[Senate Hearing 113-]
[From the U.S. Government Publishing Office]
LEGISLATIVE BRANCH APPROPRIATIONS FOR FISCAL YEAR 2015
----------
TUESDAY, MARCH 11, 2014
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 2:43 p.m., in room SD-192, Dirksen
Senate Office Building, Hon. Jeanne Shaheen (chairwoman)
presiding.
Present: Senators Shaheen, Coons, Hoeven, and Boozman.
GOVERNMENT ACCOUNTABILITY OFFICE
STATEMENT OF GENE L. DODARO, COMPTROLLER GENERAL
opening statement of senator jeanne shaheen
Senator Shaheen. Welcome, everyone. I am sorry to be a
little late. I was in another committee business meeting. So I
apologize and at this time want to call the subcommittee to
order.
I am very pleased that Ranking Member Hoeven is here for
the hearing, and we hope to have some additional members coming
in shortly.
I have a full statement that I will submit for the record.
So I will only read excerpts. As you all know, this is the
subcommittee of the Appropriations Committee on the legislative
branch, and I am pleased today to kick off the fiscal year 2015
appropriations cycle for the subcommittee.
We start this year coming off of a bipartisan and bicameral
budget compromise that provided caps for appropriations
spending for both fiscal year 2014 and fiscal year 2015. The
new budget caps ensure that Federal spending will operate
within agreed-upon fiscal constraints.
While I think we would all agree that the budget wasn't
everything we wanted, it certainly empowers the Appropriations
Committee to do its job, and that is a very good thing. Our job
is to allocate resources for individual Federal agencies and
programs based on the needs of the American people.
Today, we are going to start by reviewing the fiscal year
2015 budget request for both the Government Accountability
Office and the Congressional Budget Office. And I think it is a
fitting way to begin our work on fiscal year 2015 because both
GAO and CBO provide critical support to Congress and
particularly to this committee.
I want to ensure that both agencies have the resources they
need to continue conducting your critical work while also
ensuring that we make the best use of taxpayer dollars in
accomplishing the missions of Congress.
So let me welcome our witnesses today. Mr. Gene Dodaro is
the Comptroller General of the Government Accountability
Office. Welcome. Thank you for being here.
And Dr. Douglas Elmendorf is the Director of the
Congressional Budget Office. Welcome. Thank you for being here.
For fiscal year 2015, GAO and CBO both share a similar goal
of returning to normal business after several years of budget
uncertainty and sequestration. Because both agencies' budgets
are comprised almost entirely of personnel costs, sequestration
has forced both GAO and CBO to let staffing levels dwindle and
defer training.
For fiscal year 2014, this subcommittee provided a modest
amount of additional funding to restore many of the staffing
losses at GAO and CBO. And now for fiscal year 2015, both
agencies are asking to maintain these new restored staffing
levels and to return to investing in training and deferred
needs like IT infrastructure.
GAO requests $556 million for fiscal year 2015 to continue
its mission as the audit, evaluation, and investigative arm of
Congress. The request represents a 2.1 percent increase to the
2014 level, mainly for adding the full-year costs of new 2014
hires to the base funding.
CBO requests $46 million for fiscal year 2015 to continue
its mission to provide Congress with nonpartisan, objective
budget analysis. The request represents an increase of less
than 1 percent, like GAO, mainly for adding the full-year costs
of new 2014 hires to their base funding.
I look forward to discussing with both of you your efforts
to restore the lost expertise that has happened over the last
few years as the result of sequestration so that we can best
serve the needs of Congress. And also I look forward to
discussing any other challenges that you may be facing.
Now I am going to turn over to my ranking member, Senator
Hoeven, for his remarks. Senator Hoeven.
statement of senator john hoeven
Senator Hoeven. Thanks. I would like to thank Chairman
Shaheen for her work on the committee.
And thanks both to you, Mr. Dodaro, and to you, Dr.
Elmendorf, for being here and for the work that you do, GAO and
CBO, two agencies that have tremendous impact on what is done
here in the Congress, both in terms of making sure that we are
doing things accurately and understanding exactly what the
costs of the legislation is and how it impact our citizens in
terms of the work at GAO, but also then in trying to craft
legislation and getting it scored from the perspective of CBO.
Both of you and your agencies have incredible impact on really
the course of public policy and, therefore, on our country.
