funds or accounts for specific purposes. The
Forest Service deposited the remaining receipts--about $300
million--in the General Fund of the Treasury. Outlays for
preparing and administering timber sales totaled about $1.3
billion for the same period. Overall, for fiscal years 1992-94,
the Forest Service collected more timber sales receipts than it
distributed.
b. Benefits.--The GAO's report details timber sales
receipts and outlays by region for fiscal years 1992-94.
9. ``Community Reinvestment Act: Challenges Remain To Successfully
Implement CRA,'' November 28, 1995, GAO/GGD-96-23.
a. Summary.--At the request of Chairman Leach, Congressman
Henry Gonzalez, Chairwoman Roukema, Congressmen Bruce Vento and
Joseph Kennedy, the General Accounting Office (GAO) prepared a
report on the effectiveness of the Community Reinvestment Act.
It discusses the major problems with the implementation of the
act identified by the affected parties, the extent to which
recent regulatory reform efforts have addressed those problems,
and the challenges that regulators need to address as they
implement new CRA regulations. It also discusses initiatives
that banks have taken independently or in partnership with
others to enhance community lending.
GAO identified four major problems with the regulators'
compliance examinations and enforcement of CRA that all the
affected parties agreed were problems: (1) too little reliance
on lending results and too much reliance on documentation of
efforts and processes, leading to an excessive paperwork
burden; (2) inconsistent CRA examinations by regulators
resulting in uncertainty about how CRA performance is to be
rated; (3) examinations based on insufficient information that
may not reflect a complete and accurate measure of an
institutions' performance; and (4) dissatisfaction with
regulatory enforcement of the act, which largely relies on
protests of expansion plans to ensure institutions are
responsive to community credit needs. However, the reasons they
gave for why they believed the problems adversely affected
their interests--which form the basis for their concerns--and
often contradictory solutions they offered to address the
problems, showed that the affected parties differed
considerably on how best to revise CRA.
b. Benefits.--The results of this study should be of great
assistance to lawmakers in their efforts to revisit and revise
the CRA statute in order to clarify its intent and scope. In
particular, this study will assist with the development of
alternative strategies for meeting the goals of the CRA.
10. ``Bank Mutual Funds--Sales Practices and Regulatory Issues,''
September 27, 1995, GAO/GGD-95-210.
a. Summary.--At the request of Congressman John Dingell,
ranking minority member of the Committee on Commerce, and
Congressman Henry Gonzalez, ranking minority member of the
Committee on Banking and Financial Services, the General
Accounting Office (GAO) prepared a report on the extent to
which banks and thrifts have expanded into mutual fund
activities. The GAO found that in the last few years, many
banks and thrifts have entered the mutual fund business to
retain customers, increase fee income, and diversify their
operations. The rapid growth of bank mutual fund sales over the
last 5 years has raised concerns that bank customers may not
fully understand the risks of investing in mutual funds
compared to insured bank products. In February 1994, the four
banking regulators responded to these concerns by issuing
guidelines to banks and thrifts on the policies and procedures
that these institutions are to follow in selling nondeposit
investment products, such as mutual funds. During visits to a
sample of banks and thrifts in 12 metropolitan areas in March
and April 1994, GAO found that many institutions were not
following the guidelines. About one-third of the institutions
visited made all the risk disclosures called for by the
guidelines, and about one-third did not clearly distinguish
their mutual fund sales area from the deposit-taking area of
the bank as required by the guidelines. The banking regulators
have stated that they are including steps in their examinations
to determine how well institutions are following guidelines.
b. Benefits.--The results of this study will assist in the
development of a sensible approach to conducting examinations
of banks' mutual fund activities to provide effective investor
protection, while ensuring bank safety and soundness.
11. ``National Parks--Difficult Choices Need To Be Made About the
Future of the Parks,'' August 30, 1995, GAO/RCED-95-238.
a. Summary.--At the request of Senators Murkowski,
Campbell, Thomas, and Congressman James Hansen, the General
Accounting Office (GAO) conducted a study on the current
condition of national parks. The report specifically discusses:
(1) what, if any, deterioration in visitor services or park
resources is occurring at the 12 park units that GAO visited;
(2) what factors contribute to any degradation of visitor
services, natural and cultural resources at the 12 park units
that GAO visited; and (3) what choices are available to help
deal with identified problems. The GAO concluded that the
overall level of visitor services was deteriorating at most of
the park units that GAO reviewed. Services were being cut back,
and the condition of many trails, campgrounds, and other
facilities was declining. Trends in resource management were
less clear because most park managers lacked sufficient data to
determine the overall condition of their parks' natural and
cultural resources. In some cases, parks lacked an inventory of
the resources under their protection.
Two factors particularly affected the level of visitor
services and the management of park resources. These were (1)
additional operating requirements placed on parks by laws and
administrative requirements and (2) increased visitation, which
drives up the parks' operating costs. These two factors
seriously eroded funding increases since the mid-1980's.
The GAO has concluded that the national park system is at a
crossroads. While the system continues to grow, conditions at
the parks have been declining, and the dollar amount of the
maintenance backlog has jumped from $1.9 billion in 1988 to
over $4 billion today. Dealing with this situation involves
making difficult choices about how parks are funded and
managed. These choices call for efforts on the part of the Park
Service, the administration, and the Congress centering on one
or more of the following: (1) increasing the amount of
financial resources going to the parks; (2) limiting or
reducing the number of units in the park system; and (3)
reducing the level of visitor resources. Additionally, the Park
Service should be able to stretch available resources by
operating more efficiently and continuing to improve its
financial management and performance measurement systems.
b. Benefits.--This GAO study provides interested parties
with an honest assessment of the current status of much of our
national park system. The results of this study will assist in
determining what priorities need to be set for the national
park system, including potential solutions to many of the
problems these parks currently face.
12. ``Nuclear Safety: Concerns With Nuclear Facilities and Other
Sources of Radiation in the Former Soviet Union,'' November 7,
1995, GAO/RCED-96-4.
a. Summary.--At the request Senator Bob Graham, the General
Accounting Office (GAO) conducted a study on (1) nuclear
facilities (other than civil nuclear power reactors), nuclear-
powered vessels, and other sources of radiation in the former
Soviet Union; (2) the views of United States and international
experts on the safety of these facilities and other sources of
radiation; and (3) United States and international efforts to
address nuclear safety and environmental problems associated
with these facilities and other sources of radiation. According
to available information, the countries of the former Soviet
Union have at least 221 operating nuclear facilities, not
including civil nuclear power reactors. Ninety-nine of these
facilities are located in Russia and include facilities
involved in plutonium production and processing as well as
weapons design and production. Russia also has a fleet of
nuclear powered vessels, including 228 submarines. In addition,
according to the Department of Defense, as many as 10,000 to
20,000 organizations throughout the former Soviet Union may be
using different types of radiation sources for medicine,
industry, and research.
The GAO also found that nuclear safety experts, including
Russian officials, are concerned about the safety of certain
nuclear facilities and the potential for accidents,
particularly at facilities producing or reprocessing plutonium
and at some sites for decommissioning nuclear submarines. The
following five major factors contribute to unsafe conditions in
the former Soviet Union: (1) aging facilities and equipment and
inadequate technology; (2) the lack of awareness of and
commitment to the importance of safety; (3) the long-standing
emphasis on production over safety; (4) the absence of
independent and effective nuclear regulatory bodies; and (5)
the lack of funds for safety improvements.
Nuclear safety experts cited the radiological contamination
generated by past and continued operation of nuclear weapons
operations in the former Soviet Union as current safety and
environmental concerns. For example, over many years, nuclear
waste from three large sites in Russia producing plutonium had
been discharged directly into surrounding lakes and rivers.
Currently, radioactive waste is being injected into the ground
and continues to be stored improperly. In addition, Russia's
history of dumping liquid and solid radioactive waste from
nuclear-powered submarines and icebreakers into the Arctic seas
and the Sea of Japan has raised concerns about the long-term
environmental effects of this practice.
b. Benefits.--This report highlights some of the nuclear
safety issues concerning nuclear facilities and other sources
of radiation in the former Soviet Union and will help foster an
informed debate over the need for United States assistance in
ensuring the safety of these facilities.
13. ``Army Depot Maintenance: Privatization Without Further Downsizing
Increases Costly Excess Capacity,'' GAO/NSIAD-96-201, September
1996.
a. Summary.--Several Army depots have been recommended for
closure under the 1995 Defense Base Closure and Realignment
Commission (BRAC). The Department of Defense (DOD) is planning
to consolidate some functions to remaining Army Depots while
privatizing others. The problem of excess capacity is driving
up the maintenance cost of depots, and privatization does not
deal with this situation.
The plans to transfer certain workloads from realigned
depots to remaining depots while improving capacity usage and
lower operating costs to some extent, but will not resolve the
extensive excess depot capacity problems. Current privatization
initiatives as outlined by the Army will increase excess
capacity from 42 percent to 46 percent which will increase the
cost of depot maintenance. Privatizing-in-place will also
aggravate excess capacity conditions in the private sector.
There is also a lack of details as to how the Army will comply
with certain statutory requirements of privatizing depot
maintenance.
While the Army's plans for depot reallocation are still
evolving, the Army has not yet demonstrated that privatization
initiatives are cost effective. The General Accounting Office
(GAO) has found that opportunities do exist to significantly
reduce maintenance costs through workload transfers from
closing and downsizing depots as opposed to in place
privatization. The GAO found that while there would be benefits
from transferring workloads it is unlikely that the Army's
current plans will achieve the BRAC Commission's projected 20-
year net present value savings of $953 million from the
realignment of the Letterkenny depot or the $274 million from
downsizing the Red River depot.
b. Benefits.--An expedited transfer of equipment from the
Sacramento Air Logistics Center to the Tobyhanna Army Depot
could result in an annual savings of up to $24 million and
further savings for the Air Force by earlier termination of the
work than currently scheduled. Also consolidating the tactical
missile workload at the Tobyhanna depot could decrease costs by
as much as $27 million annually.
14. ``Nuclear Weapons: Improvements Needed to DOE's Nuclear Weapons
Stockpile Surveillance Program,'' GAO/RCED-96-216, July 1996.
a. Summary.--The Department of Energy (DOE) is responsible
for the management and surveillance of weapons in the Nation's
nuclear stockpile to identify reliability and safety problems.
DOE conducts three different types of surveillance tests on
nine different types of nuclear warheads. The three types of
tests conducted are flight tests, nonnuclear systems laboratory
tests, and nuclear and nonnuclear component tests. Based on
these tests the DOE assesses the reliability level of the
weapon. While reliability level of a particular weapon can only
be changed as the result of a test, DOE loses confidence in
reliability ratings of untested weapons.
While this loss of faith is unquantifiable, it is
significant. There are several reasons why various testing
programs are behind schedule including transfer of functions,
lack of a safety study, and concerns about safety procedures.
There is also concern that limited equipment and changes to
number of test packages that may be sent on a single flight
test have been limited by the SALT treaties. The DOE does not
yet have written plans on how it will get the backlogged
programs back on schedule, and they estimate that it may take
years to return some of these programs to schedule.
The DOE is also being forced to improvise flight test
packages on certain weapons systems made from a package
designed for a similar system. Due to the random selection of
the tested weapons and the type of data gathered the DOE also
feels that it can eliminate certain flight tests from the
backlog without effecting their confidence in the reliability
level of those systems. The DOE is also looking at ways in
which it can transfer testing functions and maintain safety at
its facilities without sacrificing time and creating delays in
the surveillance process.
b. Benefits.--The importance of knowing the safety and
reliability of our nuclear stockpile cannot be understated. The
sooner the problems in this program are addressed the less it
will cost to clear the backlog of tests and prevent similar
situations from occurring in the future.
15. ``Tax Research IRS Has Made Progress But Major Challenges Remain,''
GAO/GGD-96-109, June 1996.
a. Summary.--The Internal Revenue Service (IRS) is
responsible for enforcing compliance with the Federal tax
system. The tax system is supposed to be voluntary and the IRS
seeks to reduce noncompliance not only through enforcement
methods such as audits but also through a variety of
nonenforcement methods designed to raise voluntary compliance
through nonenforcement means such as education and assistance
through their Compliance 2000 program.
Compliance 2000 seeks to keep current enforcement methods
in place to deal with intentional noncompliance while lowering
the level unintentional noncompliance. Compliance levels have
remained static at 87 percent for about 20 years, 83 percent
from voluntary compliance and 4 percent from IRS enforcement
methods. The IRS seeks to raise this level to 90 percent by the
year 2000 mostly by increasing the level of voluntary
compliance. At the same time the IRS has undertaken a rigorous
program of reviewing procedures and developing plans to further
increase compliance by studying local and national
noncompliance problems and tailoring solutions to noncompliant
market segments.
b. Benefits.--Compliance 2000 is designed to decrease the
$1,000 billion income tax gap. These efforts will help increase
tax revenues without increasing the IRS image problem by
focusing on increasing voluntary compliance and focusing
enforcement methods to intentional noncompliance.
16. ``Tax Administration: IRS Is Improving Its Controls for Ensuring
That Taxpayers Are Treated Properly,'' GAO/GGD-96-176, August
1996.
a. Summary.--In 1994 the Internal Revenue Service (IRS)
processed over 200 million tax returns, issued 86 million tax
refunds, handled 39 million calls for assistance, conducted 1.4
million audits, and issued 19 million collection notices for
delinquent taxes. These activities result in millions of
contacts with taxpayers, and these contacts have the potential
to make taxpayers feel as though they have been abused or
mistreated by individual IRS employees. Due to the nature of
our tax system, taxpayers must be willing to comply voluntarily
for the efficient collection of taxes. A feeling that one has
been abused by part of the system, or that the system itself is
abusive has a negative impact on compliance.
In order to avoid situations in which taxpayers are abused
or feel mistreated by IRS employees, a number of controls have
been implemented. The IRS is responsible for administering
these controls and shares the responsibility for investigating
allegations of abuse. Depending on the type of abuse alleged
and the position of the alleged abuser the IRS, the Department
of the Treasury Office of the Inspector General (OIG), or the
Department of Justice (DOJ) are responsible for carrying out
the investigation. OIG is involved in complaints against senior
officials of the IRS, while DOJ may prosecute IRS employees who
are accused of taxpayer abuses that are criminal misconduct.
The DOJ can also defend IRS employees against civil suits that
arise out of actions taken as part of their official duties.
While at this time the IRS has not yet defined taxpayer
abuse, the GAO has had definitions since their 1994 report on
IRS controls. The tracking systems in place at IRS, DOJ, and
OIG are not currently prepared to follow progress of these
controls in cutting down taxpayer abuse. Without the IRS
creating a definition of taxpayer abuse and tracking the number
and disposition of complaints it is impossible to gather clear
data on the effectiveness of their implemented controls. The
IRS has not yet agreed to take such actions, but is following
other GAO recommendations to improve the general system of
controls to eliminate taxpayer abuse by IRS employees.
b. Benefits.--The perception that IRS employees or the tax
system itself is abusive can decrease voluntary compliance in
taxation by taxpayers. Eliminating these abuses would help to
increase voluntary compliance, reducing the $100 billion income
tax gap while decreasing IRS workload in the field of
intentional noncompliance cases. This would also facilitate
taxpayers confidence in the IRS and the tax system in general.
17. ``Tax Administration: Tax Compliance of Nonwage Earners,'' GAO/GGD-
96-165, August 1996.
a. Summary.--Nonwage income accounts for $859 billion of
the $3,665 billion of total income for individuals in 1992.
This is a significant increase in the percentage of total
income for individuals since 1970, and all indications are that
this percentage will continue to grow as more people earn money
from nonwage sources of income such as pensions and self
employment. It has been found that nonwage earners have more
difficulty in paying their taxes than wage earners. While it is
impossible to determine all the factors that cause nonwage
earners to be more frequently delinquent, it appears that a
large portion of the problem is the confusion generated by the
estimated tax system and lack of withholding.
The estimated tax system requires nonwage earners to file
taxes several times a year, estimating what their income will
be by projecting expected payments and dividends. The system by
which the Internal Revenue System (IRS) carries out the
estimated tax procedures has not changed in years and relies on
stringent payment schedules and old payment channels. The GAO
has made several recommendations for increasing compliance and
modernizing the IRS procedures in this area. They also suggest
that mandatory withholding extend to cover certain types of
nonwage income in order to simplify compliance, as is done in
several other countries. Many tax experts agree that this helps
to increase compliance.
The IRS and private sector both agree that improving
taxpayer awareness of their responsibilities increases
compliance. The IRS seeks ways to improve taxpayer compliance
through education and by targeting periods of transition from
wage to nonwage income to eliminate confusion. Also better
monitoring of estimated tax payments will aid the IRS in
determining how to improve compliance.
b. Benefits.--As nonwage income becomes an increasingly
large percentage of taxable income, the importance of
compliance rises proportionally. The Social Security
Administration prepares, pending authorizing legislation, to
start mandatory withholding on Social Security payments to help
ease compliance burdens. The IRS along with the private sector
studies ways in which it can increase compliance in other areas
of nonwage income, and has received several GAO suggestions in
addition to its own research and reports.
18. ``NASD Telephone Hotline: Enhancement Could Help Investors Be
Better Informed About Brokers Disciplinary Records,'' GAO/GGD-
96-171, August 1996.
a. Summary.--The National Association of Securities
Dealer's (NASD) creates a toll-free hotline in October 1991.
The hotline receives hundreds of thousands of calls from
investors seeking information on their brokers disciplinary
records. These callers represent less than 1 percent of those
who directly own shares in a publicly traded company or mutual
fund. While surveys showed that most callers were very
satisfied with the information and services provided by the
NASD hotline, many wanted more information than NASD was
providing.
NASD was not providing information that they are allowed to
disclose such as whether their broker had been subject to a
settled civil case, had a pending or settled arbitration, or a
pending customer complaint. However, all of this information is
available by calling ones State board of regulators, causing a
discrepancy in the type of information available to investors.
NASD agrees to make changes in this policy.
Also, findings indicate that in some cases NASD gave out
either too little of the information they were allowed to or in
rare instances exceeded the scope of allowed information. This
causes investors to make decisions without information they
should have, which consequently harms certain brokers.
b. Benefits.--The NASD agrees to provide in addition to the
services already available on their hotline the same
information on brokers that one could receive by calling ones
State board of regulators. This allows investors to make
informed decisions, thus decreasing unnecessary risk.
19. ``Environmental Cleanup: Cash Management Practices at Rocky
Mountain Arsenal,'' GAO/NSIAD-96-145, September 1996.
a. Summary.--The Army and Shell Oil Co. (Shell) reaches an
agreement under which they would cofund the environmental
cleanup costs at the Rocky Mountain Arsenal. The percentage of
the cleanup for which Shell is responsible expects to exceed
$500 million. Since the 1989 settlement agreement, the Army's
cash management procedures in collecting from Shell cost the
Government in excess of $1 million.
The three factors that contribute to the weakness in cash
management procedures are as follows: (1) the Army bills on a
quarterly instead of monthly basis as is the usual practice;
(2) the Army has allowed an additional 30 days in the payment
cycle agreed on; (3) the Army and Shell send payments to each
other by mail instead of by electronic transfer, causing delays
in receipt of funds. The Army has the capability to implement
changes that would eliminate all three of these problems, the
first two having each caused losses in excess of half a million
dollars apiece and the third having caused untold opportunity
costs.
b. Benefits.--The Army saves the Federal Government
millions of dollars by implementing changes to a monthly
billing cycle and holding Shell to a 60-day cycle to calculate
costs as outlined in the settlement, as opposed to the 90-day
cycle now used. In addition, switching to electronic transfer
saves the Government in opportunity cost by allowing them to
invest in a timely manner.
20. ``Tax Administration: Income Tax Treatment of Married and Single
Individuals,'' GAO/GGD-96-175, September 1996.
a. Summary.--The Internal Revenue Code (IRC) has 59
separate provisions where tax liability depends, at least in
part, on ones marital status. There is discussion over whether
the IRC creates either a marriage bonus or a marriage penalty.
Of the 59 provisions that are marriage sensitive, three of them
are frequently discussed in connection with marriage penalties
or bonuses: sections on the tax rate; the standard deduction;
and the earned income credit.
The different ways married and single people are treated
under the income tax code leads to situations where the tax
liability of married taxpayers is different than that of two
similarly situated single taxpayers. Of the 59 provisions that
GAO identifies as marriage sensitive, 56 results in marriage
bonuses or marriage penalties, depending upon the taxpayers
individual circumstances. The single most important factor in
these situations is how income is divided between spouses.
Disparate income between spouses tends to lead to marriage
bonuses while equivalent income could lead to marriage
penalties. There are other factors that lead to marriage
bonuses or penalties including property ownership and
qualification for tax credits or deductions. Examples include
capital losses and capital gains. A married couple gets the
same capital loss deduction as a single person, so if both
spouses have capital losses that when combined exceed this
deduction there is a penalty, but if one spouse has a capital
loss while the other has a larger or equal capital gain the
loss can be used to offset the gain, resulting in a marriage
bonus.
b. Benefits.--At this time there is not enough data to
quantify the number of taxpayers who may suffer a marriage
penalty or benefit from a marriage bonus. However, both of
these conditions exist under current tax law and what
circumstances can lead to benefit or penalization for married
couples.
21. ``Tax Policy: Analysis of Certain Potential Effects of Extending
Federal Income Taxation to Puerto Rico,'' GAO/GGD-96-127,
August 1996.
a. Summary.--Based on 1992 figures the net aggregate
Federal tax liability that could be collected from Puerto Rico
would have been about $49 million under the United States tax
rules as adopted by the end of 1995. Over half of all Puerto
Rican taxpayers would have received net transfers from the
Federal Government under the Earned Income Tax Credit (EITC)
while some 41 percent of taxpayers would have had positive
Federal income tax liabilities including EITC. If additional
EITC could have been claimed by legal nonfiler residents this
would result in an additional $64 million in EITC payments,
eliminating the aggregate of Federal income tax liability and
creating $15 million in EITC payments over the aggregate of tax
liability.
The Government of Puerto Rico would have had to reduce its
income tax level by about 5 percent if the Government wanted to
keep level the rate of combined taxes on its residents if the
$49 million in aggregate tax had been collected by the Federal
Government. If the aggregate Federal tax liability were wiped
out by additional EITC payments the Government of Puerto Rico
would not have to alter its tax rate.
While the per-capita amount of Puerto Rico's individual
income tax was lower than the State and local taxes in most
States and the District of Columbia the income tax as a
percentage of total personal income was higher than any State
or the District of Columbia. However because residents of
Puerto Rico pay considerably less in Federal taxes the combined
Federal and Puerto Rican income tax were lower both in dollars
per-capita and as a percentage of personal income than the
combined Federal, State and local taxes for a resident of any
State or the District of Columbia.
The elimination of the possessions tax credit saves
billions in tax expenditures. According to the Joint Committee
on Taxation we save $4.4 billion annually by the year 2000. The
U.S. Department of the Treasury is more conservative, placing
those savings at $3.4 billion within the same time period.
b. Benefits.--While the benefits of extending full Federal
taxation to Puerto Rico are unresolved, costing either $15
million a year or else netting $49 million, there are benefits
to reconsidering the possessions tax credit.
22. ``Fair Lending: Federal Oversight and Enforcement Improved but Some
Challenges Remain,'' GAO/GGD-96-145, August 1996.
a. Summary.--Recently the banking regulators, the
Department of Justice (DOJ), and the Department of Housing and
Urban Development (HUD) devote additional efforts to the
enforcement of fair lending laws, along with other responsible
Federal agencies. The banking regulatory agencies attempt to
detect discrimination through improved examination procedures.
In addition they, and other agencies, recommend a number of
compliance procedures and activities to help lenders ensure
that all loan applicants are treated fairly if implemented.
Problems remain and agencies can still take advantage of
opportunities to improve the consistency of Oversight and
Enforcement. The areas that still need work are adequate means
by which to detect discrimination in the process before the
submission of the formal loan application. Compliance examiners
at several agencies find that poor quality Home Mortgage
Disclosure Act data, examiner inexperience, and insufficient
time allowances make detecting discrimination more difficult
during fair lending examinations. Uncertainty also persists
among officials at some Federal agencies as to what constitutes
a referable pattern or practice violation under the Equal
Credit Opportunity Act and the Fair Housing Act.
There are a number of other interpretation and application
issues of the fair lending laws that remain unresolved. These
and other legal issues create uncertainty among both lenders
and regulators which impeded current attempts by Federal
banking regulatory agencies to provide clearer more concise
guidance regarding fair lending policies. Banks and other
lending institutions are in turn left confused about what is
needed to ensure that they are in compliance.
Unresolved legal issues also pose other potential barriers
to wider adoption of some programs and activities recommended
by Federal agencies to ensure compliance. Chief amongst these
is the resolution of the disparate impact theory of lending
discrimination and the use by regulators and third parties of
data acquired or generated by lenders through self-testing
programs. The disparate impact theory states that a lender
discriminates when they apply a policy or practice that while
seemingly innocuous has a disproportionate adverse impact on
applicants from a protected group, even when applied to all
groups equally. The policy or practice must also be of a nature
that is not justifiable as a business necessity.
Compounding these problems is the fact that many of these
issues may require judicial or administrative resolutions in
addition to the legislative actions being taken. This could
take some time during which the fair lending laws remain
unclear to lending institutions, thus leading to hesitation in
the implementation of additional compliance programs.
b. Benefits.--The goal of making capital and credit
available to all is aided by the efforts to cut discrimination
out of lending programs. Ongoing efforts by the banking
regulatory agencies clarify the fair lending laws, new policies
and programs which make recommendations should toward
eliminating discrimination in the industry.
23. ``National Park Service: Activities Within Park Borders Have Caused
Damage to Resources,'' GAO/RCED-96-202, August 1996.
a. Summary.--Park managers identify 127 direct internal
threats to park resources at eight parks as reviewed by the
General Accounting Office (GAO). Park managers feel that the
most serious threats to the park come from shortages in
staffing, funding, and resource knowledge which they say
contribute, or are responsible for many of the other conditions
that pose threats. The threats are divided into six categories
of threat which include: private inholdings/commercial
activities; nonnative wildlife/plants; illegal activities;
effects of visitation; agency/park management actions; and
other. While the Park Service has developed systems focusing on
tracking particular classes of resources, it has no system-wide
or national data base. It also lacks a system to categorize,
prioritize, and track internal problems. It is the Park
Services feeling that despite the General Accounting Office
recommendation, such a system is not appropriate at this time.
Private inholdings and commercial development present the
largest number of specific threats, threatening resources and
natural resources as well as affecting visitor enjoyment.
Encroachment by nonnative flora and fauna accounted for the
second largest number of direct threats destroying native
plants and animals. Illegal activities constitute the third
highest category and mainly consist of animal and resource
poaching. About 30 percent of threats are divided into two
other categories the adverse effects of people's visits to the
parks, and the Park Services own management actions. These
problems are mainly erosion and fire safety concerns. The other
direct threats are largely posed by nature itself.
The cultural resources of our national parks have more
permanent damage than natural resources. Most of this damage
can be traced to vandalism, poor upkeep, and the venturing off
of established trails or illegal vehicle usage. Historic
artifacts, buildings, and cemeteries have all been looted. So
far, mitigation efforts have been primarily limited to studies.
b. Benefits.--Park managers believe that they have taken
some action in response to 82 percent of the direct threats
identified. By adding rails and ropes and replacing easily
damaged items with more durable ones the park managers are
hoping to reduce erosion and lessen the effects of vandalism.
Also, access to certain delicate areas is being restricted to
limit looting and poaching while in addition to slowing other
forms of damage.
24. ``Earned Income Credit: IRS' 1995 Controls Stopped Some
Noncompliance, But Not Without Problems,'' GAO/GGD-96-172,
September 1996.
a. Summary.--The Internal Revenue Service (IRS) took steps
to detect and prevent noncompliance with the earned income
credit (EIC). The EIC is a refundable tax credit available to
low-income working taxpayers. There have been high numbers of
EIC claims filed with errors in calculating the amount of EIC
or by people who did not qualify for the EIC.
The IRS uses a series of filters in its Electronic Filing
System to identify problems in electronic submissions. The
filters serve as controls in finding EIC problems mainly by
identifying problems related to the submitted Social Security
numbers (SSN). Filters added by IRS in 1995 as well as the
existing filters identified about 1.3 million SSN problems.
This is a great increase over about 600,000 such problems found
in the previous year. There is no way of determining which
instances of noncompliance were intentional and which were
honest mistakes by use of these filtering mechanisms. The IRS
also had several electronic submissions that were rejected and
later filed on paper, nearly a third of which than received
their refunds.
The IRS must transcribe and validate SSN's for paper
returns. If the IRS identifies an invalid or missing SSN it
must determine whether or not they will examine those requests
for refunds. Last year the IRS only had the resources to
investigate roughly a third of the over 3 million requests for
EIC refunds with problems. Information on the results of the
roughly 1 million examinations the IRS carried out is
unavailable. For those problems that were identified but not
examined the IRS delayed, but ultimately sent, the EIC refunds.
The IRS also delayed about 4 million EIC refunds on which no
problems were identified while checking if other returns had
been filed using the same SSN's.
According to the IRS Internal Audit Division, procedures
used in determining which cases warranted followup were lacking
in several areas. The IRS procedures did not ensure the
selection of the most productive cases and resulted in an
inefficient use of IRS resources. There was also the long delay
of EIC returns in which problems had not been detected. The IRS
has since revised its procedures for selecting cases to review
in order to address these problems and the efficacy of such
reforms remains to be seen.
b. Benefits.--The IRS has not provided enough data to allow
for an overall assessment of the results of EIC noncompliance
actions in 1995. There were over 2 million less EIC claims
filed in 1995 than the IRS expected, and as of June 30, 1996
the 1 million investigations into paper returns EIC claims had
resulted in $800 million in reduced refunds and additional
assessments. The IRS continues to work to refine their
procedures in order to more efficiently use their resources and
followup on those returns most likely to produce results.
In addition the IRS is optimistic that their efforts and
the publicity surrounding them resulted in fewer EIC claims
being filed. The benefit of increased tax revenue and increased
speed in processing that will result from these reforms will be
more easily tacked with the adoption of the General Accounting
Office recommendations.
25. ``Social Security Disability: Backlog Reduction Efforts Under Way;
Significant Challenges Remain,'' GAO/HEHS-96-87, July 1996.
a. Summary.--The Social Security Administration (SSA) with
State agencies called disability determination services (DDS)
make the initial determination of disability eligibility. The
petitioner has the right to appeal the SSA/DDS decision, first
to another DDS staff, and failing that they have a second
appeal to the SSA's Office of Hearings and Appeals (OHA). The
OHA appeals go before an administrative law judge (ALJ).
From 1985 to 1995 the OHA's pending case backlog grew from
107,000 to 548,000, and processing time increased from 167 days
to 350 days for a filed claim. While there has been a surge in
initial applications and appeals to OHA, the increases in case-
processing time and the backlog of pending cases cannot be
blamed on these problems alone. SSA has failed to pay attention
to several longstanding problems until recently, compounding
the problems created by the increased demands on the system.
These longstanding problems include: (1) multiple levels of
claims development and decisionmaking; (2) fragmented program
accountability; (3) decisional disparities between DDS and OHA
adjudicators; and (4) SSA's failure to consistently define and
communicate its management authority over the ALJ's.
Since 1994, SSA has initiated a new line of programs to
address these problems including both short- and long-term
efforts. These efforts replace previous initiatives that were
outpaced by the increasing workload placed on OHA. SSA's Short-
Term Disability Plan (STDP) represents its near term efforts to
reduce OHA's backlog of pending cases to a manageable level by
the end of the year. The STDP reallocates agency resources and
institutes process changes to reduce the flow of appeals
requiring ALJ hearings and allow for reduction of the current
backlog. Startup delays, limited impact of key initiatives, and
concern over claims being allowed incorrectly due to time
pressure have limited SSA's ability to reduce the backlog of
cases. SSA is closely monitoring STDP and tracking allowances
to ensure decisional accuracy.
The long-term plan by SSA is called the Plan for a New
Disability Claim Process, also called a redesign plan. The
redesign plan is aimed at the first three longstanding problems
noted above. The SSA is still in the early testing stages of
the redesign plan so its effectiveness is not yet known. Its
goal is to implement initiatives which streamline the claims
process, improve organizational and process accountability, and
provide more consistent decisional policies to OHA and DDS. It
is believed that this project will decrease processing time
from over a year currently to about 225 days by the turn of the
century.
The only problem that the redesign plan does not address is
that of SSA's management authority over the ALJ's. The
Administrative Procedure Act protects ALJ decisional
independence, and the ALJ's have successfully argued that these
provisions protect them from management attempts to control
their workload. The success of the redesign plan hinges on the
level of cooperation that the ALJ's are willing to extend.
b. Benefits.--The Government stands to garner significant
savings from the streamlined claims process and decreased
workload on OHA.
26. ``U.S. Mint: Commemorative Coins Could Be More Profitable,'' GAO/
GGD-96-113, August 1996.
a. Summary.--The U.S. Mint is running an increasingly large
number of commemorative coin programs over recent years. While
the commemorative coin program has been profitable overall,
some recent programs have lost money. This presents a problem
for the Mint and the Government as the legislative
authorization for the commemorative coin programs states that
the mint shall take all steps necessary to ensure that the
issuance of these coins result in no net cost to the
Government. It is also one of the main problems that have
resulted in losses to the mint have been the increasing number
of coin series released, the unpopularity of chosen themes, and
the payment of surcharges to sponsors on coins that lose money
for the mint.
The increasing number of commemorative coin programs has
lead to decreased interest in individual programs by coin
collectors as well as decreasing satisfaction. This hurts the
larger market for commemorative coins, and profits for single
programs have been dropping The Citizens' Commemorative Coin
Advisory Committee (CCCAC) was established in 1992 to help
reduce the proliferation of commemorative coins. By reducing
the number of programs, it is hoped that the existing coin
programs will be more attractive to collectors and the general
public.
CCCAC is also responsible for recommending themes to
Congress for series of commemorative coins to be produced by
the mint. It is hoped that by eliminating unpopular themes and
themes of only limited or local appeal the Mint can appeal to a
larger cross section of the American public. These efforts are
also designed to maintain the interest of coin collectors in
the Commemorative Coin program, some collectors having recently
called for a boycott of the Mints commemorative coins which
they feel are flooding the market.
The Mint has also lost millions of dollars on coin programs
while still paying the sponsors their surcharges. Despite the
goal of reducing the deficit through the Commemorative Coin
programs, the current agreements between the Mint and program
sponsors are structured in such a way as to allow sponsors to
profit even when their coin series is a commercial failure. In
those cases the Mint must assume the loss, which translates to
the taxpayers ultimately assuming the loss. CCCAC has made a
recommendation is that future agreements between the Mint and
program sponsors be structured in such a way so that they are
profit-sharing arrangements instead of surcharges. This type of
arrangement would have reduced or eliminated the loss on all
programs to the Mint, and in some cases may have resulted in a
profit to the Mint instead of a loss.
CCCAC has also recommended that Congress authorize
circulating commemorative coins. These are coins which are sold
at face value and operate as legal tender, while having a
special collective appeal from their distinctive designs and
limited issue. This program would be similar to the Postal
Service's commemorative stamp programs. A circulating coin
would give the Government all costs but it would also receive
all the benefits. The circulating coins would provide millions
in seigniorage (the difference between the face value of the
coins and their cost of production, which reduces Government
borrowing requirements) and lead to a substantial savings on
interest on the national debt.
b. Benefits.--Reducing the number of noncirculating
commemorative will reduce the risk of loss to the Mint while
increasing their appeal to collectors. Following the CCCAC
recommendations would also allow the Government to reduce the
national debt and provide a means of fundraising for sponsors
while meeting the requirement without Government net cost to
the Government.
A circulating commemorative coin program of the type
suggested by CCCAC could provide about $225 million in
seignorage for the Government. In addition such a program has
the potential to save $16 million in annual interest on the
national debt.
27. ``Amtrak's Strategic Business Plan: Progress to Date,'' GAO/RCED-
96-187, July 1996.
a. Summary.--Since 1971, Amtrak took over the
responsibility for operating the Nation's intercity passenger
trains. The corporation was provided more than $18 billion from
the Federal Government to cover annual operating losses and to
make capital investments. By 1994 the long-term survivability
of Amtrak was seriously threatened. Their financial and
operating conditions had taken a serious decline. In order to
boost revenues and cut expenses, Amtrak has taken on a
Strategic Business Plan. This Plan was to increase revenues and
cut expenses with a goal of operating self-sufficiency by the
year 2002. In 1975, the development of the Strategic Business
Plan by Amtrak underwent a major corporate restructuring. The
restructuring involved dividing Amtrak's intercity passenger
service operations into three distinct operating units.
Although progress has been made in the past 18 months, it
is still too early for the corporation to judge whether their
long-term goal of operating self-sufficiency will work. Amtrak
plans to increase revenues and State support and control costs
to eliminate the need for Federal operating subsidy. Marketing
efforts and fare increases are the bases for increasing
passenger revenues. The increase in State contributions will
occur shortly. Amtrak is hoping for 100 percent of these costs
from the States by the fiscal year 1999. As of now, the States
pay only a portion of the costs, but Amtrak is increasing the
portion annually to reach their goals.
b. Benefits.--Amtrak's success in implementing the plan
will go a long way toward deciding the future of intercity
passenger rail service in the United States. With Amtrak's
success to date with the Strategic Business Plan, it provides
the Congress with a framework for determining the level capital
and operating funds Amtrak will receive. This Plan could be
critical in determining the continued availability of intercity
passenger rail service in the United States and the level of
Federal support necessary to maintain this service.
28. ``Futures Markets: Heightened Audit Trail Standards Not Met But
Progress Continues,'' GAO/GGD-96-177, September 1996.
a. Summary.--In August 1989, the Department of Justice, in
cooperation with the Commodity Futures Trading Commission
(CFTC), conducted an undercover investigation at the Chicago
Board of Trade (CBT) and the Chicago Mercantile Exchange (CME).
The investigation disclosed illegal trading practices designed
to enrich participants. GAO in a report to Congress in
September 1989 concluded that most of the types of illegal
practices disclosed could have been detected with improved
audit trails--the physical records of the price and time of
each trade. A recommendation from GAO was made for CFTC to
heighten audit trail standards by requiring a more accurate and
comprehensive record of trades.
Exchanges having a minimum average daily trading volume of
less than 8,000 contracts in each of its contract markets
qualify for an exemption from the heightened standards if they
could demonstrate substantial compliance with the act's audit
trail standards and trade monitoring requirements. In November
1994, five exchanges were covered by the heightened standards
because of their trading volume: (1) CBT; (2) CME; (3) the
Coffee, Sugar & Cocoa Exchange (CSCE); (4) the Commodity
Exchange, Inc. (COMEX); and (5) the New York Mercantile
Exchange (NYMEX).
Future exchanges use one of four types of systems to meet
audit trail standards--manual, imputed timing, pit card time
stamping, and computer trade matching. In addition to meeting
the requirements of the existing 1-minute trade timing and
sequencing standards, including capturing the essential data on
the participants, terms, times, and sequencing of all trades,
the heightened standards require that this information be
continually provided to the exchange in an unalterable manner
and that it be precise, complete, and independent. CFTC has
taken actions to enforce exchange compliance with the FTPA
audit trail standards. In June 1996, the exchanges testified
that the FTPA requirement to capture broker receipt time was
not currently practicable. Some exchanges were concerned that
due to differences in trading volume and in the way customer
orders are routed, trades recorded, and execution times
derived, audit trail features that are practicable at one
exchange may be impracticable at another exchange without
significantly disrupting trading.
The exchanges that were reviewed have continued to make
progress toward compliance with them. GAO is concerned that the
momentum toward achieving compliance could be lost now that the
legislatively mandated deadline has passed without any covered
exchange being found in full compliance.
The recommendation that the chairperson inform Congress
periodically on exchange progress toward compliance with the
FTPA heightened audit trail standards and on implementation of
the dual trading ban--including mitigating factors delaying
compliance or implementation and the steps CFTC is taking to
encourage continued progress. This information could be
provided on the anniversary of the statutory deadline, in an
annual report, for compliance with the heightened standards, or
through periodic testimonies before congressional committees.
b. Benefits.--Exact trade sequencing would help detect
trading abuses, such as trading ahead of customer orders. More
complete times could also improve an exchange's ability to
accurately sequence trades. Independent or automatic trade
recording could increase the reliability of the data collected
by preventing the broker or trader from falsifying the record.
Continually providing data to an exchange could reduce the
opportunity for floor brokers and traders to illegally alter
the trading record. The requirement that the data be
unalterable is to prevent floor brokers or traders from
changing a trading record without detection. Automated order
routing systems could enhance audit trails by meeting the FTPA
requirements for recording the time an order reaches the
exchange floor, the time the broker receives an order, and the
time the order fill is recorded. According to CFTC officials,
these systems should result in better timing data for orders by
augmenting existing sequencing information.
29. ``Debt Ceiling: Analysis of Actions During the 1995-1996 Crisis,''
GAO/AIMD-96-130, August 1996.
a. Summary.--Congress has traditionally imposed a limit on
the size of the Federal Government's public debt by
establishing ceilings (debt ceiling) on the amount of Treasury
securities that can be outstanding. In 1993, Congress raised
the debt ceiling to $4.9 trillion. This debt ceiling was
reached in the fall of 1995, but was raised until March 1996,
when it was set at $5.5 trillion.
The public debt consists primarily of Treasury securities,
which include bills, notes, and bonds that Treasury issues to
raise cash to finance Government operations and invest trust
fund receipts.
When a debt ceiling is reached, Treasury is unable to issue
additional Treasury securities without adding to the public
debt and exceeding the debt ceiling. Treasury is also unable to
discharge its normal trust fund investment and redemption
responsibilities. Treasury can avoid exceeding the debt ceiling
by not issuing Treasury securities for trust fund receipts or
reinvesting maturing Treasury securities. Also, when Government
trust funds redeem Treasury securities to pay for benefits and
expenses, the debt subject to the debt ceiling is lowered, and
therefore, Treasury can sell additional securities to the
public to raise cash.
The intervening period, beginning on November 15, 1995,
when the Secretary of the Treasury declared a debt issuance
suspension period, became known as the 1995-96 debt ceiling
crisis. Congress provided the Secretary of the Treasury
authority to issue securities that did not count toward debt
ceiling. On February 8, 1996, Public Law 104-103 provided
Treasury with the authority to issue securities in an amount
equal to the March 1996 Social Security payments. This statute
provided that the securities issued under its provisions were
not to be counted against the debt ceiling until March 15,
1996, which was later extended to March 30, 1996. On March 12,
1996, the Congress enacted Public Law 104-115, which exempted
Government trust fund investments and reinvestment from the
debt ceiling until March 30, 1996.
During the 1995-96 debt ceiling crisis, Treasury used its
normal investment procedures for 12 of the 15 major Government
trust funds. The remaining three major trust funds (Civil
Service fund, G-Fund, and Exchange Stabilization Fund), had
other actions taken to stay within the $4.9 trillion debt
ceiling.
Although actions taken during the debt ceiling crisis to
issue and redeem Treasury securities allowed the Government to
pay the Government's obligations while staying under the $4.9
trillion debt ceiling, the Government's debt which normally
would be considered part of this ceiling, increased by $138.9
billion--the amount necessary to finance those obligations
during this period.
When Treasury departed from its normal investment and
redemption policies and procedures during the 1995-96 debt
ceiling crisis, the Civil Service fund, the G-Fund, and the
Exchange Stabilization Fund incurred interest losses. Treasury
restored the interest losses to the Civil Service fund and G-
Fund, once the Congress raised the debt ceiling. The Exchange
Stabilization Fund lost $1.2 million in interest that cannot be
restored without special legislation.
b. Benefits.--During the 1995-96 debt ceiling crisis, the
Federal Government's debt increased substantially. Under normal
procedures, this debt would have been considered in calculating
whether the Government was within the debt ceiling.
30. ``Internal Revenue Service: Business Operations Need Continued
Improvement,'' GAO/AIMD/GGD-96-152, September 1996.
a. Summary.--Since 1992, IRS has made some progress in
modernizing its operations, but the differences between IRS'
current operations and those proposed in its vision are great.
The Government Performance and Results Act (GPRA) provides
an excellent vehicle for IRS to reach agreement with the
Congress on a business strategy and for the Congress to assess
IRS' performance in implementing an agreed upon strategy. Under
GPRA, each agency is to develop strategic plans for its program
activities, laying out the organization's fundamental mission
and long-term goals and objectives for accomplishing that
mission. These plans are to be submitted to OMB and the
Congress by September 30, 1997, as required by GPRA.
In May 1996, a status report of Tax Systems Modernization
(TSM) was given to the Senate and House Appropriations
Committees, the Department of the Treasury assessed TSM
progress and future redirection. Despite some qualified
success, IRS has not made progress on TSM as planned. Systems
development efforts have cost more than anticipated, it's
taking longer than planned, less functionality than originally
envisioned has been delivered. TSM would need expanded us of
external expertise in order to have the capability to develop
and integrate.
IRS expects to improve the accountability for probability
of TSM success by increasing its reliance on contractors. They
still need to address the risk inherent in shifting hundreds of
millions of dollars to additional contractual efforts before it
has the disciplined processes in place to manage all of its
current contractual efforts effectively.
GAO believes that the Congress should consider limiting TSM
spending to only cost-effective modernization efforts that: (1)
support ongoing operations and maintenance; (2) correct IRS'
pervasive management and technical weaknesses; (3) are small,
represent low technical risk, and can be delivered in a
relatively short timeframe; and (5) involve deploying already
developed systems that have been fully tested, are not
premature given the lack of a completed architecture, and
produce a proven, verifiable business value.
As the Congress gains confidence in IRS' ability to
successfully develop these smaller, cheaper, quicker projects,
it could consider approving larger, more complex, more
expensive projects in future years.
b. Benefits.--IRS has begun to analyze how it might use new
technology to change its business operations. They have
developed a vision for 2001 that called for organizational,
technological, and operational changes affecting the way it
processes tax returns, provides customer service, and ensures
compliance.
The Government Performance and Results Act (GPRA) provides
an excellent vehicle for IRS to reach agreement with the
Congress on a business strategy. GPRA requires that these plans
be submitted to OMB and the Congress by September 1997.
Recognizing the value of such plans, OMB has accelerated the
legislative schedule and is currently working with agencies in
developing key elements of their strategic plans.
As of September 1996, for TSM, IRS said it (1) has made
substantial progress in updating the business cases for TSM
projects and was continuing to refine its investment review
process, (2) had initiated the tax settlement reengineering
project to further reduce the volume of paper transactions, (3)
would continue work on the systems life cycle and was
developing a schedule for completing the TSM architecture, (4)
was establishing the GPMO which will be responsible for
directing and monitoring the activities of all modernization
contractors, and (5) would deliver a revised strategic plan to
Congress and OMB by September 1997.
31. ``Farm Credit System: Analysis and Comment on Possible New
Insurance Corporation Powers,'' GAO/GGD-96-144, August 1996.
a. Summary.--The Farm Credit System (the System) is a
government-sponsored enterprise that was chartered by Congress
to ensure a stable supply of credit to agriculture. The Farm
Credit System Insurance Corp. (FCSIC) maintains the Insurance
Fund, which insures the prompt payment of most of the debt
obligations of the System's eight banks. In 1991, the Farm
Credit Administration (FCA) recommended to Congress three
expansions of the FCSIC's powers. These changes would authorize
the FCSIC to: (1) assess the capital of the 228 System
associations that have ownership interest in the banks that
fund them; (2) charge supplemental insurance premiums to the
banks; and (3) base the premiums it charges banks on the
relative riskiness of each bank.
In the short run, authorizing the FCSIC to assess the
capital of associations, as FCA recommended, would provide
additional protections to the Insurance Fund, investors in the
System debt, and ultimately the taxpayers. However, the
concerns that gave rise to this recommendation--the limited
size of the fund and the adequacy of capital in System banks--
have diminished over time. Moreover, if the FCSIC had this
authority and used it in a time of financial stress, there is a
risk that a significant number of individual member/borrowers
would withdraw from their associations as a result. Such an
occurrence could destabilize the System and the Insurance Fund
instead of protecting them.
FCA's recommendation that FCSIC be authorized to charge
supplemental premiums to banks in case the Insurance Fund seems
unable to meet projected needs might appear justified if the
Insurance Fund experienced major losses. But, at such a time,
the size of these supplemental premiums would likely be limited
by adverse industry conditions and competitive considerations.
FCA's third recommendation--that FCSIC be authorized to
incorporate additional risk factors into its premium structure
to require higher risk banks to pay higher premium rates--could
be a useful complement to the FCA's risk-based capital
requirements. Currently, FCSIC's premiums are based in part on
credit risk, but not on other forms of risk. Giving FCSIC the
authority to charge premiums that are more fully based on all
risks could create additional incentives for banks to manage
risk prudently, because banks that were judged to be riskier
would be expected to pay higher premiums.
b. Benefits.--The FCA's first two recommendations for the
FCSIC are not currently needed, but their third recommendation
could be useful. Authorizing the FCSIC to charge premiums that
are more fully based on risk would encourage banks to be wise
risk managers and would work well with the FCA's current risk-
based capital requirements.
32. ``Northwest Power Planning Council: Greater Public Oversight of
Business Operations Would Enhance Accountability,'' GAO/RCED-
96-226.
a. Summary.--The Pacific Northwest Electric Power and
Conservation Planning Council (Council) is a four-State body
consisting of eight members appointed by the Governors of
Idaho, Montana, Oregon, and Washington. The Council was
mandated by the Pacific Northwest Electric Power Planning and
Conservation Act (act). Established as an interstate agency on
April 28, 1981, the Council oversees regional energy and fish
and wildlife policies. It's main purpose is to act as a
regional planning and policymaking agency to ensure that the
Northwest has an adequate, economical, and reliable power
system, while simultaneously rebuilding the fish and wildlife
populations damaged by the operations of Federal dams on the
Columbia River and its tributaries.
The Council's energy planning and fish and wildlife efforts
have been consistent with congressional direction, but changing
conditions now cloud the Council's future. The act directed the
Council to prepare long-range plans for the region's
conservation and electricity needs, and the Council has
prepared four such plans in its nearly 20-year history. In
connection with fish and wildlife policy, the Council has
prepared a program directing the efforts of various Federal and
State agencies and Indian tribes. However, changing conditions
in the utility industry and fish and wildlife mitigation have
implications for the Council's future. Due to these changing
conditions--such as the transition from a regulated monopoly to
a competitive market for electricity--the Governors of the four
Northwest States have convened a comprehensive review of the
Northwest energy system and the Council's role in it.
Evaluations of the role and content of the Council's fish and
wildlife program are also underway.
Although the Council's internal controls over day-to-day
operations were generally sound, the Council's oversight of
these operations has not been consistent. The Council has since
taken steps to improve their oversight of business practices,
and these steps appear sufficient to correct the immediate
problems at hand. However, the risk still exists that Council
members' attention may be diverted from administrative matters
in the future, because of the unstable nature of the Council's
main areas of focus--power, fish and wildlife. The Council
could improve its credibility as a manager of public resources
by taking steps to make its policies and decisions on business
operations more a matter of public record.
b. Benefits.--As a publicly funded regional planning body,
the Council derives its effectiveness in part from its
continued credibility. This credibility depends not only on the
quality of its work in power and fish and wildlife planning,
but also on business practices that demonstrate sound use of
public funds. Greater public oversight of the Council's
business operations could help protect this credibility.
33. ``Power Marketing Administrations: Cost Recovery, Financing, and
Comparison to Nonfederal Utilities,'' GAO/AIMD-96-145,
September 1996.
a. Summary.--The Federal Power Marketing Administrations
(PMAS) transmit and sell electric power generated mainly at
Federal hydropower facilities. Most of these facilities were
originally designed for other purposes in addition to producing
electricity. Three PMAS in particular--the Southeastern Power
Administration, the Southwestern Power Administration, and the
Western Area Power Administration--have been reviewed to
determine if they have been recovering their costs, to what
extent they are subsidized by the Federal Government, and how
they differ from nonFederal utilities.
The three PMAS, which are part of the Department of Energy,
market primarily wholesale power in 30 States produced at
large, multiple-purpose water projects. In fiscal year 1995,
their collective revenues totaled $1 billion. Most of the power
they sell is produced at 102 hydroelectric dams built and run
primarily by two operating agencies--the U.S. Army Corps of
Engineers and the Department of the Interior's Bureau of
Reclamation. The three PMAS receive annual appropriations to
cover operating and maintenance (O&M) expenses and, in some
cases, capital investment in transmission assets. Under Federal
law, the PMAS must repay these appropriations as well as the
power-related O&M and capital appropriations expended by the
operating agencies generating the power. At the end of fiscal
year 1995, the three PMAS had about $5.4 billion of
appropriated debt outstanding.
Five main power-related costs have not been fully recovered
by one or more of the PMAS through rates: (1) pensions and
post-retirement health benefits for current employees, (2)
construction costs for some power-generating and transmission
projects, (3) construction and O&M costs that have been
allocated to irrigation facilities at the Pick-Sloan Program
that are incomplete and infeasible, (4) costs of mitigating the
environmental impact of certain water projects, and (5) certain
O&M and interest expense payments due from Western. These
unrecovered costs amount to approximately $83 million for
fiscal year 1995 and cumulatively could be as much as $1.8
billion by September 30, 1995.
Financing of power-related capital projects is subsidized
by the Federal Government. Financing subsidies were about $200
million in fiscal year 1995. Cumulative financing subsidy over
the last 30 years has been several billion dollars.
The types of unrecovered costs experienced by the PMAS are
typically included in the power production costs and
electricity rates established by nonfederal utilities.
Nonfederal utilities generally pay higher interest rates on
debt than do PMAS. The unrecovered costs, financing subsidies,
and inherent cost advantages have resulted in the PMAS' being a
low-cost marketer of wholesale electric power. In 1994, PMAS'
average revenue per kilowatt-hour for wholesale sales was about
40 percent less than the average for nonfederal utilities.
Increased competition in wholesale electricity markets is
projected to lower rates, which will magnify the importance of
PMAS' marketing low-cost power because customers are able to
buy electricity from suppliers that have the most advantageous
rates.
b. Benefits.--In recent years, Congress has focused
increasing attention on the pros and cons of privatizing the
Federal PMAS. It is important to consider that, in aggregate,
the unrecovered power-related costs and financing subsidy for
Federal PMAS totaled about $300 million for fiscal year 1995
and billions of dollars over the last 30 years.
34. ``Federal Research: Changes in Electricity-Related R&D Funding,''
GAO/RCED-96-203, August 1996.
a. Summary.--In fiscal year 1996, the Congress appropriated
to the Department of Energy (DOE) about $1 billion for
electrically related research and development (R&D).
Manufacturers, States, the Federal Government, and electric
utilities have traditionally played a major role in this R&D.
Electricity R&D includes such technologies as solar energy,
fossil-fueled generating systems, and electric automobiles.
The electric utility industry is being deregulated and
moving toward a more competitive market. Reductions have
occurred in funding from the major sources of electricity-
related R&D.
The electric power industry is moving toward deregulation
and increased competition, which means utilities face
significant changes. Many utilities operated as monopolies in
protected geographic areas. Many were regulated by State public
utility commissions that approved the inclusion of electricity
R&D expenditures in the rate base. Utilities have been allowed
to earn a fixed rate of return on these expenditures. Being
driven by a combination of factors, the move toward
deregulation gained impetus with the Energy Policy Act of 1992,
which promotes increased competition in the wholesale power
market. Other factors in spurring the move toward competition
include large differences in electricity rates among utilities;
new low-cost electricity generation technologies; and recent
experiences in reduced regulation in other industries, such as
natural gas and telecommunications.
In April 1996, the Federal Energy Regulatory Commission now
requires, as a final rule, electric utilities to make their
transmission lines accessible to other utilities or power
producers for the transmission of wholesale power. This was as
a result of the Energy Policy Act of 1992. This open access is
to be made available at the same cost that public utilities
incur to transmit their own power. As of June 30, 1996,
regulatory commissions in 44 States and the District of
Columbia had adopted/evaluating deregulation alternatives.
Electricity-related R&D funding was reduced in 1996 by the
Federal Government, most States that were reviewed, and the
electric utility industry. Primary reasons for funding declines
are overall reductions in Federal and State funding and the
increased competition expected from the deregulation of the
utilities.
R&D spending by the Nation's investor-owned utilities has
declined by nearly one-third in 3 years (from 1993-96).
Utilities will be forced to price electricity to compete with
other utilities and independent power producers. As a result,
R&D managers evaluate potential R&D projects on the basis of
their likelihood of providing a near-term return to the utility
that will allow them to reduce electricity rates.
b. Benefits.--A suggestion from some utility R&D managers
and State and EPRI officials was that a nonbypassable national
wire charge could provide an alternative funding mechanism for
EPRI and longer-term collaborative R&D. It would ensure that
those who do not fund R&D do not achieve a competitive
advantage over those who do. Under this proposal, a small
charge would be assessed on all electricity entering the
transmission grid, whether it be interstate or intrastate. If
there were wire charges, the utility R&D managers would like to
have considerable say over how the money was spent.
35. ``World Bank: U.S. Interests Supported, but Oversight Needed to
Help Ensure Improved Performance,'' GAO/NSIAD-96-212, September
1996.
a. Summary.--The purpose of the World Bank is to promote
economic growth and the development of market economies by
providing finance on reasonable terms to countries that have
difficulty obtaining capital. Implicit Bank actions during most
of its history was the need to ensure the availability of
capital for countries that might otherwise turn to communism.
To achieve its goals, the Bank developed four major
institutions; the International Bank for Reconstruction and
Development (IBRD), the International Development Association
(IDA), the International Finance Corporation (IFC), and the
Multilateral Investment Guarantee Association (MIGA).
Banking operations support U.S. economic and foreign policy
goals and leverage other donors' funds to do so. The
effectiveness of the Bank's projects have been limited due to
performance weaknesses. The Bank has recognized the problems
and has developed a reform program that holds promise for
improving projects' effectiveness.
Systematically assessing country performance and direct
lending to countries that have demonstrated progress in project
implementation and in market and policy reform is a key
component of the reform effort.
Another major focus of reform is the improvement of project
design, or quality at entry.
During project implementation, the Bank is also working to
improve project management by being more proactive in
identifying and attempting to resolve problems.
Other reform efforts appear promising. They include greater
emphasis on policy and market reform objectives in projects,
increased use of nonlending services, and more focused Bank
management attention to reforms. With the Bank's greater
emphasis on policy and market reforms, in particular, may
increase the potential for Bank projects to positively impact
development in borrowing countries.
b. Benefits.--The benefits of U.S. participation in the
Bank are limited by problems with the effectiveness of Bank
projects. Through its leadership, the United States is
positioned to ensure that the Bank reforms continue to progress
and have a positive impact on development effectiveness.
36. ``Chemical Weapons Stockpile: Emergency Preparedness in Alabama Is
Hampered by Management Weaknesses,'' GAO/NSIAD-96-150, July
1996.
a. Summary.--Eight years after CSEPP's (Chemical Stockpile
Emergency Preparedness Program) inception, Alabama communities
near Anniston Army Depot are not fully prepared to respond to a
chemical stockpile emergency because they lack critical items.
Allocated to Alabama and six counties was $46 million to
enhance emergency preparedness. The following four projects for
which Federal, State, and local officials have not agreed on
specific requirements: (1) a CSEPP 800-megahertz (MHz)
emergency communications system; (2) equipment and supplies to
protect people in public buildings (including schools and
hospitals); (3) indoor alert and notification devices for
public buildings and homes; and (4) personal protective
equipment for emergency workers. Until a written commitment
from the Army to support the county's emergency preparedness
requirements or provide acceptable alternative is met, Calhoun
County Emergency Management Agency (EMA) opposes the granting
of a State environmental permit for the construction of
Anniston's disposal facility.
The lack of progress in Alabama's CSEPP is the result of
management weaknesses at the Federal level and inadequate
action by State and local agencies. Management weaknesses at
the Federal level are fragmented and unclear roles as well as
responsibilities, imprecise and incomplete planning guidance,
extensive involvement in the implementation of certain local
projects, lack of team work in the budget process, and
ineffective financial controls. At the State level, Alabama EMA
spent more than 2 years trying to contract for a demographic
survey. This would serve as the basis for determining the
requirements for the tone alert radios and developing critical
planning documents. Once Federal officials agree to the
county's requirements, then perhaps Calhoun County EMA may not
be so reluctant to initiate CSEPP projects.
Although some progress has been made, local communities
near the eight chemical weapons storage sites in the United
States are not fully prepared to respond to a chemical
emergency, financial management is weak, and costs are growing.
The Army considers the likelihood of a chemical release at
one of its eight storage sites to be extremely small, the
health effects of an accident can be severe. Some munitions
contain nerve agents, which can disrupt the nervous system and
lead to loss of muscular control and death. Other contain a
series of blister agents commonly, but incorrectly, referred to
as mustard agents, which blister the skin and can be lethal in
large amounts. Threats to the stockpile include external events
such as earthquakes, airplane crashes, and tornadoes and
internal events such as spontaneous leakage of chemical agent,
accidents during handling and maintenance activities, and self-
ignition of propellant.
Calhoun County has identified 12 major deficiencies in its
program: (1) no demographics survey; (2) no evacuation time
estimate study; (3) no indoor tone alert radio system; (4) no
personal protective equipment; (5) lack of reception and mass
care locations; (6) no collective protection system; (7) no
integrated communications system; (8) lack of 24-hour staffing
of emergency operations center; (9) lack of funding for local
public information awareness; (10) lack of complete siren
system; (11) lack of a complete, automated information system;
and (12) lack of complete planning guidance.
The Department of the Army is responsible for managing and
funding CSEPP. Program funds flow from the Army to FEMA
headquarters, through FEMA regional offices, and to the States.
b. Benefits.--To develop an effective approach for reaching
timely agreements on specific requirements in order to be able
to adequately respond to a chemical stockpile emergency.
37. ``Tax Administration: Alternative Filing System,'' GAO/GGD-97-6,
October 1996.
a. Summary.--The Internal Revenue Service (IRS) currently
offers taxpayers several choices for filing tax returns that
are less burdensome than preparing paper tax returns, such as
filing returns electronically, over the telephone, or through
use of personal computers. In at least 36 other countries they
have tax withholding systems as well as an alternative filing
system. The alternative filing system is not available in the
United States.
There are two types of such alternative filing systems
found in other countries: (1) The first type can be referred to
as the tax agency reconciliation system, whereas the taxing
authority prepares the return for the taxpayer; and (2) the
second type can be referred to as a final withholding filing
system, whereas the taxpayers' income tax is withheld at the
source and remitted to the tax agency by employers and other
payers who are responsible for withholding taxes that equal but
do not exceed each taxpayer's tax liability. By using a tax
agency reconciliation type system, tax law changes would not be
required, but with a final withholding type system, tax law
changes would be required.
If IRS were able to establish a voluntary tax agency
reconciliation filing system, it would consist of taxpayers who
claimed the standard deduction and had income from only wages,
interest, dividends, pensions, and unemployment compensation.
IRS would then be able to supply a simpler tax form. IRS would
then mail the returns and refunds or tax bills to taxpayers,
who would need to review their returns and notify IRS whether
they agreed with the return information. Taxpayers would have
to continue to keep records to be able to accurately review the
IRS-proposed tax return and tax assessment. It is unclear as to
what extent taxpayers would continue to rely on tax preparers
to assist them in reviewing their returns. Tax preparers would
likely lose some business under such a system.
Before a final withholding system could be instituted in
the United States, the law would have to be changed to require
employers to calculate employees' tax liability and adjust
employees' last paychecks so that total yearly withholdings
would equal employees' tax liability. The U.S. tax system does
not exempt or limit taxes on interest and dividend income, nor
does it require married couples to file separately.
IRS concluded that a tax agency reconciliation filing
system it studied was not feasible primarily because it would
be very difficult to receive, verify, and post over 900 million
wage and information documents in time to generate tax returns.
b. Benefits.--While both individual taxpayers and IRS could
benefit, there would still be significant obstacles to
overcome. Taxpayers could reduce the amount of time it takes to
prepare their tax returns. This would also save millions of
dollars that are paid to tax return preparers. The tax agency
reconciliation system would also be likely to further reduce
the volume of paper documents IRS would have to process. This
would lower IRS' returns processing and compliance costs by as
much as $37 million annually.
38. ``Tax Systems Modernization: Cyberfile Project Was Poorly Planned
and Managed,'' GAO/AIMD-96-140, August 1996.
a. Summary.--In August 1995, IRS signed a $22 million
interagency agreement with NTIS. To date, $17.1 million has
been advanced to NTIS. NTIS was to develop and operate
Cyberfile, a tax systems modernization (TSM) project that would
allow taxpayers to prepare and electronically submit their tax
returns using their personal computers. By using the public
switch telephone network or the Internet, electronic returns
would be submitted, then accepted at a new NTIS data center,
and then forwarded to designated IRS Service Center. A filing
fee would not be charged to taxpayers on their returns if using
Cyberfile.
IRS selected NTIS because it was expedient and because NTIS
promised IRS, without any objective support, that it could
develop Cyberfile in less than 6 months and have it operating
by February 1996. NTIS offered no convincing analytical support
for its claim that it could deliver Cyberfile by February 1996.
It provided no detailed task definitions, work breakdown
structures, or interim schedules.
In December 1995, GAO briefed the IRS Commissioner on the
risks associated with proceeding with Cyberfile as planned. GAO
explained that Cyberfile was not being developed using
disciplined systems development processes and that adequate
steps were not being taken to protect taxpayer data on the
Internet.
IRS and NTIS did not follow all applicable procurement laws
and regulations in developing Cyberfile. Cyberfile obligations
and costs were not accounted for properly. Specifically,
significant financial transactions were not properly documented
and obligations and costs were not recorded promptly and
accurately.
Adequate financial and program management controls were not
implemented to ensure that Cyberfile was acquired cost-
effectively. Excess costs were incurred as a result. Cyberfile
costs continued to be incurred after the project was suspended
due to the agreement between IRS and NTIS not being structured
to minimize costs.
GAO noted that Cyberfile development reflected many of the
same management and technical weaknesses that were found in TSM
systems and delineated in their July 1995 report.
IRS' Chief Inspector reviewed the Cyberfile acquisition and
in a briefing to management concluded that IRS did not follow
internal procurement procedures, failed to sufficiently oversee
the project, and was vulnerable to outside criticism. Inspector
General officials told GAO that they have serious concerns
about how NTIS and the department contracted for Cyberfile as
well as other projects.
In March 1996, IRS decided to delay Cyberfile operations
until after April 15, 1996. IRS is awaiting the completion of
its Electronic Commerce Strategic Plan before deciding on the
future course of Cyberfile. IRS has not yet established a
completion date for the plan.
39. ``Bureau of Reclamation: Information on Allocation and Repayment of
Costs of Constructing Water Projects,'' GAO/RCED-96-109, July
1996.
a. Summary.--Since 1902, the Federal Government has been
involved in financing and construction of water projects in the
western United States. These water projects were primarily to
reclaim arid and semiarid land in the West. The projects first
started out to be generally small and built almost solely in
providing irrigation. Over the years, the projects have grown
in size and purpose, providing municipal and industrial water
supply, recreation, flood control, hydroelectric power
generation, and other benefits in addition to irrigation. Most
Federal water projects are built by the Bureau and the U.S.
Army Corps of Engineers. The Bureau's activities are limited to
17 western States, while the Corps operates nationwide. The
beneficiaries of these projects are generally required to repay
to the Federal Government their allocated share of the costs of
constructing these projects. The Federal Government provides
various forms of financial assistance, whereas some of the
beneficiaries repay considerably less than their full share of
the costs. Irrigators generally receive the largest amount of
such financial assistance.
The Federal statutes that are applicable to all reclamation
water projects and the statutes authorizing individual projects
are known as reclamation law. Reclamation law determines how
the costs of constructing reclamation projects are allocated
and how the repayment responsibilities are assigned among the
projects' various beneficiaries. Under this law, the costs are
designated as either reimbursable--to be repaid by the
projects' beneficiaries--or nonreimbursable--to be borne by the
Federal Government. Municipal and industrial water supply,
irrigation, and power are allocated costs that are
reimbursable. The costs allocated to purposes such as
navigation and flood control are nonreimbursable because these
purposes are viewed as national in scope.
There are three types of financial assistance that
irrigators that participate in a Federal water project can
receive under reclamation law: (1) is federally subsidized
financing of the project's construction cost, where no interest
is charged; (2) a shifting to the project's other beneficiaries
of the repayment of part or all of the costs allocated to
irrigators but determined to be over their ability to pay; and
(3) relief of part or all of their repayment obligation through
specific legislation in special circumstances, such as drought
or depressed economic conditions. For example, the Omnibus
Adjustment Act of 1926 (44 Stat. 636) provided repayment relief
to irrigators at 21 projects.
b. Benefits.--As a result of this financial assistance,
irrigators have either paid, or are scheduled to pay, their
entire allocated share of the construction costs for only 14 of
the 133 water projects. According to Bureau officials,
irrigators are generally current in repaying their obligations,
having repaid $945 million as of September 30, 1994.
40. ``Global Warming: Difficulties Assessing Countries' Progress
Stabilizing Emissions of Greenhouse Gases,'' GAO/RCED-96-188,
September 1996.
a. Summary.--Industry, transportation, agriculture, and
other human activities are emitting increasing amounts of
carbon dioxide and other heat-trapping greenhouse gases into
the earth's atmosphere. The IPCC (International Panel on
Climate Change) is the group established to assess the
scientific and technical information on climate change. Climate
changes could have such important consequences as changes in
weather patterns, including shifts in precipitation patterns
that could lead to droughts, flooding; changes in crop yields;
and changes in ecosystems.
Annex I of the United Nations Framework Convention on
Climate Change have several countries: the United States, other
developed countries, the former Soviet Union, and other Eastern
European States. They have agreed to aim to return their
emissions of greenhouse gases to 1990 levels by 2000. Carbon
dioxide is the greenhouse gas considered to be the largest
single contributor to human-induced climate change.
GAO found that factors such as economic growth, population
growth, fuel prices, and energy efficiency affect trends in
energy use, thereby influencing trends in greenhouse gas
emissions. This will probably prevent the United States and
Canada from reaching the Convention's goal.
The Annex I countries' progress in meeting the Convention's
goal to reduce greenhouse gas emissions cannot be fully
assessed because the emissions data are incomplete, unreliable,
and inconsistent.
As of June 1996, 159 countries had ratified the Convention.
The Convention's ultimate objective is to stabilize the
concentrations of human-induced greenhouse gasses in the
atmosphere at a level that would prevent dangerous interference
with the climate system.
41. ``Nuclear Waste: Uncertainties About Opening Waste Isolation Pilot
Plant,'' GAO/RCED-96-146, July 1996.
a. Summary.--The Department of Energy (DOE) plans to begin,
in April 1998, a $19 billion program to permanently dispose of
about 176,000 cubic meters of transuranic waste primarily
generated and currently stored at six facilities. Transuranic
waste consists of equipment, tools, scrap materials, and other
trash that is contaminated with radioactive elements, such as
plutonium, having atomic numbers higher than uranium. This type
of waste is called contact-handled waste because it can be
handled with limited precautions to protect workers from
radiation. The remaining volume of waste is called remote-
handled waste because it emits higher levels of penetrating
radiation that requires special shielding, handling and
disposal procedures. This waste is to be permanently stored in
the Waste Isolation Pilot Plant (WIPP), a planned geologic
repository near Carlsbad, NM. The Department of Energy must
first obtain from the Environmental Protection Agency (EPA) a
certificate of compliance with its disposal regulations for
radioactive waste and meet the requirements of the Resource
Conservation and Recovery Act of 1976, as amended (RCRA), for
handling and disposing of hazardous waste.
GAO was requested to assess the prospects for opening WIPP
in 1998 and determine how well the Department of Energy is
positioned to begin filling the repository in its first few
years of operation as well as over the longer term.
The prospects for opening WIPP by April 1998 are uncertain
for two reasons. First, a wide disparity exists between DOE's
mid-1995 draft application for a certificate of compliance and
EPA's criteria for reviewing a compliance application. The
application lacked details on the repository site, on the
inventory of anticipated waste, and on future human activities
that could compromise the capability of the repository to
contain the waste; also, the application did not address many
of EPA's compliance criteria. Second, as of May 1996, DOE was
still working to complete all of the scientific and technical
activities that are essential to the preparation of a complete
compliance application.
To open WIPP on schedule, the Department of Energy needs to
submit the application in October 1996; receive a certificate
of compliance from EPA in October 1997; and, also by October
1997, obtain favorable RCRA-related decisions from EPA and the
State of New Mexico.
The Department of Energy is optimistic that it will obtain
all of the required regulatory approvals as planned because, it
says, all remaining work is known, planned, and on schedule.
42. ``Resource Conservation and Recovery Act: Inspections of Facilities
Treating and Using Hazardous Waste Fuels Show Some
Noncompliance,'' GAO/RCED-96-211, August 1996.
a. Summary.--Fuel blending facilities process many types of
hazardous waste--such as paints, solvents, and used oil--into
fuels that can be burned in cement kilns, which are regulated
as a type of industrial furnace. The facilities that blend
hazardous waste into fuels and the cement production facilities
that burn these fuels are both governed by regulations
established under the Resource Conservation and Recovery Act of
1976 (RCRA), which is administered by the Environmental
Protection Agency (EPA) and certain States.
Concerns were expressed from the Senate and the House about
whether the facilities that blend hazardous waste fuels and the
cement production facilities that burn these fuels are
operating in a manner that protects human health and the
environment.
GAO provided information on the results of recent
inspections of the facilities in five States. Compliance with
RCRA's (1) treatment, storage, and disposal regulations for the
processing of hazardous waste fuels by fuel blenders and (2)
boiler and industrial furnace regulations for the burning of
these fuels by cement producers. Both of these sets of
regulations must ensure the protection of human health and the
environment.
The most recent Resource Conservation and Recovery Act
inspections of fuel blending facilities identified many minor
but few serious violations of waste treatment, storage, and
disposal regulations. Some of the minor violations found were
inadequately labeling hazardous waste storage containers and
having an inaccurate emergency coordination list. Significant
violations found were having storage containers in poor
condition and storing waste in excess of approved capacity.
State officials are working with these fuel blenders to ensure
that the violations are corrected.
National Security, International Affairs, and Criminal Justice
Subcommittee
1. ``Export Controls: Some Controls Over Missile Related Technology to
China Are Weak,'' April 1995, GAO/NSIAD-95-82.
a. Summary.--This report presents information regarding the
Missile Technology Control Regime (MTCR) and United States
missile technology related exports to the People's Republic of
China. For fiscal years 1990 though 1993, the Commerce and
State Departments approved a total of 67 export licenses worth
about $530 million for missile-related technology commodities
for China. While United States Government officials believe
that the United States generally performs adequate monitoring
of China's compliance with the terms of its MTCR commitments,
this review indicates that because the Commerce Department's
pre-license check/post-shipment verification program is
inadequate, and hampered by Chinese government reluctance to
cooperate, the United States end-use check program to monitor
license conditions has only marginal effectiveness for exports
to China.
b. Benefits.--Given the weaknesses in monitoring
commodities after their export to China, GAO believes it is all
the more important that dual-use license applications be
scrutinized in accordance with clear procedures before their
approval. The effectiveness of United States sanctions on China
is unknown, due in part to the fact that United States
Government officials share no consensus on a definition of, or
criteria for, measuring the effectiveness of proliferation
sanctions imposed on China.
2. ``Export Controls: Concerns Over Stealth-Related Exports,'' May
1995, GAO/NSIAD-95-140.
a. Summary.--This report is a review examining export
controls over low-observable, radar signature reduction
technology, or ``stealth'' technology. Materials used for
stealth have civil and military applications and are controlled
on the Commerce Control List (CCL) and the U.S. Munitions List
(USML). However, the unclear lines of jurisdiction over
stealth-related items may lead to the inappropriate export of
militarily sensitive stealth materials and technology.
Exporters may unknowingly seek and obtain export licenses from
Commerce for militarily sensitive items controlled on the USML.
The less restrictive export controls under the Export
Administration Act (EAA) provide an incentive for exporters to
go to Commerce rather than State. Moreover, Commerce has
limited authority to prevent such exports. Licenses to export
stealth-related commodities and technology controlled on the
CCL can only be denied under limited circumstances and when the
exports are going to certain destinations.
b. Benefits.--Under current referral practices, the
majority of applications for the export categories related to
stealth are not sent to DOD or State for review. Without such
referrals, DOD, State, and Commerce cannot ensure that export
licenses for militarily significant stealth technology are
properly reviewed and controlled.
3. ``Weapons of Mass Destruction: Reducing the Threat From the Former
Soviet Union: An Update,'' June 1995, GAO/NSIAD-95-165.
a. Summary.--Congress has had an ongoing interest in the
effectiveness to reduce the threat posed by weapons of mass
destruction in the former Soviet Union (FSU). In 1991, Congress
authorized the Department of Defense (DOD) to help FSU States
destroy weapons of mass destruction, store and transport those
weapons in connection with their destruction, and reduce the
risk of proliferation. This report assesses the Cooperative
Threat Reduction (CTR) program's planning and funding status,
and recent progress in addressing CTR objectives in the FSU. In
some areas, the CTR program has made progress over the past
year and its long-term prognosis for achieving its objectives
may be promising. The program has played an important role in
facilitating Ukraine's weapons dismantlement effort and the
executive branch believes that the promise of CTR aid has been
a significant factor in the political decisions of the
recipient states to begin dismantling weapons of mass
destruction. Nevertheless, the overall specific material impact
of CTR assistance provided to date has been limited and the
program must overcome numerous challenges and problems to
realize its long term objectives. The program's long-term
prospect may be more promising, but problems and challenges
remain.
b. Benefits.--Congress may wish to consider reducing the
CTR program's fiscal year 1996 request for $104 million for
support to Russian chemical weapons destruction efforts by
about $34 million because of uncertainties regarding the
expenditure. Congress may also wish to consider withholding
approval to obligate any remaining funds designated for the
design or construction of elements of a chemical weapons
destruction facility until the United States and Russia have
agreed on the results of the joint evaluation study concerning
applicability of a destruction technology.
4. ``B-2 Bomber: Status of Cost, Development, and Production,'' August
1995, GAO/NSIAD-95-164.
a. Summary.--The conference report on the National Defense
Authorization Act for fiscal year 1994 called for the GAO to
report to the congressional defense committees at regular
intervals on the total acquisition costs of the B-2 Bomber
program throughout he completion of the production program.
This report discusses the Air Force's progress in acquiring 20
operational B-2 aircraft within cost limitations set by the
Congress and the extent of the progress achieved in flight
testing, production, and modification efforts. It finds that
although ground and flight tests have demonstrated the
structural integrity, flying qualities, and aerodynamic
performance of the B-2's flying wing design, GAO's review of
the program's progress indicates that there are many important
events yet to be completed, and many risks can impact the
ultimate cost and completion of the 20 operational B-2
aircraft. For example, the flight test program is only about
half complete, and modification efforts required to deliver 20
operational B-2's did not begin until July 1995.
b. Benefits.--After 14 years of development and evolving
mission requirements, including 6 years of fight testing, the
Air Force has yet to demonstrate that the B-2 design will meet
some of its most important mission requirements. As of May 31,
1995, the B-2 had completed about 44 percent of the flight test
hours planned for meeting test objectives. Test progress has
been slower than planned. The test program is planned for
completion in July 1997, but GAO's analysis of the tests to be
completed and the time that may be needed to complete them
indicates that completion by July 1997 is optimistic. The
flight test program depends on timely delivery of effective
integration software to bring together the functions of the
various B-2 subsystems so that the aircraft and crew can
perform the planned military functions. In the past, B-2
integration software was delivered late, without all the
planned capabilities, and with deficiencies that significantly
affected the Air Force's ability to complete flight testing on
schedule. In addition, the change in emphasis on the B-2
mission from nuclear to conventional increased the need to
integrate precision conventional weapons into the B-2 aircraft,
while after 9 years of producing and assembling aircraft,
Northrop Grumman, the prime contractor, continues to experience
difficulties in delivering B-2's that can meet Air Force
operational requirements. For the most part, aircraft have been
delivered late and with significant deviations and waivers. All
corrections are scheduled to be incorporated into B-2 aircraft
during planned modification programs scheduled for completion
on July 2000.
5. ``Foreign Assistance: Assessment of Selected USAID Projects in
Russia,'' August 1995, GAO/NSIAD-95-156.
a. Summary.--This report responds to the Committee on
International Relations' request that we evaluate assistance
projects in Russia managed by the United States Agency for
International Development (USAID). Specifically, the GAO
investigated whether individual USAID projects were meeting
their objectives and contributing to systemic reforms, whether
the projects had uncommon characteristics that contributed to
their successful or unsuccessful outcomes, and whether USAID
was adequately managing its projects in Russia. In conducting
it's study, GAO reviewed 10 judge mentally selected projects
with obligations of $64.6 million as case studies and used
audits and evaluations performed by the USAID Inspector
General.
b. Benefits.--Projects have had mixed results in meeting
their objectives. While some of the USAID projects the GAO
reviewed fully met most or all of their objectives, were
contributing to systemic reform, and were sustainable, others
did not have all or some of these attributes of success. USAID
did not adequately manage some projects it funded. The
devolution of management and monitoring responsibility from
USAID's Washington office to its Moscow office delayed
decisionmaking and created confusion among contractors. USAID's
management information systems were inadequate, and it did not
adequately monitor or coordinate some projects. USAID has taken
steps to overcome these problems, including terminating some
unsuccessful projects, refining its assistance strategy, and
undertaking efforts to improve project monitoring and
evaluation. In commenting on this report, USAID said that the
difficult operating environment in which it worked during the
first 2 years of the program in Russia cannot be overstated.
GAO agrees that USAID faced numerous operating obstacles in
getting this program underway, and these observations on how
well the projects performed should be seen in that context.
6. ``Peacekeeping: Assessment of U.S. Participation in the
Multinational Force and Observers,'' August 1995, GAO/NSIAD-95-
113.
a. Summary.--This report responds to the Committee on
International Relations' request that the GAO review U.S.
participation in the Multinational Force and Observers (MFO).
The recent signing of peace accords between Israel and the
Palestinian Liberation Organization, Israel and Jordan, and the
possibility of similar agreements between Israel and Syria and
Lebanon have heightened interest in the MFO, which has
monitored the current treaty of peace between Egypt and Israel
since 1982. The MFO operational responsibilities include
manning observation posts in the Sinai, conducting both ground
and air surveillance, and conducting naval patrols in the
Strait of Tiran to monitor implementation of the security
arrangements established in the treaty. This report provides
information on U.S. contributions to and the total cost of the
MFO, including measures taken to reduce costs; the level of
U.S. participation and its operational impacts; State
Department oversight of U.S. participation; and State
Department and other relevant parties' views of MFO performance
and lessons learned.
Despite the MFO operational success and its ability to
reduce certain costs, GAO finds that greater State oversight
over U.S. participation may be needed because of the MFO
operating environment and the absence of assurance regarding
the adequacy of internal controls. Unlike other international
organizations, the MFO does not have a formal board of
directors or an independent audit committee to oversee its
operations. Moreover, GAO observed that some MFO policies have
been changed to accommodate the personal needs of MFO officials
and that financial transactions involving the MFO and an MFO
retail store it established may not have received the necessary
review. State was not aware of the specifics surrounding these
matters, both of which had an impact on the cost of MFO
operations and amount of the U.S. contribution. State can also
improve the quality of its reporting to Congress, as some
annual reports to Congress have not contained full or accurate
information on the cost of U.S. participation.
b. Benefits.--GAO recommends that the Secretary of State
ensure adequate oversight of the MFO by examining the annual
MFO-style published financial statements for items that may
impact U.S. contributions, requesting the MFO have its external
auditor include an evaluation of the MFO management and
internal accounting controls beyond what is required to
complete the annual financial statement audit and provide a
copy of the resulting report to State. GAO also recommends that
the Secretary of State include the U.S. annual assessment cost
contribution of one-third of the MFO operating costs in its
annual report to Congress on MFO. GAO believes that the review
of external auditor's report, published financial reports, and
annual budget submissions does not provide adequate oversight
of U.S. contributions to the MFO.
7. ``Unmanned Aerial Vehicles: Maneuver System Schedule Includes
Unnecessary Risk,'' September 1995, GAO/NSIAD-95-161.
a. Summary.--This report consists of a review of the Joint
Tactical Unmanned Aerial Vehicle (UAV) program, including the
Hunter UAV system, a variant of the Hunter referred to as the
Maneuver system, and another Hunter variant for shipboard use;
and brings to attention certain aspects of the program status
and the Joint Tactical UAV project for the Maneuver system that
GAO believes will unnecessarily increase the Department of
Defense's (DOD) risk on the program.
Past UAV acquisition programs have been marked by premature
entry into production that resulted in extensive and costly
system redesigns in attempting to achieve acceptable system
performance. Nevertheless, the Joint Tactical UAV Project
Office plans to begin production of the Maneuver system without
adequate assurance that it can meet operational performance
requirements. As a result, DOD will again risk becoming
committed to acquiring an unsatisfactory system.
b. Benefits.--GAO recommends that the Secretary of Defense
change the Maneuver system's acquisition strategy to require
that sufficient operational testing be conducted before the
start of low-rate production. The purpose of this change is to
demonstrate that without any major or costly design changes,
the system can achieve its primary mission and meet
requirements for performance and suitability.
8. ``Ballistic Missile Defense: Current Status of Strategic Target
System,'' March 1995, GAO/NSIAD-95-78.
a. Summary.--This report concerns the status of the
Strategic Target System (STARS) program, the program's current
and future costs and its plans for the future. STARS began in
1985 as a result of concerns that the supply of Minuteman I
boosters, which were used to launch targets on intercontinental
ballistic missile flight trajectories, would be depleted by the
year 1988. As a result, both STARS I and STARS II were
developed as alternate launch vehicles. The first STARS I
flight was successfully launched in February 1993 and in August
1993 a STARS I reentry vehicle experiment was also successfully
launched. STARS I can deploy single or multiple payloads, but
it cannot simulate the operation of the post-boost vehicle
(PBV), which is necessary to carry multiple warheads and
independently target each warhead on a specific target. As a
result, the Ballistic Missile Defense Organization (BMDO)
created an Operations and Deployment Experiments Simulator
(ODES), which functions as a (PBV). With the addition of ODES
to STARS I, the configuration is named STARS II. STARS II was
successfully launched in July 1994.
b. Benefits.--In 1993 the Secretary of Defense compiled a
detailed ``Bottom-Up Review'' of the Nation's defense strategy.
As a result the future of the STARS program is in limbo as to
whether it will be continued, placed in a dormant status, or
terminated. The Secretary of Defense was uncertain if STARS was
necessary due to the dramatic changes in the world resulting
from the end of the cold war and the dissolution of the Soviet
Union.
STARS officials cite many reasons for continuing the
program. The Strategic Arms Reduction Treaty I (START) limits
other strategic ballistic missiles' use of telemetry
encryption, but STARS is exempt from this restriction. STARS
will also be exempt from the STARS II Treaty upon its
ratification, which means that it will be the only land-based
multiple warhead booster that the United States can use as a
target or for research and development. Other benefits of STARS
is that it is the only U.S. target missile system that operates
in the 1,500 to 3,500 km range and it can deliver a variety of
experiments and scientific payloads at various speeds and
trajectories. The final decision on the future of the STARS
program most likely will not be made for up to 6-9 months.
9. Military Training: ``Potential To Use Lessons Learned To Avoid Past
Mistakes Is Largely Untapped,'' August 1995, GAO/NSIAD-95-152.
a. Summary.--This report focuses on whether the military
and the Joint Staff have learned from past problems and
experiences and used that learned information to avoid
repeating past mistakes. Specifically, the report investigates
the military and Joint Staff's effectiveness in collecting all
significant lessons, identifying recurring weaknesses, and
implementing corrective actions. Training methods are examined
at the various combat training centers, in addition to,
examination of operations such as the Persian Gulf War and
Operation Restore Hope in Somalia.
b. Benefits.--The results of these examinations is not a
favorable one for the military and Joint Staff. The findings
conclude that despite the implementation of lessons learned
programs, mistakes are often repeated. These negative findings
are not to be taken lightly for the problems found could result
in serious consequences. Some of the specific problems are that
the Marine Corps, Air Force, and the Navy do not include all
significant information from training exercises and operations
in their lessons learned programs. Thus, important information
is missed that could be useful to others. The Joint Staff and
all the services, except the army, do not routinely analyze
lessons learned information to identify trends or potential
problems. The Air Force does not ensure that lessons learned
information receives the widest possible distribution. The lack
of training on how to access the data bases is the primary
reason for the limited distribution of information. Finally,
the Air Force, Navy, and the Marine Corps do not use lessons
learned information to its full potential. These parts of the
military are insufficient in following-up to ensure that
problems have been properly corrected.
10. ``National Security: Impact of China's Military Modernization in
the Pacific Region,'' June 1995, GAO/NSIAD-95-84.
a. Summary.--This purpose of this report is to review and
examine China's recent military modernization. The report
assesses the nature and purpose of China's improvement in their
military, while comparing China's military to other Asian
nations. China, with the end of the cold war, is now viewed as
aspiring to take over role of the leading regional power.
China's military is the world's largest military force,
although its weaponry is far outdated and its troops are not
trained in modern warfare. Since 1989, China has devoted more
of its resources toward the national goal of military
modernization. More specifically, China is attempting to
upgrade its air and naval power, while realigning its force
structure. Throughout this modernization China has maintained a
lack of openness concerning its military which leads to
suspicion and questions about its intentions.
b. Benefits.--China had initiated its military
modernization by acquiring new weapon systems, restructuring
its forces, and improving its training. China has also reduced
its forces, increased its defense budget, and changed its
military doctrine in the hope of improving its military. These
actions seemed to be fueled by a number of reasons. These
include the desire to be the leading regional power in Asia,
lessons learned about modern warfare from the Gulf War, the
need to protect its economic interests, and a need to maintain
internal stability. The improvement in China's military has
neighboring countries concerned about China challenging them in
contested areas.
11. ``Drug Courts: Information on a New Approach To Address Drug-
Related Crime,'' May 1995, GAO/NSIAD-95-159BR.
a. Summary.--This briefing report examines the usefulness
and effectiveness of the recently developed drug courts. These
courts are the result of Title V of the Violent Crime Control
and Law Enforcement Act of 1994, which authorizes the award of
Federal grants for drug courts. These courts became necessary
when State and local courts were inundated with drug cases
during the late 1980's. The drug courts are designed to monitor
the treatment and behavior of drug-using defendants. The
objective of the drug courts is to use the authority of the
court to reduce crime by changing defendants' drug-using
behavior. Incentives such as the possibility of dismissed
charges or reduced sentences are used to divert defendants to
drug courts. The judges who preside over these courts monitor
the progress of defendants through frequent status hearings,
and prescribe sanctions and rewards as appropriate. The drug
courts represent a new movement in dealing with drug-related
crime and drug-using defendants.
b. Benefits.--The conclusions resulting from the study are
mixed. There are some visible benefits to the drug court
program, but there are also limitations in its design and
methodology. The relative newness of drug courts limits the
ability to make firm conclusions on effectiveness and impact.
The program, as of March 1995, has expanded to 37 drug courts
operating nationwide. These courts have accepted over 20,000
defendants, with a third of them completing their programs.
Among the defendants, there are none currently charged with a
violent offense and most do not have prior violent convictions.
The results from the evaluations were contrasting surrounding
the amount of recidivism among the program's participants.
Thus, it's difficult to determine how many defendants the drug
courts benefited. The Department of Justice expects to assess
the impact and effectiveness of the drug courts in about 2
years to clarify the program's effectiveness. For the fiscal
year 1995, $29 million was appropriated for the drug courts.
However, Congress has proposed cutting this budget and the
House has passed legislation repealing the drug court grant
program authorized in the 1994 Crime Act.
12. ``Tactical Aircraft: Concurrency in Development and Production of
F-22 Aircraft Should Be Reduced,'' April 1995, GAO/NSIAD-95-59.
a. Summary.--This report examines the concurrency, which is
defined as the overlap between development and production of a
system, of the Air Force's F-22 fighter program. This
assessment looks at whether the fighter program was introduced
in a timely manner or fulfilled an urgent need, avoided
technological obsolescence, and maintained an efficient
industrial development/production work force. Initial
operational tests, which are field tests intended to
demonstrate a system's effectiveness and suitability for
military use, were the major way used to determine the
program's concurrency.
b. Benefits.--After tests and evaluations were concluded,
the F-22 Fighter program exhibited a high degree of
concurrency. This concurrency will allow the production of a
significant number of F-22s before many of the technological
advances are flight tested and before the completion of initial
operational testing and evaluation (IOT&E). Although there is a
certain amount of risk in the F-22's production because the
program embodies many of these important technological advances
that are critical to its operational success. The Air Force
plans to procure 80 F-22s under low-rate initial production
(LRIP), at a cost of about $12.4 billion, before completing
(IOT&E). The program's production rates are projected to
accelerate to 75 percent of the full-production rate under the
LRIP phase of the program.
13. ``Financial Management: Control Weaknesses Increase Risk of
Improper Navy Civilian Payroll Payments,'' May 1995, GAO/AIMD-
95-73.
a. Summary.--GAO's tests of 225,000 Navy payroll and
personnel records for one pay period found overpayments to 134
Navy civilians, which represented less than one-tenth of 1
percent of the accounts tested. Although GAO tallied $62,500 in
overpayments to these persons, the total amount overpaid is
likely to be far greater because some of these erroneous
payments continued for nearly 1 year. The causes of these
overpayments included the following: (1) The Defense Finance
and Accounting Service did not check to see whether civilian
employees were paid from multiple data bases for the same time
period and (2) reconciliations between civilian payroll and
personnel systems were infrequent and did not provide for
systematic follow-ups to investigate and correct discrepancies.
Navy payroll operations are susceptible to additional improper
payments because (1) a large number of payroll personnel are
granted virtually unrestricted access to both pay and personnel
data; (2) ineffective audit trails do not always identify who
made data changes; and (3) inactive payroll accounts are
maintained on the active payroll data base.
b. Benefits.--GAO examination of the Navy's payroll records
show that many of the overpayments were discovered by the
Defense Finance and Accounting Service (DFAS) within 6 months
of their occurrence. The (DFAS) then processed retroactive
transactions to change the pay records and to initiate the
resolution process. These adjustments were made on 45 out of
the 134 overpaid Navy civilians that GAO identified. GAO
provided Navy personnel officials with a comprehensive list of
all the remaining overpayments and requested that these
officials recover the cited amounts.
14. ``DOD Household Goods: Increased Carrier Liability for Loss and
Damage Warranted,'' May 1995, GAO/NSIAD-95-48.
a. Summary.--The Department of Defense (DOD) spends more
than $700 million each year to move the household goods of
military service members and DOD civilian employees. DOD shares
liability with carriers for loss and damage to these shipments.
During mid-1987, DOD increased carrier liability for domestic
household goods shipments, a change that the carrier industry
opposed. In March 1993, DOD proposed that carrier liability be
similarly increased for international household goods
shipments, a change that carriers objected to as well. This
report evaluates DOD household goods shipment programs to
determine (1) the impact of the 1987 increase in carrier
liability on domestic shipments and (2) the level and the type
of carrier liability that DOD should adopt for international
shipments.
b. Benefits.--Since DOD has increased carrier liability on
domestic household goods shipments the household goods claims
costs have declined and carrier performance has improved. Claim
costs have declined an estimated $18.9 million during the
fiscal years 1987-1991. However, the carrier liability for DOD
international household goods of $0.60 per pound per article
severely restricts DOD's ability to recover the cost of loss
and damage inflicted during shipment, it also increases
government costs, and limits carrier incentive to improve
performance. Thus, the carrier liability needs to be increased.
The GAO report concurs with DOD's proposal to change carrier
liability on international shipments from a per pound, per
article basis to one based on shipment valuation. Although, GAO
recommends that with this change, carriers should receive
compensatory payments in exchange for the increased liability.
Finally, the household goods program also has some management
and administrative problems that need to be addressed with any
increase in carrier liability.
15. ``Military Exports: A Comparison of Government Support in the
United States and Three Major Competitors,'' May 1995, GAO/
NSIAD-95-86.
a. Summary.--Declining U.S. defense spending has placed
defense-related jobs and some domestic industrial capabilities
at risk. U.S. defense companies are using various strategies to
adjust to the decline. One strategy is to boost defense export
sales. Export proponents point out that such sales maintain
industrial base capabilities and lower the cost of weapons to
the U.S. Government. They also argue that more government
support for exports is needed to level the playing field
against foreign competitors. Opponents of such support argue
that it could delay restructuring of the defense industry and
increase global weapons proliferation. This report reviews (1)
conditions in the international defense export market and (2)
the tools used by France, Germany, the United Kingdom, and the
United States to enhance the competitiveness of their defense
exports. GAO compares the U.S. position in the global defense
market with those of its major competitors and analyzes the
factors that can contribute to a sale.
b. Benefits.--The United States has moved forward to become
the world's leading defense exporter, increasing its market
share to 49 percent by 1993. This is a result of the United
States recognizing the positive impact that defense exports can
have on the defense industrial base. The United States is
projected to remain strong in the world market, but further
growth will be limited. This is due to many factors including
U.S. national security and export control policies to reduce
dangerous or destabilizing arms transfers to certain countries
and certain major foreign country buyers' practices of
diversifying weapons purchases among multiple suppliers. This
government involvement in the defense industry's sales will, in
turn, affect the position of defense manufacturers in overseas
markets. As global defense markets decrease, government support
will become more significant, and companies will fight to
maintain their market share. Other nations such as France,
Germany, and the United Kingdom provide similar types of
support. These include (1) government backed or provided export
financing; (2) advocacy on behalf of defense companies by high-
level government officials; and (3) organizational entities
that promote defense exports. The nations differ in that
central organizations support defense exports in France and the
United Kingdom, while in the United States several government
agencies share in supporting defense exports. They also differ
because United States financing is provided through the Foreign
Military Financing (FMF) in the form of grants and loans, while
the three European countries provided government-backed
guarantees for commercial bank loans.
16. ``Comanche Helicopter: Testing Needs To Be Completed Prior to
Production Decisions,'' May 1995, GAO/NSIAD-95-112.
a. Summary.--Under the restructured program to produce the
Comanche helicopter, production decisions will be made before
operational testing of the Comanche starts, thereby continuing
the risky practice of concurrent development and production.
Because of the Comanche's high costs and technical risks, GAO
believes that the Army should undertake operational testing
before making decisions on long-lead and low-rate initial
production. The Comanche will be a much more expensive
helicopter than the one originally justified to Congress. The
Comanche's acquisition unit cost has almost tripled in 10
years--from $12.1 million in 1985 to $34.4 million in 1995. The
cost and program schedule will again be affected because of the
program restructuring. After a decade of developing the
Comanche, the Army continues to experience technical
difficulties, including software problems, and key aircraft
maintainability requirements for the Comanche may not be
achievable--calling into question the Comanche's ability to
meet its wartime availability requirements and its objective of
lower operating and support cost. On the positive side, the
program is meeting its goals of reducing maintenance levels and
keeping within acceptable limits of overall weight growth for
the Comanche.
b. Benefits.--The Army's restructuring of the Comanche
program continues risks associated with making production
decisions before knowing whether the aircraft will be able to
perform as required and of higher program costs. Although there
are high risks involved with making production decisions before
operational testing, the time provided by extending the
development phase and the acquisition of the six additional
aircraft under the restructured program provides the Army with
the opportunity to conduct operational testing before
committing funds to any production decisions. Additionally, the
risks associated with concurrency can be limited by reducing
production aircraft to the minimum necessary to perform initial
operational testing. GAO predicts that the restructuring of the
program provides additional time which will provide the chance
to resolve the technical risks before the decision to enter
production is made. Long-lead production decisions are
scheduled for November 2003, and low-rate initial production is
planned to start in November 2004, about 9 months before
operational testing begins. Finally, GAO recommends that the
Secretary of Defense require the Army to complete operational
testing to validate the Comanche's operational effectiveness
and suitability before committing any funds to acquire long-
lead production items or enter low-rate initial production.
17. ``Defense Downsizing: Selected Contractors Business Unit
Reactions,'' May 1995, GAO/NSIAD-95-114.
a. Summary.--This report examines how the recent decline in
defense spending has affected individual business units of
major defense contractors. GAO selected business units from 6
of the top 10 defense contractors in 1993--General Dynamics,
General Motors, Lockheed, Martin Marietta, McDonnell Douglas,
and United Technologies. These units were engaged primarily in
defense work, an important part of their corporations' total
government sales. GAO compares defense expenditures over
several years and changes in business units' (1) sales and
employment levels and (2) spending on independent research and
development, bid and proposal preparation, capital
improvements, and facilities.
b. Benefits.--Measured from their peak years, GAO
determined that the six business units have experienced sales
decreases ranging from 21 percent to 54 percent through 1993
and estimated declines ranging from 50 percent to 73 percent
through the latest year projected. While employment reductions
ranged from 30 percent to 76 percent through 1993 and planned
reductions ranging from 44 percent to 79 percent through the
latest year are projected. As a result these business units
have significantly reduced their spending with reductions
ranging from 31 percent to 71 percent through 1993 and
projected reductions ranging from 41 percent to 84 percent
expected through the latest year. Additionally, the six units
have reduced expenditures for capital improvements by an
average of 80 percent through 1993 and, through the latest year
projected, estimate an average reduction of 76 percent in these
expenditures. Defense contractors view the current decline as
permanent and have developed a variety of strategies to deal
with reduced defense spending.
18. ``Overhead Costs: Defense Industry Initiatives To Control Overhead
Rates,'' May 1995, GAO/NSIAD-95-115.
a. Summary.--Senior Pentagon officials have expressed
concern that contractor overhead rates may drive up procurement
costs as a result of declines in Defense Department spending.
Declining defense spending since the late 1980's has reduced
sales by defense contractors and has reduced the business bases
against which they charge overhead. This report reviews (1)
initiatives taken by six individual business units of large
defense contractors--General Dynamics, General Motors,
Lockheed, Martin Marietta, McDonnell Douglas, and United
Technologies--to reduce overhead costs and (2) the issue of
whether the units' actions would avoid increases in overhead
rates.
b. Benefits.--In response to their declining business
bases, the six business units examined have taken action to
reduce their overhead costs. These measures include reducing
the number of indirect employees, cutting employee health
benefits, consolidating facilities, and reducing independent
research and development and bid and proposal expenditures.
These measures have been successful, shown by a reduction in
overhead costs by an average of 35 percent between their peak
years and 1993 and an anticipated total reduction of about 53
percent between their peak years and the latest projected
years. However, overhead costs at four of the six business
units were not declining as rapidly as their sales, and as a
result these units were forecasting increases in their overhead
rates. Unless these businesses can further reduce costs or
increase their sales, their overhead rates will continue to
rise, which could result in increased procurement costs.