And so, as we work on your budgets, it is important that we
do everything we can to make sure that you are able to operate
as effectively as possible because I think the impact of your
work is truly profound. And of course, it is a very much
people-driven business, very similar in that respect.
And I would say that also an IT-driven business, but really
people. It is really about having sharp, hard-working people
doing a really good job for the citizens of this great country.
And so, as we make this evaluation in terms of your budget,
I think we want to be as helpful as we can. Obviously, we are
in a resource-constrained environment. But in the case of both
your agencies, the potential to generate an incredible benefit-
cost relationship is there in a big, big way.
And so, I am certainly mindful of that. I know our chairman
is. But really, my hope is, as we work through this budget
process with you, we do the best job we can to make sure that
you have the people that you need to do your work because it
does have such a big, big impact on the public policy that we
pass. And of course, ultimately then, of course, on the
citizens of our country.
So thanks so much for being here.
Senator Shaheen. Thank you very much, Senator Hoeven.
I am going to ask you to begin, Mr. Dodaro, followed by Dr.
Elmendorf. And if I could ask you to limit your spoken remarks
to about 5 minutes, we will take your full statement for the
record, and that way, we will have plenty of time for Q&A.
So, Mr. Dodaro.
summary statement of gene l. dodaro
Mr. Dodaro. Very good. Thank you very much, Chairwoman
Shaheen and Ranking Member Senator Hoeven.
Good afternoon to you. The first thing I would like to do
today is thank you very much for your support for the fiscal
year 2014 levels. It was much appreciated that you showed trust
and confidence in us. We will continue to provide a good return
on that investment.
In fiscal year 2013, as a result of GAO recommendations, we
generated financial benefits of over $51 billion, which is
about a $100 return for every $1 invested in GAO. In addition
to that, there were billions of dollars in financial benefits
that were included in the Consolidated Appropriations Act of
fiscal year 2014, which helped offset the sequester based on
GAO's work. This involved areas such as raising aviation
security fees, filling the Strategic Petroleum Reserve more
efficiently, and increasing the premiums for the Pension
Benefit Guaranty Corporation, which is on our high-risk list.
In addition, we had over 1,300 other benefits as a result
of our work that helped improve the efficiency and
effectiveness of Federal programs, and improved public health
and safety. These benefits also provide help to the Congress to
make informed decisions and provide effective oversight over
the executive branch activities.
As you indicated, Chairwoman Shaheen, in your opening
statement, we are asking for funds for 2015 in order to
maintain staffing. With the support that you have given us for
2014, our goal is to increase our full-time equivalent resource
base from 2,849 to 2,945. So that is an increase of almost 100
FTE equivalents.
This is a challenge since we received the appropriation
about 4 months into the fiscal year. We are trying to revise
our hiring practices to ensure that we can bring people in on
time. I am convinced we can bring in quality people. In order
to get them all onboard and on time, we have got a good plan.
So I am comfortable that we are going to be able to do that,
but it will be a challenge.
Also I am convinced that, ultimately, our full-time
equivalent level should be around 3,250. This year, recognizing
the constrained environment, we have asked to maintain staffing
at the 2,945 level, and I think it is sufficient.
I have had a number of meetings with the chairs and ranking
members of the standing committees of the Congress. We serve
about 95 percent of the standing committees of the Congress and
two-thirds of the subcommittees, and I try to meet with as many
subcommittee leaders as I can.
So based on those meetings and our strategic planning
efforts with the committees throughout the Congress, our Fiscal
Year 2015 request will enable us to meet the highest-priority
needs of the Congress. We will continue to provide a good
return on investment in areas where cost savings can be
achieved in a targeted manner that won't have unintended
consequences and we will also identify opportunities to enhance
revenue.
prepared statement
I appreciate the opportunity to be here today to discuss
our request with you. Thank you again for your support, and I
will be happy to answer questions at the appropriate time.
[The statement follows:]
Prepared Statement of Gene L. Dodaro
gao highlights
Highlights of GAO-14-429T, a testimony before the Subcommittee on
Legislative Branch, Committee on Appropriations, U.S. Senate.
background
GAO's mission is to support Congress in meeting its constitutional
responsibilities and to help improve the performance and accountability
of the Federal Government for the benefit of the American people. GAO
provides nonpartisan, objective, and reliable information to Congress,
Federal agencies, and to the public and recommends improvements, when
appropriate, across the full breadth and scope of the Federal
Government's responsibilities.
GAO's work supports a broad range of interests throughout Congress.