19. ``Peace Operations: Estimated Fiscal Year 1995 Costs to the United
States,'' May 1995, GAO/NSIAD-95-138BR.
a. Summary.--Several United States agencies have
participated in peace operations during fiscal year 1995, such
as those in Haiti, Bosnia, and Southwest Asia. The Defense
(DOD) and State Departments are the two lead agencies involved
in U.S. peace operations. The U.S. Agency for International
Development is the lead agency that provides humanitarian
assistance and coordinates U.S. donations of food with the
Agriculture Department. This briefing report provides
information on (1) potential fiscal year 1995 costs of peace
operations; (2) the potential United States share of United
Nation assessments for peace operations; and (3) the manner in
which the annual defense budget enables DOD to participate in
peace operations.
b. Benefits.--The Federal agencies' and departments'
participation in peace operations is estimated to have cost
$3.7 billion during the fiscal year 1995; $672 million of this
estimated cost has not been funded. About $1.8 billion, or 49
percent, of the estimated cost is DOD's estimated incremental
costs, costs which would not have been incurred except for the
operations, for its involvement in peace operations. These
incremental costs include (1) special payments, including
imminent danger pay, family separation allowance, and foreign
duty pay for troops deployed to certain peace operations; (2)
operation and maintenance expenses in support of deployed
forces; (3) procurement of items such as forklifts and fire
support vehicles; and (4) limited military construction at
Guantanamo Bay, Cuba. The estimated U.S. share of special U.N.
peacekeeping assessments ($992.1 million) is also included in
this figure. The remaining cost of $1.9 billion will be paid by
several non-defense agencies and departments. These estimated
costs could increase if the need for new operations arises or
current operations are expanded.
20. ``Cassini Mission: Estimated Launch Costs for NASA's Mission to
Saturn,'' May 1995, GAO/NSIAD-95-141BR.
a. Summary.--In April 1994, NASA estimated that it would
cost about $475 million for a Titan IV-Centaur launch of its
Cassini spacecraft. NASA plans to launch its Cassini spacecraft
to Saturn in October 1997. Following a voyage of more than 6
years, the spacecraft will orbit Saturn for 4 years, observing
the planet's atmosphere, rings, and moons. In response to
congressional concerns about cost, this briefing report
provides information on the current estimated cost for the
Cassini launch and determines the extent of cost-saving
opportunities.
b. Benefits.--NASA's most recent estimate for the Titan IV-
Centaur launch of its Cassini spacecraft is about $452 million,
which is $23 million less than its previous estimate in April
1994. This decrease was the direct result of NASA reducing its
earlier estimate of mission integration costs. The $452 million
estimate includes $253 million to the Air Force for a Titan IV-
Centaur launch vehicle and launch services, mission
integration, prior-year studies, support by two NASA field
centers, NASA funding for potential future cost increase, and
miscellaneous costs. Other than the reduction in the mission
integration costs, cost savings in other areas of the Cassini
launch are unlikely, and some of NASA's cost could increase.
Additionally, the Air Force is not required to refund NASA
payments in excess of cost. Consequently, the Air Force is not
required to refund to NASA fees that the Air Force does not pay
to the Titan IV contractor. Among these fees are a $9 million
incentive fee and $2 million in award fees. Finally, NASA's
mission integration does not fully comply with the revised
policy for cost-plus-award-fee contracts, which was implemented
to encourage contractors to deliver quality products at
reasonable costs.
21. ``Peace Operations: Update on the Situation in the Former
Yugoslavia,'' May 1995, GAO/NSIAD-95-148BR.
a. Summary.--This briefing report provides an update on the
situation in the former Yugoslavia. GAO assesses (1) progress
in resolving the conflict in Croatia and Bosnia-Herzegovina and
(2) the effectiveness of the United Nations in carrying out
Security Council mandates in these countries.
b. Benefits.--Little progress has been made toward the
resolution of the major issues of conflict in Croatia and
Bosnia. In Croatia, there are still fundamental differences
between the Croatian Serbs, who demand an independent state
within Croatia, and the Croatian government, which demands
control of its occupied territory. The Croatian Serbs still
maintains an army with heavy weapons and fighter planes, while
they continue to face the Croatian government along
confrontation lines. In Bosnia, the Bosnian Serbs control 70
percent of the territory and no territory has been returned to
the Bosnian government, as proposed in the international peace
plan. As of May 1995 fighting continues and since the beginning
of the conflict many thousands of Bosnians have been killed,
widespread human rights violations have been committed, and the
guilty parties have not answered for their crimes.
The United Nations Protection Force (UNPROFOR) has been
ineffective in carrying out mandates leading to lasting peace
in the former Yugoslavia. In Croatia, UNPROFOR was unable to
demilitarize the territory controlled by the Croatian Serbs,
return displaced persons to their homes, or prevent the use of
Croatian territory for attacks on Bosnia. In Bosnia, UNPROFOR
made an assertive stand with the North Atlantic Treaty
Organization (NATO) to protect Sarajevo in February 1994. As a
result of UNPROFOR's overall ineffectiveness, Croatia announced
in January 1995 that it would not agree to a renewal of
UNPROFOR's mandate. This ineffectiveness in deterring attacks
and providing protection stems from an approach to peacekeeping
that is dependent on the consent and cooperation of the warring
parties. Another factor that has contributed to UNPROFOR's lack
of credibility is their lack of consistent assertive response
to aggression. For example, UNPROFOR has the authority to use
force, but tries to negotiate when attacked and has called
sparingly for NATO air support. However, UNPROFOR has been
successful in many other areas. They have helped provide food
for thousands living in the region over the past several
winters, monitored the situation on the ground, maintained
roads, escorted convoys to the safe areas, operated the
Sarajevo airport, and undertaken confidence-building measures,
such as joint patrols and monitoring of cease-fires.
22. ``NASA Budgets: Gap Between Funding Requirements and Projected
Budgets Has Been Reopened,'' May 1995, GAO/NSIAD-95-155BR.
a. Summary.--Recent events have reopened a gap between
NASA's program plans and its likely budgets. NASA has not yet
developed plans for closing this $5.3 billion gap projected for
fiscal years 1996-2000. NASA closed the gap that GAO reported
in 1992 primarily by changing and deleting some of its major
programs. As a result of these changes, NASA increased the
risks in several of its largest programs.
b. Benefits.--In 1992, GAO reported that NASA's funding
estimates for fiscal years 1993-1997 exceeded its likely
budgets for those years. GAO estimated that NASA would have to
reduce its program plans by $13-$21 billion to match the
available budgets. As a result, NASA has reduced its 5-year
program plans by about $20 billion, or almost 22 percent. NASA
accomplished this by eliminating some programs, scaling down
program scopes, identifying program efficiencies, stretching
some programs beyond the 5-year planning period, and reducing
the number of civil service personnel. In some cases, NASA has
accepted higher program risk to achieve the budget reductions.
For example, reductions in the space shuttle program have
increased the risk of delays in meeting projected launch
schedules. Another problem that NASA is encountering with their
reduced budget is that their future budgets are not expected to
cover anticipated inflation. In fact, GAO estimates that NASA
will lose $3.8 billion in purchasing power in fiscal years
1996-2000 because of inflation. Despite their efforts, NASA
still has a $5.3 billion gap between estimated funding
requirements and projected budgets. This gap resulted when NASA
was directed, in January 1995--just before the President's
budget was submitted to the Congress--to freeze its budget at
$14.3 billion and make increasingly larger reductions from that
level for each year from 1997-2000. Under this plan, the
agency's budget would be reduced from $14.3 billion in 1996 to
$13.2 billion in 2000. NASA has yet to figure out how it will
accomplish the $5.3 billion in unresolved reductions, although
studies are underway on how to make the reductions.
23. ``Juvenile Justice: Representation Rates Varied as Did Counsel's
Impact on Court Outcomes,'' June 1995, GAO/GGD-95-139.
a. Summary.--Some legal organizations and scholars have
raised concerns about the access to counsel afforded to young
people in juvenile court proceedings. For example, the American
Bar Association and individual law professors testified before
Congress in 1992 that half of all juveniles in the United
States waive their constitutionally guaranteed right to counsel
without speaking to attorneys. This report (1) reviews laws in
15 States to determine juveniles' right to counsel; (2)
determines how often juveniles obtain counsel in juvenile
courts in three States; (3) determines the likely impact of
counsel on juvenile justice outcomes; (4) determines whether
juveniles who are in adult court have counsel; and (5) provides
insights on the quality of counsel.
b. Benefits.--In all 15 States reviewed by GAO, juveniles
were guaranteed the right to counsel in delinquency
proceedings. In cases where the juveniles could not provide
counsel on their own, the States have provisions to provide and
compensate counsel for them. Of the 15 States, 11 had laws
allowing the waiver of counsel under certain circumstances but
generally had rules to ensure that waivers were made only when
juveniles were aware of their right and voluntarily gave up
that right. In three other States juveniles can waive counsel
even though the State statutes do not specifically address the
waiver issue. In the remaining State, juveniles could not waive
counsel. After analyzing three States, California,
Pennsylvania, and Nebraska, GAO determined that overall
representation varied from 97 and 91 percent in California and
Pennsylvania, to 65 percent in Nebraska. The overall impact of
representation on case outcomes varied according to the State
and the offense category. In most cases, juveniles without
representation were less likely to receive out-of-home
placements (e.g., training school). Additionally, unrepresented
juveniles were generally about as likely to have their cases
adjudicated (i.e., judged to be a delinquent) than represented
juveniles, but characteristics other than representation (e.g.,
detention prior to adjudication and prior offense History) were
more strongly associated with placement decisions. GAO could
not locate any data bases to determine if juveniles in adult
court had counsel or to compare access to counsel for juveniles
in adult and juvenile court. However, GAO's survey of
prosecutors indicated that juveniles in adult and juvenile
court were given the same opportunity as adults to be
represented. Finally, the report gives a favorable assessment
of the quality of counsel provided to juveniles.
24. ``U.S. Attorneys: More Accountability for Implementing Priority
Programs Is Desirable,'' June 1995, GAO/GGD-95-150.
a. Summary.--U.S. attorneys litigate for the government in
criminal and civil proceedings. They prosecute persons charged
with violating Federal criminal law, represent the government
in civil cases, and collect money and property owed to the
government. In view of the independence and the discretion
exercised by U.S. attorneys in determining which cases to
prosecute and recent growth in the size and the cost of their
operations, this report determines (1) how the Justice
Department communicates national priorities to the U.S.
attorneys; (2) how selected U.S. attorneys establish their
priorities and coordinate them with law enforcement agencies in
their districts; and (3) what, if any, measures Justice uses to
assess U.S. attorneys' effectiveness in meeting national
priorities.
b. Benefits.--Justice did not have a specific process for
communicating national law enforcement priorities over the past
10 years. National priorities, on the other hand, were
communicated through a variety of processes, such as Attorney
General speeches, press conferences, budget memorandums,
discussions at seminars and conferences, and testimony before
Congress. Justice has moved toward setting more focused law
enforcement policies and making a commitment to principles of
strategic management and clear articulation of priorities,
goals, and missions for U.S. attorneys. Seven out of eight U.S.
attorneys GAO visited did not have formal processes to
establish priorities and communicate them to law enforcement
components in their districts. Instead, their priorities were
set informally on the basis of the Attorney General's
priorities, as well as on the crime problems and socioeconomic
characteristics of their districts. The report concluded that
the U.S. attorneys interviewed were satisfied with their input
into the development of national priorities. Justice had no
requirements for these U.S. attorneys to measure their own
effectiveness. Instead, Justice's evaluation program was the
primary means of assessing the activities of individual U.S.
attorneys' offices. Finally, at the end of 1994, Justice was
developing plans to implement the Government Performance and
Results Act of 1993's requirements to measure performance.
25. ``INS: Information on Aliens Applying for Permanent Residence
Status,'' June 1995, GAO/GGD-95-162FS.
a. Summary.--This fact sheet provides information on aliens
applying to the Immigration and Naturalization Service (INS) to
adjust their status to lawful permanent residents. Recent
legislation allows aliens who entered without inspection,
worked illegally, or overstayed their visas to apply for
permanent resident status without leaving the country. GAO
provides data on (1) the number of aliens applying for
permanent resident status under the legislation; (2) revenue
that has been received as a result of these aliens'
applications; (3) denial rates for these applications; and (4)
the impact of these applications on INS' workload.
b. Benefits.--GAO concluded that from October 1, 1994, to
February 24, 1995, 175,940 aliens applied for permanent
resident status. During this same time period INS denied 8
percent, or 6,983, of the applicants. The revenue generated
from these applications totaled $61.7 million for the same time
period. These applications resulted in an increased estimated
processing time per application in many areas. To meet the
increased workload, in April 1995, the Department of Justice
notified Congress of a proposed reprogramming action that would
provide INS additional resources to enhance its application
processing capability.
26. ``Managing For Results: The Department of Justice's Initial Efforts
To Implement GPRA,'' June 1995, GAO/GGD-95-167FS.
a. Summary.--The Government Performance and Results Act of
1993 was intended to improve the effectiveness and the
efficiency of Federal programs by establishing a system to set
performance goals and measure results. This fact sheet reviews
the Justice Department's implementation of the act. As GAO was
systematically collecting information from each Justice
component about its implementation of the act, the Department
asked GAO to describe what it had found because this
information had not been consolidated at Justice. This fact
sheet provides information that addresses questions from the
Departments's components to help them develop performance
measures and discusses the processes used to develop the fiscal
year 1996 exhibits, implementation questions and concerns, and
performance measures used in the exhibits.
b. Benefits.--GAO's review of the development of the
Department's first performance measurement exhibits revealed
that the components (1) used five general processes to develop
the exhibits, four of these processes involved getting input
from program staff; (2) had a variety of questions and concerns
about implementing a performance measurement system regarding
how the Office of Management and Budget (OMB) would analyze and
use the performance data; and (3) developed a number of output
and outcome measures for a variety of activities.
27. ``Foreign Assistance: African Development Foundation's Overhead
Costs Can Be Reduced,'' June 1995, GAO/NSIAD-95-79.
a. Summary.--The African Development Foundation was created
by Congress in 1980 as an independent public corporation to
support local self-help initiatives of the poor in Africa. In
response to congressional concerns about whether the Foundation
has used its resources efficiently, GAO reviewed the
Foundation's administrative and financial management practices.
This report discusses whether the Foundation (1) used program
funds for administrative expenses; (2) presented reliable data
in its budget submissions to Congress; and (3) complied with
financial reporting requirements.
b. Benefits.--During the fiscal year 1994, the African
Development Foundation (ADF) spent more of its budget for
headquarters administrative expenses (about 28 percent) than
other similar agencies spent for such costs. ADF's higher
administrative expenses are a result of higher salaries and
greater use of consultants and contractors than were budgeted
to carry out headquarters functions. ADF's funds are
appropriated as a lump sum and not earmarked for program or
administrative use and as a result ADF is not bound by statute
as to the amount it can spend for administrative overhead. The
budgetary and cost data that ADF presented to Congress was not
reliable. The data was based on unaudited financial statements
and an accounting system that was not viable for audit. ADF has
recently acknowledged the problem and taken steps to improve
the quality of budget reporting. Finally, ADF did not meet the
financial reporting, internal controls assessment, and budget
report reconciliation requirements of the Government
Corporation Control Act; however, it began steps in 1994 to do
so.
28. ``Army National Guard: Combat Brigades' Ability To Be Ready for War
in 90 Days Is Uncertain,'' June 1995, GAO/NSIAD-95-91.
a. Summary.--The end of the cold war and budgetary
constraints have increased the military's reliance on Army
National Guard combat brigades. Shortcomings revealed during
the combat brigades' mobilization for the Persian Gulf War
raised questions about the training strategies used and the
time required to be ready to deploy. GAO found that recruitment
and training problems make it unlikely that these units could
meet a goal of combat readiness within 90 days of mobilization.
This report discusses whether (1) the Bold Shift training
strategy has enabled combat brigades to meet peacetime training
goals; (2) the advisers assigned to the brigades are working
effectively to improve training readiness; and (3) prospects of
having the brigades ready for war within 90 days are likely.
b. Benefits.--None of the seven brigades came close to
achieving the training proficiency sought by the Bold Shift
strategy during 1992 through 1994. The brigades were unable to
recruit, retrain, and meet staffing goals, and many personnel
were not sufficiently trained in their individual job and
leadership skills. In addition, collective training was also
problematic. For example, in 1993, combat platoons had mastered
an average of just one-seventh of their mission-essential tasks
and less than one-third of the battalions met gunnery goals.
The new adviser program's efforts to improve training readiness
have been limited by factors such as (1) an ambiguous
definition of the advisers' role; (2) poor communication
between the active Army, advisers, brigades, and other National
Guard officials, causing confusion and disagreement over
training goals; and (3) difficult working relationships. The
poor relationship between the active Army and the State-run
Guard, if not improved, could undermine prospects for
significant improvement in the brigades' ability to conduct
successful combat operations. Finally, GAO concluded that it is
highly uncertain whether the Guard's mechanized infantry and
armor brigades can be ready to deploy 90 days after
mobilization. It is estimated that brigades would need between
68 and 110 days before being ready to deploy.
29. ``Military Personnel: High Aggregate Personnel Levels Maintained
Throughout Drawdown,'' June 1995, GAO/NSIAD-95-97.
a. Summary.--The largest military drawdown since the end of
the Vietnam War is now about 80 percent complete. By the end of
fiscal year 1999, the Defense Department will have reduced its
military and civilian personnel by almost a third. GAO found
that despite these substantial cuts, the military services
generally kept more than 95 percent of their authorized
positions filled throughout the drawdown. They also maintained
high fill rates for most ranks and kept more than 90 percent of
authorized positions filled in most military categories. The
major area of concern was a continuing shortage of field grade
officers, especially in the Army, where fill rates generally
hovered between 80 and 85 percent. In addition to discussing
the extent to which the services were able to fill authorized
positions, this report discusses the factors contributing to
the personnel shortage at selected U.S. installations and units
and the factors that could lead to personnel shortages in the
future.
b. Benefits.--GAO reported that many factors contributing
to personnel shortages at units and installations were directly
related to the drawdown and could dissipate as the drawdown
concludes. For example, not all personnel in units being
withdrawn from Europe and not all those in units affected by
United States base closure and realignment decisions were
required to transfer with their units. This policy, as well as
others, created shortages in some units and led to multiple
personnel transfers. Other factors contributing to shortages
were less directly related to the drawdown. For example, (1)
personnel had to be transferred between units to meet the
requirements of operations other than war; (2) military
personnel had to be temporarily assigned to duties formerly
handled by civilians whose positions were eliminated; and (3)
scarce field grade officers had to be assigned to joint duty
and reserve units before other operational positions could be
filled.
30. ``Navy Torpedo Programs: MK-48 ADCAP Upgrades Not Adequately
Justified,'' June 1995, GAO/NSIAD-95-104.
a. Summary.--As part of its ongoing work on Navy torpedo
programs, GAO reviewed the Navy's plans to upgrade both the
propulsion and the guidance and control systems of the MK-48
Advanced Capability (ADCAP) torpedo. Because the program
manager is seeking approval to begin low-rate initial
production, this report discusses (1) the need for the
propulsion system upgrade and (2) the appropriateness of
approving low-rate initial production of the guidance and
control system.
b. Benefits.--GAO concluded that the $249 million upgrade
to the ADCAP propulsion system is not needed. The technological
improvement to be contributed by the propulsion upgrade, which
is torpedo quieting, will neither improve the performance of
the ADCAP nor reduce the vulnerability of the launching
submarine to enemy attack. Moreover, the Operational Test and
Evaluation Force (OPTEVFOR) already considers the current ADCAP
operationally suitable and effective in shallow water, and the
Navy did not establish a requirement to improve the ADCAP's
propulsion system for use in open ocean deep water in its
operational requirements document for the upgrade. GAO
recommended that approval for the low-rate initial production
for the guidance and control upgrade would be ill-advised at
this time. Installing the new guidance and control unit will do
nothing more to counter the existing threat than the current
units until the new software is developed and installed. The
software necessary to take advantage of the upgraded guidance
and control hardware will not be ready until mid-1998.
Therefore, upgrade acquisition would be better scheduled to
coincide with the software development schedule. As currently
planned, the Navy could buy as many as 529 units at a cost of
$177 million before the new software will be available.
31. ``Space Station: Estimated Total U.S. Funding Requirements,'' June
1995, GAO/NSIAD-95-163.
a. Summary.--The space station program was approved in the
mid-1980's and has since been redesigned several times to meet
decreasing budgets. NASA estimates that the International Space
Station can be built and completely assembled in orbit by June
2002. The International Space Station would provide more
research capacity, support more crew, and cost less than prior
space station configurations. NASA is currently planning a 10-
year operational life for the space station following
completion of assembly.
b. Benefits.--GAO estimates that it will cost about $94
billion to design and launch the space station through 2012.
Although the program has made great progress since last year in
defining its requirements, meeting its schedule milestones, and
remaining within its annual operating budgets, the program
still faces formidable challenges in meeting all its goals on
time and within budget. Moreover, low financial reserves
through fiscal year 1997 could lead to cost overruns and force
postponement of some activities. In addition, the space
station's current launch and assembly schedule is ambitious,
and the shuttle program may have difficulty supporting it. If
the contractor is unable to negotiate subcontractor agreements
for the expected price, the target cost for the prime contract
could increase. NASA plans to complete an independent internal
assessment of space station costs later this fiscal year.
32. ``Defense Management: Selection of Depot Maintenance Standard
System Not Based on Sufficient Analyses,'' July 1995, GAO/AIMD-
95-110.
a. Summary.--This report evaluates the Defense Department's
(DOD) justification for developing and deploying the Depot
Maintenance Standard System. DOD is developing the system to
help streamline depot maintenance operations and manage
resources more effectively at its repair depots. DOD spends
about $13 billion annually to manufacture, overhaul, and repair
equipment, such as airplanes, ships, and tanks, and repairable
parts of this equipment, such as radios and engines. Congress
has raised concerns that although DOD has spent billions of
dollars for information technology during the past several
years, DOD has not produced significant quality improvement,
cost savings, and productivity gains in service operations.
Congress required DOD to conduct a study to determine the best
prototype depot maintenance system and directed GAO to assess
the soundness of the study's conclusions. DOD, however, has not
completed such a study. As a result, this report determines
whether DOD had (1) based its selection of the system on
convincing analyses of costs and benefits, as well as economic
and technical risks, and (2) selected a strategy that would
dramatically improve depot maintenance operations.
b. Benefits.--GAO concluded that DOD did not base its
decision to develop and implement the Depot Maintenance
Standard System (DMSS) on sufficient analyses of costs and
benefits or on detailed assessments of economic and technical
risks. Also, DOD did not obtain project milestone reviews by
the Major Automated Information System Review Council (MAISRC)
and approvals from the Milestone Decision Authority (MDA).
These reviews and approvals are designed to ensure that system
development and implementation decisions are consistent with
sound business practices and to better manage risks inherent in
large information system projects. DOD is making a major
investment, totaling more than $1 billion, to develop and
deploy DMS, intended to incrementally improve depot maintenance
processes and move toward a DOD-wide integrated corporate
system. These improvements are intended to reduce depot
maintenance operational costs by $2.6 billion or less than 2.3
percent over a 10-year period. However, by focusing first on
developing and deploying a standard depot maintenance
information system designed to incrementally improve depot
maintenance processes, DOD will not achieve any immediate
dramatic cost reductions and may make future re-engineering
efforts more difficult by entrenching inefficient and
ineffective work processes.
33. ``Defense Communications: Management Problems Jeopardize DISN
Implementation,'' July 1995, GAO/AIMD-95-136.
a. Summary.--The Department of Defense (DOD) initiated the
Defense Information System Network (DISN) program in 1991 as a
two-phase effort to improve its long-distance
telecommunications services and reduce costs. DOD envisioned
that in the near term, DISN would achieve these goals by
consolidating and integrating about 100 existing communications
networks into one network. For the long term, DISN would
replace older telecommunications systems and use new technology
and improved acquisition strategies to provide a more cost-
effective system. In addition to the DISN initiative, the
General Services Administration (GSA) and the Interagency
Management Council (IMC) in 1993 began planning a replacement
for the Federal Telecommunications System (FTS) 2000 program,
which provides the Federal Government's long-distance service.
GAO in this report (1) assesses DISN's objectives,
requirements, management plans, and implementation status, and
(2) determines whether Defense has positioned itself to
participate effectively in the government wide Post-FTS 2000
program.
b. Benefits.--Asked to review implementation of DISN, GAO
found that DOD had not effectively planned and managed its DISN
program. DOD spent more than $100 million during the past 3\1/
2\ years on DISN's planning, implementation, operation, and
management. Despite this expenditure, DISN still lacks
validated operational requirements, approved plans for network
implementation, and guidelines needed to ensure efficient and
effective end-to-end management of this important
communications network. As a result, DOD's near-term DISN
implementation more than 2 years behind schedule and DISN's
objectives of improving DOD communications services and
reducing costs are at risk. Rather than buy services from
commercial providers through initiatives such as the Post-FTS
2000 program, Defense currently intends to use the program
primarily to obtain the communications bandwidth it needs to
build its own private DISN network. GAO determined that by
limiting its use of Post-FTS 2000 services, Defense risks
spending hundreds of millions of dollars to establish, operate,
and maintain redundant communications facilities and services
that do not efficiently or effectively respond to its
requirements.
34. ``Illegal Aliens: National Net Cost Estimates Vary Widely,'' July
1995, GAO/HEHS-95-133.
a. Summary.--In recent years, public concern has grown
about illegal aliens' use of public benefits and their overall
cost to society. The three national studies that GAO reviewed
represent the initial efforts of researchers to estimate the
total public fiscal impact of illegal aliens. The limited data
available makes it hard to develop reasonable estimates on such
a broad subject. Moreover, the national studies varied
considerably in the range of items they included and their
treatment of some items, making their estimates difficult to
compare. As a result, a great deal of uncertainty remains about
the national fiscal impact of illegal aliens. Obtaining better
data on the illegal alien population would help improve the
national net cost estimates. Such data should focus on
characteristics of illegal aliens, such as geographic
distribution, age distribution, income distribution, labor
force participation rate, tax compliance rate, and school
participation, that are helpful in estimating the largest net
cost items. Clearer explanations of which costs and revenues
are appropriate to include would also help improve the
usefulness of the estimates. The expert panel convened by the
U.S. Commission on Immigration Reform could serve as a forum
for discussing some of these data and conceptual issues.
b. Benefits.--All three national studies concluded that
illegal aliens in the United States generate more in costs than
revenues to Federal, State, and local governments combined.
However, the studies varied considerably in the range of costs
and revenues they included and their treatment of certain
items, making them difficult to compare. Thus, a great deal of
uncertainty remains about the actual national fiscal impact of
illegal aliens.
35. ``Federal Criminal Justice: Cost of Providing Court-Appointed
Attorneys Is Rising, but Causes Are Unclear,'' July 1995, GAO/
GGD-95-182.
a. Summary.--The Criminal Justice Act of 1964 required the
Federal judiciary to provide for the legal representation of
eligible Federal criminal defendants who were financially
unable to afford their own attorneys. In response, the Federal
judiciary created the Federal Defender Services program. This
program provides legal services for eligible defendants through
a mixed system, which includes 45 Federal Public Defender
Organizations (FPF's), 10 Community Defender Organizations
(CDO's), private ``panel'' attorneys chosen from a list or
maintained by the district courts. As of August 1993, 85
percent of all criminal cases prosecuted in Federal courts
required court-appointed legal counsel. This report (1) reviews
several issues related to cost growth and the workload at the
Federal Defender Services program, which provides legal counsel
for those who cannot afford attorneys, and (2) determines
whether Death Penalty Resource Centers (DPRC) have reduced
Federal costs for representing indigent defendants in death
penalty cases.
b. Benefits.--The Administrative Office of the U.S. Courts
maintains that the overall Defender Services workload has grown
and costs have increased because criminal cases, especially
drug cases, involve more defendants; more persons are defended
by court-appointed attorneys; more defendants are being tried
in Federal courts; and the costs are more complex, principally
because of changes in Federal sentencing guidelines and
mandatory minimum-sentencing statutes. Although each of these
factors may have had some effect, inadequate data prevented GAO
from determining to what extent these factors individually or
collectively accounted for the doubling of program costs or the
tripling of DPRC costs from fiscal years 1990 through 1993.
Death Penalty Resource Centers (DPRC) have reduced Federal
costs for representing indigent defendants in death penalty
cases. This is exemplified with the average DPRC cost per
representation at $17,200, while the average panel attorney
cost per representation is $37,000. However, DPRC costs have
increased because more DPRC's have been created, more death
penalty cases are in the courts, and the cases are becoming
more complex.
36. ``Depot Maintenance: Some Funds Intended for Maintenance Are Used
for Other Purposes,'' July 1995, GAO/NSIAD-95-124.
a. Summary.--During the past several years, Congress and
military officials have expressed concern about the adequacy of
the depot maintenance funding levels and the adverse effect on
readiness resulting from growing maintenance backlogs. This
report (1) determines the services' processes for deciding
which end items of equipment will be overhauled; (2) compares
the depot maintenance funding received by the military services
from Congress with the amounts requested by the service; and
(3) assesses the services' management of maintenance backlogs
and the impact of depot maintenance backlogs on readiness.
b. Benefits.--GAO determined that the services use such
measurements as hours of usage/operations, mileage, engineered
standards, historical data, and inspection results to identify
end items of equipment that qualify for depot maintenance. The
services then assess the candidates in terms of the depots'
ability to perform the maintenance and the anticipated
availability of funds. A comparison of the amount of depot
maintenance work executed to the amount of funds requested and
received shows that for fiscal years 1993 and 1994, the amount
of depot maintenance accomplished by the services was about
$485 million less than the amount requested and about $832
million less than the amount received. The depot maintenance
funds not used for depot maintenance were used for military
contingencies and other O&M expenditures such as real property
maintenance base operations. The depot maintenance backlogs at
the time the services submit their budget requests to the
Congress tend to decrease during the year of budget execution.
These decreases are a result of the services' reducing the
requirements for items requiring depot maintenance. According
to service officials, the depot maintenance backlogs are
manageable, represent an acceptable minimal level of risk, and
have not yet adversely affected equipment operational readiness
rates. The service officials attribute the lack of adverse
effects to funding levels; the levels of depot maintenance
execution; and the reductions to the force levels, which have
made more equipment available to the remaining forces.
37. ``Defense Contracting: Contractor Claims for Legal Costs Associated
With Stockholder Lawsuits,'' July 1995, GAO/NSIAD-95-166.
a. Summary.--In response to a congressional request, GAO
asked the Defense Contract Audit Agency (DCAA) for its views on
allowing the reimbursement of legal costs resulting from
stockholder derivative lawsuits associated with defense
contractor wrongdoing. The Major Fraud Act of 1988 and the
Federal Acquisition Regulation (FAR) addresses the
allowableness of defense contractors' legal fees and other
proceeding costs related to litigation with the Federal
Government. However, neither the act nor the FAR expressly
addresses the allowableness of legal costs associated with
stockholder derivative lawsuits based on prior corporate
wrongdoing. DCAA performs contract audit functions for the
Department of Defense (DOD) and provides accounting and
financial advisory services to DOD components responsible for
procurement and contract administration. In addition, DCAA
audits costs and makes recommendations regarding the
allowableness of cost claimed or proposed by contractors. This
report includes information on (1) defense procurement fraud
cases; (2) Defense Contract Audit Agency's (DCAA) policy on the
allowableness of legal fees associated with stockholder
derivative lawsuits; and (3) the number of stockholder lawsuits
associated with defense contractor wrongdoing.
b. Benefits.--DCAA responded that the Federal Acquisition
Regulation (FAR) contained no cost principle dealing
specifically with the allowableness of legal fees associated
with defending against stockholder derivative lawsuits. DCAA
concluded, however, that such costs were unallowable under the
FAR cost principle on reasonableness of costs when the lawsuit
was based on contractor wrongdoing. As a result, DCAA issued
audit guidance in April 1995 that specifically dealt with these
costs. From October 1988 through December 1994, 72 cases arose
involving procurement fraud associated with firms on the
Defense Department's Top 100 Contractors list. It is not
apparent, however, that claiming reimbursement for stockholder
derivative legal costs is a common practice.
38. ``Space Shuttle: Declining Budget and Tight Schedule Could
Jeopardize Space Station Support,'' July 1995, GAO/NSIAD-95-
171.
a. Summary.--NASA plans to use the space shuttle on 21
flights during a 5-year period to transport station components
into orbit for assembling the space station. The shuttle is
necessary because it is the only U.S. launch vehicle capable of
carrying humans into space. As a result, the shuttle will have
to be substantially redesigned to gain additional lift
capability. At times, only two of the four shuttles will be
available for station assembly. One shuttle, Columbia, cannot
provide adequate lift and one of the remaining shuttles will be
undergoing scheduled maintenance during some portions of the
assembly schedule. The space station has been redesigned in
March 1993, and is now called the International Space Station
because it combines the efforts of Europe, Japan, Canada,
Russia, and the United States.
b. Benefits.--NASA's plans for increasing the shuttle's
lift capability are complex and challenging, involving about 30
separate steps, including hardware redesigns, improved
navigational or flight design techniques, and new operational
procedures. Further difficulties are possible. NASA's schedule
for meeting the space station's launch requirements appear
questionable--particularly during a period of shrinking
budgets. Delays in the launch schedule could substantially
boost the space station's cost. Under the shuttle's
modification and launch enhancement program, NASA will defer
some recertification activities and will forgo full integration
testing of the propulsion system. NASA plans to assess the
implications of the design changes through a combination of
tanking and component tests and systems analysis. Because of
the magnitude and the complexity of the shuttle enhancement
program, GAO urges additional measures to ensure that (1) the
implications of integrating many individual design changes are
fully understood and (2) safety is not compromised.
39. ``Law Enforcement Support Center: Name-Based Systems Limit Ability
To Identify Arrested Aliens,'' August 1995, GAO/AIMD-95-147.
a. Summary.--Identifying persons arrested for aggravated
felonies as aliens is critical to joint efforts by the
Immigration and Naturalization Service (INS) and local law
enforcement agencies to prevent the release of these persons
before INS can take action. To meet this requirement, INS
established the Law Enforcement Support Center (LESC), whose
pilot operations began in July 1994. When individuals arrested
for aggravated felonies identify themselves as being foreign-
born, the local law enforcement agency (LEA) sends a request to
LESC to determine whether these individuals are aliens and,
thus, possibly subject to deportation. This report discusses
whether (1) LESC, using the INS name-based data bases, can
identify individuals arrested for aggravated felonies as
aliens; (2) other INS initiatives will allow identification of
aliens arrested for aggravated felonies; and (3) criminal alien
information in two of INS' data bases is complete and accurate.
b. Benefits.--GAO determined that INS dependance on LESC
for providing identification of aliens who were arrested for
aggravated felonies is inherently limited by the name-based
systems that it depends upon. Until INS successfully implements
a system that identifies persons on the basis of biometric
information, such as fingerprints, the INS planned move to an
automated fingerprint data base is intended to address the need
for better ways to identify persons who will be processed for
either enforcement or benefit purposes. Further, accurate and
complete criminal alien data in INS' Deportable Alien Control
System and the Central Index System are essential. Unless INS
data reliability problems are resolved, INS risks making
decisions on the basis of inaccurate and incomplete
information.
40. ``Juvenile Justice: Juveniles Processed in Criminal Court and Case
Depositions,'' August 1995, GAO/GGD-95-170.
a. Summary.--According to the Justice Department, juveniles
are committing increasing numbers of serious crimes, such as
murder and aggravated assaults. The number of juvenile court
cases involving these offenses rose 68 percent from 1988 to
1992. Each State has at least one of three methods--judicial
waiver, prosecutor direct filing, and statutory exclusion
(State laws requiring the transfer of juveniles for some
crimes)--available for transferring juveniles to criminal
court. In recent years, many States have changed their laws to
expand the criteria under which juveniles may be sent to
criminal court. This report discusses (1) the frequency with
which juveniles have been sent to criminal court; (2) the
juvenile conviction rates and sentences in criminal court; (3)
the dispositions of juvenile cases in juvenile court; and (4)
the conditions of confinement for juveniles held in adult
prisons.
b. Benefits.--GAO's analysis of nationwide estimates from
the National Center for Juvenile Justice (NCJJ) showed that
juvenile court judges transferred to criminal court less than 2
percent of juvenile delinquency cases that were filed in
juvenile court from 1988 to 1992. According to the Bureau of
Justice Statistics' 1989 and 1990 Offender Based Transaction
Statistics (OBTS) data from seven States, conviction rates of
juveniles prosecuted in criminal court for serious violent,
serious property, and drug offenses varied within and among
States. The incarceration rates varied dramatically from 3
percent in California to 50 percent in Vermont. Additionally,
many juveniles were placed on probation in juvenile court. For
example, in 1992, juveniles in 43 percent of approximately
744,000 formal delinquency cases were placed on probation. Of
the remaining 57 percent of juvenile cases, 27 percent were
dismissed, and 17 percent of the juveniles were placed in a
residential treatment program, and 12 percent of them received
some other disposition such as restitution, fines, or community
service. About 1 percent were transferred to criminal court. In
the four States that GAO visited, juveniles sentenced to adult
prisons generally were to be subject to the same policies and
procedures as adults; however, in three of the four States
visited, younger inmates were housed in separated prisons. At
all facilities, juveniles generally were to be provided with
the same health services; afforded the same educational,
vocational, and work opportunities and provided access to the
same recreational facilities as older inmates.
41. ``Defense Restructuring Costs: Payment Regulations Are Inconsistent
With Legislation,'' August 1995, GAO/NSIAD-95-106.
a. Summary.--Section 818 of the National Defense
Authorization Act for Fiscal Year 1995 governs payments made by
the Defense Department (DOD) to contractors for costs
associated with business combinations, including mergers and
acquisitions. Normally, after a business combination, a new
company will undertake restructuring activities, such as
closing plants, eliminating jobs, and relocating workers.
Section 818 prohibits payment of restructuring costs until DOD
officials certify that projected savings from the business
combination are based on audited cost data and should reduce
costs to DOD. Section 818 also requires the Secretary of
Defense to report annually on DOD experience with business
combinations, including whether savings associated with each
restructuring actually exceed costs. In response to section 818
requirements, DOD issued interim regulations on restructuring
costs effective December 29, 1994. This report reviews the
regulations to determine whether they (1) are consistent with
section 818, applicable procurement laws, and the Federal
Acquisition Regulation (FAR) and (2) ensure that restructuring
costs are paid only when in the best interests of the United
States.
b. Benefits.--DOD regulations do not comply with section
818 requirements because all restructuring costs associated
with defense contractor business combinations, for which
contractors may be reimbursed, will not be subject to the
section's certification requirements. By excluding some
restructuring costs that should be subject to section 818
certification requirements, DOD cannot ensure that payment of
these costs are made only when in the best interests of the
United States. Further, the regulations cannot ensure that DOD
will be able to meet the section's annual reporting
requirements to Congress. Moreover, DOD plans to pay
restructuring costs up to the amount of savings projected to
result from a business combination, which would result in the
payment of those costs without significant projected savings to
DOD.
42. ``Military Bases: Case Studies on Selected Bases Closed in 1988 and
1991,'' August 1995, GAO/NSIAD-95-139.
a. Summary.--As part of an earlier review of 37 bases
closed by the first two base realignment and closure rounds,
GAO reported in late 1994 on expected revenues from land sales,
resources requested from the Federal Government, and issues
delaying reuse planning. GAO collected more information on
reuse planning and implementation at the 37 bases. This report
provides updated summaries on the planned disposal and reuse of
properties, successful conversions, problems that delayed
planning and implementation, and assistance provided to
communities. GAO also profiles each of the 37 installations.
b. Benefits.--Under current plans, over half of the land
will be retained by the Federal Government because it (1) is
contaminated with unexploded ordinance; (2) has been retained
by decisions made by the base realignment and closure
commissions or by legislation; or (3) is needed by Federal
agencies. Most of the remaining land will be requested by local
reuse authorities under various public benefit transfer
authorities or the new economic development conveyance
authority. Further, reuse efforts by numerous communities are
yielding successful results. Military airfields are being
converted to civilian airports, educational institutions are
being established in former military facilities, and wildlife
habitats are being created that meet wildlife preservation
goals while reducing the Department of Defense's environmental
cleanup costs. However, some communities are experiencing
delays in reuse planning and implementation. This is due to
failure within the local communities to agree on reuse issues,
developments of reuse plans with unrealistic expectations, and
environmental cleanup requirements. In order to help alleviate
some of these problems the Federal Government has made
available over $350 million in direct financial assistance to
communities. In addition, DOD's Office of Economic Adjustment
has provided reuse planning grants, the Department of Labor has
provided job training grants, and the Federal Aviation
Administration has awarded airport planning and implementation
grants.
43. ``Inventory Management: DOD Can Build on Progress in Using Best
Practices To Achieve Substantial Savings,'' August 1995, GAO/
NSIAD-95-142.
a. Summary.--In a series of five recent reports, GAO
discussed the Defense Department's (DOD) efforts to adopt
modern logistics practices to better manage its $22 billion in
inventory of consumable items, such as food, clothing, and
industrial supplies. As of September 1994, consumable items
accounted for only 29 percent of DOD's $74 billion in secondary
inventory value, but for 88 percent of the total items. This
report discusses (1) the extent to which DOD has adopted the
specific practices that GAO recommended for consumable items;
(2) the savings and benefits being achieved through the use of
these practices; and (3) DOD's overall progress in improving
consumable item management.
b. Benefits.--While DOD has taken steps to improve its
logistics practices and reduce consumable inventories, it could
do more to achieve substantial savings. DOD can make the most
improvements with hardware items because it continues to store
large amounts of items (such as bolts, valves, and fuses) that
cost millions of dollars to manage and store. DOD's inventories
of hardware items existing in 1992 are expected to decrease
only 20 percent by 1997. In contrast, private sector companies,
have reduced similar inventories by as much as 80 percent and
saved millions in associated costs by using ``supplier parks''
and other techniques that give established commercial
distribution networks the responsibility to manage, store, and
distribute inventory on a frequent and regular basis directly
to end-users. If DOD were to adopt these innovative commercial
practices, hardware inventories and related management costs
could be significantly reduced. However, DOD has taken steps
that use prime vendors to supply personnel items directly to
military facilities. By 1997, with the expanded use of prime
vendors and by eliminating obsolete and unnecessary items, DOD
expects to reduce personnel (medical, food, and clothing) item
inventories 53 percent from 1992 levels. DOD's most successful
program to date uses prime vendors at approximately 150
military medical facilities, which has reduced overall
wholesale pharmaceutical inventories by $48.6 million and has
achieved inventory reductions and cost savings at medical
facilities. Finally, if DOD took similar steps with its prime
vendor program and consistently applied it within each service,
the current savings could be significantly increased.
44. ``U.S.-Japan Cooperative Development: Progress on the FS-X Program
Enhances Japanese Aerospace Capabilities,'' August 1995, GAO/
NSIAD-95-145.
a. Summary.--In 1988, the United States and Japan agreed to
cooperatively develop the FS-X fighter plane, which is a
significantly modified derivative of the United States Air
Force's F-16 Block 40 fighter aircraft. Congress has been
concerned about the transfer of United States technology to
Japan through the FS-X program and whether the program will
provide the United States with useful technology. As a result,
Congress requested that GAO monitor and periodically report on
the implementation of the FS-X program. This report examines
(1) the program's status; (2) United States Government and
contractor controls over technical data and hardware provided
to Japan for the program; (3) the transfer of program
technology from Japan to the United States; and (4) the
benefits that the program has provided to the Japanese and
United States aerospace industries.
b. Benefits.--The FS-X development program entered the
prototype production phase in April 1993. The first prototype
flight is currently scheduled for late summer 1995, a delay of
about 2 years from earlier estimates. The adequacy of United
States Controls of the transfer of technology and hardware to
Japan has varied. Japan is obtaining F-16 technical data from
the United States Air Force, as well as, technologies and FS-X
subsystem items from United States companies under export
licenses. However, there is inadequate sharing of licensing
information among U.S. Government entities on these and related
exports to ensure (1) compliance with DOD releasability
guidelines or (2) that FS-X items are properly categorized as
derived or non-derived. On the other hand, the United States
has gained more access to Japanese FS-X technologies since
GAO's June 1992 FS-X review, although some issues remain
unresolved. Further, Japan has been reluctant to transfer data
for certain systems to the United States and is seeking to
limit technology transfer to the United States for those
systems by reclassifying them as non-derived. Finally, no one
currently knows what benefits, if any, Japanese technologies
will provide to the United States. United States officials
believe that better coordination between United States defense
contractors is necessary to effectively evaluate and apply
Japanese FS-X technologies.
45. ``Poland: Economic Restructuring and Donor Assistance,'' August
1995, GAO/NSIAD-95-150.
a. Summary.--Since the reform process began in central and
eastern Europe in 1989, Poland has undertaken some of the most
dramatic economic reforms in the region. Although the United
States now has assistance programs in several central and east
European countries, Poland has received the largest share of
that assistance. This report (1) assesses the status and the
progress of the country's economic restructuring in the key
areas of macroeconomic stabilization, foreign trade and
investment, privatization, and banking; (2) discusses the role
that donors have played in the transformation process; and (3)
identifies lessons learned that could be useful to other
transition countries.
b. Benefits.--Poland has made substantial progress in
stabilizing and restructuring its economy. The International
Monetary Fund and other major donors played an important role
in the early stages of the reform process by requiring Poland
to adopt tough macroeconomic reforms in return for receiving
substantial donor assistance. Although Poland's own efforts to
implement tough reform measures and apply consistent
macroeconomic policy over several years have been the critical
factors in the country's economic recovery. Further, Poland has
achieved significant increases in its exports to the West and a
number of foreign companies have recently made significant
investments in Poland. However, trade barriers hamper Poland's
exports of certain products to the European Union, and a number
of internal obstacles continue to impede foreign investment.
Donor assistance has had only a marginal impact in facilitating
trade and investment. In moving toward privatizing its economy,
Poland's progress has been mixed. The country's economic
reforms have resulted in a rapidly growing private sector, but
significant portions of the Polish economy remain in the hands
of the government. Continuing, Poland has fundamentally
reformed its banking sector, but several major problems remain,
including delays in bank privatization, unclear policies
regarding the licensing of foreign banks, inadequate banking
expertise and bank supervision skills. Donors have provided key
financial support for recapitalizing Poland's state-owned banks
and restructuring their problem loan portfolios. However,
despite the progress that has been made, Poland is still
struggling to overcome relatively high rates of inflation and
unemployment. Poland's transition experience offers a number of
lessons that merit consideration by countries such as Russia,
Ukraine, and others not as far along the reform path as Poland.
These lessons suggest that while donor assistance can be
important in supporting economic restructuring efforts in
certain key areas, the ultimate success or failure of such
efforts is far more dependent upon the actions of the
transition country than it is upon those of outside
participants.
46. ``Financial Audit: Expenditures by Six Independent Counsels for the
Six Months Ended March 31, 1995,'' September 1995, GAO/AIMD-95-
223.
a. Summary.--This report presents the results of GAO's
audit of expenditures reported by six independent counsels for
the 6 months ended March 31, 1995, as well as, the
consideration of the internal control structure for this audit
period. The internal controls of the independent counsels were
tested with regard to safeguarding assets against loss from
unauthorized use or disposition, assuring the execution of
transactions in accordance with management authority, laws, and
regulations; and properly recording, processing, and
summarizing transactions to permit the preparation of
expenditure statements in accordance with the applicable basis
of accounting. GAO also discusses the evaluation of the
counsels' compliance with laws and regulations for the 6 months
ending on March 31, 1995.
b. Benefits.--GAO found that the statements of expenditures
for independent counsels Arlin M. Adams, Joseph E. DiGenova,
Robert B. Fiske, Jr., Donald C. Smaltz, Kenneth W. Starr, and
Lawrence E. Walsh were reliable in all material respects.
However, GAO also did limited tests of internal controls and
discovered a material weakness in internal controls over
reporting of expenditures. A material weakness is a condition
in which the design or operation of one or more of the internal
control structure elements does not reduce to a relatively low
risk that errors or irregularities in amounts that would be
material to the expenditure statements and may not be detected
promptly by employees in the normal course of their duties.
GAO's audit tests for compliance with selected provisions of
laws and regulations disclosed no instances of noncompliance
that would be reportable under generally accepted government
auditing standards.
47. ``Foreign Direct Investment: Review of Commerce Department Reports
and Data-Sharing Activities,'' September 1995, GAO/GGD-95-242.
a. Summary.--This is GAO's final report on the Secretary of
Commerce's first three annual reports on foreign direct
investment in the United States. GAO: (1) assesses the extent
to which Commerce's second and third reports--issued in 1993
and 1995--fulfilled their requirements under the law and
responded to recommendations made in a 1992 GAO report; (2)
reviews the process by which Federal agencies collect data on
foreign direct investment; (3) reviews the status and processes
of the data exchanges, or links, initiated by the Financial
Data Improvements Act of 1990 between the Commerce Department's
Bureau of Economic Analysis and the Labor Department's Bureau
of Labor Statistics; and (4) evaluates the extent to which
implementation of the act has improved public information on
foreign direct investment in the United States.
b. Benefits.--The 1993 and 1995 reports included discussion
of all the data requirements of the 1990 act for which data
exists, and responded to the recommendations in our 1992
report. In addition, GAO found that the two reports adequately
presented the Commerce Department's analysis and findings.
Overall, the Commerce reports' analyses and conclusions
relating to the effects of foreign direct investment in the
United States (FDIUS) on the U.S. economy were thorough and
reasonable. The U.S. Government collects data on foreign
investment principally through the Commerce Department. The
Commerce Department's Bureau of Economic Analysis (BEA) obtains
information on (FDIUS) through four survey questionnaires that
require U.S. affiliates of foreign firms to report on a wide
range of financial and operating data. The BEA-census and the
BEA-Bureau of Labor Statistics (BLS) data-sharing efforts,
initiated by the 1990 act, have generated data on U.S.
affiliates of foreign firms at a greater level of industry
specificity than was previously available. This data has
enabled Commerce to provide a richer description of U.S.
affiliates' activities and to draw more meaningful comparisons
between their operations and those of other U.S. firms without
imposing their burdens on survey respondents. The Commerce
Department's FDIUS reports and the data-sharing activities
between BEA, Census, and BLS have largely fulfilled the purpose
of the 1990 act by improving the quality and quantity of
Federal Government data on FDIUS.
48. ``Combat Identification Systems: Changes Needed in Management Plans
and Structure,'' September 1995, GAO/NSIAD-95-153.
a. Summary.--The military services are pursuing a number of
solutions that should help reduce the occurrence of friendly
fire incidents. One class of systems being pursued under Army
and Navy led efforts are cooperative identification of friend
or foe (IFF) question and answer (Q&A) systems. Because the
services are approaching major decision points in the
acquisition process for these systems, GAO reviewed their
management plans and structures for cooperative IFF Q&A systems
development and integration.
b. Benefits.--The Army and the Navy have failed to fully
consider how to integrate their independently developed systems
to identify friend from foe on the battlefield and thus reduce
fratricide incidents. Moreover, these systems, which could cost
more than $4 billion, are limited to identifying ``friends''
equipped with compatible identification systems. GAO recently
learned that the Army plans to acquire more near-term
millimeter wave cooperative identification systems without
analyzing whether the system can be integrated into the mid-
and long-term solutions--as GAO recommended in an October 1993
report. The Army plans to acquire another 115 near-term systems
at a cost of nearly $24 million. The Defense Department and the
Army are concerned about the affordability and cost-
effectiveness of the near-term system, and it may never be
fully fielded for these reasons. The Army's plan risks wasting
millions of dollars on a system that may never be procured.