In fiscal year 2013, GAO received requests for our work from 95 percent
of the standing committees of Congress and almost two-thirds of their
subcommittees. Additionally, senior GAO officials testified at 114
hearings on national and international issues, before 60 committees and
subcommittees that touch on virtually all major Federal agencies.
GAO remains one of the best investments in the Federal Government,
and GAO's dedicated staff continues to deliver high quality results. In
fiscal year 2013 alone, GAO's work yielded $51.5 billion in financial
benefits--a return of about $100 for every dollar invested in GAO.
Since fiscal year 2003, GAO's work has resulted in:
--over \1/2\ trillion dollars in financial benefits; and
--about 14,500 program and operational benefits that helped to change
laws, improve public services, and promote sound management
throughout government.
GAO is requesting a budget of $525.1 million to preserve its staff
capacity and continue critical information technology and building
infrastructure investments.
View GAO-14-429T. For more information, contact Gene L. Dodaro at
(202) 512-5500 or [email protected].
fiscal year 2015 budget request
GAO's fiscal year (FY) 2015 budget request of $525.1 million seeks
an increase of 3.9 percent to maintain staff capacity as well as
continue necessary maintenance and improvements to our information
technology (IT) and building infrastructure. Additionally, receipts and
reimbursements, primarily from program and financial audits, and rental
income, totaling $30.9 million are expected in fiscal year 2015.
GAO recently issued our draft Strategic Plan for Serving Congress
in fiscal years 2014-2019. The plan outlines our proposed goals and
strategies for supporting Congress's top priority. I also have met with
the chairs and ranking members of many of the standing committees and
their subcommittees to hear firsthand feedback on our performance, as
well as prioritize requests for our services to maximize the return on
investment.
In order to address congressional priorities, and fulfill GAO's
mission, a talented, diverse, high-performing, knowledgeable workforce
is essential. Workforce and succession planning remain a priority for
GAO. A significant proportion of our employees are currently retirement
eligible, including 34 percent of our executive leadership and 21
percent of our supervisory analysts.
In 2014, through a targeted recruiting strategy to address critical
skills gaps, GAO plans to boost our employment level for the first time
in 3 years to 2,945 full-time equivalents (FTE). The requested fiscal
year 2015 funding level will preserve strides planned for fiscal year
2014 to increase our staff capacity. In conjunction with the ongoing
recruiting efforts and planning, we will revive our intern program and
hire and train an increased number of entry level employees. This will
reverse the downward staffing trajectory, develop a talented cadre of
analyst and leaders for the future, achieve progress in reaching an
optimal FTE level of 3,250 FTE, and assist GAO in meeting the high
priority needs of Congress.
We also take great pride in reporting that we continue to be
recognized as an employer of choice, and have been consistently ranked
near the top on ``best places to work'' lists.
Improvements to our aging IT infrastructure will allow GAO to
further streamline business operations, increase staff efficiency and
productivity, as well as improve access to information. Planned
investments in IT will address deferred upgrades and enhance our
technology infrastructure to support an array of engagement management,
human capital, and financial management systems.
We also plan to continue upgrading aging building systems to ensure
more efficient operations and security. Areas of focus include,
increasing the energy efficiency and reliability of the heating,
ventilation, and air conditioning system; enhancing continuity planning
and emergency preparedness capabilities; and addressing bomb blast
impact mitigation efforts.
______
Chairwoman Shaheen, Ranking Member Hoeven, and Members of the
Subcommittee:
On behalf of the U.S. Government Accountability Office (GAO), I
appreciate the opportunity to discuss our fiscal year (FY) 2015 budget
request. I also want to thank the subcommittee for its continued
support of GAO and the confidence you have shown in our efforts to help
support the Congress.
With Congress's support, our fiscal year 2014 funding will allow
GAO to increase its staff capacity to 2,945 full-time equivalents
(FTE). This level reverses a downward FTE trajectory and allows us to
make progress towards our optimal FTE level of 3,250.
GAO's fiscal year 2015 budget request of $525.1 million represents
an increase of 3.9 percent that will preserve the 2,945 FTE level
planned for fiscal year 2014, as well as allow for needed maintenance
and improvements to our information technology (IT) and building
infrastructures. This will ensure we have the staff capacity to support
Congress in carrying out its responsibilities and oversight.
assisting congress and the nation
GAO remains one of the best investments in the Federal Government,
and our dedicated staff continues to deliver high quality results. In
fiscal year 2013 alone, GAO provided services that spanned the broad
range of Federal programs and activities. We received requests for our
work from 95 percent of the standing committees of Congress and almost
two-thirds of their subcommittees. We reviewed a wide range of
Government programs and operations including those that are at high
risk for fraud, waste, abuse, and mismanagement. GAO also reviewed
agencies' budgets as requested to help support congressional
decisionmaking.