49. ``Aircraft Requirements: Air Force and Navy Need To Establish
Realistic Criteria for Backup Aircraft,'' September 1995, GAO/
NSIAD-95-180.
a. Summary.--Since 1977, many audits by the Defense
Department (DOD) and GAO have pointed out that the military
services overstate the number of backup fighter and attack
aircraft needed for training, test, and evaluation, and to
replace combat aircraft that are lost through attrition or are
being repaired. At the end of fiscal year 1993, the Air Force
and the Navy/Marine Corps maintained nearly 3,000 fighter and
attack aircraft and about 1,600 similar, equally capable backup
planes. In response to congressional concerns that backup
forces are not efficiently managed and that this had adversely
affected funds available for combat forces, this report
identifies (1) trends in the number of backup aircraft
maintained by the services; (2) steps that the military has
taken in response to recommendations made by GAO and others to
validate backup aircraft requirements; and (3) opportunities to
remove unneeded backup aircraft from the force to minimize the
cost of operating and maintaining combat aircraft.
b. Benefits.--The Air Force and the Navy/Marine Corps
operate and maintain about one backup aircraft for every two
combat-designated fighter/attack aircraft. The Air Force's and
the Navy/Marine Corps' plans to reduce the size of the combat-
designated aircraft forces will, if implemented, essentially
achieve the bottom-up review's force level goals by the end of
the fiscal year 1996. Backup forces will also be reduced but
will still make up about one-third of all fighter/attack
aircraft operated and maintained by the services. The Air Force
has not developed supportable criteria for structuring and
managing the backup forces and justifying the procurement of
backup aircraft. The Navy/Marine Corps have begun to revise
their criteria. Realistic criteria is essential because both
the Air Force and the Navy plan to buy expensive new aircraft
systems in the near future--the F-22 and the F/A-18E/F,
respectively. If realistic criteria for backup aircraft are not
established soon, the Air Force and the Navy could buy more
aircraft than needed. Finally, if attrition aircraft in excess
of short-term needs were stored until needed, the Air Force
could reduce operation and maintenance costs.
50. ``Weapons of Mass Destruction: DOD Reporting on Cooperative Threat
Reduction Assistance Can Be Improved,'' September 1995, GAO/
NSIAD-95-191.
a. Summary.--In 1991, Congress authorized the Defense
Department to help the former Soviet Union (1) destroy nuclear,
chemical, and other weapons of mass destruction; (2) transport,
store, and safeguard such weapons in connection with their
destruction; and (3) prevent the proliferation of such weapons.
Under the Cooperative Threat Reduction program, DOD manages
various projects to help Balarus, Kazakhstan, Russia, and
Ukraine--the four republics that inherited the former Soviet
Union's weapons of mass destruction. This report examines
whether DOD had (1) made progress in auditing and examining
program aid; (2) listed its planned audit and examination
efforts to be carried out during fiscal year 1995; (3) compiled
a list describing the current location and condition of program
assistance; and (4) provided a basis for determining whether
the assistance was being used for the purposes intended.
b. Benefits.--DOD made some progress in the Cooperative
Threat Reduction (CTR) program's first year of audit and
examination activities. DOD has worked to resolve recipient
nations' concerns over audit and examination implementing
procedures; conducted five audits at sites in three countries
as of July 1995, and planned an audit every month of other CTR-
provided assistance through the end of the fiscal year 1995.
However, in reviewing DOD's report to Congress, GAO found
the following shortcomings:
(1) The report does not fully represent all of DOD's audit
and examination activities for the fiscal year 1995, as
required, and does not describe how DOD plans such activities.
(2) The report does not describe the condition of the
assistance, as required, and contains outdated and inaccurate
listings of CTR assistance deliveries. While the report is
dated January 5, 1995, it was not issued until May 31, 1995.
Moreover, the list of CTR deliveries that the report includes
is dated February 2, 1995. After that date and through May
1995, DOD delivered CTR aid worth over $38 million.
(3) The limited number of projects DOD reviewed raises
questions about the basis for DOD's programwide determination
that CTR assistance--with one classified exception--has been
accounted for and used for its intended purpose. According to
DOD's report, this determination was based on information on 9
of the 23 projects for which CTR-provided assistance was being
used. Of these nine projects, only three had actually been
audited. Other sources of information for the projects included
random observations by U.S. technical teams, recipient-provided
data, and national technical means.
51. ``Unexploded Ordinance: A Coordinated Approach To Detection and
Clearance Is Needed,'' September 1995, GAO/NSIAD-95-197.
a. Summary.--Inexpensive improvements in mine design; the
unique challenges posed by clearing large areas, such as
farmland, in Third World countries; and the difficulty of
controlling the proliferation of antipersonnel landmines have
thwarted U.S. technological efforts to detect and clear
unexploded ordinance, which kills an estimated 30,000 people
around the world each year. Many of the victims are civilians,
including children, who are killed years after hostilities have
ceased. This report reviews the extent of ordinance problems.
GAO (1) reviews the extent to which the Defense Department's
and other agency's requirements and associated research and
development could be applied to clearance problems elsewhere in
the world; (2) assesses the ability of existing or foreseeable
technologies to detect and clear landmines and other unexploded
ordnance (UXO); and (3) identifies barriers that could impede
the progress or output of this technology.
b. Benefits.--U.S. research and development for UXO
detection and clearance technology are broader today than they
were during the cold war years and thus have more in common
with the worldwide problem. With the dissolution of the Soviet
Union, United States requirements have evolved that have more
in common with area clearance than ``breaching'' or making
paths through minefields during combat. These new requirements
include clearing (1) U.S. military sites of UXO and other
hazards, and (2) areas and roads needed for conducting
operations other than war, such as peacekeeping. Such broader
requirements make it likely that research and development
sponsored by DOD will have more direct application to the
clearance problems faced by Third World countries. The
technologies available today to clear wide areas are inadequate
and cannot keep pace with the number of landmines being
emplaced annually. For example, the United Nations estimated
that in 1993, 2.5 million mines were emplaced, while only
80,000 were removed. The most effective techniques, such as
hand-held probes and metal detectors, are time-consuming,
expensive, and labor-intensive. While heavy mine clearing
equipment, such as plows, are suited to breaching paths, it is
not practical for clearing large areas. Several factors limit
the potential output from U.S. investment in technologies
related to the detection and clearance of landmines and other
forms of UXO. For one, there is no overarching, government wide
strategy or organization that exists to ensure that the most is
gained from these various efforts. Moreover, it is difficult to
estimate if the level of funding for applicable technologies is
sufficient. Other barriers to technical solutions include the
relative ease with which inexpensive improvements in mine
designs have outstripped detection and clearance methods, the
unique area clearance challenges Third World countries pose,
and the difficulty of controlling the proliferation of
antipersonnel landmines.
52. ``1996 DOD Budget: Potential Reductions to Operation and
Maintenance Programs,'' September 1995, GAO/NSIAD-95-200BR.
a. Summary.--This report evaluates the military services'
and Department of Defense's (DOD) fiscal year 1996 operation
and maintenance (O&M) budget requests totaling $70.3 billion.
GAO reviewed selected O&M accounts for U.S. Army, Europe
(USAREUR); U.S. Forces Command (FORSCOM); U.S. Air Forces,
Europe; Air Combat Command; Air Material Command; and the
Atlantic and Pacific Fleets. They also reviewed selected
activities managed at the headquarters of the Army, Navy, and
the Air Force, as well as some DOD-managed activities. Specific
programs were included because (1) O&M funding levels are
increasing; (2) GAO's ongoing or issued reports identified O&M
implications; or (3) congressional committees have expressed a
specific interest in the program.
b. Benefits.--GAO identified potential reductions of $4.9
billion to the fiscal year 1996 operation and maintenance
budget requests, which totaled $70.3 billion, from the military
services and the Defense Department (DOD). In addition, GAO
notes that funding for the Partnership for Peace program, which
is designed to encourage joint training and military exercises
with NATO forces and to promote greater partner
interoperability, is divided between the DOD and State
Department budgets. As a result, no one congressional committee
has complete oversight to ensure that the program's efforts are
effective and not duplicative. The fiscal year 1996 operation
and maintenance budget request from DOD earmarks $40 million
for program expenses, including an information management
system, regional airspace initiative, defense resource
management program, and unit exchanges. Meanwhile, the State
Department is requesting $60 million for this same program.
53. ``Future Years Defense Program: 1996 Program Is Considerably
Different From the 1995 Program,'' September 1995, GAO/NSIAD-
95-213.
a. Summary.--This report compares the Defense Department's
(DOD) fiscal year 1996 Future Years Defense Program (FYDP) with
the program for fiscal year 1995. Specifically, GAO discusses
(1) what major program changes were made from 1995 to 1996; (2)
what the implications of these changes are for the future; and
(3) whether the 1996 program complies with statutory
requirements.
b. Benefits.--The fiscal year 1996 FYDP, which covers
fiscal years 1996-2001, is considerably different from the 1995
FYDP, which covers fiscal years 1995-1999. First the total
program increased by about $12.6 billion in the 4 common years
of both plans. Second, approximately $27 billion in planned
weapon system modernization programs for these 4 years have
been eliminated, reduced, or deferred to the year 2000 and
beyond. Third, the military personnel, operation and
maintenance, and family housing accounts increased by over $21
billion during the common period. The net affect is a more
costly defense program, despite substantial reductions in DOD's
weapon modernization programs between 1996 and 1999. As a
result of these changes, Defense plans to compensate for the
decline in procurement during the early years of the 1996 FYDP
by substantially increasing procurement funding in 2000 and
2001. The Secretary of Defense plans to pay for this increase
with a combination of savings achieved from infrastructure
reductions, acquisition reforms, and from real budget growth.
The additional budget amounts are expected, in part, to lessen
the need for Defense to reduce or defer weapon modernization
programs to meet other near-term readiness requirements.
Congress will specify how Defense is to spend some of the added
funds; however, DOD may have an opportunity to restore some
programs that were reduced to the year 2000 and beyond.
Moreover, the additional funding could mitigate the need for
DOD to increase out-year budgets. The fiscal year 1996 FYDP was
submitted in compliance with applicable legislative
requirements.
54. ``Discrimination Complaints: Monetary Awards in Federal EEO
Cases,'' January 1995, GAO/GGD-95-28FS.
a. Summary.--Federal employment discrimination complaints
are resolved in various ways. For example, an agency may
provide a complainant with appropriate training if training is
at issue. Another way to resolve a complaint, which is very
common, is to provide the complainant with monetary relief
through back pay, which gives the victim of discrimination the
salary he or she would have received had the alleged
discrimination not occurred. Further, Federal employment
discrimination complaints are handled through administrative
procedures and the courts. When a lawsuit is filed, any
resulting monetary relief is generally paid from the Judgement
Fund. However, in some cases the monetary relief is paid by the
discriminating agency. Additionally, a prevailing party in a
discrimination case at the administrative or judicial level can
receive reasonable attorney fees and costs.
b. Benefits.--Although exact payment figures are not
readily available, GAO found that Federal agencies and the
Judgement Fund paid at least $87.4 million to Federal workers
and their attorneys since fiscal year 1989 as a result of
Federal equal employment opportunity cases. Of that amount,
$30.6 million was paid in fiscal years 1993 and 1994. Much of
the $87.4 million was back pay to Federal employees. However,
at least $30.5 million was for attorney fees and costs. Of that
amount, $8.7 million was paid in fiscal years 1993 and 1994.
55. ``Missile Development: Status and Issues at the Time of the TSSAM
Termination Decision,'' January 1995, GAO/NSIAD-95-46.
a. Summary.--The Tri-Service Standoff Attack Missile
(TSSAM) program--a $13.7 billion effort to develop and acquire
a stealthy, conventional, medium-range cruise missile--has been
plagued by significant technical problems, cost growth, and
schedule delays. In May 1994, the Defense Department began
restructuring the program after a series of flight test
failures and unresolved technical problems. On December 9,
1994, the Secretary of Defense announced plans to cancel the
program because of significant development difficulties and
growth in the expected unit cost for each missile. This report
provides pertinent information on the History and status of the
TSSAM program at the time of the Secretary's announcement for
use by Congress as it reviews the termination decision.
b. Benefits.--Unsuccessful flight test results,
particularly over the last 2 years, made attainment of TSSAM's
very high reliability requirement questionable. A reliable
improvement program has been initiated to address this problem,
but demonstration of whether problems would have been resolved
would have taken several years. The acquisition of more test
missiles would have added nearly $300 million to the program's
estimated development cost but provide little, if any,
assurance of TSSAM performance and reliability before the
critical early production decisions. Moreover, the total TSSAM
program cost increased from an estimated $8.9 billion in 1986
to $13.7 billion in 1994, and the total number of missiles to
be produced decreased by over 50 percent. During the same
period, estimated procurement unit costs increased from
$728,000 to over $2 million. Additionally, declining budgets
and changes in threat had prompted the services to consider
alternative systems. DOD's March 1994 Cost and Operational
Effectiveness Analysis (COEA) concluded that TSSAM was the most
cost-effective weapon among several alternatives, principally
because of its success in high-threat situations. However, the
analysis showed some alternative weapon systems performed well
in less demanding situations and might be adequate to meet
existing national security requirements.
56. ``Department of Energy: National Laboratories Need Clearer Missions
and Better Management,'' January 1995, GAO/RCED-95-10.
a. Summary.--The Energy Department's (DOE) national
laboratories have made vital contributions to the Nation's
defense and to civilian science and technology efforts.
However, the national laboratories today lack clearly defined
missions and suffer from poor coordination to solve national
problems. As a result, DOE has underutilized the laboratories'
talents to tackle complex issues and these institutions may be
unprepared to meet future expectations. GAO raises questions
about the laboratories' ability to help the United States meet
its changing defense needs at the end of the cold war and
compete against growing foreign competition in technology.
b. Benefits.--DOE's laboratories do not have clearly
defined missions that focus their considerable resources on
accomplishing the Department's changing objectives and national
priorities. DOE has not coordinated these laboratories' efforts
to solve national problems but has managed each laboratory on a
program-by-program basis. As a result, DOE has underutilized
the laboratories' special talents to tackle complex, cross-
cutting issues. Additionally, DOE has not acted on
recommendations by government advisory groups that they
redefine the laboratories' missions to meet changes in
conditions and national priorities. Moreover, DOE's day-to-day
management of the laboratories--perceived as costly and
inefficient by laboratory managers--inhibits the achievement of
a productive working relationship between the laboratories and
DOE that is necessary if the laboratories are to move
successfully into new mission areas. Both laboratory and DOE
managers believe that more realistic and consistent priorities
are needed to comply with the growing oversight and
administrative requirements placed on the laboratories in
recent years.
57. ``Naval Petroleum Reserve: Opportunities Exist To Enhance Its
Profitability,'' January 1995, GAO/RCED-95-65.
a. Summary.--The Naval Petroleum Reserve in Elk Hills, CA,
is jointly owned by the U.S. Government and Chevron U.S.A.,
Inc. It is now operated by Bechtel Petroleum Operations, Inc.,
under a contract that expires in July 1995. Chevron believes
that it can run the reserve more profitably than the Government
can, and in May 1995 it proposed taking over reserve
operations. Later, the Energy Department (DOE) suspended
negotiations with Chevron on this proposal and recently began
to solicit interest from other parties to operate the reserve.
This report explores actions that DOE and Congress can now take
to improve the reserve's profitability.
b. Benefits.--Three actions could enhance the profitability
of the Naval Petroleum Reserve (NPR-1). First, DOE could be
allowed to set the rate of production in a way that maximizes
profits, which is standard industry practice. In contrast, the
production rate of oil and gas at the reserve is currently set
by statutory requirement at the rate that can be achieved
``without detriment to the ultimate recovery'' of the
resource--called the maximum efficient rate (MER). Second,
making a final decision on how ownership shares in the NPR-1
are distributed between DOE and Chevron could enhance the
reserve's profitability by allowing the owners to focus on
investments that enhance the venture as a whole. Currently, an
open-ended arrangement between Chevron and DOE governs their
equity and ownership shares of projection. This open-ended
situation has undermined trust and cooperation between the two
owners, and both spend a significant amount of resources
examining the likely impact of proposed investments on their
equity shares before committing to new projects. As a result,
these expenditures and the slowed decisionmaking result in
reduced profits. By contrast, standard industry practice calls
for operating a mature commercial oil and gas field with the
equity shares finalized among the partners so the unit can be
developed and production managed in the most profitable manner
possible. Finally, adding a clause to the contract between DOE
and Chevron to promote risk sharing could help encourage
investments that enhance profits. In standard industry
practice, sharing such risks is encouraged by a contract's
``nonconsent clause,'' which governs how a partner that does
not share the initial risks or costs of a project will be
treated. Without such a cause, one partner may decide not to
participate in drilling a well but later decide that it wants a
share of any resulting profits.
58. ``Juvenile Justice: Minimal Gender Bias Occurred in Processing
Noncriminal Juveniles,'' January 1995, GAO/GGD-95-56.
a. Summary.--This report studies gender bias in State
juvenile justice systems' handling of status offenders, who are
youths and have committed an offense, such as truancy or
ungovernable behavior, that would not be a crime if committed
by an adult. GAO defines ``gender bias'' as intentional or
unintentional differences in the juvenile justice system's
outcomes of female and male status offenders who have similar
characteristics, such as age, status offense, and prior offense
History. GAO (1) compares the outcome of the intake decisions
and the frequency and outcomes of detentions, adjudications,
and out-of-home placements of female and male status offenders,
and (2) compares the availability of facilities and services
for female and male status offenders in selected jurisdictions.
b. Benefits.--GAO concluded that there was minimal gender
bias, as they defined it, in processing noncriminal juveniles.
According to the National Center for Juvenile Justice's
national data, 500,620 status-offender cases were petitioned to
juvenile courts in the United States during the 6-year period
from 1986 to 1991. Five of the six intake regression models
that GAO studied indicated no evidence of gender bias.
Similarly, for 14 of the 19 regression models for the
detention, adjudication, and placement decisions, results
indicated no evidence of gender bias in the juvenile courts'
handling of status offenders. However, for the one intake model
that exhibited a difference for a specific State, females were
more likely to be petitioned to juvenile court than males. For
the other five State-specific models--three detention, one
adjudication, and one placement--females were less likely to be
detained, adjudicated, or placed than males. GAO determined
that factors, such as prior offense, history, and source of
referral, affected the offenders' outcomes. At the 15
facilities that GAO visited, they found minimal gender-based
differences in the availability of counseling, educational, and
medical services for females and males, although the extent of
such services varied by type of facility. The only gender-based
difference we noted involved admission physicals. At two of the
female-only group homes, health examinations included testing
for sexually transmitted diseases, whereas, at similar male-
only facilities operated by the same organizations, such
testing was not done unless requested by the males.
59. ``Former Soviet Union: Creditworthiness of Successor States and
U.S. Export Credit Guarantees,'' February 1995, GAO/GGD-95-60.
a. Summary.--Under the 1990 Farm Bill, the Office of
General Sales Manager (GSM)-102 program is intended to develop,
expand, or maintain U.S. agricultural markets overseas by
facilitating commercial export sales of U.S. agricultural
products. Under the program, the U.S. Department of
Agriculture's (USDA) Commodity Credit Corporation (CCC) may
guarantee loans to buy U.S. agricultural exports. Through this
program the Soviet Union received $3.74 billion in credit
guarantees. After its dissolution, and through September 30,
1993, Russia and Ukraine received credit guarantees equal to
$1.06 billion and $199 million, respectively. In this report,
GAO (1) considered the general economic and political
environment in the former Soviet Union (FSU) and its successor
states; (2) reviewed how the Soviet debt crisis developed and
the relationship between debt problems, on the one hand, and
economic reform and creditworthiness on the other; (3) examined
how USDA decisions on providing the FSU/successor states with
credit guarantees; and (4) considered the exposure of the
(GSM)-102 portfolio to default by the FSU and its successor
states.
b. Benefits.--Burdened with debt and plagued by economic
and political uncertainties, the successor states of the former
Soviet Union are not creditworthy and are at high risk for
default on billions of dollars in United States agricultural
export credit guarantees. Arrears on the debt of the former
Soviet Union have continued to mount since 1989--
notwithstanding debt deferral, debt rescheduling, and other
foreign assistance provided by creditor nations. Although
Western nations have indicated a willingness to provide more
debt relief and other assistance, much of this aid depends on
Russia's implementing difficult macroeconomic and structural
reforms. Whether, and when, Russia can or will implement such
reforms is questionable. During the period when the Agriculture
Department (USDA) provided more than $5 billion in export
credit guarantees to the former Soviet Union, Russia, and
Ukraine, USDA's own evaluations found that these states were
very risky in terms of their ability to repay such debt. As a
result of the large amount of credit guarantees made to the
former Soviet Union and its successors and their poor
creditworthiness, the export credit guarantee program is
heavily exposed to default.
60. ``Former Soviet Union: U.S. Bilateral Program Lacks Effective
Coordination,'' February 1995, GAO/NSIAD-95-10.
a. Summary.--Since the Soviet Union was dissolved late in
1991, the newly independent successor states have been trying
to develop more efficient, market-based economies and establish
democratic governments. The United States has strongly
supported this transition, both diplomatically and financially.
The structure that the executive branch established to
coordinate, manage, and implement U.S. programs to help with
this enormous undertaking is both unique and complex. This
report (1) identifies the size, scope, and status of the
various United States bilateral programs for the Soviet Union;
(2) describes the structures established for coordinating and
managing these programs; and (3) describes some of the
coordination and structural problems the executive branch has
faced.
b. Benefits.--For the fiscal years 1990 through 1993, 19
United States Government agencies committed a total of $10.1
billion for bilateral grants, donation, and credit programs to
the former Soviet Union (FSU). During the period, Federal
agencies obligated $1 billion and spent $434 million of the
$1.8 billion authorized by Congress for grant programs,
obligated $1.6 billion, and spent $1.22 billion for the
donation program, and made $6.7 billion available for direct
loans, guarantees, and insurance agreements. The structure for
coordinating and managing U.S. bilateral programs for the FSU
starts with the National Security Council's Policy Steering
Group chaired by the Deputy Secretary of State. This group is
the only place where all U.S. Government policies and programs
involving the FSU come together and where all agencies report.
Pursuant to the Freedom Support Act, in May 1993, the President
designated a Coordinator within the Department of State and
charged him with broad responsibility for U.S. bilateral
programs with the FSU that included management and
implementation of assistant programs, resolving policy and
assistance program disputes among U.S. agencies participating
in the assistance program, designing overall assistance and
economic cooperation strategy for the FSU, and ensuring program
and policy coordination amongst agencies. Despite this, GAO
found that the State Department Coordinator's role is much more
limited. Other groups within the executive branch have equal or
greater influence and authority over assistance to the FSU or
function autonomously outside the Coordinator's purview. In
fact, the only bilateral program wholly within the
Coordinator's purview is the program funded by the Freedom
Support Act. Additionally, other participants involved with
U.S. assistance to the FSU have at times resisted, hindered, or
overruled the Coordinator's efforts to develop a coherent and
comprehensive assistance program for the FSU. These include
Cabinet and other agencies, the Gore-Chernomyrdin Commission
and Congress through congressional earmarks. Further, the
Coordinator's role has been complicated by the existence of
serious disagreement between agencies over various aspects of
the program. For example, USAID, a primary implementing agency
for Freedom Support Act programs, has been involved in numerous
disputes with other government agencies over money and policy.
61. ``Federally Funded R&D Centers: Executive Compensation at the
Aerospace Corporation,'' February 1995, GAO/NSIAD-95-75.
a. Summary.--The Aerospace Corporation is a nonprofit
mutual benefit corporation that provides scientific and
technical support, principally general systems engineering and
integration services, for the Air Force and other government
agencies. Aerospace runs a federally funded research and
development center (FFRDC) sponsored by the Air Force.
Aerospace's FFRDC's are funded solely or substantially by
Federal agencies to meet special long-term research or
development needs that cannot be met as effectively by existing
in-house or contracting resources. While compensation to
Aerospace employees is primarily paid from government
contracts, which represent over 99 percent of the company's
total business revenue. Aerospace compensation is reviewed by
the Air Force for reasonableness during its annual contract
negotiations. This report discusses the salary and other
benefits provided to Aerospace's corporate officers and other
senior management personnel and includes information on Defense
Contract Audit Agency (DCAA) audits on Aerospace compensation
costs and congressional actions regarding FFRDC compensation.
b. Benefits.--As of September 1994, Aerospace employed 32
executives, 12 of whom were corporate officers. The officers'
total compensation averaged about $240,000, and their annual
salary averaged about $176,000. From September 1991 to
September 1994, total salary cost for all Aerospace executives
rose 78 percent, primarily due to raises of up to 29 percent
for individual executives in 1992 and a 45-percent increase in
the number of executives from 1991 to 1994. In addition,
Aerospace paid executives hiring bonuses of $30,000 each in
1993. In an audit started in response to Aerospace's June 1992
salary increases, the Defense Contract Audit Agency (DCAA)
initially questioned the reasonableness of the salaries and
fringe benefits. In its final report, however, DCAA no longer
questioned the reasonableness of corporate officers' salaries
but recommended that Aerospace provide further support for
corporate officers' fringe benefits.
62. ``DOD Budget: Selected Categories of Planned Funding for Fiscal
Years 1995-99,'' February 1995, GAO/NSIAD-95.
a. Summary.--GAO identified programs in the Defense
Department's (DOD) future funding plans for fiscal years 1995-
99 for the following 13 categories: environmental cleanup and
restoration, defense conversion, DOD dependents schools and
Junior ROTC, basic research, counter-drug efforts, humanitarian
and foreign assistance programs, civilians separation pay and
military temporary early retirement authority, grants to
colleges and universities, operation of the 89th Military
Airlift Wing at Andrews Air Force Base, medical education and
noncombat-related medical research, support for foreign
military sales, antiterrorism activities, and pay and
allowances to jailed military personnel.
b. Benefits.--GAO notes that DOD planned to fund about 13
categories when the President submitted his fiscal year 1995
budget in February 1994. More than half of the funds are in the
operations and maintenance account, which traditionally has
funded combat training and other readiness-related items. The
largest part of the remaining funds are in the research,
development, test, and evaluation account.
63. ``Peace Operations: Information on U.S. and U.N. Activities,''
February 1995, GAO/NSIAD-95-102BR.
a. Summary.--Peace operations use military forces to help
maintain or restore international peace. Peace operations fall
into three categories: those seeking to prevent conflict from
breaking out, those that seek to compel countries to comply
with international sanctions designed to maintain or restore
peace and order, and those designed to relieve human misery and
suffering. This briefing report covers (1) the cost and funding
of peace operations; (2) the effectiveness of U.N. operations;
(3) U.S. policy and efforts to strengthen U.N. capabilities;
and (4) the impact of peace operations on the U.S. military.
b. Benefits.--GAO noted that when considering the cost of
operations it should be recognized that DOD's financial systems
cannot reliably determine costs. For the fiscal year 1994, DOD
reported incremental costs for peace operations of $1.9 billion
and they estimate a cost of $2.6 billion for 1995. In addition
to DOD's costs, the Department of State paid $1.1 billion
toward U.S. peacekeeping, the Agency for International
Development paid $100 million, and various other agencies paid
amounts ranging from several hundred thousand to several
million dollars. The United Nations has had limited
effectiveness carrying out complex missions such as the U.N.
Transitional Authority in Cambodia (UNTAC) and operations that
entail the use of force, such as the U.N. Protection Force
(UNPROFOR) in Bosnia and U.N. Operations in Somalia (UNOSOM).
Although, these operations took place in quite hostile
environments. However, several weaknesses of the United Nations
limit its ability to effectively undertake such large and
ambitious operations. These include weaknesses in leadership,
command and control, and logistics. Moreover, the United
Nations is ill-equipped to plan, logistically support, and
deploy personnel for large missions. The United States is
making an effort to remedy these problems by recommending steps
to improve the capabilities of the U.N. Department of
Peacekeeping Operations and thus provide for effective and
efficient peace operations. For example, DOD has detailed
military officers, sealift and airlift planners, and budget
experts to U.N. headquarters to improve planning and
preparation for new and ongoing operations. Peace operations
have stressed certain key military capabilities, few of which
are in the active component. These include certain Army support
services, Air Force specialized aircraft, and the F-4G Wild
Weasel, which is used for lethal suppression of enemy radars.
However, peace operations have also provided the military
forces with valuable experience in joint and coalition
operations.
64. ``Foreign Assistance: Selected Donors' Approaches for Managing Aid
Programs,'' February 1995, GAO/NSIAD-95-37.
a. Summary.--Congress and the executive branch have been
deliberating on how to reform the U.S. foreign assistance
program given the rapidly changing global environment and
recurring management problems. This report provides information
on how six other bilateral donors--Canada, Germany, Japan,
Sweden, the Netherlands, and the United Kingdom--and the
European Union, a multilateral donor, manage their foreign aid
programs. GAO discusses (1) the difficulty of planning in an
uncertain environment; (2) common structural dilemmas in
foreign aid programs; and (3) common management weaknesses.
b. Benefits.--Careful planning is becoming increasingly
important as the worldwide recession, growing deficits, and the
resulting budget cuts force most donors to make choices among
aid programs and recipients. Aid agencies must balance their
governments' development assistance goals with newer foreign
aid goals associated with the environment, U.N. peacekeeping,
and democracy. Moreover, the balancing of these goals is then
weighed against their governments' self-interests and domestic
needs, placing additional pressure on declining aid budgets. In
addition to an uncertain environment, there are several common
structural dilemmas in foreign aid programs the donors have to
overcome. These include (1) ensuring coordination and relieving
organizational tension among government agencies, particularly
aid agencies and foreign ministries, caused by overlapping
jurisdictions and conflicts over aid priorities; (2) increasing
institutional specialization as new development problems or
functions are turned over to newly created aid agencies; (3)
determining the most efficient and effective approaches for in-
country representation; and (4) determining how much
implementation of development activities should be carried out
by nongovernment personnel. Finally, donors have reported long-
standing problems with inadequate administrative capacity among
aid agencies. Addressing management problems takes on a new
urgency now that politicians and the general public are looking
for greater evidence of development results. The lack of
criteria for measuring project and program results,
preoccupation with formulating new projects, and inadequate
monitoring of program and project implementation were
consistently cited as problems among the donors.
65. ``Defense Operations Fund: Management Issues Challenge Fund
Implementation,'' March 1995, GAO/AIMD-95-79.
a. Summary.--The National Defense Authorization Act for
Fiscal Year 1995 directed the Secretary of Defense to submit to
the congressional defense committees a report on the progress
made in implementing the September 1993 Defense Business
Operations Fund Improvement Plan by February 1, 1995. GAO has
monitored and evaluated the Fund's implementation in February
1991 and its operation since. It was previously reported that
the Department of Defense (DOD) had not achieved the Fund's
objectives. It was also concluded that the Fund's problems are
symptomatic of the weaknesses in DOD's overall financial
management environment. This report provides GAO's (1)
assessment of DOD's progress in correcting the ongoing problems
that have hindered the Fund's operations, and (2)
recommendations to the Congress and DOD to address GAO's
concerns.
b. Benefits.--The Pentagon faces formidable challenges in
overcoming problems plaguing the Defense Business Operations
Fund. Many of these shortcomings, such as inadequate financial
and accounting systems, are the result of years of neglect and
date from the old industrial and stock funds. The Fund's
financial systems cannot produce accurate and reliable
information on Fund operations. Until these antiquated systems
are eliminated, (1) the infrastructure costs of maintaining
multiple systems for the same purpose will persist, and (2) the
Defense Department (DOD) and Congress will continue to receive
inaccurate and unreliable information and Fund operations.
Also, the recent decision to devolve cash management abandons
one of the Fund's goals. DOD can cut costs only if it is more
conscious of operating expenses and makes fundamental
improvements in the way it conducts business. Although the Fund
is supposed to operate on a break-even basis, it had not been
able to meet this goal. Fiscal year 1994 marked the third
consecutive year of reported losses. If top management does not
reverse this trend, potential savings from the Fund will not be
realized.
66. ``Travel Process Reengineering: DOD Faces Challenges in Using
Industry Practices To Reduce Costs,'' March 1995, GAO/AIMD/
NSIAD-95-90.
a. Summary.--DOD reported that it spent about $3.5 billion
in direct costs and processed about 8.2 million vouchers for
temporary duty travel in fiscal year 1993. DOD estimated that
it spent 30 percent of direct costs to process temporary duty
travel. Defense employees perform various types of travel to
carry out mission and business functions. This report focuses
on temporary duty travel, which includes travel for business,
deployment, and training purposes. DOD's travel processing is
done on a decentralized basis. The processing generally
includes (1) authorizing the funding and appropriate means of
travel and issuing travel orders; (2) arranging transportation,
accommodations, and developing itineraries; (3) making travel
expenditures, purchasing tickets, and collecting receipts; (4)
preparing and processing vouchers based on receipts; and (5)
reconciling accounts, auditing vouchers, making payments, and
generating management reports. The report includes information
on DOD's temporary duty travel processes, estimates of travel
costs, and an assessment of DOD's ongoing initiatives to
improve its travel processes.
b. Benefits.--With processing costs accounting for at least
30 percent of the $3.5 billion that the Pentagon spent on
travel in fiscal year 1993, adopting private industry's ``best
practices'' for travel management could save millions of
dollars. DOD's needs to streamline its complex processing
system, which involves 700 voucher-processing centers, multiple
travel agencies, and more than 1,300 regulations. ``Best
practices'' in the private sector include empowering employees
to make travel decisions, reducing the number of travel agents
to as few as one, consolidating multiple travel-processing
centers into a single facility, and simplifying travel policies
to less than 20 pages.
67. ``Managing Customs: Efforts Under Way To Address Management
Weaknesses,'' March 1995, GAO/GGD-95-73.
a. Summary.--The U.S. Customs Service enforces trade laws
and policies designed to prevent importation of foreign goods
that threaten our health and safety. Customs also collects
duties, fees, and taxes that have totaled about $20 billion
annually in recent years, and Customs is the initial source of
trade statistics used in formulating and monitoring our
Nation's foreign trade policies. GAO had previously identified,
in a December 1992 report, a number of problems that could
hinder Customs' ability to meet the challenges of the changing
world trade environment. The major problem areas were in (1)
mission planning; (2) financial, information, and human
resource management; and (3) its organizational structure.
Since then Customs has made efforts to improve on these noted
problems areas. This report discusses the U.S. Customs
Service's efforts to address weaknesses GAO identified in the
1992 report and during subsequent reviews.
b. Benefits.--Customs has taken action in each of the
problem areas. Some of the more significant efforts include the
following:
(1) Customs has revised its 1993 5-Year Plan to clarify and
set priorities for its trade enforcement objectives, including
fully automating its transaction processing and establishing
performance accountability measurements for achieving its trade
enforcement goal.
(2) It has improved controls over the identification and
collection of duties, taxes, fees, and penalties.
(3) It has reorganized its debt collection unit, formalized
its collection procedures, and aggressively pursued collection
of delinquent receivables.
(4) It has embarked on a reorganization plan to correct
institutional problems related to cooperation and coordination
among its programmatic units and to ensure consistency in
policy implementation.
Although, additional efforts will be needed in Customs'
financial and information systems modernization programs, GAO's
recent audits of Customs' financial statements disclosed that
Customs has improvement efforts under way but had not yet fully
resolved many of the financial management problems reported in
1992. Also, these audits identified two areas not identified in
the 1992 report. One concerns Customs' inability to detect and
prevent duplicate or excessive claims for refunds of duties and
taxes paid on imported goods that are subsequently exported or
destroyed. The other relates to Customs' inability to prevent
or detect unauthorized access and modifications to critical and
sensitive data and computer programs.
68. ``Defense Health Care: Issues and Challenges Confronting Military
Medicine,'' March 1995, GAO/HEHS-95-104.
a. Summary.--The Defense Department's (DOD) military health
care system provides medical services and support both in
peacetime and in war to members of the armed forces and their
families, as well as to retirees and survivors. Post-cold war
planning scenarios, efforts to reduce the overall size of the
military, Federal budget cuts, and base closures and
realignments have focused attention on how large DOD's health
care system is, what its makeup is, how it operates, whom it
serves, and whether its missions can be carried out in a more
cost-effective way. This report describes the Military Health
Services System (MHSS), past problems faced by DOD as it ran
the system and efforts to solve those problems, and the
management challenges now confronting DOD.
b. Benefits.--The MHSS is one of the Nation's largest
health care systems, offering health benefits to about 8.3
million people and costing over $15 billion annually. Its
primary mission is to maintain the health of 1.7 million
active-duty service personnel and to be prepared to deliver
health care during times of war. Past reports about DOD's
ability to meet its wartime mission described problems such as
inadequate training, missing equipment, and large numbers of
nondeployable personnel as serious threats to the Department's
ability to provide adequate medical support to deployed forces.
Other problems that have faced DOD in the past decade are
increasing costs, uneven access to health care services, and
disparate benefit and cost-sharing packages for similarly
situated categories of beneficiaries. In response to these
challenges, DOD initiated, with congressional authority, a
series of demonstration programs around the country designed to
explore various means by which it could more cost effectively
manage the care it provides and funds. The experiences of these
demonstration programs provided many valuable lessons and has
enabled DOD to become one of the Nation's leaders in the
managed care arena. Additionally, DOD, in 1993, began a
nationwide managed care program, called TRICARE, to improve
beneficiary access to high-quality care while containing the
growth of the system's costs. The program calls for
coordinating and managing beneficiary care on a regional basis
using all available military hospitals and clinics supplemented
by contracted civilian services. As DOD implements the TRICARE
program, several operational challenges have emerged. These
range from deciding the appropriate authorities of regional
health administrators to constructing networks adequate to
serve all beneficiaries in each region. Finally, as the
Congress and the Department plan for the future, decisions
about the appropriate size of the military health care system
will be of paramount importance.
69. ``Security Clearances: Consideration of Sexual Orientation in the
Clearance Process,'' March 1995, GAO/NSIAD-95-21.
a. Summary.--The requirement for Federal employees who
handle classified information to be loyal and trustworthy was
an outgrowth of a 1947 Federal loyalty program, established by
President Truman during a time of heightened feelings of
national security over growing concerns about the communist
threat. Executive Order 10450 modified the loyalty program in
1953, requiring that any individual's employment be ``clearly
consistent with the interests of the national security,'' and
for the first time included sexual perversion as a basis for
removal from the Federal service. Federal agencies used the
sexual perversion criteria in the early 1950's to categorize
homosexuals as security risks and separate them from government
service. Agencies could deny homosexual men and women
employment because of their sexual orientation until 1975, when
the Civil Service Commission issued guidelines prohibiting the
government from denying employment on the basis of sexual
orientation.
b. Benefits.--GAO found during a review of eight Federal
agencies that, in a break with government policy dating to the
1950's, sexual orientation was no longer a factor in issuing
security clearances to Federal workers and contractors. Some
persons GAO spoke with, however, believed that they had been
asked inappropriate questions during the clearance processes.
All eight agencies indicated that concealment of any personal
behavior that could result in exploitation, blackmail, or
coercion was a security concern. However, the treatment of
concealment as it relates to sexual orientation varies. Most
agencies have eliminated specific questions about sexual
orientation, but Defense Department and FBI guidelines treat
concealment as a security concern.
70. ``Peace Operations: Heavy Use of Key Capabilities May Affect
Response to Regional Conflicts,'' March 1995, GAO/NSIAD-95-51.
a. Summary.--As the number, size, and scope of peace
operations have increased in the past several years, the nature
and extent of U.S. military participation has changed markedly.
Recently, the United States has used more military forces, of
an increasingly varied nature, in peace operations in places
such as Somalia, Bosnia, Haiti, and Northern and Southern Iraq.
These operations often take place for an extended duration,
usually occurring in austere environments with little or no
infrastructure from which to base and sustain an operation.
This report discusses the impact that peace operations have on
U.S. military forces, force structure limitations that may
affect the military's ability to respond to other national
security requirements while engaged in peace operations, and
options for increasing force flexibility and response
capability.
b. Benefits.--Increasing U.S. involvement in peace
operations heavily stresses some U.S. military capabilities,
including such support functions as quartermaster and
transportation forces and the use of specialized aircraft.
Extended participation in multiple or large-scale peace
operations could tax the military's ability to carry out the
Defense Department's strategy for fighting two nearly
simultaneous regional conflicts. Several options exist that
could allow DOD to meet the demands of peace operations while
responding to its two-conflict strategy. These options include
changing the mix of active and reserve forces and making
greater use of the reserves and contractors.
71. ``Unmanned Aerial Vehicles: No More Hunter Systems Should Be Bought
Until Problems Are Fixed,'' March 1995, GAO/NSIAD-95-52.
a. Summary.--The Hunter is a pilotless aircraft resembling
a small airplane that is controlled from a ground station. It
is intended to perform reconnaissance, target acquisition, and
other military missions by flying over enemy territory and
transmitting video imagery back to ground stations for use by
military commanders. The Hunter program began in 1989, at an
estimated cost of $4 billion, as a joint-service effort in
response to congressional concern over the proliferation of
Unmanned Aerial Vehicles (UAV) by different services and the
need to acquire UAV's that could meet the requirements of more
than one service. GAO reviewed the Hunter program to determine
(1) whether it has been demonstrated to be logistically
supportable; (2) whether its performance deficiencies found in
prior testing have been resolved; and (3) whether it represents
a valid joint-service effort as mandated by Congress.
b. Benefits.--Although the Defense Department (DOD) has
spent more than $4 billion to acquire the Hunter Short-Range
Unmanned Aerial Vehicle. The aircraft suffers from serious
performance problems and has crashed repeatedly during flight
tests. The plane's engines, originally designed for a
motorcycle, have proven especially unreliable. GAO believes
that the plane may prove unsuitable for use by military forces
and could require costly contractor maintenance to stay in the
air. DOD's recent restructuring of the program would further
delay and curtail critical testing while allowing for
additional procurement of systems whose performance is so far
unproven and possibly defective.
72. ``Foreign Aid: Actions Taken To Improve Food Aid Management,''
March 1995, GAO/NSIAD-95-74.
a. Summary.--For over 4 decades the United States has
provided agricultural commodity assistance, or food aid, to
foreign countries to combat hunger and malnutrition, encourage
development, and promote U.S. foreign policy goals. The 1990
Agricultural Development and Trade Act made several major
changes in the U.S. food aid program. One of the changes
involved providing agricultural commodities to developing
countries to enhance their ``food security'', that is, access
by all people at all times to sufficient food and nutrition for
a healthy and productive life. Moreover, Title II of the act
authorizes food donations in response to famines and other
emergencies and food aid grants to private voluntary
organizations (PVO) and cooperatives, intergovernmental
organizations, and multilateral institutions for nonemergency
uses. Another important part of the act is Title III, which
gives the Administrator of the U.S. Agency for International
Development (USAID) considerable flexibility in designing food
aid programs that complement its overall country development
activities.
b. Benefits.--A July 1993 GAO report identified several
problems with the U.S. Agency for International Development's
(USAID) management of its food aid programs. These problems
included USAID's lack of criteria and guidance for implementing
the programs, USAID's inability to show the impact of food aid
on food security, and USAID's failure to account for food aid
resources. Among the recommendations GAO made: USAID to
establish criteria and guidance on how food aid should be
programmed, managed, and accounted for; assess the efficiency
of food aid in achieving food security; and evaluate the impact
of food aid on food security. USAID has fully or partially
implemented 11 of 13 recommendations made in GAO's 1993 report.
USAID has yet to (1) establish criteria as to when U.S.
procurement and shipping regulations may be waived and (2)
report to Congress on the efficiency of food aid in achieving
food security.
73. ``Army Reserve Components: Cost, Readiness, and Personnel
Implications of Restructuring Agreement,'' March 1995, GAO/
NSIAD-95-76.
a. Summary.--The Defense Department's bottom-up review
concluded that the Army's reserve components should be reduced
to 575,00 positions by 1999--a 201,000 decrease since fiscal
year 1989. In December 1993, the Defense Department announced a
major restructuring of the Army National Guard and the Army
Reserve. The Offsite Agreement spelled out how personnel
reductions would be distributed among the reserve components.
This report evaluates (1) the cost of implementing the
agreement; (2) the agreement's impact on reserve components'
readiness; and (3) reserve components' efforts to absorb
displaced personnel.
b. Benefits.--Implementation of the Offsite Agreement could
cost over $180 million. The Army's latest cost estimate is
about $85 million. As of now, it is too early to tell how the
agreement will affect readiness for most units. Although GAO
estimated the readiness impact for some of the units and
determined that 13 units will be replaced by units with lower
readiness ratings, 18 units will be replaced by units having
the same or higher readiness ratings. Finally, in the three
areas affected by the agreement--the 157th Separate Infantry
Brigade, aviation units, and special operation units--some of
the commands' and units' initiatives, to help affected persons
find new units, appear to be working well. Others, however,
appear to discourage the transfer of personnel, even if a
transfer would result in a more effective use of their skills.
74. ``Force Structure: Army National Guard Divisions Could Augment
Wartime Support Capability,'' March 1995, GAO/NSIAD-95-80.
a. Summary.--The Department of Defense (DOD), in its
bottom-up review of the Nation's defense needs in the post-cold
war era, judged that it is prudent to maintain the capability
to fight and win two nearly simultaneous major regional
conflicts. In responding to a single conflict during Operation
Desert Storm, the Army had difficulty providing support units,
even though it deployed only a portion of its total combat
force. Because of this experience, GAO examined whether (1) the
Army might face similar challenges in supporting the two-
conflict strategy; and (2) support capability in certain Army
National Guard units could be used to alleviate any potential
shortfalls.
b. Benefits.--The Army would be hard-pressed to provide
enough nondivisional support units for two nearly simultaneous
major regional conflicts. The Army had difficulty providing
such units during the Persian Gulf War--a single regional
conflict. One option for augmenting the Army's nondivisional
support capability is to use existing support capability--
units, personnel, and equipment--in the eight National Guard
divisions that DOD did not include in the combat force for
executing the two-conflict strategy. These divisions contain
several support units that are similar or identical to
nondivisional support units that were not allocated resources
during the 1993 Total Army Analysis. These divisions have many
of the same types of skilled personnel and equipment that the
nondivisional support units have.
75. ``Chemical Weapons: Army's Emergency Preparedness Program Has
Financial Management Weaknesses,'' March 1995, GAO/NSIAD-95-94.
a. Summary.--GAO reviewed how the Army's Chemical Stockpile
Emergency Preparedness Program funds (CSEPP)--about $281
million appropriated in fiscal years 1988-94--were spent. GAO
has previously reported on problems that the Army experienced
in improving the emergency preparedness capabilities of local
communities and the ineffectiveness of its management approach.
GAO (1) identifies the purposes for which the funds were
allocated; (2) determines how funds were spent by States and
communities associated with four chemical weapons storage
sites; and (3) examines elements of the program's financial
reporting and internal control systems.
b. Benefits.--Army and Federal Emergency Management Agency
(FEMA) officials lack accurate financial information to
identify how funds are spent or to ensure program goals are
achieved. However, GAO, by analyzing why funds were allocated
and by visiting four States participating in the program,
developed a general picture of expenditures. More than $145
million (52 percent) was allocated to States and counties, $127
million (45 percent) was allocated to the Army and FEMA, and
almost $8.9 million (3 percent) is unallocated. The State
allocations for major program categories were (1) $35.1 million
for communications; (2) $28.4 million for alert and
notification; (3) $18.3 million for salaries and benefits; (4)
$15.8 million for automation; and (5) $12.7 million for
emergency operations centers. In general, funds were used for
priority items and other critical CSEPP objectives, but not all
items are operational or have been purchased. Finally, adequate
internal controls to ensure assets are safeguarded and program
goals are efficiently and effectively achieved do not exist,
leaving the program susceptible to fraud, waste, and abuse.
76. ``Background Investigations: Impediments to Consolidating
Investigations and Adjudicative Functions,'' March 1995, GAO/
NSIAD-95-101.
a. Summary.--Executive Orders 10450 and 12356, as amended,
establish uniform requirements for personnel security programs
in the Federal Government. They require agency heads to (1)
classify Federal positions for sensitivity in relation to
national security and (2) investigate each person as
appropriate based on the position's level of access to national
security information. These background investigations are used
to determine whether an individual meets established criteria
for access to classified information. Moreover, Executive Order
10450, as amended, directs the Office of Personnel Management
to provide investigative services to Federal agencies except
those authorized to conduct their own investigations such as
the Departments of Defense and State, the FBI, and the CIA. In
this report, GAO collected and analyzed information on (1) the
feasibility of one central agency conducting all background
investigations or adjudicative functions; (2) Federal agencies'
compliance with National Security Directive on single scope
background investigations for top secret clearances; and (3)
costs of background investigations and number of security
clearances.
b. Benefits.--GAO concludes that it may be feasible to have
one central agency conduct all background investigations and
adjudicative functions. However, most of the nine key Federal
agencies that account for 95 percent of the security clearances
oppose consolidation. Moreover, several other impediments would
have to be resolved. Potential benefits of consolidation
include cost savings, fewer oversight agencies, standardized
operating procedures and information systems, and more
consistency in applying standards. However, consolidation could
also result in less agency control over the process,
potentially reducing the extent to which an individual agency's
requirements and priorities were met. GAO found that Federal
agencies were complying with National Security Directive 63 on
single-scope background investigations for top secret
clearances. The purpose of the directive was to eliminate
redundant investigative practices for granting persons access
to top secret and sensitive information. Consistent with the
directive, some agencies now require even more background
information to meet their missions. For example, the United
States Secret Service conducts polygraph tests for its agents
and employees. In the fiscal year 1993, executive branch
agencies spent $326 million on background investigations, $20
million of which went to private sector investigators.
77. ``Military Readiness: Improved Assessment Measures Are Evolving,''
March 1995, GAO/T-NSIAD-95-117.
a. Summary.--In recent years, military leaders have
expressed concern about the effect on military readiness of (1)
the level of current military operations; (2) contingency
operations; (3) the shifting of funds to support these
operations; and (4) personnel truculence. Questions have also
been raised about the ability of the Defense Department's (DOD)
readiness-reporting system to provide a comprehensive
assessment of overall readiness. In an October 1994 report, GAO
examined whether current indicators of readiness adequately
reflected the many complex components that contributed to
overall military readiness and whether readiness indicators
existed that could predict positive or negative changes in
readiness.
b. Benefits.--This testimony highlights key findings from
that report and discusses some major DOD initiatives to achieve
a more comprehensive readiness assessment.
78. ``Navy Shipbuilding Programs: Nuclear Attack Submarine
Requirements,'' March 1995, GAO/T-NSIAD-95-120.
a. Summary.--There are less costly alternatives than the
Navy's approach to maintain the required fleet of nuclear
attack submarines. These alternatives would save billions of
dollars and meet the Navy's force structure and threat
requirements. In addition, the SSN-23 is not needed to satisfy
force structure requirements or to counter a treat. Instead,
the Defense Department's (DOD) justification for building the
submarine is to preserve competition and to meet industrial
base and national security needs.
b. Benefits.--GAO believes that this is an inadequate
justification for building the SSN-23 because currently no
competition exists to build nuclear attack submarines and DOD
has not made clear what it means by long-term industrial base
and national security needs.
79. ``Wartime Medical Care: Aligning Sound Requirements With New Combat
Care Approaches Is Key to Restructuring Force,'' March 1995,
GAO/T-NSIAD-95-129.
a. Summary.--The Defense Department's (DOD) medical system
costs about $15 billion annually and employs about 227,000
active duty and reserve personnel. Recent legislation required
DOD to determine (1) the size and the composition of the
military medical system needed to support U.S. forces during a
war, and (2) any adjustments needed for cost-effective delivery
of medical care to covered beneficiaries during peacetime.
b. Benefits.--The resulting DOD study challenged the cold
war assumption that all medical personnel employed during
peacetime are needed for wartime and questioned whether U.S.
military medical forces should be reduced to only those needed
for wartime.
80. ``Department of Justice: Office of Professional Responsibility's
Case-Handling Procedures,'' March 1995, GAO/OSI-95-8.
a. Summary.--A February 1992 GAO report recommended that
the Justice Department's Office of Professional Responsibility
(OPR), which investigates allegations of criminal or ethical
misconduct involving Justice employees, (1) establish basic
standards for conducting investigations; (2) set standards for
case documentation; (3) review case files to identify needed
changes to Justice procedures and operations; and (4) follow up
more consistently on the results of misconduct investigations
conducted by other Justice components and maintain the follow-
up information in the case files. This report discusses whether
the recommendations have been implemented and provides
information on the Offices's handling of referrals.
b. Benefits.--OPR's procedural standards for investigating
and documenting cases addressed only those cases that OPR staff
actually investigated--72 of the 106 cases. In three of the
seven OPR investigations, the application of OPR's
investigative and documentation standards was questionable.
However, OPR's new procedures addressed GAO's recommendation
regarding case file reviews to identify systemic problems in
Justice procedures and operations. Continuing, the OPR
standards did not cover cases that OPR monitored or supervised
or cases that involved other matters, such as preliminary
reviews of complaints. These cases were not subject to any
formalized case file documentation requirements. In addition,
GAO found inconsistencies in how OPR monitored and supervised
investigations by other Justice components and questioned OPR's
handling of some cases in the ``other'' category. Finally,
except for the Office of Inspector General (OIG), OPR had no
formal referral procedures with any Justice component.
81. ``Chemical Weapons Disposal: Issues Related to DOD's Management,''
July 1995, GAO/T-NSIAD-95-185.
a. Summary.--Defense Department (DOD) efforts to destroy
its chemical weapons stockpile have been plagued by soaring
costs and schedule delays. Cost estimates to dispose of this
deadly material have risen from $1.7 billion to $11.9 billion,
and the planned completion date has slipped from 1994 to 2004.
DOD has taken some encouraging steps to improve its management
and oversight of the disposal program, but a number of areas
are still of concern. To date, only two of nine planned
incinerators have been built and only one of the two, at
Johnston Atoll, is operational. About $2 billion has been spent
on the program, but only 2 percent of the stockpile has been
destroyed. The Army continues to experience added program
requirements, public opposition, and technical and programmatic
problems. Although the storage of the M55 rocket poses the
largest safety risk, the Army lacks information to predict the
safe storage life of the rocket. Communities near the storage
sites are still not yet fully prepared to respond to a chemical
emergency. Finally, although the Army is researching technology
to dispose of the chemical weapons stockpile, this technology
will not be ready in time to meet the current disposal deadline
of December 31, 2004.
82. ``Military Base Closures: Analysis of DOD's Process and
Recommendations for 1995,'' April 1995, GAO/T-NSIAD-95-132.
a. Summary.--The Defense Base Closure and Realignment Act
of 1990 established the current process for DOD base closure
and realignment actions within the United States. This report
responds to the act's requirement that GAO provide to the
Congress and the Defense Base Closure and Realignment
Commission an analysis of the Secretary of Defense's
recommendations for bases for closure and realignment and the
selection process used. On February 28, 1995, the Secretary of
Defense recommended closures, realignments, and other actions
affecting 146 domestic military installations. Of that number,
33 were described as closures of major installations, and 26 as
major realignments. An additional 27 were changes to prior base
closing round decisions. The Secretary projects that the
recommendations, when fully implemented, will yield $1.8
billion in annual recurring savings.
b. Benefits.--Although DOD has undergone substantial
downsizing in funding, personnel, and force structure, it is
generally recognized that much excess capacity likely will
remain after the 1995 Base Realignment and Closure Commission
(BRAC) round. Currently, DOD projects that its fiscal year 1996
budget represents a 39-percent reduction below its fiscal year
1985 peak. By way of comparison, 1995 BRAC recommendations
combined with previous major domestic base closures since 1988
would total a reduction of 21-percent. However, DOD's 1995 BRAC
process was generally sound and well documented and should
result in substantial savings. Although, the recommendations
and selection process were not without problems, and in some
cases, there are questions about the reasonableness of specific
recommendations. At the same time, we also noted that
improvements were made to the process from prior rounds,
including more precise categorization of bases and activities.
This resulted in more accurate comparisons between like
facilities and functions and better analytical capabilities.
GAO raised a number of issues that they believe warrant the
Commission's attention in considering DOD's recommendations.
These issues include: (1) DOD's attempt at reducing excess
capacity in common support functions facilitated some important
results. However, agreements for consolidating similar work
done by two or more of the services were limited, and
opportunities to achieve additional reductions in excess
capacity and infrastructure were missed. (2) Although the
services have improved their processes with each succeeding
BRAC round, some process problems continued to be identified.
In particular, the Air Force's process remained largely
subjective and not well documented; also, it was influenced by
preliminary estimates of base closure costs that changed when
more focused analyses were made.
83. ``U.S.-China Trade: Implementation of the 1992 Prison Labor
Memorandum,'' April 1995, GAO/GGD-95-106.
a. Summary.--Following the crackdown on protestors in
Tiananmen Square, United States Government officials began
debating whether to link renewal of China's most-favored-nation
status to improving human rights in China. Among the issues
raised was Chinese exports made with prison labor. In early
August 1992, the United States and China signed the prison
labor memorandum of understanding (MOU) providing for the
exchange of information between both countries regarding their
respective prison facilities. Not only does United States law
prohibit imports of prison labor products, but China itself
prohibits such exports. Then, in May 1993, President Clinton
signed an Executive order requiring the review of Chinese
compliance with the 1992 MOU as part of the annual assessment
of China's most-favored-nation status. This report is a review
of recent issues regarding the United States-China MOU on
prison labor. Specifically, GAO's describes (1) the United
States Customs Service's assessment of China's compliance with
the prison labor MOU, and (2) the experience of the United
States Government in obtaining information sufficient to
enforce the prohibition against goods made with Chinese prison
labor since the MOU was signed.
b. Benefits.--Although the United States Customs Service
was concerned in 1993 that China had not shown a willingness to
fulfill its responsibilities under the memorandum, Customs said
that Chinese officials had been more cooperative of late.
Customs officials said that they had obtained information from
the Chinese that allowed them to pinpoint imported goods made
with prison labor. This was upheld in December 1994, when the
United States Court on International Trade upheld an
affirmative Customs finding that imported goods from China had
been made with prison labor. However, Justice Department
officials are concerned whether any memorandum or agreement
could provide Justice attorneys with the information necessary
to defend Customs' decisions in an efficient and inexpensive
manner because of the evidence that might be required under
U.S. law. In addition, the evidence obtained from Chinese
government documents may not be present in future cases
primarily because the information used as evidence is no longer
published in China.
84. ``U.S.-Vietnam Relations: Issues and Implications,'' April 1995,
GAO/NSIAD-95-42.
a. Summary.--Although the United States has lifted its
trade embargo against Vietnam and allowed United States
businesses to invest there, the United States has yet to
establish full diplomatic relations with Vietnam. Additional
steps toward normalization of relations depend on political and
economic change in Vietnam and continued progress on the POW/
MIA issue. This report discusses (1) ongoing changes in
Vietnam's foreign and domestic policies and the reaction of the
international community; (2) changes in United States policy
toward Vietnam and the substance of bilateral relations between
the two countries; (3) the interests that the United States and
Vietnam are pursuing; (4) political development; and (5) key
factors affecting the pace of movement toward normalized
relations.
b. Benefits.--Changes in Vietnam's foreign and domestic
policies have led to broader acceptance of Vietnam by the
international community. Vietnam's withdrawal from Cambodia and
subsequent cooperation in the U.N.-coordinated search for a
peaceful settlement in that country, and Vietnam's ongoing
program of market-oriented domestic reforms have largely
removed the basis for the international community's 1980's
consensus that Vietnam should be isolated as an outcast.
Further, the United States has, among other things, ended its
opposition to international financial institution (IFI) lending
to Vietnam and lifted its embargo against trade with Vietnam.
As a result, United States private sector interests, including
businesses, nongovernmental organizations, and Vietnamese-
Americans, have established growing ties with Vietnam.
Government agencies, including the Departments of State and
Defense, have established limited ties. The United States has
also altered its policy interests with Vietnam; they now
include the promotion of human rights and democracy in Vietnam,
as well as United States commercial and security interests. For
its part, Vietnam has important commercial and security
interests to pursue with the United States. Vietnam still faces
an uncertain future, despite ongoing reforms and positive
economic trends. While Vietnam has potential for growth and
change, analysts still can point out serious constraints that
remain. Vietnam remains one of the world's poorest countries,
and the Communist party continues to exercise a monopoly on
political power. Finally, executive branch officials and other
analysts stated that the pace at which the administration moves
toward full bilateral ties will depend on United States
conclusions regarding developments within Vietnam, particularly
with regard to progress on the POW/MIA issue.
85. ``Army Training: One-Third of 1993 and 1994 Budgeted Funds Were
Used for Other Purposes,'' April 1995, GAO/NSIAD-95-71.
a. Summary.--The Army uses the Training Resource Model to
identify the amount of operating tempo funds that its military
units require to meet readiness objectives. Once the Army
determines direct (fuel, maintenance, and spare parts) and
indirect (civilian pay and maintenance contracts) costs for
each reporting unit, it aggregates operating tempo costs, or
military training funds, by major command. Finally, the Army
establishes a total operating tempo cost for inclusion in the
President's budget submission for annual congressional
appropriation. Congress has consistently supported Army
requests for tempo costs to keep Army forces at a high level of
combat readiness. However, as a result of reports that
scheduled training exercises have been canceled, GAO in this
report determines whether (1) operating tempo funds were spent
for purposes other than training, and (2) the operating tempo
funds requested in the Army's congressional budget submissions
were consistent with the amounts needed for training exercises
necessary to meet its readiness objectives.
b. Benefits.--Of the $3.6 million allocated in fiscal years
1993 and 1994 for military training to keep United States
forces in the United States and Europe and a high level of
combat readiness, the Army diverted nearly one-third for other
purposes, including base operations, property maintenance, and
other peacekeeping operations. At the same time, outdated
assumptions and the failure to consider unit ability to train
at their home stations resulted in Army budget submissions to
Congress that overestimated the funding needed to conduct
training exercises.
86. ``DOD Service Academies: Comparison of Honor and Conduct
Adjudicatory Processes,'' April 1995, GAO/NSIAD-95-49.
a. Summary.--Over the years, several highly publicized
incidents have occurred at the Nation's military academies
involving honor or conduct charges against students. GAO
reviewed the adjudicatory systems used at the academies to make
decisions on student conduct and performance. This report (1)
compares the honor and conduct systems at each academy and
describes how the various systems provide common due process
protection, and (2) describes the attitudes and the perceptions
of students regarding these systems.
b. Benefits.--The three service academies have established
review processes to evaluate cases of academically deficient
students and prescribe dispositions for each case. The
processes in place at each academy are generally similar.
Dispositions range from requiring an individual to repeat a
failed course to disenrollment from the academy. Before a
student is academically disenrolled, at least one academic
review group evaluates the case. Students may present
statements on their behalf during the review process.
87. ``Nuclear Safety: U.S. Assistance to Upgrade Soviet-Designed
Nuclear Reactors in the Czech Republic,'' June 1995, GAO/RCED-
95-157.
a. Summary.--In March 1994, the Export-Import Bank
guaranteed a loan of $317 million for work done by the
Westinghouse Electric Corp. on a nuclear power plant in the
Czech Republic. The project entailed integrating Western
technology into a Soviet-designed pressurized water reactor.
Although United States officials saw an opportunity to gain
more than $330 million in United States exports and to make the
reactors safer, the Austrian Government and some Members of
Congress have expressed concern about the safety of the Soviet-
designed reactors and the extent of potential United States
liability in the event of a nuclear accident. This report
discusses (1) the reasons for the Export-Import Bank's loan
guarantee for the nuclear power plant; (2) the steps that the
Export-Import Bank took to ensure the project's soundness; and
(3) the U.S. Government's potential liability as a result of
the Export-Import Bank's loan guarantee.
b. Benefits.--United States Government officials believe
that Western technology can make the Soviet-designed Temelin
reactors safer and provide more than $330 million in United
States export earning. As a result, United States officials
strongly supported United States industry's participation in
the Temelin project and worked with Westinghouse and the Czech
Government to help bring about the acceptance of a United
States firm for the project. To determine whether the project
complied with the administration's policies--particularly
United States environmental policy--and to draw on the
administration's expertise, the Bank chairman requested
guidance from the National Security Council, which conducted an
interagency review of the safety of the reactor's design and of
the technical capabilities of the Czech regulatory authorities.
The results of the National Security Council's review and the
engineering and environmental evaluation by the Bank's nuclear
engineer satisfied the Bank's Board of Directors, and the loan
guarantee was approved. In addition, the Bank's Office of the
General Counsel examined the question of whether the Bank,
since it is guaranteeing a loan for equipment and nuclear fuel
to complete the reactors, could be held liable for damages in
the event of a nuclear incident at the Temelin plant. The
Bank's General Counsel concluded that the chances are small
that the Bank would be held liable in any court for damages.
88. ``DOD Infrastructure: DOD's Planned Finance and Accounting
Structure Is Not Well Justified,'' September 1995, GAO/NSIAD-
95-127.
a. Summary.--The Defense Department's (DOD) consolidation
of more than 300 defense accounting offices did not adequately
consider the functions and proper staffing levels of the new
offices and gave undue weight to the reuse of closed military
bases. GAO concludes that DOD's plan, which is expected to cut
23,000 finance and accounting jobs, stressed short-term cost
savings at the expense of customer service and improved
business practices. This report assesses (1) the process that
DOD used to identify the appropriate size and location for its
finance and accounting centers and operating locations; (2) the
consolidation's potential impact on customer service; and (3)
the extent to which DOD's consolidation plan reflects cutting-
edge business practices.
b. Benefits.--GAO stated that DOD's plan to consolidate and
reduce personnel as a necessary step toward a more efficient
finance and accounting service. In such an undertaking it is
important to strike a balance between cost considerations and
other factors important to maintaining customer service and
improving business operations. GAO concluded that DOD, based on
their analysis of the process DOD used to select the proper
number of new operating locations and where they should be
located, did not achieve that balance. Specifically, GAO found:
(1) DOD decided to open 20 new operating locations
without first determining what finance and accounting
functions they would perform or if 20 was the right
number to support its operations.
(2) DOD, in selecting the 20 specific operating
locations, used criteria that resulted in placing undue
weight on using excess DOD facilities, primarily those
on military bases closed or realigned during the base
realignment and closure process.
(3) DOD, for the most part, has not re-engineered the
finance and accounting functions that will be performed
at the 20 new operating locations. Accordingly, the
consolidation may reduce the number of people
performing the finance and accounting functions, but
operations at the new locations will not reflect
leading-edge business practices.
DOD needs to develop a new estimate of number of locations
and personnel needed to meet current and future operating
requirements. This estimate should factor in the impact on
operating requirements of new processes that cure present
deficiencies and take full advantage of modern technology.
89. ``Peace Operations: Effect of Training, Equipment, and Other
Factors on Unit Capability,'' October 1995, GAO/NSIAD-96-14.
a. Summary.--Since the end of the cold war, the U.S.
military has become increasingly involved in peace operations,
ranging from military observer duties to humanitarian and
disaster relief work. This report examines (1) how the military
services incorporate peace operations into their training
programs; (2) what effect peace operations have on maintaining
combat readiness; and (3) whether the services have the weapon
systems and equipment they need for these operations.
b. Benefits.--Commanders of ground combat units differ on
when special peace operations training should be provided. Some
commanders include aspects of peace operations in standard unit
training. Other commanders prefer to maintain an exclusive
combat focus until their units are formally assigned to a peace
operation. Participation in peace operations can provide
excellent experience for combat operations, but such
participation can also degrade a unit's war-fighting
capability. For example, it can take up to 6 months for a
ground combat unit to recover from a peace operation and become
combat ready. Additionally, peace operations may interrupt
naval training schedules, but there is little difference in the
naval skills required for peace operations and for other
operations. Finally, to determine whether the services have the
appropriate weapon systems and equipment for peace operations
is an ongoing process taking place primarily at the service
level. The services have identified specific requirements in
three areas: (1) force protection; (2) equipment for military
operations in built-up areas; and (3) nonlethal weapons. Except
for the recent withdrawal operation from Somalia, few nonlethal
weapons have been used to date in peace operations.
90. ``Cuba: U.S. Response to the 1994 Cuban Migration Crisis,''
September 1995, GAO/NSIAD-95-211.
a. Summary.--This report reviews the United States
Government's efforts to cope with the mass exodus of people
from Cuba during the summer of 1994. GAO (1) describes how
United States policy toward those seeking to leave Cuba has
changed since then; (2) identifies the agencies and the costs
to the United States Government associated with the exodus of
Cubans; (3) assesses the capabilities of the United States
Interests Section in Havana to process applicants seeking legal
entry into the United States; and (4) evaluates the adequacy of
living conditions in the United States, and at the United
States Naval Station, Guantanamo Bay.
b. Benefits.--For over 30 years, fleeing Cubans had been
welcomed to the United States. However, the United States
Government reversed this policy on August 19, 1994, when
President Clinton announced that Cuban rafters interdicted at
sea would no longer be brought to the United States. Instead,
they would be taken to safe haven camps at the United States
Naval Station, Guantanamo Bay, Cuba, with no opportunity for
eventual entry into the United States other than by returning
to Havana to apply for entry through legal channels at the
United States Interests Section. On September 9, 1994, the
United States and Cuban Governments agreed that the United
States would allow at least 20,000 Cubans to enter annually in
exchange for Cuba's pledge to prevent further unlawful
departures by rafters. On May 2, 1995, a White House
announcement was released stating that Cubans interdicted at
sea would not be taken to a safe haven but would be returned to
Cuba where they could apply for entry into the United States at
the Interests Section in Havana. Several United States agencies
have been involved in implementing the United States policy
regarding Cubans wishing to leave their country. The
predominant agencies are: (1) the Department of Defense, which
will spend about $434 million from August 1994 through
September 1995 operating the safe haven camps; (2) the United
States Coast Guard, which spent about $7.8 million interdicting
Cubans at sea from August 1994 to the present; (3) the
Department of Justice's Immigration and Naturalization Service
(INS) and Community Relations Service (CRS), which together
will spend about $48.3 million for the Cuban migration crisis
from August 1994 through September 1995; and (4) the Department
of State, which will spend an estimated $7.1 million during
this same period. Further, the United States Interests Section
in Havana has been able to meet the workload of processing
applicants seeking legal entry into the United States. As of
June 9, 1995, it had approved 16,305 Cubans for United States
entry. Finally, the Cubans' living conditions at the Guantanamo
Bay safe haven camps are difficult, but adequate based on our
observations at the camps. GAO found no internationally
accepted standards of what the living conditions should be at
refugee camps, but GAO noted that conditions in all camps
generally exceeded U.N. inspection guidelines for minimal
shelter, food, and water.
91. ``Inventory Management: Purchasing Parts From Contractor-Operated
Parts Stores and Commercial Sources,'' September 1995, GAO/
NSIAD-95-176.
a. Summary.--Air Force bases use a variety of vehicles to
support base operations. Common commercial vehicles used
include Plymouth and Dodge sedans and Ford and Chevrolet pickup
trucks. When making small purchases for vehicle repair parts
the bases are directed to use the small purchase procedure that
is most suitable, efficient, and economical for each
acquisition. Small purchase procedures include blanket purchase
agreements, purchase orders, and the International Merchant
Purchase Authorization Card. Bases may also meet their vehicle
repair needs by establishing Air Force Contractor Operated
Parts Stores (COPARS). These stores were authorized in the
early 1960's because the Air Force believed they would usually
be more responsive and less costly than the traditional Air
Force base supply system. Currently, the Air Force contracts
with COPARS at 46 of its bases, and the value of these
contracts totals $79.6 million. This report includes a cost
comparison study of vehicle repair parts purchased from COPARS
with those purchased directly from commercial suppliers. Also,
included is whether the provisions of Office of Management and
Budget (OMB) Circular A-76 are to be applied before terminating
a COPARS contract.
b. Benefits.--In comparing costs for vehicle parts
purchased from COPARS with those purchased directly from
commercial suppliers, GAO found that the most cost-effective
way to buy parts to repair vehicles can vary from base to base.
Factors, such as the types of vehicles in a fleet, the volume
of business being done, vendor availability, and vendor payment
preferences, differ among bases and can affect the price of
parts. Also, mission-related factors, such as deployments, can
affect the availability of personnel needed to manage a
commercial-source parts procurement operation. Given these
differences, installation commanders are in the best position
to decide which approach for acquiring parts will best meet
their needs. GAO also found that controlling personnel costs is
key to determining whether savings can be achieved in a
commercial-source procurement system. Office of Management and
Budget Circular A-76 does not apply to the Air Force's vehicle
repair parts support decision. The establishment of a
commercial-source procurement system is simply an alternative
way of doing business. The Air Force is not replacing the
stores with an identical in-house service. As a result, no
study is required.
92. ``Nuclear Facility Cleanup: Centralized Contracting of Laboratory
Analysis Would Produce Budgetary Savings,'' May 1995.
a. Summary.--The Department of Energy (DOE) is undertaking
the cleanup of contaminants that were dumped or leaked into the
soil and water at its facilities during more than 50 years of
nuclear weapons production. The Environmental Protection Agency
(EPA) is also engaged in an expensive cleanup of some of the
same contaminants at the Nation's worst nonFederal sites. DOE
estimates that this cleanup will cost at least $300 billion and
take more than 30 years to complete. In this report, GAO (1)
compares the average prices that DOE and EPA pay to commercial
laboratories for the same types of analysis and determine
whether the two agencies' different contracting approaches
affect these prices; (2) identifies whether DOE's decentralized
approach has resulted in any administrative inefficiencies; and
(3) discusses any key changes DOE is making in its contracting
for laboratory analysis.
b. Benefits.--Under DOE's decentralized approach,
contractors independently obtain laboratory analyses of soil
and water through either commercial laboratories or contractor-
run laboratories. In contrast, the EPA, which oversees cleanup
of Superfund sites, contracts for these analyses on a
centralized basis. DOE pays substantially higher prices than
EPA does for the same types of analyses at commercial
laboratories. For example, DOE's price for inorganic chemical
analysis $358, about 223 percent more than EPA's price of $111.
GAO concluded that if DOE had used a centralized approach, like
the EPA, they would have saved $247 per analysis, on average.
They also determined that DOE dilutes its massive buying power
by procuring commonly used analyses on a piecemeal basis
through its contractors. The results of DOE's contracting
approach are higher prices and unnecessary costs arising from
duplication of efforts. Without centralizing its laboratory
analysis procurements, DOE will not reap the cost benefits
resulting from its enormous buying power.
93. ``Federally Funded R&D Centers: Use of Contract Fee by the
Aerospace Corporation,'' September 1995, GAO/GGD-96-4.
a. Summary.--The Air Force provided a $15.5 million
contract fee to the Aerospace Corp. to operate a federally
funded research and development center. Such fees are common
for federally funded, private sector organizations who perform
research and development that cannot be done in-house or by
contract. Such fees are awarded according to weighted
guidelines. The Air Force does submit a plan expressing its
needs, but there is discretion as to how the fee is used.
Included in the fee are ``unreimbursable expenses'' which are
incurred only if such expenses are ``ordinary or necessary.''
b. Benefits.--There should be better coordination between
the research and development centers and the agency providing
the fee so that the agency obtains from the fee the research
and development that best suits its immediate needs. In
addition, there should be a better definition of ``ordinary or
necessary'' expenses.
94. ``Community Policing: Information on the ``COPS on the Beat'' Grant
Programs,'' October 1995, GAO/GGD-96-4.
a. Summary.--This is a description of the grant
application, selection processes for the COPS, Phase I, COPS
Funding Accelerated for Smaller Towns (FAST), and COPS
Accelerated Hiring, Education, and Deployment (AHEAD) programs.
This report also includes a comparison of COPS FAST and COPS
AHEAD programs by looking at the crime rates in applicant and
nonapplicant jurisdictions, the reasons some jurisdictions
chose not to apply for COPS program grants, and the public
safety issues identified by a sample of jurisdictions applying
for COPS FAST grants.
b. Benefits.--The Department of Justice created a COPS
office to award Community Policing Act grants in a non-
competitive, two-step application and a selection process to
allow officers to be hired more quickly. Basically, the higher
the crime rate, the more likely a jurisdiction was to apply.
The primary reasons jurisdictions chose not to apply for COPS
grants were cost related. Specifically, these jurisdictions
expressed uncertainty about being able to continue officer
funding after the grant expired and about their ability to
provide the required 25-percent match. Property crimes and
domestic violence were the most frequently included crimes in
the top five public safety issues among approved COPS FAST
applicants.
95. ``Coast Guard: Enforcement Under MARPOL V Convention on Pollution
Expanded, Although Problems Remain,'' May 1995, GAO/RCED.
a. Summary.--As much as 1 million metric tons of garbage
and plastics are dumped into the ocean each year, killing
seabirds and marine mammals, creating safety hazards for
shippers and boaters, and polluting shorelines and beaches. To
mitigate this uncontrolled ocean dumping, the United States
became a party to Annex V of the International Convention for
the Prevention of Pollution From Ships--known as MARPOL V--
which restricts the discharge of garbage and plastics from
ships of signatory countries. However, Congress has repeatedly
expressed concerns about the Coast Guard's enforcement of
MARPOL V provisions. This report discusses the Coast Guard's
progress in enforcing MARPOL V and determines whether funds
that Congress earmarked for 100 enforcement positions are being
used for educational and outreach efforts, which are intended
to improve compliance with MARPOL V.
b. Benefits.--Although the provisions of MARPOL V became
effective on December 31, 1988, the Coast Guard did not begin
substantial enforcement efforts until the early 1990's.
Following congressional criticism in 1990 and 1992, and aided
by additional personnel, the Coast Guard stepped up its
enforcement efforts. As a result, the number of reported cases
involving violations of the MARPOL V regulations has increased
steadily from 16 in 1989 to 311 in 1994. At present, no
accurate means exists to determine whether the Coast Guard is
fully utilizing the additional resources that the Congress
provided for enforcing MARPOL. Moreover, the amount of time the
Coast Guard, in aggregate, spends on MARPOL-related activities
is uncertain because the Coast Guard does not consistently
record time spent on this function. In addition, education and
outreach has become an important part of the Coast Guard's
strategy to achieve compliance with MARPOL. In 1994, the Coast
Guard's education and outreach efforts for MARPOL V expanded
from targeting commercial shippers to include other groups,
such as recreational boaters and fishing vessel operators.
96. ``Defense Inventory: Opportunities to Reduce Warehouse Space,'' May
1995, GAO/NSIAD-95-64.
a. Summary.--The Defense Department's (DOD) 600 million
cubic feet of warehouse space make DOD the world's largest
inventory manager. Although DOD has substantially cut the
number of its storage depots and the inventory stored there--
ranging from medical supplies to clothing to spare parts--it
could reduce inventory levels still further, particularly among
deteriorated or obsolete items. DOD should focus on getting rid
of unneeded items that take up a lot of space and involve more
than 20 years supply on hand. This report determines (1) the
size of DOD's secondary inventory; (2) the amount of space
occupied by secondary inventory that DOD does not need to
satisfy current war reserve and operating requirements; (3) the
cost of storing this inventory; and (4) the time it will take
to use it.
b. Benefits.--Over the past several years, DOD has made
sizable reductions to the number of storage depots and to the
amount of inventory stored in them. DOD has initiatives to make
further reductions and we believe opportunities exist to build
on these initiatives. Additionally, GAO analyzed DOD secondary
inventory, an estimated volume of 218.8 million cubic feet.
They found that 60 percent of this volume, or 130.4 million
cubic feet, is not needed to satisfy current war reserve and
operating requirements. About 84,000 of these items, occupying
41.7 million cubic feet, has more than a 20-year supply. DOD
has begun programs to reduce the secondary inventory level;
however, its efforts have been partially offset by decreasing
inventory demands and increasing returns of material by forces
being deactivated. During the last 3 fiscal years, DOD disposed
of secondary inventory costing about $43 billion.
97. ``Military Exports: Recovery of Nonrecurring Research and
Development Costs,'' May 1995, GAO/NSIAD-95-147.
a. Summary.--Since 1967, the Defense Department (DOD) has
been recovering nonrecurring research and development and one-
time production costs on sales of weapon systems to foreign
governments. The intent of this effort was to control U.S.
costs and the extent of weapons sales to foreign governments.
In 1992, DOD canceled its policy of recovering nonrecurring
costs on direct commercial sales in an effort to boost the
competitiveness of U.S. firms in the world market. In 1995,
several bills were introduced that could affect the recovery of
nonrecurring costs on military sales. This report discusses (1)
the government's recovery of nonrecurring research and
development costs on sales of major defense equipment; (2) the
effect of charging a flat or standard fee rather than the
current pro rata fee; and (3) views from supporters and
opponents of the recovery of these costs.
b. Benefits.--DOD recovered $181 million in nonrecurring
costs on foreign military sales in fiscal year 1994 and
estimated, based on historical trends, that collections could
amount to $845 million between fiscal years 1995 and 1999. It
has been considered to change from the current pro rata fee to
a flat or standard fee. A flat rate would be easy to calculate
and would not need to be periodically updated, as is the case
of a pro rata charge. However, the effect of using a flat rate
varies, depending on the way it is applied. Supporters and
opponents of the recovery of nonrecurring costs differ on its
benefits and drawbacks. Supporters believe that the charges
serve national security interests by keeping weapon systems out
of unstable regions of the world and the weapons industry
should not be subsidized at taxpayers' expense. Opponents, on
the other hand, believe the charges adversely affect U.S.
industry's competitiveness in the world market and could affect
the U.S. economy in the long run.
98. ``Military Capabilities: Stronger Joint Staff Role Needed To
Enhance Joint Military Training,'' July 1995, GAO/NSIAD-95-109.
a. Summary.--U.S. military strategy today stresses the need
for air, land, sea, and special operations forces to work
together in large-scale combat and noncombat operations.
Operation Desert Storm, humanitarian relief efforts in Rwanda
and Somalia, and the effort to restore democracy in Haiti
illustrate the diverse missions that United States forces can
expect to carry out. This report examines (1) the scope of the
Defense Department's joint training activities; (2) the
effectiveness of the management of these activities; and (3)
the actions that have been taken and any additional steps
needed to improve joint training.
b. Benefits.--Although the chairman of the Joint Chiefs of
Staff (CJCS) Exercise Program is the primary method DOD uses to
train its for joint operations, inadequate Joint Staff
oversight has led to perpetuating a program that provides U.S.
forces with little joint training. The vast majority of the
exercises were conducted to maintain U.S. access or presence in
a region or to foster relations with foreign military forces.
The J-7 has not provided the strong leadership needed to ensure
that the full range of program management tasks required for an
effective joint training program are carried out and
coordinated. It has not (1) critically reviewed planned
exercises to ensure that the program provides joint training
benefits to the fullest extent possible; (2) ensured that
problems surfacing in the exercises are identified and
addressed; or (3) monitored enough exercises to gain first-hand
knowledge of the problems. Finally, the Secretary of Defense
and the Joint Staff have recently taken steps aimed at
improving joint training. Notably, they have strengthened the
roles of the U.S. Atlantic Command and the Joint Warfighting
Center.
99. ``Defense Inventory: Shortages Are Recurring, but Not a Problem,''
August 1995, GAO/NSIAD-95-137.
a. Summary.--As part of its ongoing evaluation of the
Defense Department's (DOD) secondary inventory, GAO reviewed
issues relating to inventory shortages. This report analyzes
inventory shortages to determine the (1) size of the shortage;
(2) steps that inventory managers were taking in response to
the shortage and if funding problems caused managers not to buy
needed items; and (3) need to revise DOD's inventory reporting.
b. Benefits.--DOD's September 1991 secondary inventory
shortage was $16.4 billion rather than the $26 billion that DOD
cited. Between September 1991 and September 1993, the $16.4
billion shortage decreased to about $8.1 billion. The decrease
was attributable to (1) removal of Operation Desert Storm
requirements; (2) downsizing the military forces; (3)
elimination of some war reserve requirements; and (4) decreases
in requirements due to reduced levels of operations. GAO found
that in only a relatively small number of instances was funding
an issue in deciding whether or not to purchase needed items.
GAO found that managers made purchases for about $578 million
of $1.1 billion in shortages that they analyzed. For the
remaining $559 million, inventory was ordered because (1)
requirements on which the shortages were based were no longer
paid; (2) inventory managers decided that purchases were not
necessary for reasons such as the availability of substitute
items in the supply system; and (3) responsibility for items
had been transferred to other organizations or the items had
been removed from the inventory. In general, the decisions not
to buy were valid and may have precluded DOD's acquisition of
millions of dollars of inventory that probably would not have
been used. Finally, DOD's inventory reporting needs revising
because it does not focus on the amount of inventory that is
needed to be on hand. For example, only $28.8 billion of DOD's
reported $58.8 billion September 1993 wholesale inventory had
to be on hand.
100. ``1996 Defense Budget: Potential Reductions, Rescissions, and
Restrictions in RDT&E,'' September 1995, GAO/NSIAD-95-218BR.
a. Summary.--GAO examined the Department of Defense's
fiscal year 1996 budget request and prior years appropriations
for selected research, development, test, and evaluation and
procurement programs. GAO's objectives were to identify
potential reductions in the fiscal year 1996 budget request and
potential rescissions to prior years appropriations. This
report summarizes information and briefings provided to
congressional committees from April through July 1995.
b. Benefits.--Due to schedule delays, changes in the
program requirements, and issues that emerged after the budget
request was developed, GAO identified opportunities to reduce
the funding levels for fiscal year 1996 by about $956 million
and rescind about $265 million from prior years'
appropriations. GAO also found $934 million that Congress can
restrict from obligation until specified criteria are met to
minimize risks in acquisition programs. Of these totals, GAO
identified potential budget cuts of nearly $103 million to the
fiscal year 1996 research, development, test, and evaluation
budget request and potential rescissions of about $15 million
to prior year appropriations. GAO also identified about $27
million in obligational authority that can be restricted. GAO
identified potential budget reductions of about $854 million to
the fiscal year 1996 procurement budget request, potential
rescissions of about $250 million to prior year appropriations,
and about $907 million in potential restrictions. GAO also
found nearly $98 million in obligational authority expiring on
September 30, 1995, including about $77 million in fiscal year
1994 research, development, test, and evaluation funds and
about $19 million in fiscal year 1993 procurement funds.
101. ``Export Controls: Some Controls Over Missile-Related Technology
Exports to China Are Weak,'' April 1995, GAO/NSIAD-95-82.
a. Summary.--Because of inadequate export controls over
shipments of United States missile technology to China--
ostensibly for use in satellite projects--and weaknesses in
monitoring such shipments after export to China, the United
States has no guarantee that such sensitive equipment will not
be used for military purposes. This report discusses (1) the
nature and the extent of United States dual-use and missile
technology exports to the Peoples Republic of China and the
extent to which the items are exported to sensitive end users;
(2) the ability of the United States to monitor Chinese
compliance with conditions attached to United States missile
technology exports and with the terms of United States-China
understanding on missile technology exports and with the terms
of United States-China understanding on the regime; and (3) the
effectiveness of United States sanctions imposed on China.
b. Benefits.--For fiscal years 1990 through 1993, the
commerce and State Departments approved a total of 67 export
licenses worth about $530 million for missile-related
technology commodities for China. Most of this amount was for
licenses in support of satellite projects, to be owned or
operated by other countries or by multinational
telecommunications corporations for or within China, for which
the President waived applicable sanctions. In general, export
licensing process and monitoring controls for missile
technology and dual-use export license applications cannot
ensure that such United States exports to the Peoples Republic
of China are kept from sensitive end users. Further, United
States Government officials believe that the United States
generally performs adequate monitoring of China's compliance
with the terms of its Missile Technology Control Regime (MTCR)
commitments. However, GAO's review indicates that the United
States end-use check program to monitor license conditions has
only marginal effectiveness for exports to China. The terms of
the 1992 United States-China bilateral understanding on China's
adherence to MTCR, commit China, as a nonmember, to less
restrictive requirements than currently apply to full members
of the regime. China agreed to commit to only the MRCR
Guidelines and Annex of 1987, in force at the time of its MTCR
pledge, but not to the guidelines and annex as subsequently
advised. Finally, GAO determined that the effectiveness of
United States sanctions on China is unknown. United States
Government officials share no consensus on a definition of, or
criteria for, measuring effectiveness of proliferation
sanctions imposed on China.
102. ``Peace Operations: DOD's Incremental Costs and Funding for Fiscal
Year 1994,'' April 1995, GAO/NSIAD-95-119BR.
a. Summary.--The Defense Department (DOD) participated in
peace operations in several locales, including Somalia, Bosnia,
Haiti, and Southwest Asia, during fiscal year 1994. To help
cover the incremental costs of these operations, Congress
provided DOD with two supplemental appropriations. DOD also
received reimbursements from the United Nations for incremental
costs incurred in Somalia. This report provides information on
(1) whether the supplemental appropriations fully covered DOD's
incremental costs; (2) what the impacts on the services were
from funding shortages and overages; and (3) how DOD spent the
reimbursements received from the United Nations.
b. Benefits.--During the fiscal year 1994, DOD reported
$1,907.8 million in incremental costs for peace operations.
Congress provided supplemental appropriations that covered
almost two-thirds of these incremental costs, leaving DOD with
a funding shortfall of $709.5 million. Then on September 30,
1994, the fiscal year 1995 defense appropriations act provided
additional supplemental appropriations of $299.3 million
through the Defense Emergency Response Fund (DERF) to further
reimburse DOD for certain operations that occurred in fiscal
year 1994. Despite this second supplement, and funds from the
Feed and Forage Act and the operation and maintenance accounts,
DOD still sustained a funding shortfall of $176.9 million.
Units participating in peace operations were fully funded for
their incremental costs. To pay these units' costs, DOD used
funds from other service programs or units that did not
participate. Although the funding shortages adversely affected
military readiness in several units in the Air Force. The $98.1
million that DOD received in reimbursements from the United
Nations for 1993 was deposited to fiscal year 1994
appropriation accounts and, according to DOD, cannot be traced
to specific expenditures.
103. ``Defense Sector: Trends in Employment and Spending,'' April 1995,
GAO/NSIAD-95-105BR.
a. Summary.--This report includes data on (1) the extent of
the Department of Defense (DOD) and defense industry
downsizing, and (2) defense reinvestment and conversion
expenditures.
b. Benefits.--The defense sector, as measured by Pentagon
spending and military and defense industry employment, has been
shrinking, both in absolute terms and relative to the U.S.
economy, since the mid-1980's. Declines in Defense Department
(DOD) spending and decreases in defense-related employment have
occurred during a period of strong increase in the gross
domestic product and in nondefense employment. The defense
reinvestment and conversion initiative was established in 1993
to help ease the displacement caused by defense downsizing. Not
all programs were tied directly to DOD cuts, however. Some
individual programs in the initiatives have other purposes and
will likely continue after the initiative ends in fiscal year
1997.
104. ``National Airspace System: Comprehensive FAA Plan for Global
Positioning System Is Needed,'' May 1995, GAO/RCED-95-26.
a. Summary.--The FAA has been meeting its milestones for
implementation of the Department of Defense Global Positioning
System thus far. The Global Positioning System will consist of
24 satellites in six orbits at approximately 11,000 miles above
the earth. The satellites transmit radio signals that permit
adequately equipped users to calculate the time as well as
their speed and tridimensional position anywhere on or above
the earth's surface and in any weather condition. This report
analyzes the status of the implementation of the Global
Positioning System.
b. Benefits.--FAA will have more complex and difficult
tasks in achieving future milestones. The revised schedule may
not give the agency enough time to develop and implement its
wide area system for augmenting the Global Positioning System
resulting in having to rely on other navigation aids for
backup. The current FAA plan omits (1) milestones for
implementing the local area system to augment the Global
Positioning System; (2) cost estimates for this system and the
wide area system; and (3) information on the probabilities of
meeting schedule and cost estimates, given known potential
problems that may affect the development of these systems.
105. ``Military Bases, Analysis of DOD's 1995 Process and
Recommendations for Closure and Realignment,'' April 1995, GAO/
NSIAD-95-133.
a. Summary.--The 1990 Defense Base Closure and Realignment
Act (Title XXIX, Public Law 101-510), authorized the base
closure rounds in 1991, 1993, and 1995. The purpose was to
provide a bipartisan approach to the Department of Defense
downsizing in funding, personnel, force structure and
infrastructure. This report analyzes the improvement of the
1995 round over previous years.
b. Benefits.--While some progress occurred regarding the
reduction in excess infrastructure, much excess capacity will
remain after the 1995 BRAC round. The Department of Defense
1995 BRAC process was generally sound and well documented and
should result in substantial savings. However, the
recommendations and selection process were not without problems
and, in some cases, raise questions about the reasonableness of
specific recommendations. GAO suggests the following areas that
need attention: (1) agreements for consolidating similar work
done by two or more of the services were limited, and
opportunities to achieve additional reductions in excess
capacity and infrastructure were missed; (2) The Air Force BRAC
process was largely subjective and not well documented and the
Navy did not consistently apply DOD's criteria when excluded
certain facilities from closure for economic impact reasons.
106. ``Space Shuttle, NASA Must Reduce Costs Further To Operate Within
Future Projected Funds,'' June 1995, GAO/NSIAD-95-118.
a. Summary.--The purpose of this investigation was to
determine (1) how successful NASA has been in reducing funding
for shuttle operations and what changes enabled the reductions;
(2) if the potential exists for further reductions; and (3)
whether NASA adequately considered the impact, if any, of the
reductions on shuttle safety. NASA will spend about $3.2
billion of its $14.3 billion budget for shuttle production and
operations. Since the space shuttle is the Nation's only launch
system capable of transporting people, it's viability is
critical to other space programs such as the international
space system.
b. Benefits.--Significant additional funding reductions are
needed to achieve NASA's future budget projections for shuttle
operations. If NASA cannot reduce shuttle operating costs to
match available funds in fiscal years 1996 through 2000, either
NASA's budget must be increased or funding for other programs
will have to be cut. On May 19, 1995, the Administrator
announced plans for significantly reducing NASA's
infrastructure.
107. ``DOD Service Academies: Comparison of Honor and Conduct
Adjudicatory Processes'' April 1995, GAO/NSIAD-95-49.
a. Summary.--This report examines the adjudicatory systems
at the service academies to make decisions regarding student
conduct and performance by (1) comparing the honor and conduct
systems at each academy and describing how the various systems
provide common due process protections, and (2) describing the
attitudes and perceptions of the students toward these systems.
Each academy establishes a conduct system that establishes
rules and regulations and provides for dealing with those
accused of violations. Each academy also has a largely student-
run honor system that prohibits lying, cheating, and stealing.
b. Benefits.--GAO found that although there are many
similarities in each academy's honor system, there are some
prominent differences. The honor system at the Military and Air
Force academies include non-toleration clauses that make it an
honor offense to know about an honor offense and not report it,
while at the Naval Academy failure to act on a suspected honor
violation is a conduct offense. The standard of proof also
differs. The Air Force Academy utilizes the ``beyond a
reasonable doubt,'' while the other academies utilize ``a
preponderance of the evidence''. Students at the academies
receive protections typically associated with procedural due
process, with a few notable exceptions. The most prominent
exception is the right to representation by counsel and the
right to remain silent, however, the right to remain silent is
granted once an individual is charged with an offense. GAO
administered a questionnaire which indicated that academy
students generally saw their honor systems as fair, however, it
was found that there is a considerable reluctance among
students to report fellow students for honor violations.
108. ``International Broadcasting: Downsizing and Relocating Radio Free
Europe/Radio Liberty,'' April 1995, GAO/NSIAD-95-53.
a. Summary.--In the 1950's, the United States Government
established Radio Free Europe/Radio Liberty (RFE/RL) as a
private nonprofit company to provide radio programming to
Eastern Europe and the former Soviet Union. With the end of the
cold war, the executive branch began questioning the role and
the management of international broadcasting. Executive branch
officials concluded that management consolidation would reduce
costs by promoting more rational programming decisions and
sharing of engineering and other resources. In July 1994, the
President directed that the operations of RFE/RL be moved from
Munich to Prague. This report discusses (1) RFE/RL's ability to
meet its congressionally mandated funding ceiling and
successfully operate in Prague; (2) the most pressing
management problems RFE/RL faces in Prague; and (3) RFE/RL's
view of its role and mission in the 21st century.
b. Benefits.--Current and planned sources of revenue are
insufficient to cover RFE/RL downsizing and relocation costs
and to meet mission requirements through 1999. The Board for
International Broadcasting estimates that the overall funding
shortfall could reach as high as $28 million. Also, the move
and operations in Prague may not occur as easily as RFE/RL has
anticipated. The move is behind schedule and some RFE/RL
managers are concerned about their ability to recruit the most
qualified staff from within and outside the company. In looking
to the future, RFE/RL officials see an enduring, although
changing mission. They believe their broadcasts will continue
to be needed to provide accurate, objective news in support of
democratic institutions and to present journalistic standards
that in-country media can emulate. RFE/RL is also crafting a
role for itself to directly assist in the democratic
development of the former Eastern bloc countries.
109. ``Illegal Immigration: INS Overstay Estimation Methods Need
Improvement,'' September 1995, GAO/PEMD-95-20.
a. Summary.--Reliable and valid estimates of the number of
``overstays''--persons who enter the United States legally as
visitors but do not leave under the terms of their admissions--
are important to public policymaking. Higher numbers of
overstays might suggest, for example, the need for stricter
policies or laws for issuing temporary U.S. visas to citizens
of those countries whose travelers tend to overstay their visas
in significant numbers. Overstay data are also needed to
monitor travel from countries whose citizens are not required
to obtain a U.S. tourist visa. This report examines the basis
for the Immigration and Naturalization Service (INS) estimates
of overstays and suggests ways in which INS can improve these
estimates.
b. Benefits.--INS devised a creative approach for
estimating overstays through estimating the number of uncounted
departures (that is, ``system error''). Specifically, INS
determined that system error could be estimated by using data
from countries for which it seems safe to assume there are few
or no overstays (that is, ``index countries''). GAO devised an
alternative method for estimating overstays among foreign
visitors who arrive by air. Their method is based on INS' index
country strategy but uses more detailed INS data and avoids the
global assumption. GAO method also corrects an error in INS'
computation formula and uses appropriately weighted data. GAO's
overstay estimates are between 16 percent and 47 percent lower
than INS'. INS' global approach provided a good starting point
for estimating overstays, but makes too many assumptions, which
increases the uncertainty of their estimates.
110. ``Nuclear Nonproliferation: Information on Nuclear Exports
Controlled by U.S.-EURATOM Agreement,'' June 1995, GAO/RCED-95-
168.
a. Summary.--The United States-EURATOM Agreement, which
expires on December 31, 1995, controls the export of nuclear
materials--specifically enriched uranium, natural and depleted
uranium with nuclear uses, plutonium, thorium, and nuclear
reactors and their major components--from the United States to
15 western European countries. If a new agreement is not
concluded before the expiration date, exports of United States
nuclear materials and components to EURATOM would be banned. In
addition, the expiration of the agreement would also prohibit
Japan from transferring United States-origin nuclear materials
to EURATOM because United States-origin nuclear materials are
not permitted to be transferred to countries that do not have
in place agreements for cooperation with the United States.
This report provides information on (1) the amount of United
States nuclear exports to EURATOM and Japan and United States-
origin nuclear materials transferred from Japan to EURATOM; (2)
the value of United States nuclear exports to EURATOM and
Japan; and (3) the nuclear industry's views on the potential
impact on nuclear commerce with EURATOM and Japan if the
agreement is not renewed.
b. Benefits.--From 1980 through 1994, the United States
exported about 32.6 million kilograms (kgs) total. About 11
million kgs of nuclear materials went to EURATOM and Japan,
respectively, and Japan transferred about 4.7 million kgs of
United States-origin nuclear materials to EURATOM. The United
States Department of Commerce has valued United States nuclear
materials exported from 1989 through August 1994 at about $1.1
billion for EURATOM countries and about $4 billion for Japan.
According to United States Enrichment Corporation officials, if
the United States-EURATOM agreement expires, the future of the
Corporation's uranium enrichment services could be seriously
affected. Corporation officials estimated that contracts with
EURATOM worth about $470 million would be in jeopardy if the
agreement expires. Furthermore, another $1.8 billion in
potential new contracts with EURATOM and Japan could be lost.
111. ``Foreign Investments: Foreign Laws and Policies Addressing
National Security Concerns,'' April 1996, GAO/NSIAD-96-61.
a. Summary.--Japan, France, Germany, and the United Kingdom
have the authority to block investments for national security
reasons, as does the United States. In recent years, however,
these five countries have rarely invoked this authority. Some
of these countries have established processes for reviewing
foreign investment for national security concerns. United
States defense industry officials have said that they had not
pursued defense-related direct investment in Japan, France,
Germany, or the United Kingdom because of economic factors,
such as the size of the defense markets in these nations, as
well as informal barriers, such as domestic company ownership
structures. Most countries offer investment incentives, but the
U.S. defense industry officials did not cite them as a major
inducement to invest. U.S. defense industry officials said that
they were pursuing access to overseas defense markets through
strategies other than foreign direct investment. For example,
United States defense firms either licensed technology to
Japanese companies or made direct sales to Japan. In the three
European countries, United States companies formed partnerships
to compete for projects.
b. Benefits.--According to the Organization for Economic
Cooperation and Development (OECD), total foreign direct
investment inflows and outflows among member countries have
increased in recent years. Cross-border mergers in Europe in
1994 were almost double the level of 1993 in value terms.
United States firms were the most active buyers in Europe.
Similarly in the United States, foreign companies significantly
increased their investment activity.
112. ``Marine Safety: Coast Guard Should Address Alternatives as It
Proceeds With VTS 2000,'' April 1996, GAO/RCED-96-83.
a. Summary.--Currently, the U.S. Coast Guard and private
entities operate radar-based vessel traffic services (VTS) in
several U.S. ports. A VTS system employs remote surveillance
sensors, such as radar or closed-circuit television, that relay
information on maritime traffic conditions to VTS personnel,
who pass it on to mariners and the maritime industry by radio.
The purpose of these systems is to improve the safe and
efficient movement of ships around ports and to protect the
environment. The Coast Guard is considering installing VTS
systems in as many as 17 ports. The Federal Government will
spend as much as $310 million to build the proposed expansion,
known as VTS 2000, and about $42 million annually to operate
it. The report answers the following four questions: What is
the status of the Coast Guard's development of VTS 2000? At
ports being considered for VTS 2000, to what extent do major
stakeholders support acquiring and funding it? If major
stakeholders do not support VTS 2000, to what extent are they
interested in acquiring and funding other VTS systems? What
other issues could affect the establishment of VTS systems that
are privately funded?
b. Benefits.--GAO did not find widespread support for VTS
2000 among the interviewed stakeholders at the eight ports
where site visits were conducted. Many who opposed VTS 2000
said that the proposed system would likely be more expensive
than necessary for their port. Many opposed the user fees and
other funding approaches that would pass the cost of VTS 2000
from the Federal Government to those using the system.
113. ``Promoting Democracy: Progress Reported on U.S. Democratic
Development Assistance to Russia,'' February 1996, GAO/NSIAD-
96-40.
a. Summary.--United States-funded democracy projects have
demonstrated support for, and contributed to, Russia's
democracy movement. Those assisted include prodemocracy
political activities and political parties, proreform trade
unions, court systems, legal academies, Government officials,
and the media. The democracy projects that GAO reviewed,
however, had mixed results in meeting their stated objectives.
Russian reformers and others generally viewed United States
democracy assistance as valuable, but in only three of the six
areas GAO reviewed had projects contributed significantly to
political, legal, or social changes. Media projects generally
succeeded in increasing the quality and the self-sufficiency of
nongovernment media organization, but the weak economy
continues to threaten the press's ability to remain
independent. United States' efforts to develop a democratic
trade union movement and improve Russia's electoral system also
contributed to systemic changes, although more needs to be
done. Projects relating to political party development, rule of
law, and civil-military relations had limited impact. Russian
economic and political conditions were the most important
factors determining project impact. Implementation problems
accounted for the limited results derived from the rule-of-law
project.
b. Benefits.--The United States-funded independent media
program in Russia has helped raise the quality of print and
broadcast journalism and contributed to Russia's movement
toward an independent, self-sustaining local television
network. The USAID-funded election administration project,
implemented by the International Foundation for Electoral
Systems has made important contributions to addressing the
legal, institutional, and procedural shortcomings evident
during Russia's December 1993 national elections. Trade union
development assistance in Russia has helped increase the size
and effectiveness of democratic trade unions. But United
States-funded political party development programs, United
States-funded projects intended to strengthen civilian control
of the Russian military, and United States-funded rule of law
activities have made only incremental improvements in reforming
Russia's legal, military, and judicial institutions, largely
due to a lack of interest by the Russian Government in these
areas.