Last year, our work yielded significant results across the
Government, including $51.5 billion in financial benefits--a return of
about $100 for every dollar invested in GAO. Also, in fiscal year 2013,
we issued 709 reports and made 1,430 new recommendations. The findings
of our work were often cited in House and Senate deliberations and
committee reports to support congressional action, including improving
Federal programs on our High Risk list; addressing overlap,
duplication, and fragmentation; and assessing defense, border security
and immigration issues. Our findings also supported the Bipartisan
Budget Act of 2013, in areas such as aviation security fees,
unemployment insurance, improper payments to inmates, the strategic
petroleum reserve, and the contractor compensation cap.
Senior GAO officials also provided testimony 114 times before 60
committees or subcommittees on a wide range of issues that touched
virtually all major Federal agencies. A list of selected topics
addressed is included in Appendix I.
Financial Benefits
GAO's findings and recommendations produce measurable financial
benefits through congressional action or agency implementation.
Examples of fiscal year 2013 financial benefits resulting from
congressional or Federal agency implementation of GAO recommendations
include:
--$8.7 billion from reducing procurement quantities of the Joint
Strike Fighter Program: DOD decreased near-term procurement
quantities in three successive budget submissions to lessen
concurrency and the associated cost risks in light of our
numerous recommendations citing the F-35 Joint Strike Fighter
program's very aggressive and risky acquisition strategy,
including substantial overlap among development, testing, and
production activities.
--$2.6 billion from revising the approach for the Navy's Next
Generation Enterprise Network (NGEN) Acquisition: Our
recommendations led Navy to revise its NGEN acquisition
strategy--which was riskier and potentially costlier than other
alternatives identified due to a higher number of contractual
relationships--thus significantly reducing program costs
between 2013 and 2017.
--$2.5 billion from eliminating seller-funded payment assistance for
FHA-insured mortgages: The Department of Housing and Urban
Development and Congress took steps to prohibit seller-funded
down payment assistance, citing our findings that losses
associated with those loans had substantially higher
delinquency and insurance claim rates than similar loans
without such assistance, and were contributing to the Federal
Housing Administration's deteriorating financial performance.
--$2.3 billion from consolidating U.S. Forces stationed in Europe:
DOD removed two brigade combat teams and support units from
Europe, allowing it to further consolidate and close
facilities, based in part on our work showing significant costs
related to maintaining permanent Army forces in Europe and our
recommendations that DOD identify alternatives that might lead
to savings.
--$1.3 billion through improved tax compliance: Our recommendations
on the use of information reporting to reduce the tax gap
contributed to legislation requiring banks and others to report
income that merchants receive through credit cards, third-party
networks, and other means to help IRS verify information
reported on merchants' income tax returns. The estimated
increased revenue through improved tax compliance is expected
over the provision's first 3 fiscal years.
GAO has generated recommendations that save resources, increase
Government revenue, improve the accountability, operations, and
services of Government agencies, increase the effectiveness of Federal
spending as well as provide other benefits. Since fiscal year 2003,
GAO's work has resulted in substantial financial and other benefits for
the American people, including:
--over \1/2\ trillion dollars in financial benefits;
--about 14,500 program and operational benefits that helped to change
laws, improve public services, and promote sound management
throughout Government; and
--about 12,000 reports, testimony, and other GAO products that
included over 22,000 recommendations.
Program and Operational Benefits
In fiscal year 2013, GAO also contributed to 1,314 program and
operational benefits that helped to change laws, improve public
services, and promote sound management throughout Government. Thirty
six percent of these benefits are related to business process and
management, 31 percent are related to public safety and security, 17
percent are related to program efficiency and effectiveness, 8 percent
are related to acquisition and contract management, 5 percent are
related to public insurance and benefits, and 3 percent are related to
tax law administration. Examples include:
--enhancing coordination between DOD and the Social Security
Administration (SSA) on the more timely delivery of military
medical records through electronic transfer;
--improving Veterans Affairs (VA) oversight of its medical equipment
and supply purchasing;
--increasing collaboration between the Army and Veterans Affairs
through a joint working group to improve management of military
cemeteries and help eliminate burial errors and other past
problems;
--updating Federal Emergency Management Administration (FEMA)
National Flood Insurance Program contract monitoring policies
to reduce the likelihood that contractor performance problems
would go unnoticed; and
--establishing National Oceanic and Atmospheric Administration
policies outlining the processes, roles and responsibilities
for transitioning tsunami research into operations at tsunami
warning centers.
Overlap, Duplication, and Fragmentation
In fiscal year 2013 GAO issued its third annual report on overlap,
duplication, and fragmentation. In it, we identified 31 new areas where
agencies may be able to achieve greater efficiency or effectiveness.
Within these 31 areas, we identified 81 actions that the executive
branch and Congress could take to reduce fragmentation, overlap, and
duplication, as well as other cost savings and revenue enhancement
opportunities. This work identifies opportunities for the Federal
Government to save billions of dollars.
We also maintain a scorecard and action tracker on our external
website where Congress, Federal agencies, and the public can monitor
progress in addressing our findings. Federal agencies and Congress have
made some progress in addressing the 131 areas we identified and taking
the 300 actions that we recommended in our 2011 and 2012 reports.
High Risk Programs
In February 2013 GAO issued the biennial update of our High Risk
report, which focuses attention on Government operations that are at
high risk of fraud, waste, abuse, and mismanagement, or need
transformation to address economy, efficiency, or effectiveness
challenges. This report, which will be updated in 2015, offers
solutions to 30 identified high-risk problems and the potential to save
billions of dollars, improve service to the public, and strengthen the
performance and accountability of the U.S. Government. Our 2013 High
Risk work produced 164 reports, 35 testimonies, $17 billion in
financial benefits, and 411 program and operational benefits.
The major cross-cutting High Risk program areas identified as of
September 2013 range from transforming DOD program management and
managing Federal contracting more effectively, to assessing the
efficiency and effectiveness of tax law administration and modernizing
and safeguarding insurance and benefit programs.
The complete list of high-risk areas is shown on Appendix II.
Details on each high risk area can be found at http://www.gao.gov/
highrisk/overview.
Electronic Protest Docketing System
GAO's fiscal year 2014 budget request sought statutory authority
for a new electronic docketing system to be funded by a filing fee
collected from companies filing bid protests. The sole purpose of the
filing fee would be to offset the cost of developing, implementing, and
maintaining the system. We appreciate that the Consolidated
Appropriations Act, 2014, directed GAO to develop an electronic filing
and document dissemination system under which persons may
electronically file bid protests and documents may be electronically
disseminated to the parties. GAO is making progress in establishing the
electronic protest docketing system. We have convened an
interdisciplinary team of experts within GAO to examine matters such as
technical requirements, the potential for commercially available
systems, fee structure, cost-benefit analysis, and outreach to
stakeholders, including representatives from the small business
community. GAO will be reporting regularly to the House and Senate
Committees on Appropriations on its progress in implementing the
system.
Watchdog Website
In September 2013, GAO launched the Watchdog website, which
provides information exclusively to Members and congressional staff
through the House and Senate intranets. The new site is designed to
provide a more interactive interface for Members and their staff to
request our assistance and to access our ongoing work. In addition,
Watchdog can help users quickly find GAO's issued reports and legal
decisions as well as key contact information.
strategic plan for serving congress
In December 2013, Members and their staff were invited to comment
on our draft Strategic Plan for Serving Congress in fiscal years 2014-
2019. The draft plan was issued in February 2014 and outlines our
proposed goals and strategies for supporting Congress's top priorities.
Our strategic plan framework (Appendix III) summarizes the global
trends, as well as the strategic goals and objectives that guide our
work. GAO's strategic goals and objectives are shown in Figure 1.