114. ``United Nations: U.S. Participation in the Fourth World
Conference on Women,'' February 1996, GAO/NSIAD-96-79BR.
a. Summary.--This briefing report focuses on the Fourth
World Conference on Women, sponsored by the United Nations
(UN). GAO discusses (1) the cost of United States participation
in the conference and the parallel, independently convened
nongovernmental organizations' forum, (2) the UN process for
accrediting nongovernmental organizations, and (3) the handling
of conference travel visas by the Chinese. A summary of GAO's
discussions with 28 U.S. nongovernmental organizations about
their views on the accreditation process, the adequacy of
accommodations, and physical access to conference and forum
facilities is included.
b. Benefits.--The total cost to the United States for the
Conference and Forum was approximately $5.9 million. The UN
invited nongovernmental organizations (NGO's) to apply for
accreditation to participate in Conference activities. Of the
2,450 NGO's worldwide that applied for accreditation, 277 were
not accredited. Of the 588 U.S. NGO's that applied, 69 were not
accredited. And although the Chinese were late in processing
visas, an official of the United States Mission to the UN
stated that most applicants did receive one. Possible causes of
problems include the overwhelming number of visa requests
received by the Chinese and the requirement to have a confirmed
hotel reservation before applying for a visa.
115. ``Military Aircraft Safety: Significant Improvements Since 1975,''
February 1996, GAO/NSIAD-96-69BR.
a. Summary.--Despite a series of recent crashes, the safety
record of military aircraft has improved significantly during
the past 20 years. Accidents dropped from 309 in 1975 to 76
last year, while fatalities declined from 285 to 85 during the
same period. Human error was reported as a contributing factor
in 73 percent of these flight mishaps. This report discusses
(1) historical trends in aircraft accidents involving deaths or
extensive aircraft damage, (2) investigations performed to
determine the causes, and (3) examples of actions taken to
reduce the number of aviation accidents.
b. Benefits.--Each of the services have taken steps to
reduce aviation mishaps, such as tracking mishap investigation
recommendations and disseminating safety information in
manuals, newsletters, videos, and messages. Recent safety
initiatives include risk management and human factor studies.
116. ``DOD Procurement: Use and Administration of DOD's Voluntary
Disclosure Program,'' February 1996, GAO/NSIAD-96-21.
a. Summary.--Forty-eight of the top 100 military
contractors have disclosed procurement fraud as part of a
Defense Department (DOD) program encouraging voluntary
reporting of such incidents. But the total number of
disclosures has been small and the dollar amounts recovered
have been modest--less than $100,000 in 63 percent of the
cases. Moreover, under DOD's Voluntary Disclosure Program,
cases took an average of 2.8 years to close, with about 25
percent taking more than 4 years. Less-than-full cooperation
from contractors and low priority given by DOD and other
investigative agencies to managing cases expeditiously may be
problems in some cases.
b. Benefits.--From its inception in 1986 through September
1994, DOD reported the 138 defense contractors made 325
voluntary disclosures of potential procurement fraud, of which
129 have been closed. According to DOD, 48 of the top 100
defense contractors made 222 disclosures. The remaining 103
disclosures were made by 90 contractors from among the more
than 32,000 contractors doing business with DOD. Through
September 1994, DOD reported recoveries from the program of
about $290 million, of which about 38 percent is associated
with cases that are still open.
117. ``Military Readiness: A Clear Policy is Needed to Guide Management
of Frequently Deployed Units,'' April 1996, GAO/NSIAD-96-105.
a. Summary.--This report addresses concerns raised by
Congress that the length of time that military personnel are
spending away from home on deployments--commonly called
personnel tempo--has increased and is stressing portions of the
military community and harming readiness. GAO discusses (1)
U.S. forces' frequency of deployments in recent years; (2) the
effect of increased personnel tempo on the readiness of U.S.
forces; and (3) Defense Department efforts to mitigate the
impact of high personnel tempo, including measures to create
systems for measuring personnel tempo.
b. Benefits.--GAO's analysis of a group of high-deploying
units over a 4-year period showed the most had elements that
were deployed for more than one-half of each year. Peace
operations were the driving force behind the increases,
accompanied by smaller increases in joint activities. DOD
officials believe that deployments could be reduced by
eliminating redundant military training and combining or
canceling some exercises.
118. ``Acquisition Reform: Efforts to Reduce the Cost to Manage and
Oversee DOD Contracts,'' April 1996, GAO/NSIAD-96-106.
a. Summary.--The Defense Department (DOD) contracted with
the management consulting firm of Coopers and Lybrand to study
the impact of the military's acquisition regulations and
oversight requirements on its contracts. Coopers and Lybrand's
1994 report cited more than 120 regulatory and statutory ``cost
drivers'' that increased the prices that DOD paid for goods and
services by 18 percent. In response, DOD established a working
group to address the issue of cost drivers. The working group
is tracking many reforms initiated by DOD to reduce the cost of
managing and overseeing DOD contracts. Although DOD expects
substantial savings from these reforms, the actual savings may
be significantly less than the 18-percent cost premium noted by
Coopers and Lybrand. In December 1995, contractors
participating in DOD's Reducing Oversight Costs Reinvention
Laboratory noted that current measures would yield savings of
only 1 percent. DOD said that the 1-percent cost savings was
based on ``work in progress'' and that it would be
inappropriate to use these results to draw conclusions about
DOD's ability to reduce the cost premiums. DOD fully expects
the savings from laboratory activities to exceed the level
reported in December 1995.
b. Benefits.--In response to the Coopers and Lybrand study,
DOD established the Regulatory Cost Premium Working Group in
1994 to identify and coordinate efforts to address to cost
drivers. The working group is addressing the top 24 cost
drivers and intends to expand its work to include the top 59
cost drivers identified in the study. Although substantial
savings are expected from DOD's acquisition reform efforts, the
savings from on-going initiatives to address the cost drivers
may be significantly less than the 18-percent cost premium
identified by Coopers and Lybrand.
119. ``Defense Transportation: Streamlining of the U.S. Transportation
Command Is Needed,'' February 1996, GAO/NSIAD-96-60.
a. Summary.--The military often pays as much as three times
the amount commercial carriers would normally charge to ship
cargo because of a fragmented and inefficient organizational
structure and outdated management practices at the U.S.
Transportation Command. This situation has led to confusing
billing practices and expensive staff overhead. For example, a
military customer might pay the United States Transportation
Command $3,800 to ship a load of cargo from California to
Korea, while a commercial carrier would have charged only
$1,250 for the shipment. Much of today's military cargo moves
by air, land, and sea transport. Under the U.S. Transportation
Command's unwieldy organizational structure, customers receive
bills from each command for each mode of transportation, rather
than a single bill covering the entire shipment. In addition to
confusing customers, separate billing systems increase
personnel and costs. Salaries and wages alone for the command
in fiscal year 1994 topped $1 billion.
b. Benefits.--Customers using defense transportation
services pay substantially more than the component commands do
for basic commercial transportation. Higher defense
transportation costs are driven by process fragmentation,
duplication, and overlap within component commands and the need
to maintain mobilization capability. GAO recommends (1)
separate traffic management component command headquarters
staff, (2) the consolidation of separate field-subordinate
command traffic management staff, and (3) the elimination of
all remaining duplicative field-based subordinate command
support staff.
120. ``Closing Maintenance Depots: Savings, Workload, and
Redistribution Issues,'' March 1996, GAO/NSIAD-96-29.
a. Summary.--The Department of Defense (DOD) spends $15
billion annually to maintain aircraft, ships, tracked and
wheeled vehicles, and other equipment. However, it believes
that it can reduce maintenance costs by better matching its
depots' workload capacity with current maintenance
requirements. Accordingly, as part of the ongoing base closures
and realignments, DOD is closing 15 of its major maintenance
depots and is transferring their workloads to other depots or
the private sector. This report: (1) assesses the reliability
of DOD's depot closure cost and savings estimates, (2) provides
information on the policies and the programs used to provide
employment and training to employees at depots being closed,
(3) determines if the military can increase savings by using
competition between DOD depots or between depots and the
private sector when redistributing the workloads of closed
depots, and (4) determines if the military services adequately
consider other services' depots when they use methods other
than competition to redistribute the workloads.
b. Benefits.--GAO found the (1) public-public and public-
private competition programs were discontinued in May 1994; (2)
the Air Force is implementing a privatization-in-place plan
that will likely increase maintenance costs; (3) the military
services rarely consider interservicing alternatives (one
service relying on another service for depot maintenance
support) when they redistribute workloads; and (4) neither DOD
nor the services require depots to reengineer workloads they
receive from closing depots.
121. ``Intelligence Agencies: Personnel Practices at CIA, NSA, and DID
Compared with Those of Other Agencies,'' March 1996, GAO/NSIAD-
96-6.
a. Summary.--Intelligence agencies employ thousands of
people who, for reasons of national security, are not covered
by Federal personnel statutory protections. Members of Congress
have raised concerns that intelligence agency employees lack
the same protections afforded other Federal workers. GAO found
that the Central Intelligence Agency, the National Security
Agency, and the Defense Intelligence Agency have equal
employment opportunity practices similar to those of other
Federal agencies. In contrast, adverse action practices at the
intelligence agencies vary by agency and by type of employee.
The external appeals procedures at the intelligence agencies
differ from the procedures at other Federal agencies in that
most employees may not appeal adverse actions to the Merit
Systems Protection Board.
b. Benefits.--GAO's review indicated that with the
retention of summary removal authorities, these intelligence
agencies could follow standard Federal practices, including the
right to appeal adverse actions to the Merit Systems Protection
Board, without undue risk to national security. GAO sees no
justification for treating employees at these intelligence
agencies differently from employees at other Federal agencies
except in rare national security cases.
122. ``Defense Logistics: Requirement Determinations for Aviation Spare
Parts Need to be Improved,'' March 1996, GAO/NSIAD-96-70.
a. Summary.--The Air Force and the Navy budgeted $132
million more than needed for aviation spare parts because of
questionable policies governing the determination of
requirements and the accountability for depot maintenance
assets. The Air Force, in preparing its fiscal year 1996 budget
for aviation parts, did not consider $72 million worth of on-
hand assets. In computing its fiscal year 1997 requirements for
aviation parts, the Navy counted $60 million in depot
maintenance requirements twice. GAO found that the Air Force
and the Navy had made other errors in computing their
requirements because of poor management oversight and internal
controls. Both the Air Force and the Navy used unsupported or
incorrect maintenance replacement rates, demand rates, planned
program requirements, repair costs, lead times, due-out
quantities, and asset quantities on hand and on order. These
inaccuracies totaled $35 million for the items in GAO's sample
alone and resulted in some requirements being overstated by $25
million and others being understated by $10 million.
b. Benefits.--Although Air Force and Navy policies and
procedures related to reserving on-hand assets for depot
maintenance requirements differ, both agencies' policies and
procedures result in overstated requirements. GAO's review of
overall budget inventory data related to these assets and their
sampling tests of F-100 and F-404 engine parts showed that the
Air Force and the Navy overstated budget buys and repairs by
about $132 million. This overstatement occurred because of
questionable Air Force and Navy policies concerning the
determination of requirements and the accountability for assets
held in reserve to satisfy depot maintenance needs.
123. ``Defense Budget: Trends in Active Military Personnel Compensation
Accounts for 1990-1997,'' July 1996, GAO/NSIAD-96-183.
a. Summary.--The Defense Department's (DOD) budget request
for fiscal year 1997 includes nearly $70 billion for pay and
allowances for military personnel. This amount represents about
30 percent of DOD's total budget request. DOD projects that
during the next 5 years, pay and allowances will remain about
30 percent of its total budget. This report (1) identifies the
various pay categories included in the accounts, (2) describes
the trends of those pay categories, and (3) determines how
changes in the budget compared with changes in service force
levels. GAO also discusses the reasons for some of the service
trends and differences among the services.
b. Benefits.--GAO found the military personnel budget for
active forces is projected to decline by 30 percent from about
$85 billion to $60 billion through fiscal year 1997, while
military personnel levels are projected to decline by the same
rate from over 2 million to about 1.4 million. Discounting for
inflation by using constant 1996 dollars, the cost of each
person in FY97 is projected to be about the same as it was in
FY90. Specifically, the cost per military person has decreased
by roughly $80 between 1990 and 1997 to about $40,600. A
decrease of about $2,000 per person in retired pay accrual
mostly offset increases in basic pay ($700), the basic
allowances for quarters ($200), and six other categories.
124. ``Physically Demanding Jobs: Services Have Little Data on
Availability of Personnel to Perform,'' July 1996, GAO/NSIAD-
96-169.
a. Summary.--This report reviews the use and development of
gender-neutral occupational performance standards in the
military. GAO (1) discusses the military services' approaches
to implementing gender-neutral performance standards and
screening service members to ensure that they can meet the
physical demands of their jobs, (2) discusses how the military
services identified the extent to which service members had
problems in accomplishing the physical demands of their jobs,
and (3) evaluates the Air Force's implementation of its
strength aptitude testing program.
b. Benefits.--Except for the Army, the services have not
collected data on service members' ability to do physically
demanding jobs and have little basis on which to conclude that
service members are not having problems. GAO is concerned that
some service members may have difficulty doing some physically
demanding tasks based on the results of a limited survey
conducted by the Army Research Institute and anecdotal
information obtained in interviews with service members.
125. ``Military Bases: Potential Reductions to the Fiscal Year 1997
Base Closure Budget,'' July 1996, GAO/NSIAD-96-158.
a. Summary.--A review of the Defense Department's (DOD)
Base Realignment and Closure (BRAC) accounts indicates that
Congress has little assurance that appropriated BRAC funds will
be used as requested in DOD budget submissions. In past
submissions, environmental costs have been understated while
costs for other BRAC subaccounts, such as military construction
and operation and maintenance, have been overstated. The DOD
fiscal year 1997 budget request can be reduced by about $148
million (about 6 percent) because funds from prior year
appropriations will be available to fund future expenditures.
Additional reductions are possible because mandated annual DOD
Inspector General (IG) audits of BRAC construction projects
identify those activities that can be eliminated or reduced in
scope. If the fiscal year 1997 IG audit identifies reductions
in the projects proportionate to the reductions identified in
1996 and 1995, the amount would be about $60 million.
b. Benefits.--DOD did not concur with this draft report,
nor did it agree with the report's conclusion that the fiscal
year 1997 BRAC budget request could be reduced by $300 million.
GAO believes that by reducing the BRAC 1997 budget would better
align available funds with closure actions and reduce
unobligated balances in the BRAC account.
126. ``Defense Depot Maintenance: Commission on Roles and Mission's
Privatization Assumptions Are Questionable,'' July 1996, GAO/
NSIAD-96-161.
a. Summary.--GAO questions the assumption made by the
Commission on Roles and Missions (CORM's) that privatizing all
Defense Department (DOD) depot maintenance activities would
save 20 percent and not harm readiness or sustainability. The
Commission's assumptions are based on conditions that do not
now exist for many depot workloads. The extent to which DOD's
long-term privatization plans and market forces will
effectively create more favorable conditions for outsourcing is
uncertain. The Commission assumed that a highly competitive and
capable market exists or would develop for most depot
workloads. However, most of the depot workloads contracted to
the private sector are awarded noncompetitively--mostly to the
original equipment manufacturer. Moreover, several factors
would likely limit private sector competition and capable
private sector markets, the cost and readiness risks of
privatizing depot maintenance workloads may prove unacceptable.
Furthermore, the Commission's privatization savings do not
reflect the cost impact of excess capacity in the public
depots.
b. Benefits.--The CORM assumed the public-private
competitions would only be used in the absence of private
sector competition and would be limited to only a few cases.
GAO found the public-private depot maintenance competitions
have resulted in savings and benefits and can provide a cost-
effective way of making depot workload allocation decisions for
certain workloads.
127. ``Inventory Management: Adopting Best Practices Could Enhance Navy
Efforts to Achieve Efficiencies and Savings,'' July 1996, GAO/
NSIAD-96-156.
a. Summary.--This report is part of a series comparing the
Defense Department's (DOD) logistics practices with those of
the private sector. Although DOD has introduced some innovative
practices, many opportunities exist for improving the logistics
system. This report focuses on the Navy's logistics system for
aircraft parts. GAO (1) examines the current performance of the
Navy's logistics system, (2) reviews the Navy's efforts to
improve its logistics system and reduce costs, and (3) examines
leading best practices used by the airline industry that could
potentially help the Navy bolster the efficiency and
effectiveness of its logistics operations.
b. Benefits.--GAO believes that these practices can be
integrated into the Navy's logistics system and that they are
compatible with many aspects of Navy's operations. DOD agreed
with the findings of this report and will issue a memorandum to
the Secretary of the Navy requesting that a demonstration
project be initiated. This project should be underway by the
beginning of FY97. The Navy will conduct a business care
analysis and access the leading-edge practices highlighted in
this report for their applicability in a Navy setting and,
where appropriate, will tailor and adopt a version of these
practices for use in its repair process.
128. ``Bosnia: Costs are Uncertain but Seem Likely to Exceed DOD's
Estimate,'' March 1996, GAO/NSIAD-96-120BR.
a. Summary.--The Defense Department's (DOD) cost to send
almost 27,000 troops to Bosnia as part of peacekeeping
operations could well exceed DOD's original estimate. Army
costs, which are estimated at two-thirds of total operation
costs, are likely to exceed DOD projections, while Air Force
costs are likely to be less than estimated. DOD estimated
deployment transportation costs at nearly $73 million, but
through the end of January 1996, DOD had spent about $157
million on deployment transportation. DOD estimated the cost of
contractor support at $192 million; through February 1996,
however, the Army had spent more than $247 million on
contractor services, and Army officials said that contractor
costs could go as high as $500 million. Several major cost
areas remain uncertain. They involve the operating tempo of the
forces in Bosnia, the cost of redeploying the implementation
force, and the expense of reconstituting equipment used in the
operation.
b. Benefits.--Because of the uncertainty in the cost
estimate, GAO suggested that in determining funding Congress
consider (1) expenses incurred in support of contingency
operations involving the former Yugoslavia, and (2) the
reimbursement of accounts initially utilized to fund those
operations. In fiscal year 1995, some of the military services
ended the year with contingency costs that were below the
amounts provided in supplemental appropriations and used the
remaining funds for other needs that otherwise would have gone
unfunded. A related guideline is that if initial funding proves
to be inadequate, but some services have costs that are below
their funded level while other have costs that are above it,
the excess contingency funds should be redistributed before
providing additional funds.
129. ``Contingency Operations: Defense Cost and Funding Issues,'' March
1996, GAO/NSIAD-96-121BR.
a. Summary.--The Defense Department (DOD) participated in
contingency operations in several places during fiscal year
1995, including Haiti, Southwest Asia, and the former
Yugoslavia. To help cover the incremental costs of these
operations, Congress provided DOD with a supplemental
appropriation. This report provides information on (1) the
extent to which the supplemental appropriation fully covered
DOD's incremental costs and the impact that funding shortages
or overages may have had on the services and (2) the accuracy
of the methods used to estimate incremental costs compared with
actual costs and ways to improve the method of estimating
costs.
b. Benefits.--DOD reported fiscal year 1995 contingency
operations-related incremental costs of $2.2 billion. The Air
Force, Marine Corps, the Defense Intelligence Agency, and the
U.S. Special Operations Command collectively received fiscal
year 1995 supplemental funding of $133 million in excess of
their reported incremental costs for contingency operations.
Based on these figures, GAO found it necessary to improve the
methods of estimating costs in order to avoid such over-
expenditure of funding.
130. ``Peace Operations: U.S. Costs in Support of Haiti, Former
Yugoslavia, Somalia, and Rwanda,'' March 1996, GAO/NSIAD-96-38.
a. Summary.--The United States paid more than $6.6 billion
to support United Nations peacekeeping operations in Haiti, the
former Yugoslavia, Rwanda, and Somalia between fiscal years
1992 and 1995. Slightly more than half of these costs were
incurred by the Defense Department, which sent troops and
equipment to support the missions in these countries. The State
Department's costs were about $1.8 billion, while costs for the
U.S. Agency for International Development--the lead agency
responsible for providing humanitarian assistance, including
food donated by the Agriculture Department--were about $1.3
billion. The Departments of Justice, Commerce, the Treasury,
Transportation, and Health and Human Services reported costs
totaling about $91 million to support peace operations.
b. Benefits.--The United Nations has reimbursed the United
States $79.4 million for some of these costs. The subcommittee
learned from this report how officials from the Departments of
Defense and State budgeted and accounted for peace operations'
costs. Also, GAO reviewed previous reports on peace operations
costs. In some cases, the cost data obtained from participating
agencies changed from amounts previously reported because
agencies update their costs as more information becomes
available. Therefore, the numerical data in this report may be
inaccurate, depending on how much information was not accounted
for at the time of the reports release.
131. ``Military Readiness: Data and Trends for January 1990 and March
1995,'' March 1996, GAO/NSIAD-96-111BR.
a. Summary.--This is an unclassified version of an earlier
classified GAO report on military readiness. GAO analyzed
military readiness data found in the Defense Department's
Status of Resources and Training System to determine if the
information showed significant changes in readiness since
1990--a year of peak readiness. This report provides readiness
information for all four military services. Specifically, GAO
(1) summarizes the reported overall readiness status of all
military units from January 1990 to March 1995, (2) assesses
the readiness trends of selected units from each service for
the same period and discusses any readiness problems
experienced, and (3) explains significant changes in reported
readiness of selected units.
b. Benefits.--Of the 94 units GAO reviewed, readiness
remained at levels consistent with service goals in 75 (80
percent) of the units. However, readiness declined below the
goals in 19 (20 percent) of the units. In five of these units,
the readiness reduction were for fairly short periods of time
due to the units' participation in contingency operations. In
the remaining units, readiness reductions were caused primally
by personnel shortages, equipment shortages, and difficulty in
obtaining training for personnel in certain military
occupations.
132. ``Army National Guard: Validate Requirements for Combat Forces and
Size Those Forces Accordingly,'' March 1996, GAO/NSIAD-96-63.
a. Summary.--Although the Army National Guard has come down
in size since the end of the cold war, the Guard's combat
strength still exceeds what the Defense Department needs to
fight two major regional wars--the basic goal of U.S. military
strategy today. GAO recommends that the Army validate the size
and the structure of all the Guard's combat forces and develop
a plan to bring the size and the structure of these forces in
line with validated requirements. Depending on the study's
conclusions, the Army should consider converting some Guard
combat forces to support roles. To the extent that Guard forces
exceed validated requirements, the Army should consider
eliminating them.
b. Benefits.--According to DOD documents and Army
officials, the excess forces are a strategic reserve that could
be assigned missions such as occupational forces once an enemy
has been deterred and as rotational forces. However, GAO could
find no analytical basis for this level of strategic reserve.
133. ``Military Airlift: Observations on the Civil Reserve Air Fleet
Program,'' March 1996, GAO/NSIAD-96-125.
a. Summary.--This report provides information on the Civil
Reserve Air Fleet Program, which augments military airlift
during emergencies. According to Air Mobility Command
documents, fleet aircraft played a vital role in Operations
Desert Storm and Desert Shield by providing 62 percent of the
Air Force's passenger airlift capability and 27 percent of its
cargo airlift capability. GAO discusses the (1) extent to which
participation by commercial carriers in the program meets
wartime requirements, (2) Defense Department's efforts to
ensure future carrier participation, and (3) recent review of
the program that was directed by the C-17 Defense Acquisition
Board.
b. Benefits.--GAO found that (1) commercial carriers have
committed only 19 of the 44 aircraft required for aeromedical
evacuation, (2) carriers have committed 114 of the 120 wide-
body equivalent aircraft required for cargo airlift, and (3)
participation in passenger airlift exceeds requirements--a
commitment of 161 wide-body equivalent aircraft to meet a
requirement of 136.
134. ``Air Force Maintenance: Two Level Maintenance Program
Assessment,'' March 1996, GAO/NSIAD-96-86.
a. Summary.--The Air Force's Two Level Maintenance program,
which seeks to save money by reducing maintenance staffing,
equipment, and base-level support without sacrificing force
readiness, is not fully achieving its intended benefits. The
estimated costs to implement the program have increased, and
the expected net savings have decreased--from $385 million to
$258 million. In addition, not all program costs have been
included in the cost-savings analyses. Under the program, the
turnaround time to repair avionics items generally have met Air
Force standards. For engines, however, the turnaround times
have exceeded the standard by as many as 87 days. The use of
the program to support troops during wartime will add to the
airlift burden. Because the deployed forces will not have in-
country intermediate maintenance capability, the forces will
have to depend on airlift for spare and repair parts. However,
the theater commander, not the Air Force, controls airlift
priorities. As a result, the early stages of a conflict
outweighed the return of unserviceable items to depot repair
facilities and the movement of items from the depots to the
battlefront.
b. Benefits.--DOD agreed that there should be a continuing
reassessment of TLM candidates to gaurantee that the right ones
are in the program and that further assessments are made
through the TLM end-to-end analysis and engine supply
reassessment. Officials further stated that the Air Force will
continue to work with the Joint Staff and Supported Commanders-
in-Chief to determine executive use of airlift allocation to
meet service requirements. The need for early sustainment
airlift to support Two Level Maintenance is an issue that has
not been fully resolved and is one that could affect
sustainment of the deployed forces.
135. ``DOD Research: Acquiring Research by Nontraditional Means,''
March 1996, GAO/NSIAD-96-11.
a. Summary.--With considerable support from Congress, the
Defense Department (DOD) has made acquisition reform one of its
top priorities as it tries to reduce the cost of maintaining
technological superiority in an era of tighter military
budgets. Acquisition reform has generally focused on measures
affecting DOD procurement. However, DOD is also investigating
new approaches in its science and technology efforts, including
using cooperative agreements and other transaction instruments
to enter into research projects with commercial firms and
consortia. DOD has cited the use of cooperative agreements and
other transaction instruments as a way to (1) reduce barriers
to integrating the defense and civilian sectors of the
industrial base, (2) promote new relationships and practices
within the defense industry, and (3) allow the Government to
leverage for defense purposes the private sectors' financial
investments in research and development of commercial products
and processes. This report discusses DOD's use of the
instruments to further these three objectives. GAO also
discusses issues concerning the selection and structure of the
instruments.
b. Benefits.--GAO found that the use of cooperative
agreements and other transactions appears to provide some
opportunities to remove barriers between the defense and
civilian industrial bases, in particular by attracting firms
that traditionally did not perform research for DOD.
136. ``Depot Maintenance: Opportunities to Privatize Repair of Military
Engines,'' March 1996, GAO/NSIAD-96-33.
a. Summary.--In recent years, Congress has expressed
continuing interest in the Pentagon's management of its $15
billion depot maintenance program. One area of particular
interest has been the allocation of depot maintenance workload
between the public and private sectors, including various
privatization initiatives. This report addresses the depot
maintenance workload for an essential military commodity--gas
turbine engines. GAO discusses (1) the rationale supporting the
continued need for DOD to be able to repair engines at its own
maintenance depots, (2) opportunities to privatize additional
engine workloads, and (3) the impact that excess capacity
within DOD's depot system has on the cost-effectiveness of
decisions to privatize additional workloads.
b. Benefits.--GAO surveyed private sector companies to
determine their interest in repairing military engines with
commercial counterparts that are currently repaired in DOD
depots and their capability to do the job. The survey
identified interest in the maintenance workload for all 10
military commercial counterpart engines the DOD has or is
considering developing depot maintenance capability to support.
137. ``DOD Bulk Fuel: Services' Fuel Requirements Could Be Reduced and
Funds Used for Other Purposes,'' March 1996, GAO/NSIAD-96-96.
a. Summary.--For fiscal year 1996, bulk fuel requests by
the Army, the Navy, and the Air Force totaled $4.12 billion.
The three services planned to spend $107 million on this
amount, or 2.6 percent, on fuel from commercial sources. The
rest was used to buy fuel from the Defense Fuel Supply Center,
which buys fuel from commercial sources and sells it to the
military services. On the basis of historical usage data, the
Center estimates that the services' fuel purchases in fiscal
year 1996 would total $3.57 billion, or about $440 million less
than the amount the services had requested in their budgets.
This estimate is lower than the estimate made when the services
submitted their budget requests in January 1995. At the time,
the Center projected that the services would buy 3.68 billion
dollars' worth of fuel in fiscal year 1996, or about $330
million less than the amount requested. Because the services'
bulk fuel budgets are still overstated by about $440 million--
$440 million less than the $100 million congressional
reduction--GAO suggests that Congress rescind the $340 million
and apply it to other unfunded needs.
b. Benefits.--GAO believes that budget requests should
reflect the best estimate of what is needed for the purpose for
which funds are being requested. DOD justified their budget
request by pointing out that the fuel account has over executed
its budget in 2 of the last 4 years. But GAO thinks that in
those cases in which the request is excessive to meet known
needs, Congress should redirect the funds to other purposes
rather than allowing DOD to decide where to use the funds.
138. ``Military Bases: Update on the Status of Bases Closed in 1988,
1991, and 1993,'' August 1996, GAO/NSIAD-96-149.
a. Summary.--Land sales for the first three rounds of
military base closure totaled nearly $180 million as of March
1996. There were only two sales in the 1993 round, for a total
of $1.5 million. Although private parties are not precluded
from buying surplus properties at the closed military bases,
they rarely have a chance to bid on the properties because
communities are requesting the properties under public benefit
transfers, economic development conveyances, and noncompetitive
negotiated sale authorities. Communities are planning
industrial and office complexes, parks and recreational
facilities, residential housing, and prisons on this land.
Developing and implementing reuse and disposal plans, however,
can be a lengthy process. Readily marketable properties may
decline in value as they sit idle and may require resources
from the services' budgets for protection and maintenance. GAO
recommends that the Defense Department (DOD), to preserve the
facilities' value while reducing protection and maintenance
costs, (1) set time limits on negotiations before offering
properties for public sale and (2) when practical, rent
unoccupied surplus housing and other facilities as a way to
preserve properties pending final disposal.
b. Benefits.--DOD now reports that for the 60 bases GAO
reviewed, about 21 percent of the 88,000 DOD civilian jobs have
been replaced. To help communities successfully transform
closed bases into new opportunities, Federal agencies have
provided more that $780 million in direct assistance to areas
affected by 1988, 1991, and 1993 realignment and closure
rounds. GAO believes property can be effectively used to create
jobs and reduce the military services' protection and
maintenance costs even before community plans are finished or
military missions have ceased. The DOD Base Reuse
Implementation Manual describes leasing for reuse as one of the
most important tools for initiating rapid economic recovery and
job creation while reducing the military's protection and
maintenance costs.
139. ``Environmental Protection: Status of Defense Initiatives for
Cleanup, Compliance, and Technology,'' August 1996, GAO/NASD-
96-155.
a. Summary.--The Defense Department (DOD) manages thousands
of military installations throughout the United States and
overseas. Its operations are subject to the same environmental,
safety, and health laws as is private industry, as well as
additional regulations governing Federal facilities. The day-
to-day operations of a typical military installation mirror
those of a small city. As a result, these installations face
many of the same environmental problems confronting the
industrial and commercial sectors. DOD has organized its $5
billion environmental program into five areas: cleanup,
compliance, conservation, pollution prevention, and technology.
This report discusses three of these areas: (1) cleanup
(remediation), which involves investigating and cleaning up
contamination from hazardous substances and waste on land used
by DOD; (2) compliance with Federal, State, and local
environmental laws and regulations; and (3) technology research
and development.
b. Benefits.--GAO found that (1) recent DOD initiatives
affecting environmental cleanup include efforts to focus
funding on actual cleanup versus study and oversight, better
target the funds through the use of risk determination in
priority setting, and devolve the budget process to the
military services; (2) DOD lacks the data it needs to manage
its environmental compliance program, and (3) DOD plans to
implement an on-line strategic environmental technology plan
that will show specific service requirements and match ongoing
and planned initiatives.
140. ``Mine Detection: Army's Detector's Ability to Find Low-Metal
Mines Not Clearly Demonstrated,'' August 1996, GAO/NSIAD-96-
198.
a. Summary.--Land mines, especially those with little metal
content, have been used extensively by the warring factions in
the former Yugoslavia, and up to 7 million mines are believed
to be in the region. Before the deployment of United States
troops in the area, U.N. forces were involved in 174 land mine
incidents in Bosnia, which included 204 casualties and 20
deaths. The ability of the Army's AN/PSS-12 portable mine
detector to locate low-metal mines has not been clearly
demonstrated. The AN/PSS-12 performed poorly against low metal
targets in operational tests. The AN-PSS-12's testing history
suggests that the detector may have only limited application in
Bosnia, where most of the buried mines are of the low-metal
variety. Although the Army claims that the AN-PSS-12 has
performed well in Bosnia, other sources raise questions about
the detector's abilities there. The Air Force recently
cautioned its explosive ordinance technicians in Bosnia that
the AN/PSS-12 is not sensitive enough to detect the low-metal
mines that they may encounter. In addition, an Army report on
United States operations in Somalia says that the detector
could not find low-metal mines. In Bosnia, United States troops
have been able to pick routes that avoid minefields or they use
heavy equipment, such as vehicles equipped with rollers, to
clear paths.
b. Benefits.--GAO believes that the more important factor
in explaining the AN/PSS-12's performance in Bosnia to date has
been the prudent steps taken by the Army to minimize the threat
posed by the land mines there. The resulting infrequent
reliance on the AN/PSS-12 helps explain why its shortcomings in
testing may not have been borne out in Bosnia.
141. ``Navy Aviation: F/A-18E/F Will Provide Marginal Operational
Improvement at High Cost,'' June 1996, GAO/NSIAD-96-98.
a. Summary.--With a projected total cost of $63 billion,
the Navy's program to modernize its fleet of F-18 tactical
aircraft ranks among the most costly of military aviation
projects. Yet the planned F/A-18E/F will deliver only marginal
operational improvements over the current F/A-18C/D model. The
operational deficiencies in the F/A-18C/Ds that the Navy cited
as a justification for developing the F/A-18E/F either have
failed to materialize or can be corrected with nonstructural
changes to the C/D. Furthermore, E/F operational capabilities
will be only slightly better than those of the C/D model. Given
the expense and the marginal improvements in operational
capabilities that F/A-18E/F would provide, GAO recommends that
the Pentagon reconsider the decision to produce the F/A-18E/F
aircraft and, instead, consider procuring additional F/A-18C/
Ds. The number of F/A-18C/Ds that the Navy would ultimately
need to buy will depend on when the next generation strike
fighter becomes operational and the number of those planes the
Navy decides to purchase.
b. Benefits.--GAO recommends that DOD reconsider the
decision to produce the F/A-18E/F aircraft and, instead,
consider procuring additional F/A-18C/Ds. The number of F/A-
18C/Ds that the Navy would ultimately need to procure would
depend upon when the next generation strike fighter achieves
operational capability and the number of those aircraft the
Navy decides to buy.
142. ``Canada, Australia, and New Zealand: Potential Ability of
Agricultural State Trading Enterprises to Distort Trade,'' June
1996, GAO/NSIAD-96-94.
a. Summary.--The agricultural agreements of the Uruguay
Round of the General Agreements on Tariffs and Trade (GATT)
seek to establish a fair and market-oriented agricultural
trading system. Through progressive reductions in governmental
support and export subsidies, conversion of quotas to tariffs,
lowering of barriers to import access, and other reforms,
member nations hope to reduce distortions in world agricultural
markets. Some member states are using state trading enterprises
(STE) to regulate imports and exports. STEs are authorized to
engage in trade and are owned, sanctioned, or otherwise
supported by the Government. Although STEs are legitimate
trading entities and are subject to GATT regulations, some U.S.
agricultural producers are concerned that STEs, through their
monopoly powers and Government support, may be able to distort
worldwide trade in their respective commodities. This report
reviews state trading enterprises in Canada, Australia, and New
Zealand. GAO focuses on the activities of the Canadian Wheat
Board, the Australian Wheat Board, and the New Zealand Dairy
Board. GAO discusses whether the boards are capable of
distorting world markets in their respective commodities.
b. Benefits.--GAO's framework for analyzing export STEs
highlight three STE relationships--with domestic producers,
Government, and foreign buyers. STEs can have monopoly buying
authority over all domestic production of a particular
commodity, or the production of that commodity for export. This
authority provides STEs with the ability to potentially distort
trade through such practices as cross-subsidization. GAO found
that the establishment of an STE can also lead to a reduction
in the number of exporters and an increase in the market power
of the remaining participants.
143. ``Operation and Maintenance Funding: Trends in Army and Air Force
Use of Funds for Combat Forces and Infrastructure,'' June 1996,
GAO/NSIAD-96-141.
a. Summary.--The Secretary of Defense contends that the
Defense Department (DOD) must increase its procurement funding
if it is to have a modern future force. The Secretary wants to
reform the acquisition process and streamline infrastructure to
pay, in part, for force modernization. DOD now expects
decreases in its operation and maintenance account and
increases in its procurement account beginning in fiscal year
1998. This report reviews how the Army and the Air Force
obligated their annual operation and maintenance account funds
and compares their obligations to what was requested in the
President's budgets. GAO determines what part of total
obligations was used for infrastructure activities as opposed
to combat force. The Navy is not included in this review
because, at the headquarters level, it does not maintain the
level of budget request and obligation data that GAO needed for
its analysis.
b. Benefits.--GAO's comparison of the amounts obligated and
budgeted by the Air Force for the same functions showed that
the Air Force obligated slightly more than it requested for
combat forces. With regard to training and recruiting, the Air
Force obligated less than the amounts requested. It obligated
more than it requested for base support and slightly less than
it requested for management activities.
144. ``Basic Training: Services are Using a Variety of Approaches to
Gender Integration,'' June 1996, GAO/NSIAD-96-153.
a. Summary.--The military services are using various
approaches to integrate men and women during basic training.
These approaches range from using the same program to instruct
both sexes and integrating some training units to using
different programs of instruction and providing separate
training. The costs associated with gender integration have
been low. In fact, the Army is the only service that has
incurred expenses to accommodate gender-integrated basic
training. Studies of the impact of gender-integrated units have
been done for the Navy and the Army. A 1993 study done for the
Navy reported no impact on objective performance measures and
improvement in teamwork measures for both men and women
training in gender-integrated units. A recent study found that
the performance of men was not degraded. Although the Army
introduced limited gender-integrated basic training in the late
1970's and early 1980's, the Army has no records from that
period to compare with its current program.
b. Benefits.--As women comprise an increasingly large
portion of the military, each of the services are striving to
adjust their philosophy of basic training in order to achieve a
more gender-neutral military.
145. ``Navy Ship Propulsion: Viability of New Engine Program in
Question,'' June 1996, GAO/NSIAD-96-107.
a. Summary.--Although the Navy has spent more than 4 years
and nearly $225 million in a joint venture with the British and
French to develop a new gas turbine ship propulsion system, the
effort has encountered serious problems in development. Navy
officials have raised many questions about the new engine,
including the practicality of using it in the DDG-51 destroyer.
They also have concerns about whether the new engine will
provide a viable and timely return on the large investment to
develop it. GAO urges the Pentagon to reassess the need for
this program. As the Navy restructures the engine development
program, it must decide how and if it will use the $5.4 million
test facility that it built in Philadelphia. The Navy now plans
to conduct almost all of its engine testing at a test site in
the United Kingdom. The Navy must also decide whether to test
the engine at sea in a pilot ship. The cost to do so is
estimated as high as $12.5 million.
b. Benefits.--Given the (1) small number of new U.S.
destroyers involved, (2) adequacy of the current destroyer
engine, (3) high cost and difficulty of incorporating the
engine into the destroyer, (4) uncertain status of DDG-51
integration plans, and (5) current state of intercooled
recuperated gas turbine engine (ICR) development, GAO believes
that the Navy should at least wait for a more appropriate new
ship for the ICR engine.
146. ``Bottom-Up Review: Analysis of DOD War Game to Test Key
Assumptions,'' June 1996, GAO/NSIAD-96-170.
a. Summary.--This report, an unclassified version of an
earlier classified GAO report, reviews the objectives,
methodology, and results of the Pentagon's war game Nimble
Dancer, which assessed the ability of the U.S. armed forces to
fight and win two nearly simultaneously major regional
conflicts. GAO also discusses the assumptions and data used in
Nimble Dancer relating to several areas, such as readiness,
threat, and force availability. GAO provides its observations
on the objectives, methodology, and results of the exercise. It
also provides details on specific areas of interest.
b. Benefits.--GAO recognized that Nimble Dancer involved
analyses of key assumptions, enabling game participants to gain
insight into various aspects of the two major regional conflict
requirement. GAO believes that certain game assumptions were
favorable because they set conditions that were mostly
advantageous to U.S. forces, thereby minimizing risk.
147. ``Combat Air Power: Assessment of Joint Close Support Requirements
and Capabilities is Needed,'' June 1996, GAO/NSIAD-96-45.
a. Summary.--During the next 6 years, the military plans to
spend more than $10 billion on aircraft and other weapons to
bolster its already formidable close support capabilities. This
effort, however, comes at a time of shrinking defense budgets,
defense downsizing, and increasing questions about the
affordability of defense modernization. This report (1)
discusses the overall capabilities of the military services to
provide close support and the extent to which those
capabilities continue to be modernized and enhanced and (2)
evaluates the processes that the Defense Department uses to
assess missions needs, capabilities, and modernization
proposals for the close support mission.
b. Benefits.--GAO recommends that comprehensive cross-
service of overall joint close support missions needs existing
close support systems, and planned enhancements to be made on a
routine basis. DOD's current assessment processes do not enable
the chairman of the Joint Chiefs of Staff to provide effective
military advice to the Secretary of Defense on the services
acquisition and modernization proposals for close support.
148. ``Contingency Operations: Update on DOD's Fiscal Year 1995 Cost
and Funding,'' June 1996, GAO/NSIAD-96-184BR.
a. Summary.--During fiscal year 1995, the Defense
Department (DOD) participated in contingency operations around
the globe, including Haiti, Southwest Asia, and the former
Yugoslavia. To help cover the incremental costs of these
operations, Congress provided DOD with supplemental
appropriation. In an earlier report (GAO/NSIAD-96-121BR), GAO
found that although DOD ended fiscal year 1995 with
supplemental funding of $12 million above its reported
incremental costs, some of the military services and defense
agencies had reported costs that exceeded their supplemental
appropriations. GAO also indicated that costs surged in
September 1995. This briefing report provides information on
(1) how the services that reported costs in excess of
supplemental funding covered their shortfalls and (2) why the
surge occurred.
b. Benefits.--The Army and Navy reported incremental costs
in excess of their O&M supplemental appropriations. They
covered their shortfall completely, and both Army and Navy
officials believe that unit readiness was not affected
significantly. GAO found that the surge in September costs were
primarily related to (1) accounting adjustments; (2) end-of-
year payments; and (3) other spending, including spending
associated with higher operating tempo in Bosnia and Southwest
Asia.
149. ``Counterfeit U.S. Currency Abroad: Issues and U.S. Deterrence
Efforts,'' February 1996, GAO/GGD-96-11.
a. Summary.--U.S. currency, reportedly the most widely held
in the world, is susceptible to counterfeiting. The Federal
Reserve estimates that of the $380 billion of U.S. currency in
circulation, more than 60 percent may be held outside the
United States. The widespread use of U.S. currency abroad,
together with the outdated security of the currency, make it
particularly vulnerable to international counterfeiters.
Widespread counterfeiting of U.S. currency could undermine
confidence in the dollar and, if done on a large enough scale,
could harm the U.S. economy. This report discusses (1) the
nature of counterfeiting of U.S. currency abroad, (2) the
extent of that counterfeiting and of concerns about this issue,
and (3) the status of U.S. efforts to deter such
counterfeiting.
b. Benefits.--GAO found that the U.S. Government, primarily
through the Treasury and the Federal Reserve, has increased its
efforts to put an end to counterfeiting activities. These
anticounterfeiting efforts included (1) redesigning U.S.
currency to incorporate additional security features, and then
publicizing and distributing the new currency; (2) using joint
Federal agency team visits abroad to obtain more information on
counterfeiting and provide counterfeit-detection training; (3)
increasing Secret Service staffing abroad; and (4) using
additional task forces and increasing diplomatic efforts to
combat counterfeiting abroad, particularly efforts to eradicate
the highest quality counterfeit note known to the Secret
Service, commonly referred to as the ``Superdollar.''
150. ``Reserve Officers' Training Corps: Questions Related to
Organizational Restructuring,'' February 1996, GAO/NSIAD-96-56.
a. Summary.--Because of questions about readiness, housing,
and costs, the Army has not approved the proposal to close the
Reserve Officers' Training Corps (ROTC) regional head quarters
at Fort Knox, KY. As a result, the regional headquarters at
Fort Knox remains open and the summer camp run at Fort Knox is
expected to remain in place through fiscal year 1996 and
possibly 1997. Still unresolved are questions about the (1)
impact of the ROTC program on training and readiness of combat
units stationed at some bases that house and support ROTC
summer camp programs; (2) adequacy and condition of housing at
bases being considered for consolidation of the ROTC program,
on both a short- and long-term basis; and (3) costs to address
the housing program.
b. Benefits.--Before a decision can be made, GAO recommends
a broad-based assessment of ROTC restructuring which should
include readiness, housing, and cost issues to accommodate the
long-term needs of ROTC within the context of the Army's total
base structure.
151. ``Defense Industrial Security: Weaknesses in U.S. Security
Arrangements with Foreign-Owned Defense Contractors,'' February
1996, GAO/NSIAD-96-64.
a. Summary.--This unclassified version of a 1995 GAO report
discusses security arrangements--known as voting trusts, proxy
arrangements, and special security agreements--used to protect
sensitive information when foreign-owned defense contractors
work on classified Defense Department projects. GAO concludes
that the Pentagon needs to strengthen controls to prevent the
export of military secrets when foreign-owned defense
contractors work on such highly sensitive weapons programs as
the B-2 bomber and the F-22 fighter. Agreements at most of the
14 companies GAO reviewed permitted some risk of foreign
control, influence, and unauthorized access to classified data
and technology.
b. Benefits.--GAO observed the following: (1) 36 percent of
special security agreement companies were graced exceptions to
restrictions on their access of the most highly classified
information; (2) visitation agreements permitted numerous
visits, many occurring under contracts and export licences for
military and dual-use products between the foreign owners and
the U.S. defense contractors; and (3) most trustees performed
little oversight and, at four companies, some trustees appeared
to have conflicts of interest.
152. ``Foreign Banks: Assessing Their Role in the U.S. Banking
System,'' February 1996, GAO/GGD-96-26.
a. Summary.--During the past 20 years, the share of U.S.
banking assets held by foreign banks has increased
significantly. This report examines the role of foreign banks
in the United States and reviews U.S. laws and regulations
governing their operations. Specifically, GAO evaluates whether
these laws and regulations give foreign banks operating in the
United States a significant competitive advantage over U.S.
banks. GAO also identifies areas in which U.S. laws and
regulations have been adapted to meet the circumstances of
foreign banks and examines the competitive impact of these
adaptations on U.S. banks.
b. Benefits.--At the end of 1994, foreign branches and
agencies held 17 percent of domestic U.S. banning assets. The
addition of assets held in foreign-owned U.S. subsidiary banks
increased the foreign bank market by about 4 percentage points.
Foreign banks have been cited as an important source of capital
to the U.S. economy because they are believed to supply more
funds to the United States than they raise from it. In
addition, GAO's review of current laws and regulations
indicated the foreign branches and agencies operating in the
United States are subject to substantially the same laws and
regulations as those governing U.S. banks.
153. ``Military Personnel Reassignments: Services are Exploring
Opportunities to Reduce Relocation Costs,'' February 1996, GAO/
NSIAD-96-84.
a. Summary.--In fiscal year 1995, the military spent nearly
$3 billion to move 850,000 service members and their families.
GAO has found that few opportunities exist to reduce the costs
of permanent change-of-station moves. Overseas commitments and
other laws also require the miliary to move many service
members each year. Despite these constraints, the military is
trying to cut annual costs by reducing the number of permanent
change-of-station moves. To further reduce costs, the services
are encouraging consecutive assignments in some geographic
areas and increasing tour lengths where possible. Finally, the
Defense Department can further decrease its overseas military
requirements by hiring overseas contractors. The number of
relocations, but not their costs, decreased in proportion to
the defense downsizing from fiscal year 1987 through fiscal
year 1995. The main reasons that permanent change-of-station
moves did not decrease were inflation, changes in some
entitlement, and an increase in the number of service members
with dependents. According to military officials, the frequency
of permanent change-of-station moves is only a minor
contributor to readiness problems in military units. Other
factors, especially the increase in deployments for operations
other than war, have a greater impact on readiness.
b. Benefits.--GAO found several areas in which the services
could reduce personnel change-of-station costs: (1) the
services could cut personnel costs by using civilians for
certain positions; (2) the services maintain more recruiting
stations throughout the United States than they need; and (3)
the services could work toward reducing the attrition rate for
first-term enlistees.
154. ``Best Management Practices: Reengineering the Air Force's
Logistics System Can Yield Substantial Savings,'' February
1996, GAO/NSIAD-96-5.
a. Summary.--Redesign of the Air Force's $33 billion
reparable parts inventory could benefit from adopting leading-
edge practices used by the commercial airline industry to
reduce costs and improve services. However, success hinges on
the Air Force's ability to overcome major barriers, such as
organizational resistance to change and poor inventory data.
Some commercial manufacturers are providing aircraft parts to
the customers on a just-in-time basis, and suppliers are
assuming inventory management responsibilities for airlines and
manufacturers. One airline has reengineered its entire
logistics system in an integrated fashion by examining all
aspects of its logistics operation to pinpoint and remove
inefficient processes and functions. The Air Force is beginning
to test private-sector management practices, such as removing
unnecessary inventory layers, repairing parts as they break,
and rapidly transporting parts between the end user and the
repair facility.
b. Benefits.--GAO recommends establishing a top-level
Defense Department position to champion change, using third
party logistics services more often, building closer
partnerships with suppliers, encouraging suppliers to use local
distribution centers, centralizing repair functions, and
modifying repair facilities to accommodate these new practices.
155. ``Space Shuttle: Need to Sustain Launch Risk Assessment Process
Improvements,'' March 1996, GAO/NSIAD-96-73.
a. Summary.--The 1986 explosion aboard the space shuttle
Challenger underscored the risks inherent in human space
flight. The Presidential Commission investigating the accident
found that it had been caused by poor rocket motor design, but
the Commission also cited as a contributing factor shortcomings
in NASA's processes for identifying, assessing, and managing
risk. This report reviews the steps that NASA has taken to
improve the free flow of information in launch decisions and
the progress NASA has made in adopting quantitative methods for
assessing risks.
b. Benefits.--GAO recommends that NASA (1) identify guiding
principles of good risk management; (2) take steps to ensure
that flight readiness review participants understand and agree
on the minimum issues that should always be discussed at the
review and the level of detail that should be provided; (3)
establish a strategy for deciding whether and how quantitative
methods might be used as a supplemental tool to assess shuttle
risk; and (4) assess the shuttle program's centralized data
base to insure that data required to conduct risk assessments
and inform decisionmakers is accessible, timely, accurate, and
complete.
156. ``Drug Control: Counternarcotics Efforts in Mexico,'' June 1996,
GAO/NSIAD-96-163.
a. Summary.--Hampered by declining United States funding,
staff cutbacks, and corruption among key Mexican institutions,
drug interdiction efforts in Mexico have failed to stem the
flow of illegal drugs reaching the United States. Mexico
remains the primary transit route for cocaine, heroin,
marijuana, and methamphetamine smuggled into this country.
United States narcotics activities in Mexico and the transit
zone have declined since 1992. United States funding for
counternarcotics efforts in the transit zone and Mexico fell
from $1 billion in fiscal year 1992 to $570 million in fiscal
year 1995. Moreover, since 1992, direct U.S. assistance to
Mexico has been negligible because of Mexico's 1993 policy of
refusing most United States counternarcotics assistance.
Staffing reductions in the State Department's Narcotics Affairs
Section at the United States Embassy in Mexico City have
limited monitoring of earlier United States assistance, mainly
helicopters and spare parts. Since GAO's June 1995 testimony
before Congress (GAO/T-NSIAD-95-182), the United States Embassy
has elevated drug control issues in importance and has
developed a drug control operating plan with measurable goals;
the Mexican Government has indicated a willingness to develop a
mutual counternarcotics assistance program and has taken action
on important law enforcement and money laundering legislation;
and the United States and Mexico have created a framework for
greater cooperation and are expected to develop a joint
counternarcotics strategy by the end of the year. Following
through on these efforts is critical to combating drug
trafficking in Mexico.
b. Benefits.--This report highlights problems in such areas
as changes in the U.S. drug interdictions strategy; competing
foreign policy objectives at some U.S. Embassies; coordination
of U.S. activities; management and oversight of U.S. assets;
and willingness and ability of foreign governments to combat
the drug trade.
157. ``Acquisition Reform: Military-Commercial Pilot Program Offers
Benefits but Faces Challenges,'' June 1996, GAO/NSIAD-96-53.
a. Summary.--Faced with substantial finding cuts for
defense procurement, the Pentagon has made acquisition reform a
top priority. The challenge for the Defense Department (DOD) is
to maintain technological superiority and ensure a strong
national industrial base while reducing acquisition costs. The
need to reform the miliary's acquisition system is well known;
however, acquisition reform has been an elusive goal. DOD has
on several occasions tried to introduce a commercial-style
procurement system that would take advantage of commercial
products and processes and, whenever possible, eliminate
contracting, technical, and accounting requirements that are
unique to the military. According to DOD, acquisition reform
could cut costs by as much as 30 percent. This report discusses
a pilot program, known as ``Military Products From Commercial
Lines,'' set up by the Air Force with one of its contractors.
GAO evaluates the pilot program to determine (1) its potential
for producing the benefits sought through reform and (2) any
barriers to achieving these benefits.
b. Benefits.--This pilot represents a low-risk effort to
demonstrate the potential benefits of designing and producing a
military component on a commercial line. GAO recommends that
the Air Force and TRW identify the Government-unique
requirements that prevent the pilot from demonstrating that
military items can be produced at better quality on commercial
production lines at lower prices, and then seek requirement
waivers from Congress and the Secretary of Defense.
158. ``Overseas Real Estate: Millions of Dollars Could Be Generated by
Selling Unneeded Real Estate,'' April 1996, GAO/NSIAD-96-36.
a. Summary.--The State Departments own more than $10
billion in real estate at 200 locations overseas. GAO reviewed
State's efforts to identify and sell excess or under used real
estate and to use the proceeds for other high-priority real
property needs. GAO reported in 1995 (GAO/NSIAD-95-73) on the
potential budget savings from selling expensive property in
Tokyo and on the problems in State's management of properties
abroad. This report (1) identifies real estate at other
locations that could possibly be sold to provide money to meet
other real estate needs, (2) describes problems that State has
had in deciding which properties to dispose of, and (3)
explains how State uses the proceeds from the properties it
does sell.
b. Benefits.--GAO recommends the Secretary of State appoint
an independent panel to decide which properties should be sold.
The reasons for retaining any property should be weighed
against the financial interests of the State Department and the
U.S. Government.
159. ``Best Practices: Commercial Quality Assurance Practices Offer
Improvements for DOD,'' August 1996, GAO/NSIAD-96-162.
a. Summary.--The Defense Department (DOD) spends about $1.5
billion extra per year on military-unique quality assurance
requirements for major acquisitions. It spends billions more on
cost and schedule overruns to correct problems caused by poor
quality practices. To hep improve DOD's quality assurance
program, GAO reviewed world-class commercial organizations to
determine what practices they had adopted to more efficiently
produce quality products. This report describes (1) the
problems DOD has had historically in improving quality
assurance practices, (2) some private sector practices that
could benefit DOD, and (3) a current plan for improving quality
assurance activities.
b. Benefits.--GAO believes that achieving the same results
as world class companies would require DOD to consider quality
assurance as an integral part of the entire acquisition process
and diffuse responsibilities accordingly. DOD must encourage
the defense industry to use more advanced commercial
techniques, such as design manufacturing, statistical process
control, and supplier quality programs.
160. ``Contingency Operations: Defense Department's Reported Costs
Contain Significant Inaccuracies,'' May 1996, GAO/NSIAD-96-115.
a. Summary.--Since fiscal year 1992, the Pentagon has
reported more than $7 billion in incremental costs for its
participation in contingency operations, ranging from
peacekeeping missions in Haiti and the former Yugoslavia to
deployments to the Middle East during the Persian Gulf War.
Accurate reporting of these costs is crucial to effective
congressional oversight of appropriated funds. GAO found
inaccuracies in the Defense Department's (DOD) costs for
contingency operations, representing about 7 percent of the
$4.1 billion in costs reported in fiscal years 1994 and 1995.
In GAO's judgement, this variance in reported costs is
indicative of a material weakness in the accounting systems.
DOD guidance on reporting incremental costs is vague and
incomplete, and weaknesses plague DOD's accounting system.
b. Benefits.--In February 1995, DOD added a chapter on
contingency operations to its financial management regulations
to include guidance for developing and reporting incremental
costs. Neither DOD nor the resulting service guidance provides
instruction on which costs to include, how to calculate them,
or how to apply generally accepted internal control standards
to test the accuracy and reliability of the reported costs. The
incremental cost data is developed using financial management
systems that DOD has reported as a high-risk area within its
Federal Managers' Financial Integrity Act Statement of
Assurance. DOD is taking steps to improve its incremental cost
reporting, but problems remain.
161. ``Ammunition Industrial Base: Information on the Defense
Department's Assessment of Requirements,'' May 1996, GAO/NSIAD-
96-133.
a. Summary.--This report reviews the production facilities
available to support the military's ammunition requirements and
the status of the ammunition stockpile. GAO focuses on the
Defense Department's assessment of the industrial base's
ability to supply ammunition to meet requirements for peacetime
and two major regional conflicts and to replenish ammunition
stockpile following those conflicts.
b. Benefits.--According to DOD, the ammunition stockpile,
which is to meet peacetime needs and support two major regional
conflicts, has no major shortages due to the industrial base.
However, there is no longer a requirement to surge the
industrial base during conflicts. In addition, the most lethal,
up-to-date, ``preferred'' munitions will be at a premium; some
requisitions will be filled with older ``substitute''
ammunition items, but these items are considered adequate by
DOD to defeat the threat that U.S. forces are expected to
encounter.
162. ``Defense Department Dependents Schools: Cost Issues Associated
with the Special Education Program,'' May 1996, GAO/HEHS-96-77.
a. Summary.--Congress created the Department of Defense
(DOD) Dependents Schools in 1978 to provide a free public
education for dependents of military personnel serving abroad.
DOD Dependents School are required to provide special education
to all eligible students as required by the Individuals With
Disabilities Education Act. Members of Congress have raised
concern that DOD Dependents Schools are spending excessive
amounts to educate special education students who live in areas
overseas that lack a school that can meet their needs. This
report discusses (1) the amount of money the schools spend on
their special education programs, (2) the number of special
education students who live in areas lacking a DOD Dependents
School with the resources to meet the students' needs and the
cost to meet their needs another way, and (3) the number of
special education students who are sent to schools outside the
DOD Dependents School system because no DOD Dependents School
is nearby to meet their needs and the cost to do so.
b. Benefits.--DOD Dependents Schools do not track and
report information on the additional costs it incurs to (1)
acquire services for special education students whose needs
cannot be met by DODDS schools in locations where their
sponsors have been placed or (2) send special education
students to non-DODDS schools to meet their needs. District
office special education staff estimated that DODDS had
incurred additional annual per student costs that ranged from
several hundred dollars for evaluation and monitoring to
$60,000 when teachers had to be flown in to one DODDS school
thought the school year to provide services. DOD's lack of
adherence to its policies for screening and placing dependents
with special education needs, as well as its management of the
special education program are two factors in which
effectiveness should be greatly improved to reduce program
costs.
163. ``Defense Depot Maintenance: More Comprehensive and Consistent
Workload Data Needed for Decisionmakers,'' May 1996, GAO/NSIAD-
96-166.
a. Summary.--The National Defense Authorization Act for
Fiscal Year 1996 requires GAO to analyze the Defense
Department's (DOD) report entitled ``Depot Maintenance and
Repair Workload,'' which was submitted to Congress in April
1996. GAO focuses on DOD's analysis of (1) the need for and
effect of the 60/40 legislative requirement concerning the
allocation of depot maintenance workloads between the public
and private sectors, (2) historical public and private sector
depot maintenance workload allocations, and (3) projected
public and private depot maintenance workload allocations.
b. Benefits.--This report found that DOD generally complied
with the section 311 requirements regarding workload data,
except that it did not provide direct labor hour data as
required by Congress. GAO's analysis of DOD's workload report
shows that the use of more comprehensive and consistent data
would provide Congress and DOD decisionmakers a more accurate
picture of historical and future projections of depot
maintenance workload allocations between the public and private
sectors.
164. ``Defense Depot Maintenance: DOD's Policy Report Leaves Future
Role of Depot System Uncertain,'' May 1996, GAO/NSIAD-96-165.
a. Summary.--The National Defense Authorization Act for
Fiscal Year 1996 requires GAO to analyze the Defense
Department's (DOD) report entitled ``Policy Regarding
Performance of Depot-Level Maintenance and Repair,'' which was
submitted to Congress in April 1996. GAO focuses on (1) the
likely future role of the defense depots, (2) the adequacy of
the depot maintenance policy's content, and (3) the
inconsistency of DOD's policy with current statutes and
congressional direction on the use of public-private
competitions.
b. Benefits.--GAO found that the DOD depot maintenance
policy report calls for a clear shift to a greater reliance on
private sector maintenance capabilities than exists today. But,
the policy is vague or provides wide implementation latitude in
a number of key areas, leading to questions as to what the
practical effects it could have once implemented. In addition,
the policy is inconsistent with congressional direction calling
for competition between private-public entities for noncore
work.
165. ``NATO Enlargement: NATO and U.S. Actions Taken to Facilitate
Enlargement,'' May 1996, GAO/NSIAD-96-92.
a. Summary.--In January 1994, the North American Treaty
Organization (NATO) committed itself to expanding its
membership to include the newly democratic states of the former
Communist bloc. According to the State Department, the United
States has been the driving force behind NATO's enlargement.
This report discusses (1) actions taken or planned to enlarge
NATO, (2) the extent of current and planned U.S. bilateral
assistance programs to enhance the military operations and
capabilities of aspiring NATO members, and (3) the potential
costs of enlargement to NATO and the new members.
b. Benefits.--The United States has five bilateral
assistance programs that help to improve the operational
capabilities of potential NATO members an other countries of
Central and Eastern Europe and the Newly Independent States. In
fiscal year 1995, the United States provided about $54 million
in bilateral assistance to Partnership for Peace (PFP) member
states through these five programs; and in 1996, the United
States will provide about $125 million. Although the total cost
of NATO enlargement is unknown, increased membership will place
new financial burdens on NATO's commonly funded infrastructure
programs and on the new members themselves.
166. ``Air Force Aircraft: Consolidating Fighter Squadrons Could Reduce
Costs,'' May 1996, GAO/NSIAD-96-82.
a. Summary.--The Air Force decided in 1992 to reconfigure
its fighter force into smaller squadrons. This decision was
made at a time when the Defense Department was seeking to
reduce military operating and infrastructure costs. GAO found
that the organizational structure of the Air Force's fighter
force is not cost-effective. By operating F-15's and F-16's in
smaller squadrons, the Air Force boosts the number of squadrons
above the number that would have been used in the traditional
24-aircraft configuration. This reconfiguration has increased
operating costs and slowed reductions in infrastructure costs.
Although the Air Force considers smaller fighter squadrons to
be beneficial, it has not undertaken any studies to support its
decision. The Air Force's arguments for using smaller squadrons
do not justify the additional expense. GAO evaluated a range of
options for consolidating squadrons that could cut operating
costs by as much as $745 million during fiscal years 1997-2002.
In addition, consolidating squadrons could result in base
closures, reducing infrastructure costs by about $50 million
per base closure per year.
b. Benefits.--The Air Force cited increased deployment
flexibility and reduced span of control as the primary benefits
for having smaller fighter squadrons. However, the Air Force
has not demonstrated that these benefits are compelling.
Moreover, the Air Force has neither documented instances of
problems with deployment flexibility and span of control nor
conducted studies that support its decision to use smaller
squadrons.
167. ``Tactical Intelligence: Accelerated Joint STARS Ground Station
Acquisition Strategy is Risky,'' May 1996, GAO/NSIAD-96-71.
a. Summary.--The Army and the Air Force are jointly
developing the Joint Surveillance Target Attack Radar System
(Joint STARS), which is designed to locate and track wheeled
and track vehicles beyond the ground line of sight during
either day or night and under most weather conditions. The Army
is responsible for the development, test, production, and
fielding of Joint STARS ground station modules. GAO found that
the Army's strategy to accelerate production of the Common
Ground Station--the next version of the ground station
modules--unnecessarily risks millions of dollars on an unproved
system. GAO believes that buying more systems than are needed
for operational testing and evaluation significantly raises the
risks of procuring a costly and ineffective system. The Army
has accelerated the program and moved the first fielding date
for the Common Ground Station from fiscal year 2002 to fiscal
year 1998. However, the Army lacks analyses showing an urgent
need to field the added capabilities of the Common Ground
Station 4 years earlier than planned or showing that the
expected benefits of accelerated procurement, prior to
successful completion of operational testing and evaluation,
outweigh the risks.
b. Benefits.--DOD believes that the Army's acquisition
strategy espouses prudent risks. The risks of systems starting
production before operational tests include reliability that is
significantly less than expectations, systems that cannot meet
current specifications, systems that are never fielded and/or
retired after fielding because of poor performance, and systems
that require significant and expensive post-fielding repairs
for faults identified during operational test and evaluation.
168. ``Passports and Visas: Status of Efforts to Reduce Fraud,'' May
1996, GAO/NSIAD-96-99.
a. Summary.--Technical problems and the failure of overseas
consular staff to comply with internal management controls have
hampered State Department effort to modernize its visa and
passport operations and make them less vulnerable to fraud.
After initial delays, State has made steady progress in
installing its machine-readable system--the primary initiative
for eliminating visa fraud--and provided all visa-issuing posts
with automated access to its global data base containing the
names of persons ineligible for visas. State's modernization
program to reduce passport fraud is behind schedule. State
originally planned to install a new wide-area network, develop
a system to print a digitalized passport photograph, and
install a system to verify the multiply issuance of passport by
December 1995. However, only the installation of the wide-area
network, upon which the other two projects depend, has been
completed. Full implementation also depends on modernizing the
passport production system, which according to State depends on
funding availability.
b. Benefits.--Operational problems have diminished the
effectiveness of efforts to overcome the material weaknesses in
visa and passport processing. These problems include (1)
technical problems that have limited the availability and
usefulness of the visa improvements, (2) limited usefulness of
embassy lookout committees because of the reluctance of some
agencies to share information and the lack of representation of
key agencies, and (3) lack of compliance with management
control procedures designed to decrease the vulnerability of
consular operations to fraud.
169. ``U.S. Combat Air Power: Reassessing Plans to Modernize
Interdiction Capabilities Could Save Billions,'' May 1996, GAO/
NSIAD-96-72.
a. Summary.--In view of continuing concerns over future
defense spending and the military's services' ample ability to
intercept enemy missiles and aircraft, GAO questions the
Pentagon's decision to upgrade warplanes and other weapons
systems at a cost of more than $200 billion during the next 20
years. GAO recommends that the Defense Department routinely
review modernization proposals according to how they will
enhance the overall ability of the U.S. military to intercept
enemy targets. Proposals that add redundancy, such as the B-1B
and Apache modifications and the purchase of F/A-18E/F's,
attack helicopters, and precision-guided missiles, should be
examined in the context of the additional interdiction
capability they offer. This analysis could serve as the basis
for deciding funding priorities, the sufficiency of investment,
and the future force structure.
b. Benefits.--GAO finds that the services have proposed
upgrades or new weapons that offer little additional
interdiction capability. DOD has not assessed interdiction
modernization proposals in terms of adequacy of aggregate
capability, therefore little assurance has been provided that
indicate that its interdiction capabilities are properly sized
to meet mission needs, or whether more cost-effective
alternatives exist.
170. ``Satellite Control Capabilities: National Policy Could Help
Consolidation and Cost Savings,'' May 1996, GAO/NSIAD-96-77.
a. Summary.--Satellite control relies on ground antennas to
track satellites and collect satellite health and status data
by telemetry as well as to command satellites to perform
various functions. GAO has been reviewing space programs and
activities within the Defense Department and intelligence
community. This report discusses the potential for
consolidating satellite control functions within the
Government.
b. Benefits.--GAO believes that a national satellite
control policy that addresses the objective of interoperability
and standardization through integration, consolidation, and
sharing of the defense, intelligence, and civil space sector's
satellite control capabilities is needed. And for these
requirements, GAO recommends that the National Science and
Technology Council develop an inter-sector space policy, to be
included with its revisions of other space policies, that would
direct the Nation's satellite control networks.
171. ``Defense Management: Information on Selected Aspects of DOD's Jet
Fuel Programs,'' July 1996, GAO/NSIAD-96-188.
a. Summary.--Under its bulk fuel program, the Defense
Logistics Agency buys jet fuel from commercial suppliers and
transports it via trucks, pipelines, barges, and railroads to
military installations for use by military aircraft. The into-
plane program involves individual contracts between the Defense
Fuel Supply Center and fixed-base operators who provide jet
fuel at contractually set prices. These prices are generally
less than commercial prices charged at civilian airports. This
report discusses (1) the pricing policies, rules, and
regulations used for both fuel programs and whether the cost
factors used for each are consistent with applicable policies;
(2) whether bulk fuel usage and into-plane sales have changed
in recent years and GAO's assessment of the reasons for any
changes; and (3) the significance and validity of questions and
complaints raised by into-plane contractors and the National
Air Transportation Association about the effect on their
businesses of Defense Department changes in the pricing of
into-plane jet fuel.
b. Benefits.--Defense Business Operations Fund policies
governed standard pricing for both the bulk and into-plane jet
fuel programs. The standard prices used in each program were
based on appropriate cost factors and complied with current
DBOF policies. However, while the current policies as applied
to the into-plane program meet DBOF's original objective that
standard prices recover the total costs of goods and services
provided to customers, they do not in the bulk fuel program in
which the current standard price is based only on the direct
costs incurred by the Defense Fuel Supply Center.
172. ``C-17 Aircraft: RM&A Evaluation Less Demanding Than Initially
Planned,'' July 1996, GAO/NSIAD-96-126.
a. Summary.--The Air Force reported that the C-17 transport
aircraft met or exceeded 10 of the 11 contract specification
requirements during its reliability, maintainability, and
availability (RM&A) evaluation. However, the evaluation was
less demanding than the one called for in a draft 1992 plan.
The reduced rigor stemmed primarily from changes in the number
of aircraft sorties, average sortie length, and total flying
hours. The evaluation was also less demanding because it had
fewer airdrops and landings at small, austere airfields than
originally planned and flew cargo loads that were significantly
lighter than projected in the contract specifications. In
awarding the incentive fee, the Air Force credited the C-17
aircraft with meeting the full mission capable rate goal.
During the RM&A evaluation, however, the aircraft was
restricted from performing formation personnel airdrop under
realistic conditions and was rated not functionally effective
for aeromedical evacuation. As a result, the $5.91 million
incentive fee was $750,000 higher than justified.
b. Benefits.--The RM&A evaluation was not a statistically
valid test for determining C-17 wartime utilization rates and
did not prove what a mature C-17 fleet would do during 45 days
of wartime surge operations. It simply demonstrated that a high
utilization rate could be achieved during a 48-hour period.
173. ``Ballistic Missile Defense: Issues Concerning Acquisition of
THAAD Prototype System,'' July 1996, GAO/NSIAD-96-136.
a. Summary.--The Ballistic Missile Defense Organization and
the Army plan to acquire a Theater High Altitude Area Defense
(THAAD) User Operational Evaluation System--an early prototype
version of the final THAAD system. The Army now plans to buy 40
interceptors well before testing ensures the User Operational
Evaluation System's capabilities, even though the THAAD program
has already experienced significant cost, schedule, and
technical performance problems. As a result, the Defense
Department risks acquiring system that might not be worth
deploying in an emergency.
b. Benefits.--GAO found that (1) the contractor's cost
estimate for the interceptors has more than doubled since 1992
and is likely to increase further and (2) test schedule
slippage, increase delivery lead times, and funding limitations
have delayed the availability of the interceptors by about 2
years. Furthermore, airborne deployment of the Use Operational
Evaluation System may be difficult because it must compete with
other military hardware for scarce airlift resources.
174. ``Space Station: Cost Control Difficulties Continue,'' July 1996,
GAO/NSIAD-96-135.
a. Summary.--The international space station, a joint
venture involving NASA, Japan, Canada, the European Space
Agency, and Russia, will be a permanently orbiting laboratory
used to conduct scientific research under weightless
conditions. NASA estimates its share of the costs to build the
space station at $17.4 billion. The space station is now
scheduled to be completed by 2002. As of April 1996, the prime
contract for the space station was nearly $90 million over cost
and about $88 million behind schedule. Overall, the prime
contract is 45-percent complete and these variances are within
planned funding levels. NASA has tried to ensure that the prime
development contractors and its major subcontractors implement
effective performance measurement systems for managing their
contractors, but a complete performance measurement system is
still not in place. Also, NASA has made slower progress
implementing effective performance measurement systems on its
contractors for developing ground-based and on-orbit
capabilities for using and operating the space station.
b. Benefits.--Many cost threats remain, and financial
reserves needed for unexpected contingencies remain limited
during the next several years. If available resources prove
inadequate, program managers either will be forced to exceed
the annual funding limitation, or will have to defer or
rephrase other activities, potentially delaying the space
station's schedule and increasing its overall cost.
175. ``Defense Research and Development: Federal Centers' 1993
Compensation in Relation to Federal Levels,'' July 1996, GAO/
NSIAD-96-140.
a. Summary.--This report provides information on the
professional staff, managers, and executives of the Defense
Department's federally funded research and development centers.
GAO reviews fiscal year 1993 costs for salaries, other cash
compensation, and benefits to determine total compensation for
the centers and identifies the Federal levels that contained
the average compensation paid by the centers to their
personnel.
b. Benefits.--GAO determined that the average compensation
for all fiscal year 1993 federally funded research and
development centers employees, including average base salaries,
benefits, and total compensation, was $89,000. The average base
salary for all study employees was $73,000 with individual
averages ranging from $67,000 for the Center of Naval Analyses
to $81,000 for the RAND Corp.
176. ``Chemical Weapons Stockpile: Emergency Preparedness in Alabama is
Hampered by Management Weaknesses,'' July 1996, GAO/NSIAD-96-
150.
a. Summary.--Eight years after the inception of the Army's
Chemical Stockpile Emergency Preparedness Program, communities
near the Anniston Army Depot in Alabama are not prepared to
respond to a chemical stockpile emergency because they lack
critical items, including communication warning systems and
protective equipment for emergency workers. Alabama and six
counties have yet to spend $30.5 million--about two-thirds of
the $46 million earmarked for improvements in emergency
preparedness. This lack of progress is the result of management
weaknesses at the Federal level and inadequate action by State
and local agencies.
b. Benefits.--GAO has found that local communities near the
eight chemical weapons storage sites in the United States are
not fully prepared to respond to a chemical emergency,
financial management is weak, and costs are mounting.
177. ``Haiti: U.S. Assistance for the Electoral Process,'' July 1996,
GAO/NSIAD-86-147.
a. Summary.--This report reviews United States efforts to
foster democratic elections and greater respect for human
rights in Haiti. GAO discusses (1) how the elections in Haiti
were conducted, (2) the nature and extent of United States
support for these elections, and (3) whether election
assistance funds for Haiti were properly controlled and spent.
GAO also assesses Haiti's progress in investigating allegations
of politically motivated killings.
b. Benefits.--GAO observed that the elections were
generally peaceful, citizens were free to vote, organized fraud
was not evident, and technical irregularities did not affect
the outcome of the election, although several incidents of
violence and intimidation, and uncertainty did arise over
President Aristide's intentions to step aside to his successor,
Rene Preval. In support of the Haitian elections, the United
States spent about $18.8 million used for financial and
diplomatic support, without which the elections would not have
been possible.
178. ``NASA Budget: Carryover Balances in Selected Programs,'' July
1996, GAO/NSIAD-96-206.
a. Summary.--In response to concerns raised in an oversight
hearing, GAO reviewed the extent of carryover balances for the
Mission to Planet Earth and other NASA programs. Carryover
balances consist of unobligated funds and uncosted obligations.
Unobligated balances represent the portion of its budget
authority that NASA has not obligated. Uncosted obligations
represent the portion of its authority that NASA has obligated
for goods and services but for which it has not yet incurred
costs. Carryover balances in NASA's Human Space Flight and
Science, Aeronautics, and Technology programs totaled $3.6
billion by the end of fiscal year 1995--an amount equal to
almost one-third of the budget authority provided for these
programs in fiscal year 1995 that will be used to cover costs
that will accrue in fiscal year 1996 or beyond. Individual
programs carried over varying amounts, ranging from the
equivalent of 1 month to 16 months of fiscal year 1995's new
budget authority. The Mission to Planet Earth carried $695
million, or more than 6 months, of budget authority into fiscal
year 1996.
b. Benefits.--Under NASA's current budget and cost plans,
these balances will be reduced in fiscal years 1996 and 1997,
but the actual reductions depend on (1) the extent NASA's
projected costs match the actual costs incurred and (2) the
amount of new budget authority received for fiscal year 1997.
179. ``Federally Funded R&D Centers: Issues Relating to the Management
of DOD-Sponsored Centers,'' August 1996, GAO/NSIAD-96-112.
a. Summary.--Federally funded research and development
centers (FFRDC) were first established during World War II to
meet the military's specialized research needs that could not
be met by Government workers because of limits placed on
salaries and hiring. Today, eight agencies, including the
Defense Department (DOD), fund 39 centers that are run by
universities, nonprofit groups, and industrial firms under
long-term contracts. GAO believes that the following four
issues merit attention as Congress and DOD work to resolve
concerns regarding the centers: (1) whether DOD limits its
centers to performing appropriate work, (2) whether DOD
adequately safeguards the objectivity of its centers, (3)
whether DOD effectively oversees its centers, and (4) whether
DOD adequately considers cost-effective alternatives to using
the centers. GAO also discusses recent steps DOD has taken to
improve management of the centers.
b. Benefits.--The DOD has recently provided an update on
initiatives it was taking to (1) define FFRDC core work
appropriate for FFRDSs, (2) establish stringent criteria for
the noncore work FFRDC's parent corporations accept, (3)
develop guidelines to ensure that management fees are based on
need and detailed justification, and (4) establish an
independent advisory panel as the Defense Science Board Task
Force recommended.
180. ``Military Readiness: Data and Trends for April 1995 to March
1996,'' August 1996, GAO/NSIAD-96-194.
a. Summary.--This updates GAO's March 1996 report on
military readiness (GAO/NSIAD-96-111BR) and discusses
significant changes. From April 1995 through March 1996,
readiness of the 87 military units covered by the earlier
report was at levels consistent with service goals in 80
percent of the units. This represents a 12-percent improvement.
Readiness reductions were caused mainly by shortages of
available personnel, particularly those trained to do highly
skilled military jobs. Of the 31 Army and 5 Air Force units GAO
reviewed that participated in the Bosnia operation, 5 Army
units and 1 Air Force unit reported readiness reductions. The
Army units had sent elements of key personnel to Bosnia, thus
reducing resources available to the parent units. The Air Force
unit has historically suffered from personnel shortages. The
Bosnia operation did not affect the readiness of either Navy or
Marine Corps units because they were either already in the
theater or had planned a forward presence deployment to the
area.
b. Benefits.--Most of the Army units GAO reviewed (26 of
31) that had participated in the Bosnia operation remained
capable of performing major portions of their wartime missions.
The readiness of Air Force and Naval units remained stable or
improved.
181. ``Environmental Cleanup: Cash Management Practice at Rocky
Mountain Arsenal,'' August 1996, GAO/NSIAD-96-145.
a. Summary.--The Rocky Mountain Arsenal, located on 17,000
acres northeast of Denver, is one of the Defense Department's
most contaminated installations. The military manufactured
chemical weapons there for decades, and the Army leased part of
the arsenal to the Shell Oil Co., which produced herbicides and
pesticides. A cost-sharing arrangement between the Army and
Shell does not provide for timely or efficient collection of
what is expected to exceed $500 million in cleanup costs from
Shell. When the Government does not collect receivables in a
timely manner, it loses the opportunity to invest these funds
until needed. Since the 1989 settlement agreement with Shell,
weak cash management practices have cost the Government more
than $1 million.
b. Benefits.--GAO noted three weaknesses in cash management
practices at the arsenal. First, the Army bills Shell
quarterly, rather than monthly, as is the usual business
practice. Second, the payment cycle allows 90 days--rather than
the 60 days called for in the settlement agreement--to document
cost claims, prepare a quarterly statement, and pay the amount
due. Third, the Army and Shell exchange payments through the
mail rather than electronically, which further delays access to
the funds. Of the 10 checks GAO reviewed, 9 including 1 for $12
million, were deposited after the due date.
182. ``Acquisition Reform: Purchase Card Use Cuts Procurement Costs,
Improves Efficiency,'' August 1996, GAO/NSIAD-96-138.
a. Summary.--The National Performance Review recommended in
1993 that agencies increase their use of Government commercial
credit cards--called purchase cards--for small purchases to cut
the red tape normally associated with Federal procurement.
Since then, legislation has eliminated some requirements for
purchases of $2,500 or less, called micropurchases. Agencies
have found that they can carry out their missions at lower cost
by having staff use the purchase cards for simple purchases.
Further, agency studies have showed that card use reduces labor
and payment-processing costs. In fact, a 1994 interagency study
showed that costs had often been cut by more than half; other
studies have identified millions in potential savings from card
use. Since the cards first became available Governmentwide,
their use has skyrocketed. Even so, significant room for growth
exists: the average purchase card transaction was $375 in
fiscal year 1995, well below the micropurchase threshold.
Despite the growth in purchase card use, GAO found no evidence
of increased abuses. In fact, the electronic data stored on all
purchase card transactions permits close monitoring of card
use. Officials at most agencies GAO reviewed believe that the
Federal Acquisition Regulation, which governs Federal
procurement, should more clearly address card use. Also,
although agencies want to learn from one another's experiences,
no mechanism exists for them to communicate with one another
and to share their improvements.
b. Benefits.--Agency officials have used the purchase card
and the micropurchase authority to move simple purchases from
procurement offices to program offices. Several studies have
shown that this move reduced the labor and payment processing
costs for those purchases by eliminating steps from the
procurement process and consolidating bills for many purchases
into one payment. GAO found that most agencies that were
reviewed indicated that they were trying to improve their card
programs by emphasizing card use, reengineering their
processes, and increasing their use of automation.
183. ``State Department: Options for Addressing Possible Budget
Reductions,'' August 1996, GAO/NSIAD-96-124.
a. Summary.--The State Department received appropriations
of $2.695 billion for fiscal year 1995 and $2.671 billion for
fiscal year 1996 to conduct foreign affairs. Although State has
cut its staff and implemented cost reduction measures, it has
been reluctant or unable to significantly reduce its overseas
presence and the scope of its activities or to significantly
change its business practices. Budgetary constraints make it
highly unlikely that State will receive a level of funding that
would allow it to maintain its current level of activities. The
greatest opportunity to reduce costs is by closing, or reducing
the size of, overseas posts, which cost about $1.9 billion
annually--or nearly 70 percent of State's budget. State
maintains diplomatic presence in more than 250 locations
overseas, including countries where the United States has
limited interests. This structure has not changed significantly
since the end of the cold war. State could also reduce support
costs by several hundred million dollars by accelerating
changes to its business practices. State now spends nearly $1.8
billion on communications, real estate, and other support
services for domestic and overseas operations. Prompt disposal
of unneeded overseas real estate is just one example of how
State could reduce its support costs.
b. Benefits.--In February 1995, the Secretary of State
chose not to support reforms that might fundamentally change
the Department's mission, organizational structure, and
processes. The State Department believes that a substantial
downsizing to accommodate potential funding reductions would
severely jeopardize its ability to achieve U.S. foreign policy
goals. However, GAO believes that State can take steps to
reduce its costs, while continuing to protect U.S. interests.
In light of potential funding reductions and post cold war
realities, State needs to plan for how it can become a smaller,
more efficient, and less expensive organization. Development of
a downsizing strategy should start with identification of core
missions and functions and critical locations and the resources
required to support them.
184. ``U.S. Combat Air Power: Aging Refueling Aircraft Are Costly to
Maintain and Operate,'' August 1996, GAO/NSIAD-96-160.
a. Summary.--The military's KC-135 tanker fleet used for
air refueling is now 30 to 40 years old, and these aircraft are
taking longer and costing more to maintain and operate.
Moreover, the Air Force could spend more than $6 billion on
modifications and structural repairs to keep the KC-135 fleet
operational. Despite increasing demands on the tanker fleet,
the Air Force has deferred a replacement program and is relying
on reserve personnel to relieve pressure on active duty tanker
crews. The reserve forces have been able to assume more of the
tanker workload because many crew members have volunteered
extra time, thus exceeding the reserves' legal training
requirement of 38 days per year. In fact, many have served more
than 100 days a year in training and flying sorties.
b. Benefits.--GAO found that KC-135 tankers are the oldest
aircraft the services operate and are becoming more expensive
to operate because they require more maintenance, reducing the
number or aircraft available for operations. The Air Force
could spend over $6 billion for a variety of modifications and
structural repairs to improve the reliability, maintainability,
and capability of its DC-135's. GAO proposes that a dual-use
replacement aircraft could fulfill both airlift and air
refueling missions.
185. ``Electronic Warfare: Navy's New Radar Warning Receiver Needs More
Testing,'' June 1996, GAO/NSIAD-96-68.
a. Summary.--The Navy plans to begin low-rate production of
new radar warning receivers despite serious flaws in two
earlier versions and performance problems that surfaced during
testing of the latest version. The receivers developed under
the ALR-67(V)3 radar receiver program are designed to sense the
signals from hostile radars, provide an audio warning to the
pilot, and display the warning information on a video screen in
the cockpit. GAO concludes that the Navy risks acquiring a
deficient system that may require expensive changes if the
receivers are to effectively alert pilots to radar-controlled
enemy weapons.
b. Benefits.--GAO recommends that the Secretary of Defense
require that the ALR-67(V)3 complete both phases of operational
testing to determine its effectiveness and suitability, and
that the deficiencies identified during developmental testing
be resolved before committing to low-rate production in order
to minimize the risk of procuring another deficient radar
warning receiver.
186. ``Weapons Acquisition: Warranty Law Should Be Repealed,'' June
1996, GAO/NSIAD-96-88.
a. Summary.--Requiring the use of warranties in weapon
system acquisitions is impractical and provides the Government
with few benefits. GAO estimates that the military spends about
$271 million each year on weapon system warranties, which
return only about 5 cents for every $1 spent. Congress expected
warranties to improve weapon system reliability by providing a
mechanism to hold contractors liable for poor performance. In
practice, however, warranties have proved an expensive way for
the Defense Department to resolve product failures with
contractors. The Government has traditionally self-insured
because its large resources make protection against
catastrophic loss unnecessary. Further, it is often the sole
buyer for a product and cannot share the insurance costs with
other buyers. Because a contractor cannot allocate the cost of
insuring against the risk of failure among multiple buyers,
Defense Department ends up bearing the entire estimated cost.
Moreover, Defense Department program officials said that
warranties do not motivate contractors to improve the quality
of their products. GAO believes that the warranty law should be
repealed and the decision to obtain a warranty should be left
to the program manager.
b. Benefits.--Based on GAO reviews, the Defense
Department's (DOD) costs for warranties have greatly exceeded
any financial return it has received. For contracts on which
DOD could provide both price and claim data, GAO estimated that
DOD received about $1 in direct benefit for every $19 paid to a
contractor for a warranty. Although warranties provide
unquantifiable benefits such a prepaid maintenance support and
a mechanism for resolving product performance disputes, some
military officials claim that repairs were not performed
quickly and that contractors routinely contested warranty
claims.
187. ``Environmental Compliance: Continued Need for Guidance in
Programming Defense Construction Projects,'' June 1996, GAO/
NSIAD-96-134.
a. Summary.--Since GAO last reported on this subject in
1993 (GAO/NSIAD-94-22), the military services have tried to
improve the manner in which they program and prioritize
environmental compliance construction projects. However,
Defense Department (DOD) policy still does not specify how the
military services should report costs for environmental
compliance construction projects and how they should decide
which appropriation account should provide the funds.
Consequently, the military services and the Defense Logistics
Agency continue to differ in how they classify and prioritize
projects and how they determine their source of funding. These
inconsistencies and lack of guidance inhibit congressional
oversight and DOD program management. DOD's estimates for
fiscal year 1997 environmental compliance construction
requirements fell from $257 million in February 1995 to $84
million in April 1996. Because of the lack of a uniform
approach to categorizing these projects, GAO cannot determine
the precise reasons for this drop in funding.
b. Benefits.--GAO found the following service initiatives
being taken: the Army is moving toward more centralization in
the management of its military construction priorities to
promote oversight of construction-related environmental issues
on an Army-wide basis; the Air Force now requires its commands
to prioritize and consolidate environmental compliance
construction projects with other military construction
projects; and the Marine Corps is updating its environmental
compliance and tracking system to more easily identify
environmental compliance and other environmental projects, and
the Navy created a single-source headquarters sponsor for
construction projects.
188. ``NASA Personnel: Challenges to Achieving Workforce Reductions,''
August 1996, GAO/NSIAD-96-176.
a. Summary.--By the end of fiscal year 1996, NASA will be
about halfway to its goal of reducing its workforce from 25,000
full-time-equivalent employees to about 17,500. NASA's success
is due mainly to the use of buyouts to encourage employees to
voluntarily resign or retire from the Government. About two-
thirds of the 4,000 people who left NASA in 1994 and 1995 took
buyouts. Voluntary attrition should meet NASA's downsizing
goals through fiscal year 1998, but the agency doubts whether
attrition would provide sufficient personnel losses by fiscal
year 1999. Thus, NASA intends to start planning for a
reduction-in-force during fiscal year 1998 if not enough NASA
employees are retiring or resigning voluntarily. NASA's ability
to reach its goal of 17,500 employees is subject to major
uncertainties, including the shifting of program management
from headquarters to field centers and the award of a single
prime contract for managing the space shuttle at Kennedy Space
Center. Because of questions about NASA's ability to achieve
major personnel reductions to meet likely future budgets,
Congress may want to consider requiring NASA to submit a
workforce-restructuring plan for achieving its fiscal year 2000
goal.
b. Benefits.--NASA recently requested buyout authority from
Congress. GAO reports that savings from buyouts generally
exceed those from reductions-in-force and that savings from
downsizing largely depend, among other things, on whether the
workforce restructuring has been effectively planned.
189. ``Defense Infrastructure: Budget Estimates for 1996-2001 Offer
Little Savings for Modernizations,'' April 1996, GAO/NSIAD-96-
131.
a. Summary.--The Pentagon is counting on large savings from
streamlining infrastructure to pay for new weapons systems, but
GAO found that substantial net savings from infrastructure
improvements, such as base closures and military purchasing
reforms, are unlikely during the next 5 years. In defining
``infrastructure,'' the Defense Department (DOD) has excluded
most intelligence; space; and command, control and
communications programs. These programs will cost about $25
billion in fiscal year 1996. If DOD's objective is to examine
all possible infrastructure for savings, it should include
these programs. Moreover, some infrastructure costs are hidden
in accounts that are supposedly devoted to operations and
maintenance and to quality-of-life programs for military
personnel. Unless the Pentagon is willing to consider these
areas, military overhead will likely remain relatively
constant--at 60 percent of DOD's budget--through 2001. This
report identifies options to consolidate and reengineer
infrastructure that would yield savings of nearly $12 billion
in future years.
b. Benefits.--This report offers 13 options of estimated
budgetary savings totaling $11.8 billion from fiscal years
1997-2001. These options include discontinuing the National
Guard youth programs, collocating and closing recruiting
facilities, reassessing defense conversion spending,
consolidating Air Force fighter squadrons, reducing the size of
DOD's transportation infrastructure, establishing copayments
for care in military hospitals, capping funding for the Civil
Air Patrol, and reducing the size of DOD's finance and
accounting infrastructure.
190. ``M1 Tanks: Status of Proposed Overhaul Program,'' April 1996,
GAO/NSIAD-96-100.
a. Summary.--Concerns have been raised in Congress about
the absence of a procurement program to modernize the M1 tank
fleet beyond the current upgrade of existing tanks and to
counter new tank threats. This report discusses whether the (1)
current readiness level of the M1 tank is adequate to meet its
war-fighting requirements, (2) operating condition of the tanks
at the National Training Center is adequate to meet training
requirements, and (3) change in repair parts funding harmed
unit maintenance. GAO also reports on the status of the Army's
proposed M1 tank overhaul program.
b. Benefits.--Some Army officials have proposed an M1
overhaul program, at a cost of $559,000 a tank, because they
were concerned that latent deficiencies that do not show up
during routing readiness inspections could show up during
wartime and affect the tanks' performance. These officials
believe that the overhaul program would not only increase
availability, reliability, and fightability of the M1 tank
fleet but would also protect industrial base core capabilities
that would be needed in time of conflict.
191. ``Military Exports: Offset Demands Continue to Grow,'' April 1996,
GAO/NSIAD-96-65.
a. Summary.--This report examines offset requirements
associated with military exports. Offsets are the range of
industrial and commercial compensation packages offered to
foreign governments and companies as inducements to purchase
military goods. They include coproduction, technology transfer,
training, investment, marketing assistance, and commodity
trading. Since the mid-1980's, U.S. firms have entered into
offset agreements valued at more than $84 billion. GAO
discusses the (1) ways in which the offset goals and strategies
of major buying countries have changed, (2) offset requirements
of these countries and the kinds of activities being undertaken
to satisfy their requirements, and (3) effects of offsets and
the steps that the U.S. Government has taken on this matter.
GAO focuses on 10 buying countries from the Middle East, Asia,
and Europe.
b. Benefits.--Over the last 10 years, the countries in this
GAO study have increased their demands for offsets in order to
achieve more substantial economic benefits, begun to emphasize
longer term offset projects and commitments to achieve lasting
economic benefits, or initiated offset requirements.
192. ``DOD Infrastructure: DOD Is Opening Unneeded Finance and
Accounting Offices,'' April 1996, GAO/NSIAD-96-113.
a. Summary.--In a September 1995 report (GAO/NSIAD-96-127),
GAO evaluated the Defense Department's (DOD) justification and
its cost analysis for consolidating more than 300 defense
accounting centers into 5 large existing finance centers and 20
new sites called operating locations. GAO challenged the need
for the 20 operating locations because (1) DOD's analysis
showed that finance and accounting operations could be
consolidated into as few as 6; (2) some planned sites,
particularly those located on closed or realigned military
bases, would cost $173 million to renovate; and (3) DOD, in
arriving at its decision, had not considered additional
operating efficiencies expected from business process
reengineering initiatives. DOD generally agreed with GAO's
findings. This report raises an issue that, in GAO's view,
warrants immediate attention: DOD is opening new finance and
accounting centers even though its recent analysis shows that
they are not needed.
b. Benefits.--GAO recommends that DOD terminate plans to
open the five facilities that Defense Finance and Accounting
Service determined are no longer needed to effectively carry
out DOD's finance and accounting operations. With the current
trend of declining defense budgets, DOD should reconsider how
many operating locations are absolutely necessary.
193. ``Cambodia: Limited Progress on Free Elections, Human Rights, and
Mine Clearing,'' February 1996, GAO/NSIAD-96-15BR.
a. Summary.--The signing of the Paris Peace Accords in 1991
ended years of devastating civil war and started Cambodia on
the road to building a democratic civil society. The United
Nations Transitional Authority in Cambodia, established to
carry out the accords, supervised the withdrawal of Vietnamese
forces from Cambodia, repatriated more than 360,000 refugees,
improved human rights conditions, and conducted free and fair
national elections in 1993. The authority concluded its mission
in late 1993 with the formation of a duly elected Government in
Cambodia. This briefing report provides information on
Cambodia's progress since 1993. GAO discusses (1) Cambodia's
prospects for holding free and fair national elections by 1998;
(2) its progress in meeting international human and political
rights standards; and (3) its progress in clearing millions of
land mines left over from decades of war.
b. Benefits.--Cambodia is having difficulty achieving its
objectives to attain both domestic and international support.
If it is to gain that support, the Cambodian Government must
increase its efforts. The fact that Cambodia is making efforts
to hold fair, democratic elections sometime in 1998
demonstrates how far they have come since signing the peace
accords in 1991. Although Cambodia still has far to go, with
international assistance and support, their goals of holding
fair elections and instilling and preserving human rights are
attainable. These goals seemed out of reach 10 years ago.
194. ``Federal Fugitives: More Timely Entry on National Wanted Person
File Is Needed,'' February 1996, GAO/GGD-96-64.
a. Summary.--As a result of earlier work on interagency
coordination in apprehending Federal fugitives, GAO noted that
many entries in the FBI's National Crime Information Centers'
(NCIC) wanted persons file had been made long after arrest
warrants had been issued. This was contrary to the policies of
the agencies that had made the entries and the widespread view
that the timely use of the file aids in the apprehension of
fugitives and reduces risk to law enforcement personnel and the
public. GAO did a follow-up review of the entries made in the
wanted person file and found that the FBI; the U.S. Marshals
Service; the Bureau of Alcohol, Tobacco, and Firearms (ATF);
and the Customs Service had entered many fugitives in the file
long after their arrests had been authorized. In response to
GAO's finding, the FBI, ATF, and the Customs Service did their
own reviews and discovered similar entry time problems. GAO
concludes that NCIC and its participating agencies need clear,
written policies that call for and define ``immediate entry''
and set forth any exceptions. Moreover, agencies should
periodically monitor entry times and reasons for delays and
communicate problems and suggest actions to their field
offices. Although GAO did not review entry times for all law
enforcement agencies in the Justice and Treasury Departments,
GAO believes that the same reasons for timely entry generally
would apply to these agencies.
b. Benefits.--GAO's investigation and subsequent report to
the Attorney General and the Secretary of the Treasury alerted
them to a problem which jeopardized public safety. The report
allowed them to address the problem. A consensus seems to be
coming together among agencies reviewed that immediate entry
means within 24 hours. Agencies are working to get the 24-hour
threshold into written policy. Adherence to the policies could
be better ensured if the agencies periodically monitored and
reviewed entry times and reasons for delays, and communicated
problems and suggested actions to their respective field
offices.
195. ``Navy Aviations: AV-8B Harrier Remanufacture Strategy is Not the
Most Cost-Effective Option,'' February 1996, GAO/NSIAD-96-49.
a. Summary.--The Navy could save millions per aircraft by
buying new AV-8B Harrier fighters equipped with night attack
and radar capabilities instead of disassembling and
retrofitting older Harriers with the desired technology. The
Navy estimates that each remanufactured AV-8B aircraft could
cost as much as $29.5 million. Such aircraft are made up
largely of used and refurbished components. GAO calculates that
the Marines can buy new radar model AV-8Bs for about $23.6
million per aircraft. Because the program is conducted under an
annual contract, the Navy can change its procurement strategy
and begin immediate negotiations to buy new radar models rather
than continuing to rebuild the aircraft. The first aircraft
rebuilt at the Naval Aviation Depot in Cherry Point, NC, took
almost twice as long to disassemble as planned. Delays have
also arisen from the inability of McDonnell Douglas and depot
vendors to provide components promptly. In addition, the radars
to be used in the Harriers are not going to be available as
originally planned.
b. Benefits.--This report helped the subcommittee
understand one area that the Navy needs to improve its
procurement practices in. It would be more cost-effective to
buy new radar AV-8B aircraft, instead of modifying the day
attack AV-8B, and GAO recommended that Congress direct the
Secretary of the Navy to develop a current cost estimate for
producing new radar model aircraft, and take advantage of the
savings available through multiyear procurement.
196. ``Military Bases: Closure and Realignment Savings Are Significant,
but Not Easily Quantified,'' April 1996, GAO/NSIAD-96-67.
a. Summary.--Savings from military base closures and
realignments should be substantial. The Pentagon's accounting
systems, however, do not provide Congress with an accurate
picture of actual savings. The Defense Department (DOD) is
counting on significant savings to pay for a host of
initiatives--from force modernization to child care support.
DOD will have difficulty funding these programs should the
savings fall short of expectations. This report examines cost
and savings estimates for past base closures and realignments.
GAO discusses (1) the extent to which the DOD is achieving
actual savings from the base closures and realignments and (2)
the adequacy of DOD's process for developing the cost and
savings estimates reported in its annual budget submissions.
b. Benefits.--DOD indicated that the inconsistencies in its
budget savings estimates we cited were the result of an attempt
to give the services reporting flexibility. DOD recognized that
cost estimates in BRAC budget submissions do not include some
costs that were paid from other DOD accounts or from non-DOD
appropriations. DOD agreed that the BRAC budget submissions
should include an advisory statement that economic assistance
and non-DOD costs are not included. DOD also showed interest in
considering including a brief statement that the BRAC budget
submissions are based on the initial cost and savings
estimates, which are subsequently refined through the use of
site surveys. GAO provided an alternative estimate of savings
for the base closure program to insure the DOD has the best
budgeting information available.
197. ``Defense Contractor Restructuring: First Application of Cost and
Savings Regulations,'' April 1996, GAO/NSIAD-96-80.
a. Summary.--The National Defense Authorization Act for
Fiscal Year 1995 restricts Defense Department (DOD) payments to
contractors for costs associated with business combinations.
Specifically, the law prohibits payment of restructuring costs,
such as those associated with closing facilities and
eliminating jobs, until a senior DOD official certifies that
projected savings from the restructuring are based on audited
data and should reduce DOD's overall costs. This report
discusses whether the certification process (1) was carried out
in accordance with the interim regulations and (2) reduced
DOD's contract prices. GAO focuses on the United Defense,
Limited Partnership business combination of FMC Corporations'
Defense Systems Group and Hirsch Corporation's Defense
Division--two manufacturers of tracked combat vehicle for the
Army. This business combination is particularly significant
because restructuring at United Defense could be a model for
future DOD restructuring efforts.
b. Benefits.--DOD has complied with its draft regulation
and demonstrated the efficacy of this program.
198. ``Peace Operations: Reservists Have Volunteered When Needed,''
April 1996, GAO/NSIAD-96-75.
a. Summary.--United States participation in peace
operations, such as those in Haiti and the former Yugoslavia,
has increased dramatically since the end of the cold war in
1989. At the same time, fewer active duty forces are available
today as a result of defense downsizing, and the Defense
Department (DOD) depends on the reserves to play a greater role
in peace operations. Although authority to order reservists
involuntarily to active duty has been available for recent
operations in Haiti and Bosnia, DOD will likely have to rely on
volunteers to meet some of its future needs. This report
discusses (1) whether qualified volunteers have been accessible
for recent peace operations, (2) differences among services in
how much they rely on volunteers, (3) factors that affect the
availability of volunteers, and (4) any steps being taken by
DOD to ensure that volunteers are accessible.
b. Benefits.--The problems with future reliance on
volunteers lie in budgeting and operations which require
greater needs. To date, volunteers have satisfied the DOD's
need for reserve forces in peace operations. However, past
success in obtaining volunteers may not be indicative of the
future. The Air Force has relied most heavily on volunteers and
has been considered a model in the DOD because they budget much
more for volunteer support expenses than the other services.
Availability of funding has been a critical factor in whether
reserve volunteers are used to support active component
operations. In most cases, the expenses of volunteer support
are funded by the active component. The Assistant Secretary of
Defense for Reserve Affairs has been working through the DOD
budgeting process to obtain more funds for reserve support of
the active component.
199. ``Army Acquisition: Medium Trucks Passed Key Operational and
Technical Tests,'' January 1996, GAO/NSIAD-96-4.
a. Summary.--Army trucks--part of the family of medium
tactical vehicles--passed technical and operational tests,
paving the way for the Army's August 1995 decision to approve
full-rate production. Following contractor modifications to
correct vehicle deficiencies found in earlier testing, the Army
conducted (1) a limited follow-on technical test to determine
whether the trucks could meet contractual reliability and
performance requirements and (2) a full operational test to
determine whether it could meet its operation reliability and
other mission requirements when operated and maintained by
soldiers. The trucks exceeded reliability requirements in both
tests and met most performance requirements. However, many of
the test vehicles had not been produced on the production line
or had been retrofitted to correct past deficiencies. Also, the
contractor pretested both the technical and operation test
vehicles and corrected deficiencies before delivering them to
the Army for testing.
b. Benefits.--DOD noted that the Army plans to perform the
comparison tests on both retrofit and new production vehicles
to verify that the quality and performance of the vehicles will
continue to meet the requirements. GAO believes that these
tests will be responsive to their observations on the
differences in the Army's and DOT & E's operational test
results, the modifications of test vehicles, and the needed
corrections. DOD will save more appropriated funds if it
continues to make sure the vehicles are up to specification
before they are accepted from the contractor.
200. ``Navy Maintenance: Assessment of the Public-Private Competition
Program for Aviation Maintenance,'' January 1996, GAO/NSIAD-96-
30.
a. Summary.--GAO reviewed the Navy's plans and procedures
for public-private competitions of aviation depot-level
maintenance workloads. Various factors limited the amount of
past depot-level work available for competitive awards,
including time and costs for performing competitions. Although
actual savings were difficult to quantify, GAO found that the
Navy's competition programs generally reduced operating costs
and in many cases streamlined production processes. The Navy
ended its aviation maintenance competition program in 1993, and
the Defense Department terminated the program in 1994 despite
continued congressional support for it. However, as DOD begins
to implement recommendations by the Commission on Roles and
Missions leading to the possible privatization of most depot
maintenance, use of competitive procedures for distribution of
workloads between the public and private sectors should prove
cost-effective.
b. Benefits.--DOD needs to improve its financial accounting
and information systems; however, completion of these
improvements should not preclude public-private competitions.
GAO believes that development of the Cost Comparability
Handbook for preparing bids and the availability of the Defense
Contract Audit Agency to review the current cost systems and
assure that successful bids include comparable estimates of all
direct and indirect costs provide reasonable bases for
conducting such competitions. GAO's report shows that as the
Navy adapts to the future, it may rely on public-private
competition for cost savings.
201. ``Foreign Assistance: Controls Over U.S. Funds Provided for the
Benefit of the Palestinian Authority,'' January 1996, GAO/
NSIAD-96-18.
a. Summary.--A series of letters allegedly prepared by the
Palestinian Authority's Finance Minister and the Director
General of the Palestine Economic Council for Development and
Reconstruction (PECDAR) indicates that $138 million from
unidentified sources was ``diverted'' in late 1994 to finance
several covert transactions. These transactions include
purchasing land and building apartments in Jerusalem, funding a
Palestinian journal, and providing financial support to groups
inside Israel that are sympathetic to the Palestinian cause. In
response to congressional concerns that United States
assistance may have been involved in these transactions, this
report discusses (1) the financial controls established by the
World Bank and the U.S. Agency for International Development to
monitor use of United States funds provided to the Palestinian
Authority, PECDAR, or the Palestine Liberation Organization
officials for budget support purposes and (2) what controls the
U.S. Agency for International Development established over
project funds provided to other United States Government
agencies, private contractors, nongovernmental organizations,
private voluntary organizations, and the United Nations for the
benefit of the Palestinian Authority.
b. Benefits.--GAO determined that all funds were under
tight auditing controls and that no funds were directly
disbursed to Palestinian Authority, PECDAR, or PLO officials.
The auditing controls proved to be adequate in this instance,
and included 1) grant and project officer oversight, 2)
incremental funding, 3) monthly or quarterly financial status
reports, 4) progress reports, and 5) auditing provisions. These
auditing provisions call for annual audits of each contractor's
overhead rate, contract-specific audits on an as-needed basis,
and close-out audits valued in excess of $500,000.
202. ``Acquisition Reform: Regulatory Implementation of the Federal
Acquisition Streamlining Act of 1994,'' June 1996, GAO/NSIAD-
96-139.
a. Summary.--The Federal Acquisition Streamlining Act of
1994 contained more than 200 sections changing the laws
governing how agencies acquire nearly $200 billion worth of
goods and services annually. The act sets deadlines for
publishing proposed and final implementing regulations,
prescribes a minimum 60-day period for public review and
comment on proposed regulations, and requires the drafters of
such regulations to make every effort to ensure that
regulations are concise and understandable. This report (1)
determines whether all regulations are necessary to implement
the act were published in accordance with the act's
requirements and (2) describes the efforts made to make the
regulations concise and understandable.
b. Benefits.--Implementation of the Federal Acquisition
Streamlining Act utilized a number of training resources and
explanatory materials, including: a five-part videotape series
on operational uses of new policies and procedures; viewer
reference materials; call-in question and answer sessions with
drafting team leaders and other procurement expert; and a
process-oriented ``Guide to Federal Acquisition Regulation
Changes.''
203. ``Wartime Medical Care: Personnel Requirements Still Not
Resolved,'' June 1996, GAO/NSIAD-96-173.
a. Summary.--Since 1994, the Defense Department (DOD) and
the military services have produced several estimates of
wartime medical personnel requirements. The National Defense
Authorization Act of 1996 requires GAO to study the
reasonableness of the models each military service uses to
determine appropriate wartime medical personnel force levels.
DOD recently embarked on, but has yet to complete, another
major wartime medical requirements study. This study is
expected to modify the data contained in the service models and
is intended to produce a unified DOD position on medical
requirements. This report addresses the service models'
results, their methodologies, and their inclusion of active
duty and reserve medical personnel. A separate report will
examine DOD's updated wartime medical requirements study and,
to the extent needed, address any remaining issues associated
with the service models.
b. Benefits.--Although the services used different
techniques to determine wartime medical personnel requirements,
each of the services considered appropriate factors, such as
current defense planning guidance, DOD policies for evacuating
patients from the theater, and casualty projections.
204. ``Operational Support Airlift: Analysis of Joint Staff Estimate of
Military Wartime Requirements,'' June 1996, GAO/NSIAD-96-157.
a. Summary.--Operational support aircraft are used to meet
short notice, generally smaller cargo and passenger
requirements that cannot be met by regularly scheduled tactical
resupply aircraft. A study by the Joint Chiefs of Staff found
that the joint wartime requirement for operational support
aircraft is 391 planes, or about 100 less than the fleet in
existence at the time of the study. In response to a
congressional request that GAO determine if the requirement for
391 aircraft was excessive, this report (1) recalculates the
Joint Staff's estimate using the same computerized model and
(2) determines how changes in the flight frequency assumptions
affected the calculation of aircraft requirements.
b. Benefits.--GAO's calculations of the activity based
demand found the need for 385 aircraft, 6 less than the
estimate set forth by the Joint Staff.
205. ``Defense Ammunition: Significant Problems Left Unattended Will
Get Worse,'' June 1996, GAO/NSIAD-96-129.
a. Summary.--The Defense Department (DOD) has poorly
managed its huge stockpile of ammunition--a legacy of the cold
war and Operation Desert Storm. Of an $80-billion inventory, an
estimated $31 billion worth of conventional ammunition,
explosives, and missiles were surplus. Much of this was old and
unusable. For some types of ammunition, the military had more
than 50 times its stated needs. The massive quantities of
ammunition that were returned to the stockpile as a result of
closed military bases in Europe and the end of the Persian Gulf
War--combined with decreases in budgets, staff, and storage
space--have severely taxed the military's ability to manage the
ammunition inventory. Managers have difficulty (1) identifying
ammunition beyond what is needed for the military's stated
requirements, (2) sharing excess ammunition with military
services that may need it, and (3) disposing of excess
ammunition that it no longer makes sense to retain. In
addition, ammunition inspections and tests have fallen so far
behind that the military cannot guarantee the usability or
readiness of the stockpile.
b. Benefits.--To facilitate implementation of the single
manager's plan for storing, maintaining, and disposing of
ammunition, GAO recommends that the military services
categorize their ammunition, update this information annually,
and relinquish control of their excess ammunition to a single
Army manager for distribution to other services that have
shortages of ammunition or for disposal when it no longer makes
sense to retain it.
206. ``Navy Mine Warfare: Budget Realignment Can Help Improve
Countermine Capabilities,'' March 1996, GAO/NSIAD-96-104.
a. Summary.--Operation Desert Storm revealed major
weaknesses in the Navy's ability to detect and disarm enemy
mines. The Navy possessed only limited capability at the time
to conduct mine countermeasures at various water depths. In
addition, two Navy warships struck Iraqi mines in open waters
in the Persian Gulf, causing $21.6 million worth of damage. By
contrast, one of the mines was believed to cost $10,000 and the
other $1,500. This report examines the steps the Navy is taking
to ensure a viable, effective naval force that will be ready to
conduct countermeasures in two nearly simultaneous regional
wars. GAO evaluates the (1) status of the Navy's research and
development projects, (2) readiness of the Navy's on-hand mine
countermeasure assets, and (3) match between the Navy's planned
and on-hand mine countermeasures assets and its mine
countermeasures requirements.
b. Benefits.--The systems and equipment installed on the
Navy's ocean-going mine countermeasures ships have experienced
reliability problems and parts shortages for several years. As
a result, individual ships are not fully capable of performing
their mine countermeasures missions, although collectively they
may be able to carry out particular missions. The Navy is
spending about $1.5 billion to acquire 12 coastal mine hunter
ships that were designed specifically to protect United States
coastal waters against the Soviet Union but not to travel
across the ocean under their own power.
207. ``Marine Corps: Improving Amphibious Capability Would Require
Larger Share of Budget Than Previously Provided,'' February
1996, GAO/NSIAD-96-47.
a. Summary.--The Navy and the Marine Corps estimate that it
will cost about $58 billion during the next 25 years to
modernize the amphibious force, which suffers from reduced
vehicle lift capability and other operational limitations. This
could be a major challenge for the Navy, which risks a $16
billion gap between its projected shipbuilding budget and the
cost estimate to build all ships planned between 2002 and 2005.
The Navy and Marine Corps plan to spend a much larger share of
their procurement funds to buy upgraded equipment for
amphibious operations than has been the case for most of the
past 40 years. The Navy and the Marine Corps will need to
earmark beyond 2001 a large share of available procurement
dollars for amphibious equipment to avoid delays in the
modernization effort. Amphibious programs are competing with
other major weapons programs, such as the DDG-51 destroyer, the
Army's Apache helicopter, and the Air Force's F-22 fighter
aircraft.
b. Benefits.--Should Congress decide to support the planned
Navy and Marine Corps amphibious programs, three options seem
plausible: increase Navy and Marine Corps procurement funding,
spend less on other Navy or other services' planned procurement
or other parts of the defense budget, or implement some
combination of the first two options.
208. ``State Department: Actions Needed to Improve Embassy
Management,'' March 1996, GAO/NSIAD-96-1.
a. Summary.--The State Department has not acted on
recommendations by GAO and Congress to improve the management
of it's overseas posts. GAO suggested that each diplomatic post
establish a proactive management improvement program. Although
State has taken steps to improve embassy management controls,
these initiatives were inconsistently implemented at embassies
GAO visited. As a result, long-standing management deficiencies
continue to hinder the efficiency and the effectiveness of many
embassies' operations. By contrast, three embassies--those in
Ankara, Turkey; Dhaka, Bangladesh; and Tunis, Tunisia--have
implemented management practices to improve administrative
operations. These practices, which include tracking accounts
receivables and automating travel vouchers, have strengthened
internal controls, improved compliance with regulations,
reduced costs, and led to more efficient and effective
operations. In addition, these embassies differed from other
posts GAO visited because of the active involvement of senior
management and the use of existing reporting mechanisms. These
management practices could be replicated at other embassies.
b. Benefits.--GAO believes reforms should be introduced in
the following areas: (1) controlling personal property; (2)
training for U.S. and foreign service national personnel; (3)
contracting and procurement practices; (4) poor controls over
cashiering functions; (5) medical insurance reimbursements; and
(6) senior-level oversight of operations. The subcommittee has
learned that the State Department has not established a
Congress-endorsed proactive management improvement program, but
it has taken some actions to improve embassy management
controls. Actions such as providing additional embassy guidance
and oversight in safeguarding resources and revising the
overseas risk assessment questionnaire--a tool designed for
posts to identify management weaknesses.
Postal Service Subcommittee
1. ``D.C. Area Mail Delivery Service: Resolving Labor Relations and
Operational Problems to Service Improvement,'' February 23,
1995. GAO/GGD-95-77.
a. Summary.--At the request of the Treasury, Postal Service
and General Government Subcommittee and the Committee on
Appropriations, the General Accounting Office reported on mail
delivery service in the Washington, DC, metropolitan area. The
GAO reported that a number of systemic and operational problems
caused poor mail service in the Washington, DC, metropolitan
area. First, the Postal Service was unable to deal with the
unexpected growth in local mail volume in 1994 which was twice
the national average. Second, the Postal Service experienced
mail processing problems. The Postal Service has taken a number
of actions to address the mail delivery problems including
increasing staffing, recombining responsibility for processing
and customer service at the operational level, eliminating some
duplicative handling of mail in Northern Virginia, and
processing mail at an auxiliary postal facility in Southern
Maryland. These initiatives should help to improve service, but
substantial, long-term improvement will require that postal
management and labor unions work together to address long-
standing employee relations problems that are reported to be
more severe in Washington, DC, metropolitan area than in most
other locations.
b. Benefits.--By continuing to study the mail delivery
service in the Washington, DC metropolitan area, this GAO
review provides important information to the American people
and the Congress that will help foster a full and open debate
on the quality of mail service.
2. ``Automation Is Taking Longer and Producing Less Than Expected,''
February 22, 1995, GAO/GGD-95-89BR.
a. Summary.--As a joint request of subcommittee Chairman
McHugh and Senator Stevens, the General Accounting Office
reported on the U.S. Postal Service's progress in using optical
scanning technology to achieve its goals of (1) bar coding
virtually all letter mail; (2) automatically sorting mail to
individual home and business addresses; and (3) adjusting work
methods and employment to achieve workforce reductions.
Barcoding of letter mail and automatic sorting of letters to
homes and businesses, referred to as ``delivery point
sequencing,'' has proven more difficult than the Service
expected and is therefore behind schedule. The savings from
automation continue to be small compared to overall labor costs
and is more difficult to achieve than the Service anticipated.
b. Benefits.--This report provided the Congress information
to make informed oversight decisions on the effectiveness of
postal automation, a $15 billion effort.
3. ``Many Challenges in a Changing Environment,'' February 23, 1995,
GAO/T-GGD-95-93.
a. Summary.--As part of a general oversight hearing before
the Subcommittee on the Postal Service, the General Accounting
Office assembled data on (1) the key characteristics of the
Postal Service of today, and (2) challenges that will face the
Service and Congress as they consider how mail service will be
provided in the United States in the future. GAO's testimony
was based on work they have completed or have underway on
Postal labor management relation, customer service, postal
revenues, automation, and competition. Service delivery
problems and other challenges have increased the calls for
basic reforms of the Postal Service. Recent developments
include legislation to turn the Postal Service into a publicly
owned corporation, and a coalition request to the Postmaster
General to suspend the monopoly over third class advertising
mail. The Postal Service has suggested that it be given more
operational flexibility in several areas.
b. Benefits.--The GAO report highlights key characteristics
of the Postal Service and the challenges that will face both
the Service and the Congress as they consider how mail service
will be provided in the future.
4. ``Performing Remote Barcoding In-House Costs More Than Contracting
Out,'' September 13, 1995, GAO/GGD-95-143.
a. Summary.--At Chairman Lightfoot's request, the General
Accounting Office compared the direct costs to the U.S. Postal
Service of contracting out for remote barcoding services versus
having the work done by postal employees. This examination was
conducted for a 36-week period, from July 23, 1994, through
March 31, 1995. GAO estimated on the basis of Postal Service
data, that in-house barcoding of about 2.8 billion images cost
about $4.4 million, or 6 percent more than if the images were
processed by contractors. This 6 percent cost differential was
based on an in-house mix of 89 percent transitional and 11
percent career employee work hours through March 1995.
b. Benefits.--This detailed study of contracting out for
remote barcoding helped provide important information to the
American people and Congress that will help foster a full and
open debate on this decision by the Postal Service.
5. ``Postal Ratemaking In Need of Change,'' November 15, 1995, GAO/GGD-
96-8.
a. Summary.--At subcommittee Chairman McHugh's request, the
General Accounting Office revisited matters for congressional
consideration contained in its March 1992 report to Congress on
postal pricing. The report focuses on (1) whether changes in
policies concerning volume discounting and demand pricing
should still be considered by Congress, (2) the issues
surrounding the current ratemaking process, and (3) what
proposals for modifying the postal ratemaking process and other
changes merit further consideration by Congress. The GAO report
finds that changes to the ratemaking provisions of the Postal
Reorganization Act of 1970 may be necessary to recognize market
realities which have contributed to the reasons why the Postal
Service has not been an effective competitor in some markets.
These reasons include such factors as price and regulatory
constraints. GAO believes that if the Postal Service is to be
competitive and is to keep rates lower for most mail classes
over the long term, it needs more flexibility in setting postal
rates and that postal rates should be based to a greater extent
on economic principles that consider volume discounting and
demand pricing.
b. Benefits.--By studying the Postal Service's continued
viability as a full service provider, this GAO review provides
important information to the American people and the Congress
on the effectiveness of the current process for setting postal
rates.
6. ``New Focus on Improving Service Quality and Customer
Satisfaction,'' December 20, 1995, GAO/GGD-96-30.
a. Summary.--As a joint request of subcommittee Chairman
McHugh and Representative Gary Condit, the General Accounting
Office reported on the Postal Service's efforts to measure,
report, and improve customer satisfaction. The report contains
recommendations to the Postmaster General to improve the
dissemination and use of customer satisfaction and other
performance measurement data. Among other recommendations, the
report recommends that the Postal Service consult with
appropriate congressional oversight committees to determine
business and residential customer satisfaction data and what
other performance data should be regularly provided to Congress
for its use.
b. Benefits.--This report provides the Congress information
on ways the Postal Service can improve on all performance
measures as part of a new initiative called Customer Perfect
and how that information can be disseminated to Congress, the
public, and within the Postal Service.
7. ``Postal Employment and Barcoding,'' December 15, 1995, GAO/GGD-96-
54R.
a. Summary.--At subcommittee Chairman McHugh's request, the
General Accounting Office responded to questions raised during
the Subcommittee on Postal Service meeting on September 21,
1995. The GAO reported on (1) changes in the Postal Service
employment subsequent to the 1992 downsizing decision, and (2)
actions taken and planned by the Postal Service to convert
remote barcoding sites from contractor to Postal Service
operations. To obtain information on changes in Postal Service
employment, the GAO interviewed responsible Postal Service
headquarters officials, analyzed postal employment statistics,
and reviewed related Postal Service documents.
b. Benefits.--This detailed study of workforce growth and
the effects of barcoding on Postal employment will help provide
important information to the American people and Congress that
will help foster a full and open debate on this decision by the
Postal Service.
8. ``Postal Service: Conditions Leading to Problems in Some Major
Purchases,'' January 18, 1996, GAO/GGD 96-59.
a. Summary.--The GAO reviewed whether changes are needed in
the Postal Service's purchasing program, focusing on whether:
1) certain problem purchases were due to some underlying causes
that should be addressed through legislation; and 2) the
Service should implement additional procedural safeguards to
minimize future occurrences of such problems.
b. Benefits.--This report served to focus the attention of
postal management upon weaknesses in its contracting and
purchases decisions and pointed out the problems encountered
during the seven selected procurements. GAO reported that these
weaknesses were attributable to Postal officials' poor
judgement, circumventions of existing internal controls, and
failure to resolve conflicts of interest. In response to this
report, the Postal Service has taken action to increase
accountability over its purchasing process and to safeguard
against such future problems. The Postal Service has also taken
steps to improve its ethics program and has established a
formal ethics education and training program for contracting
officers and personnel. It has also established one purchasing
executive with management authority over the three separate
purchasing groups.
9. ``U.S. Postal Service: A Look at Other Countries' Postal Reform
Efforts,'' January 25, 1996, T-GGD-96-50.
a. Summary.--Many countries have recently reformed or made
substantial changes to their postal systems. GAO highlighted
these changes for the subcommittee and the Senate Subcommittee
on Post Office and Civil Service during a joint hearing on
January 25, 1996. The GAO found that while many countries have
substantially reformed, privatized, corporatized or
commercialized their postal systems, it cautioned the
subcommittees to consider any postal reforms in the context of
the complexities and unique attributes of the U.S. postal
system.
b. Benefits.--The subcommittee benefits and the American
people benefit through a systematic review of foreign postal
administrations in efforts to improve the Postal Service. GAO
testified that most foreign postal systems share the U.S. goal
of providing universal service and the use of a government-
granted postal monopoly to guarantee this mandate.
10. ``U.S. Postal Service: Unresolved Issues in the International Mail
Market,'' March 11, 1996, GAO/GGD-96-51.
a. Summary.--Aware that many countries have recently
reformed or made substantial changes to their postal systems
and that certain postal issues, such as restricted access to
individual mailboxes, are unique to the United States, the
subcommittee asked the GAO to review and discuss reform efforts
of other countries.
b. Benefits.--This report examined the Service's statutory,
current, and planned role in the delivery of international
mail. Areas under examination include the existing
relationships between the Postal Service, foreign postal
administrations and the Universal Postal Union; and whether
current postal laws and international agreements may limit the
Service's ability to participate internationally. This reports
benefits postal customers by allowing the subcommittee to
examine the current international mail market to determine the
appropriate role the U.S. Postal Service should play in this
competitive arena.
11. ``U.S. Postal Service: Challenges In Improving Performance and
Meeting Competition,'' March 13, 1996, T-GGD-96-90.
a. Summary.--In conduct of its general oversight authority,
the subcommittee invited GAO to evaluate Postal Service
performance and its ability to compete in a less regulated
market environment. GAO reported that labor-management
relations remained strained and that filed grievances were
increased by 31 percent from 1993 to 1995. It pointed out that
an effort to seek feedback from employees in the form of an
employee opinion survey was hurt by one union's claim the
results were used improperly during the subsequent labor
negotiations. The GAO further found that the Postal Service was
losing market share because of the way the Postal
Reorganization Act required it to set rates and allocate
revenues. GAO testified that the rate-setting requirements
reduced Postal Service flexibility in responding to market
changes and that the Postal Service must control the cost of
its operations to remain competitive as a full-service
provider.
b. Benefits.--This report, in the form of testimony,
provided the subcommittee with an excellent ``snapshot'' of
challenges to postal competitiveness. It further aided the
subcommittee in its effort to develop comprehensive postal
reform legislation which would benefit all postal customers.
12. ``U.S. Postal Service: Improved Oversight Needed to Protect Privacy
of Address Changes,'' August 13, 1996, GAO/GGD-96-119.
a. Summary.--The Postal Service National Change of Address
(NCOA) Program mass disseminates postal customer address change
data to 24 licensees who use the data to update proprietary
address lists they sell nationwide. To protect the privacy of
its customers, the Postal Service imposes restrictions on
licensees' use of NCOA information and monitors compliance with
these restrictions. However, an unresolved dispute is to what
degree the restrictions on licensee's apply to the licensees'
clients or contractors. The subcommittee is examining what
restrictions the NCOA license agreement imposes regarding the
use and release of address information; whether those
restrictions are consistent with ``privacy'' requirements of
Federal law; and how Postal Service monitors the licensees'
compliance with NCOA license agreements and oversees corrective
actions for identified violations.
b. Benefits.--This report provided the subcommittee and
others who are concerned about privacy issues with critical
information regarding the privacy of individual postal patrons.
The GAO determined that the Postal Service has been unable to
prevent, detect or correct potential breaches in the licensing
agreement and that Postal officials believe the NCOA licensing
agreement helps to insure that Federal privacy guarantees are
not compromised through the NCOA program. However, GAO
expressed concerns regarding the Postal Service failure to
express a clear and consistent position regarding the use of
NCOA data to create ``new-movers'' lists and that it has failed
to terminate licensees that fail to maintain address-matching
software or enforcing the performance standards prescribed in
the license agreements. In brief, the Postal Service needs to
ensure that the use of NCOA-derived data is limited to the
purpose for which it was intended. The subcommittee fully
intends to continue to monitor the progress of the Postal
Service on this issue as well as other privacy issues in
regards to the Postal Service.
13. ``Inspectors General: A Comparison of Certain Activities of the
Postal IG with Other IGs,'' September 20, 1996, AIMD-96-150.
a. Summary.--As part of the subcommittee's ongoing review
of postal reform issues it requested that the GAO study and
report on the functions of the various agency Inspectors
General to determine the structural ability of the Postal
Service Inspector General to conduct independent audits and
investigations. Pursuant to the Inspector General Act
Amendments of 1988, the Chief Postal Inspector, while serving
as the chief law enforcement officer, also serves in the dual
role as the Postal Service Inspector General. The subcommittee
viewed this structure as organizationally impaired and
questioned the independence of the Postal Service the Office of
Inspector General.
In its review the GAO found that the subcommittee's
concerns were valid and stated that the Postal IG was unable to
conduct audits of the Postal Service's law enforcement
operations in accordance with required auditing standards
because, as the Chief Postal Inspector and Inspector General,
the position was not organizationally independent. These
findings clarified and served as the basis for the amendment
providing for the establishment of an independent Office of
Inspector General within the Postal Service to Public Law 104-
208.
14. ``U.S. Postal Service: Revenue Losses From Express Mail Accounts
Have Grown,'' October 24, 1996, GAO/GGD-97-3.
a. Summary.--The subcommittee received allegations that the
Postal Service was accepting for shipment Express Mail from
business clients with invalid Express Mail Corporate Accounts
(EMCA) after reviewing the thousands of invalid EMCA numbers
published monthly in the Postal Service's Postal Bulletin. This
review was part of the continuing subcommittee efforts to
review Postal Service efforts aimed at revenue protection. The
subcommittee asked the GAO to review these accounts and the
procedures used to govern EMCA acceptance.
The GAO found that some mailers obtained Express Mail
services using invalid EMCA numbers and the Postal Service did
not collect the postage due or verify EMCA which were later
determined to be invalid. GAO recommended that the Postal
Service improve on weaknesses in EMCA procedures. Subsequently,
postal management has agreed that stronger requirements for
opening EMCA need to be implemented and that managers and
employees must be held accountable for handling EMCA
transactions. The Postal Service plans to automate the invalid
account numbers giving acceptance personnel rapid access to
invalid account information at post offices.
b. Benefits.--This, and other subcommittee investigations
and GAO reports, highlight the need for the Postal Service to
emphasize and direct attention to revenue protection.
Ratepayers benefit through the effective collection of properly
assessed postal rates, thereby helping alleviate the need for
further rate increases.
15. ``Final-Offer Arbitration as an Alternative Means of Resolving
Contract Disputes Between Postal Management and Labor Unions.''
a. Summary.--In September 1994, GAO reported that
adversarial postal labor-management relations have resulted in
reliance on arbitration to settle contract disputes. Both
management and unions have expressed dissatisfaction with such
a procedure. The subcommittee asked that GAO obtain more
information on final-offer arbitration as an alternative to the
current procedure. Specifically: What is final-offer
arbitration? How and where has final-offer arbitration been
used? What do management and labor officials believe has been
the impact of final-offer arbitration on their relations?
GAO briefed the subcommittee regarding its informal
findings. Specifically, GAO found that final offer arbitration
is a specific approach to interest arbitration in which an
arbitrator's decision is restricted to the selection of either
management's offer or the union's offer. In contrast, the
approach used by the Postal Service and its four major postal
unions has been conventional interest arbitration, an approach
that allows an arbitrator to develop an award decision that may
be different from the offers submitted by the Service and the
unions.
b. Benefits.--The subcommittee is hopeful this review will
indicate ways that Congress can encourage and assist postal
management and unions to resolve longstanding labor relations
problems. Resolution of these problems benefits postal workers,
management and ratepayers by providing a workplace environment
free of violence and conducive to gains in worker productivity.
B. OTHER REPORTS AND STATEMENTS
District of Columbia Subcommittee
The following District of Columbia Auditor Reports for 1995
have been sent to Congress as mandated by Section 455 of Public
Law 93-198:
1. (4/12/95) Review of the District of Columbia Board of
Education's Personnel Screening Procedures for New Hires.
2. (04/17/95) Audit of the D.C. Taxicab Commission
Assessment Fund--Fiscal Years 1992, 1993, 1994.
3. (06/01/95) FY 1992 Annual Report on Advisory
Neighborhood Commissions.
4. (06/08/95) Implementation of the Government Managers
Accountability Act of 1995 and the Merit Personnel Law.
5. (06/29/95) FY 1993 Annual Report on Advisory
Neighborhood Commissions.
6. (07/10/95) Review of the Agency Fund of the Office of
the People's Counsel for Fiscal Year 1994.
7. (07/12/95) Review of the Award and Administration of
Parking Ticket Processing and Delinquent Ticket Collection
Services Contracts.
8. (07/13/95) Analysis of the Propriety of Lazard Freres
Entering Into an Agreement with Merrill Lynch While Serving as
the District's Financial Advisor.
9. (07/27/95) Fiscal Year 1994 Annual Report on Advisory
Neighborhood Commissions.
10. (08/11/95) Water and Sewer Utility Administration's
Participation in the District's Cash Management Pool.
11. (09/05/95) Audit of the District of Columbia Lottery
and Charitable Games Control Board for Fiscal Year 1994.
12. (09/20/95) Financial Review of the District of
Columbia's Drug Asset Forfeiture Program.
13. (10/20/95) Review of the Public Service Commission
Agency Fund for Fiscal Year 1994.
14. (10/24/95) Audit of the District of Columbia's
Recycling Program (Revised).
15. (11/07/95) Performance Audit of the Office of Emergency
Preparedness.
Government Management, Information, and Technology Subcommittee
general services administration
Report to the Congress of the United States--Utilization and Donation
of Federal Personal Property--Fiscal Years 1991 and 1992,
December 1994.
a. Summary.--This biennial report is required by section
203(o) of the Federal Property Act (Property Act) (40 U.S.C.
484 (o)). It is to present a full and independent evaluation of
the programs for donation of Federal surplus personal property.
It also contains statistics on excess personal property
transferred to Federal agencies which thereupon furnished the
items to certain non-Federal organizations. The report is to
include such recommendations as GSA determines necessary or
desirable.
The instant report makes no recommendations. It states that
evaluations and analyses of these programs indicate they are
operating as intended by Congress. The report adds, however,
that ``the proliferation of disposal authorities outside the
Property Act is fragmenting both programs causing a loss of
oversight and accountability for the transfer of Federal
Property.'' The report speaks, for example, about DOD's
Humanitarian Assistance Program. It notes that donation
participants and Federal agencies have expressed concern to GSA
and Congress that the priority assigned to humanitarian
assistance for foreign countries is higher than for meeting
domestic needs. Cited property categories are excess clothing,
vehicles, and heavy-duty motor equipment, all generated in the
continental United States and transferred in substantial
quantities for foreign use through the DOD program. The report
also discloses swift growth in other transfer programs that
adversely impact the donation program, since they involve
property at the excess stage before it can be determined
surplus. This in effect gives these other transfer programs a
priority over the donation program, which involves property at
the later surplus stage. In addition, GSA has completed its
Federal Operations Review Model (FORM) report on personal
property disposal, and the subcommittee will be reviewing this
report in detail in the second session of the 104th Congress.
b. Benefits.--The structure of the present donation program
was established in 1976 by Public Law 94-519. It consolidated
numerous Federal programs for distributing unneeded personal
property to State and local organizations. It made GSA, as a
single agency, responsible for guiding the partnership with
individual State governments. (The current requirement for a
biennial report was added in 1988.) The instant report gives a
clear picture of the continuing trend toward special
legislative deviations outside the Property Act framework that
adversely affect the consolidation intended by the 1976 act.
The report supplies a solid basis for subcommittee review of
the need for further legislative rationalization of this very
large but fragmented form of unbudgeted Federal assistance.
explanatory statements
During the first session of the 104th Congress, a total of
12 explanatory statements of proposed negotiated disposal of
Federal surplus property were referred to the subcommittee
after submission to the full committee pursuant to section
203(e)(6) of the Federal Property and Administrative Services
Act of 1949. These properties include the Army Family Housing
Site, Orangetown, NY, for $2.0 million; Air Force Plant 78, Box
Elder County, UT, for $6.45 million; the Research Triangle
Foundation in Research Triangle Park, NC, for other property;
the golf course at Fort Benjamin Harrison, Marion County, IN,
for $2.4 million; utility systems at Lowry Air Force Base,
Denver, CO, for $1.025 million; Youngs Lake Family Housing
Site, WA, for $1.6 million; and the Federal Building, Sanford,
NC, for $141,000; Seattle Stadium Homesites, Seattle, WA, for
$375,000; Chicago O'Hare Air National Guard Base, Chicago, IL,
for $100 million; Rickenbacker Air National Guard Base,
Columbus, OH, for $600,000; Housing at Myrtle Beach Air Force
Base, Myrtle Beach, SC, for $5.05 million; and the electrical
distribution system at Myrtle Beach Air Force Base, Myrtle
Beach, SC, for $250,000. Of the 12, 3 were transmitted by the
Administrator of General Services on behalf of GSA as the
disposal agency. The other seven were transmitted by the
Secretary of the Army or the Secretary of the Air Force. These
were disposals of property determined surplus as a result of
recent base closure and realignment legislation which directed
GSA to delegate disposal functions under the Federal Property
Act to the Secretary of Defense. During the 103d, 102d, and
101st Congresses, the numbers of statements received were 16,
20, and 13, respectively. This contrasts with 45 statements
received during the 100th Congress. The decline in the number
received results from several factors: (1) Public Law 100-612's
raising the dollar threshold for statement submission; (2) the
involved screening process for homeless assistance use and the
priority of consideration required by section 501 of the
Stewart B. McKinney Homeless Assistance Act; (3) the shifting
of the approach to real property disposal that has accompanied
enactment of the recent base closure and realignment statutes;
and (4) special legislative authorizations of individual
property transfers, which depart, in whole or in part, from the
regular disposal procedures of the Federal Property Act.
According to GSA data, since 1967 through fiscal year 1995,
there have been over 1,000 negotiated sales of surplus property
to public bodies. These have generated over $846 million in
proceeds. The total number of all sales of surplus property
since 1967 is 6,587, with an aggregate yield of $1.86 billion.
For nearly 50 years, the Committee on Government Reform and
Oversight or its predecessors have exercised, by House
precedent, legislative and oversight jurisdiction over property
management and surplus property disposal. The subcommittee
takes seriously the responsibility to provide advance review of
explanatory statements in order to monitor compliance with
statutory and regulatory provisions.
After thorough review of the statements and supporting
documentary, the subcommittee frequently offers comments and
recommendations regarding such matters as appraising,
negotiating, and adhering to legal policy requirements. In
recent Congresses, the subcommittee has directed comments and
recommendations toward assuring, for example, that:
1. GSA's or other disposal agency's negotiations are
conducted only with public bodies or such private
entities as meet strict statutory criteria and carried
out vigorously by the parties at arms length and in the
basis of approved valuations. (The Property Act
requires that in negotiated disposal the estimated fair
market value of the property be obtained.)
2. If, after negotiations leading to a final offer to
the Government and before award, special circumstances
should cause the property's value to appreciate
substantially, GSA does not hesitate to reject the
offer and seek further negotiations with the party.
3. The standard 10 percent earnest money deposit is
always obtained with the final offer.
4. Any excess profits from resale by the original
purchaser are prevented for the standard period of 3 to
5 years.
5. GSA restricts so-called pass-through sales, which
are early resales or long-term leases to a developer
made by the public body with which GSA has negotiated
an otherwise acceptable offer. (Sales to public bodies
should involve public-purpose use of the property;
otherwise the general statutory policy of disposal by
public advertising should be followed.) A local public
body should not, of course, be able to channel valuable
property directly into private entrepreneurship. (The
current GSA policy is set out in its Handbook PBS P
4000.1 CH 4-31. June 29, 1994.)
6. Credit sales are made only on the basis of
standard credit terms as provided in the GSA
regulations.
7. There is a close scrutiny of negotiations in which
part of the consideration to the Government is a
valuable nonmonetary benefit, such as parking spaces.
Sale should be for cash, credit or cash equivalent.
8. Property under lease to the proposed purchaser is
disposed of only when made subject to required audit
and payment of lease revenues payable to the
Government.
9. Negotiations be conducted only in the presence of
authorized representatives.
10. GSA's acquisition of new property by exchanging
Federal property under the Property Act or under the
Public Buildings Act of 1959 follows precisely the
statutory and regulatory criteria which restrict
exchanges involving privately owned property. (See
further discussion below of a recent example.)
11. The timely notice required by regulations to be
given local public agencies for screening purposes is
not waived.
12. Interest in available surplus property expressed
by a representative of the homeless is recognized
consistently with the priority of consideration
afforded by section 501 of the Stewart B. McKinney
Homeless Assistance Act or, with respect to base
closure lands, the Base Closure Community Redevelopment
and Homeless Assistance Act of 1994 (Public Law 103-
421) (10 U.S.C. 2684 note at ``SEC. 2905 (b)(7)'').
13. A protective covenant is included the deed to
assure that the land will not be used for a structure
that the FAA finds would create a hazard to air
navigation.
14. GSA's property appraisal data are not divulged to
the other party or to the public. (The Freedom of
Information Act [5 U.S.C. 552(b)(c)] has been
interpreted as sanctioning the withholding of such
information.)
15. Appraisals and appraisal reviews follow uniform
standards of professional appraisal practice of the
Appraisal Standards Board of the Federal Financial
Institutions Examination Council.
16. That departures from arms-length and vigorous
negotiations are not made through such devices as
agreement to use a third-party appraiser or appraisal
reviewer as a basis for settling price differences.
During the 104th Congress, one explanatory statement was
received involving disposal by property exchange. Exchanges of
property are by nature negotiations. As a result of
longstanding subcommittee concern about difficulties inherent
in disposal by exchange, GSA's regulations have made
subcommittee review of such proposed transactions a two-step
process that involves a preliminary subcommittee examination
(41 CFR 101-47.301-1). Important Federal interest to be served
by the transaction may be clear; whereas a clear compliance
with the narrow authority supporting exchange may not be
ascertainable. Exchanges are even more difficult when the
parties seek to exchange lands of equal value so that there be
no payment of any cash differential. (GSA does not have
authority to pay such a differential.) Appraisal and
negotiation difficulties can prolong the transaction for years,
as well as complicate eventual subcommittee review of the
proposal.
The Defense Base Closure and Realignment Acts of 1988 and
1990 (10 U.S.C. 2687 note) provide that real property and
facilities at a closed military installation are subject to the
utilization disposal provisions of the Federal Property Act.
These provisions also require the Administrator of General
Services to delegate his property disposal authority under the
Federal Property Act. As a result the subcommittee has now
received explanatory statements from the Department of Defense.
But amendments to the 1988 and 1990 statutes enacted as part of
the National Defense Authorization Act for fiscal year 1994
(section 2903 of Public Law 103-160) have given the Secretary
supplemental authority to dispose of base closure property
outside the Property Act in cases where severe economic impact
on the community resulting from closure justifies a less than
fair market value transfer to the recognized local
redevelopment authority. In such cases, however the Secretary
must furnish an explanation as to why the transfer is not for
estimated fair market value and why the transfer could not be
made in accordance with the still-effective provisions of the
1988 and 1990 base closure acts which require that the Property
Act disposal authority (delegated to the Secretary by GSA) be
followed. Accordingly, the opportunity will remain for the
review by cognizant, congressional committees of DOD
transactions even under the supplemental authority.
C. COMMITTEE PRINTS
Committee on Government Reform and Oversight
1. ``Deposition Transcripts From the Committee Investigation into the
White House Office Travel Matter, Volumes 1, 2, 3, 4, and 5''
In the course of the committee's Travel Office
investigation, it became clear that the committee would require
the testimony of dozens of witnesses--most of whom were current
or former White House staffers or volunteers--to complete its
inquiry. A number of prospective witnesses generally were
unwilling to be interviewed by committee staff, and most
refused to testify under oath. In addition, on more than one
occasion, the White House interfered with previously arranged
interviews of former administration staffers and insisted on
having White House lawyers attend committee depositions.
In order to ensure access to all appropriate witnesses in
its White House Travel Office investigation while minimizing
the number of hearings required to complete the investigation,
it was decided that the committee should seek the authority to
depose Travel Office witnesses under oath.
Chairman Clinger submitted H. Res. 369, which was referred
to the Committee on Rules, on February 29, 1996. H. Res. 369
provided special authority to the Committee on Government
Reform and Oversight to obtain testimony for purposes of
investigation and study of the White House Travel Office
matter. The bill was limited to provide deposition authority to
the Committee on Government Reform and Oversight for its
investigation of the Travel Office and related matters.
Deposition authority allowed the committee to obtain sworn
testimony from witnesses while minimizing the number of
hearings needed in order to complete the investigation.
The House approved H. Res. 369 on March 7, 1996. Thereupon,
the committee on Government Reform and Oversight notified
witnesses it wished to testify under oath before the committee.
Depositions commenced in late March 1996. Initially, they were
expected to be completed by July 1996, but an additional
extension of time was agreed upon to August 1, 1996.
Without deposition authority, it would have been impossible
for the committee to schedule and complete more than 70
depositions with witnesses who, in many cases, otherwise would
have been uncooperative. Deposition authority allowed the
committee to complete its Travel Office investigation as well
as an interim draft report on the related FBI files matter with
minimal disruption to the committee and the witnesses involved.
Postal Service Subcommittee
1. ``Mail Service in the United States: Exploring Options for
Improvement,'' A Report prepared by Congressional Research
Service of the Library of Congress for the Committee on
Government Reform and Oversight, December 1995, 95-1105 E.
a. Summary.--This report is an extensive review of the
structure, operation and organization of the U.S. Postal
Service (USPS) and was prepared at the request of subcommittee
Chairman John McHugh.
In recent years the USPS has come under severe criticism
for its service and delivery operations. Furthermore, USPS
general labor and overtime costs have far exceeded Service
estimates. The Service had anticipated that automation would
curb increases in operating costs; however, savings from this
effort have fallen short of expectations. The Postal Service
has said that it is hampered by constraints in law under which
it must operate.
The report discusses the mandate and mission for the Postal
Service and questions whether such goals now create a barrier
to the Service's attempt to compete in today's complex
communications environment. It analyzes the current statutory
structure, the Postal Reorganization Act of 1970, under which
the Service operates and raises the question whether statutory
change is warranted in helping the Postal Service meet the
expectations of its customers. The report elaborates on
competition in the modern communications industry, and the
effective erosion of the postal monopoly by advances in
communications technology. It also discusses the impediments
the Postal Service faces in its attempts to respond to market
developments and to modifying postal rates and services.
b. Benefits.--The report is a comprehensive primer
analyzing the scope and effectiveness of the U.S. Postal
Service. It provides a reference point in the committee's
deliberations to understand the problems of the Service and
provide remedial legislation where necessary.
V. Prior Activities of Current or Continuing Interest
District of Columbia Subcommittee
The subcommittee will continue areas of interest from the
103d Congress in the following areas:
1. The 104th Congress drew heavily upon the work of
its predecessor in producing two pieces of legislation
which are H.R. 1345 (Public Law 104-8) and H.R. 2108
(Public Law 104-28) (see Section II.A.4., Legislation).
These laws relate respectively to the District's
financial condition and the proposed convention center
and sports arena.
2. In May 1994, the Committee on the District of
Columbia commissioned a GAO study of the District's
finances. That report found that the District was
``facing both unresolved long-term financial issues and
continual short-term financial crises.'' It warned that
the District would run out of cash by fiscal year 1995.
The GAO study found the District's budgetary
expenditures did not reflect historical and projected
trends and found its projections overly optimistic. The
104th Congress found the GAO study particularly helpful
as it attempted to ascertain the extent of the
District's problem.
3. With regard to the convention center and sports
arena, the Committee on the District of Columbia of the
103d Congress commissioned a GAO study that concluded
that the District and the Congress needed better cost
and benefit projection estimates before commencing this
project and urged that a mechanism be found to generate
sufficient revenues to cover known expenses. Action was
taken on both of these fronts and the revenue source
was stipulated in the enacted legislation.
4. The 103d Congress also considered the possible
transfer of ownership of St. Elizabeth's Hospital and
the District's unfunded pension liability. These remain
ongoing concerns. Although the District of Columbia
Subcommittee took no action regarding these issues
during the first session of the 104th Congress, it
intends to revisit them.
Human Resources and Intergovernmental Relations Subcommittee
1. Department of Veterans Affairs handling of medical
claims by Gulf War veterans.
2. Federal and State child support enforcement program
implementation and coordination.
3. HUD takeover of the Chicago Housing Authority and the
department's capacity to manage that and other distressed
housing authorities.
4. Head Start program.
5. Efforts to combat fraud against Medicare and Medicaid in
the home health care industry and in nursing homes.
6. Maximizing the use and efficiency of computers in the
Social Security system.
7. FDA drug advertising, promotion and labeling policies.
8. Operation of the Vaccines for Children program.
9. DoL enforcement authority and activities with regard to
sweat shops, racketeering and organized crime.
10. HUD management of public housing tenant initiatives.
11. FDA standards for assessment of risk, safety and
efficacy of medical devices, including breast and jaw implants.
12. Health Care Finance Administration efforts to control
the growth of Medicare and Medicaid expenditures.
13. AIDS funding.
14. Monitoring of emerging infectious diseases by the
Centers for Disease Control and Prevention.
15. Health Care Finance Administration's proposed
``Medicare Transaction and Information Systems.''
16. HUD compliance with statutory deadline to end the use
of ``welfare hotels'' and other unfit transient facilities.
17. Mission and level of coordination between the NLRB,
National Mediation Board, the Federal Mediation and
Conciliation Service and the Railroad Retirement Board.
18. Social Security Disability Income claims screening for
alcohol and drug abuse.
19. FDA regulation of health claims for dietary
supplements.
20. Organizational structure of the Equal Employment
Opportunities Commission.
21. Review of rural health programs.
22. Status of FDA action on the backlog of food additive
petitions.
23. Department of Veterans Affairs/Department of Defense
Hospital coordination.
24. Preventing teen pregnancy.
25. DoL management of Multiemployer Welfare Arrangements
with regard to health care fraud.
26. Unfunded Mandates Reform Act (Public Law 104-4)
compliance.
27. Organizational structure and effectiveness of the
Office of Workers Compensation Program.
28. Preemption of State governments by Federal health and
safety agencies.
29. Safety of the Nation's blood supply.
30. Department of Education's direct student lending
program.
31. Quality of health care provided by the Indian Health
Service.
32. Medicare reimbursement for durable medical equipment.
33. National Institute of Health grant allocations process.
34. Ensuring medical records privacy.
National Economic Growth, Natural Resources, and Regulatory Affairs
Subcommittee
1. Investigation of the White House Database.
2. Implementation of the Small Business Regulatory
Enforcement Fairness Act of 1996.
a. Congressional review of Federal agency
regulations.
3. Investigation of senior executive travel practices of
agencies under the subcommittee's jurisdiction.
4. Regulatory reform--oversight of agency regulations and
regulatory practices.
5. Oversight of management and clean up of Superfund sites
under the current law.
6. Investigation of Federal agency and Federal grantee
abuse of taxpayer-funded grants for lobbying and/or political
purposes.
National Security, International Affairs, and Criminal Justice
Subcommittee
1. National drug control strategy source country programs
and management.
2. The foreign assistance/drug cooperation certification
process.
3. U.S. support of alternative crop production in Peru and
Bolivia.
4. Coordination and effectiveness of counterdrug
intelligence efforts at all levels of government.
5. Southwest border narcotics interdiction, support and
coordination.
6. Maritime narcotics interdiction in the Caribbean.
7. Review of Russia and Newly Independent States'
involvement in narcotics transshipment.
8. Examination of the role the Department of Defense plays
in counterdrug efforts and how to maximize National Guard
assistance.
9. Examination of individual illegal drugs:
methamphetamine; cocaine; heroin; marijuana; rohypnol;
hallucinogens.
10. Money laundering in support of narco-trafficking.
11. Cooperation and effectiveness of Federal, State and
local drug use prevention efforts.
12. Oversight of the Safe & Drug Free School program.
13. Oversight of Federal and non-federal prison drug
treatment programs.
14. The decennial census: sampling; adding a multiracial
category to census forms; review Census 2000 preparations.
15. The census: continuous measurement costs and benefits.
16. Progress in implementing BRAC closure and
consolidations.
17. Review of DOD non-appropriated funds and resale
activities.
18. DOD information security procedures and maintenance.
19. Review of DOD Fixed Wing Fleet (B-2, B-52, Fighter
Aircraft including Joint Strike Fighter).
20. Waste in DOD inventory management.
21. Examination of readiness levels and adequacy of
training funding levels.
22. Review of Posse Comitatus Act: Implications in domestic
counterdrug efforts.
23. NASA shuttle privatization and safety concerns.
24. Continuing review of NASA downsizing efforts.
25. Setting Realistic Project Priorities for NASA.
26. Abuses in spending by Federal Department of
Corrections.
27. Review of Justice Department weakening of child
pornography prosecution policies.
28. Effectiveness of FBI efforts in expanded
counterterrorism role.
29. Management of U.S. embassies.
30. Management of overseas real estate.
31. Foreign buildings operations and diplomatic security
construction programs.
32. Ballistic missile defense.
33. Review of FEMA's discretionary spending, post-recovery
expenditures, and audit procedures.
34. Review of FEMA's flood insurance program and mapping
activities.
35. U.S. Customs corruption along the southwest border.
36. NAFTA's impact of drug interdiction efforts.
37. Review of ATF's efforts to decrease Federal firearms
licensees.
38. Merger of ATF law enforcement functions into FBI.
39. Federal sentencing guidelines for cocaine and
marijuana.
40. National Archives and Records Administration: spacing
problems due to accelerated archiving.
Postal Service Subcommittee
The subcommittee will continue its investigations and
oversight work in the following areas within its jurisdiction:
1. Operation of the U.S. Postal Service. The
subcommittee will continue to exercise its general
oversight authority through the conduct hearings.
2. Postal Service labor-management relations. The
subcommittee will continue to explore ways to reduce
the incidents of workplace violence.
3. Postal Service and Bureau of the Census
cooperation in implementing plans toward the conduct of
the decennial census in 2000.
4. Workplace safety, health and ergonomic issues.
Additionally, the subcommittee continues to monitor the
Postal Service's operation of its workers' compensation
program.
5. Postal Service rate and reclassification
processes. The Postal Rate Commission issued its
recommended decision in Docket No. MC95-1, Mail
Classification Reform I. The subcommittee will monitor
any actions the Postal Service Board of Governors may
take on this decision and its implementation by the
Postal Service. In addition, the Postal Service is
expected to submit a second reclassification case for
nonprofit mailers and other mailers not included in the
original filing.
6. Fiscal year budget proposals and impact on the
Postal Service, customers and employees. The
administration proposed a substantial Federal budget
obligation of $9.85 billion on the Postal Service in
its balanced budget submission for FY 1996. The
subcommittee will continue to monitor any legislative
action on this and other budget proposals affecting the
Service.
7. Postal Service Reform. The subcommittee will
continue with its review of postal reform proposals in
an effort to develop a comprehensive legislative
package which will address the defects of the current
postal statutory structure.