FIGURE 1: GAO STRATEGIC GOALS AND OBJECTIVES--FISCAL YEAR 2014
THROUGHPFISCAL YEAR 2019
------------------------------------------------------------------------
Goals Objectives
------------------------------------------------------------------------
Provide Timely, Quality Service to _Healthcare needs
Congress and the Federal Government _Lifelong learning
to . . . _Benefits and protections
Address Current and Emerging Challenges for workers, families and
to the Well-Being and Financial Security children
of the American People related to . . . _Financial security
_Effective system of justice
_Viable communities
_Stable financial system
consumer protection
_Stewardship of natural
resources the environment
_Infrastructure
------------------------------------------------------------------------
Respond to Changing Security Threats and _Homeland security
the Challenges of Global Interdependence _Military capabilities
involving . . . readiness
_U.S. foreign policy
interests
_Global market forces
------------------------------------------------------------------------
Help Transform the Federal Government to _The Government's fiscal
Address National Challenges by assessing. position and outlining
options for closing the
fiscal gap
_Fraud, waste, and abuse
_Major management challenges
and program risks
------------------------------------------------------------------------
Maximize the Value of GAO by Enabling _Efficiency, effectiveness,
Quality, Timely Service to Congress and and quality
Being a Leading Practices Federal Agency _Diverse and inclusive work
in the areas of . . . environment
_Professional networks
collaboration
_Institutional stewardship
resource management
------------------------------------------------------------------------
Source: GAO.
The draft strategic plan also summarizes the trends shaping the
United States and its place in the world. The plan reflects the areas
of work we plan to undertake, including science and technology, weapons
systems, the environment, and energy. We also will increase
collaboration with other national audit offices to get a better handle
on global issues that directly affect the United States, including
international financial markets; food safety; and medical and
pharmaceutical products. These trends include:
--U.S. National Security Interests;
--Fiscal Sustainability and Challenges;
--Global Interdependence and Multinational Cooperation;
--Science and Technology;
--Communication Networks and Information Technology;
--Shifting Roles in Governance and Government; and
--Demographic and Societal Changes.
In the upcoming decade, for example, the U.S. will face demographic
changes that will have significant fiscal impacts both on the Federal
budget and the economy. The number of baby boomers turning 65 is
projected to grow from an average of about 7,600 per day in 2011, to
more than 11,600 per day in 2025, driving spending for major health and
retirement programs.
To ensure the updated strategic plan reflects the needs of Congress
and the nation, we have solicited comments from stakeholders in
addition to Congress, including GAO advisory entities, the
Congressional Budget Office, and the Congressional Research Service.
managing workload by focusing resources on congressional priorities
To manage our congressional workload, we continue to take steps to
ensure our work supports congressional legislative and oversight
priorities and focuses on areas where there is the greatest potential
for results such as cost savings and improved Government performance.
Ways that we actively work with congressional committees in advance of
new statutory mandates \1\ include (1) identifying mandates real time
as bills are introduced; (2) participating in ongoing discussions with
congressional staff; and (3) collaborating to ensure that the work is
properly scoped and is consistent with the committee's highest
priorities.
---------------------------------------------------------------------------
\1\ Congressional mandates include requirements directed by
statutes, congressional resolutions, conference reports, and committee
reports.
---------------------------------------------------------------------------
In fiscal year 2013, 35 percent of our audit resources were devoted
to mandates and 61 percent to congressional requests. I have met with
the chairs and ranking members of many of the standing committees and
their subcommittees to hear firsthand feedback on our performance, as
well as highlight the need to prioritize requests for our services to
maximize the return on investment.
Repeal or Revision of Mandates
GAO also appreciates Congress's assistance in repealing or revising
statutory mandates that are either outdated or need to be revised. This
helps streamline GAO's workload and ensure we are better able to meet
current congressional priorities. During the second session of the
112th Congress, based on our input, 16 of GAO's mandated reporting
requirements were revised or repealed because over time they had lost
relevance or usefulness. In addition, GAO worked with responsible
committees to have 6 more mandates repealed or revised as part of the
2014 National Defense Authorization Act.
GAO has identified 11 additional mandates for revision or repeal
and is currently working with the appropriate committees to implement
these changes. For example, our request includes language to repeal a
requirement for GAO to conduct bimonthly reviews of State and local use
of Recovery Act funds. As the vast majority of Recovery Act funds have
been spent, GAO's reviews in this area are providing diminishing
returns for Congress.
Promoting Good Governance and Accountability
GAO is seeking authority to establish a Center for Audit Excellence
to improve domestic and international auditing capabilities. The Center
also will provide an important tool for promoting good governance,
transparency and accountability. There is a worldwide demand for an
organization with GAO's expertise and stature to assume a greater
leadership role in developing institutional capacity in other audit
offices and provide training and technical assistance throughout the
domestic and international auditing communities. The proposed Center
would operate on a fee-basis, generating revenue to sustain its ongoing
operation, including the cost of personnel and instructors. The Center
would be primarily staffed with retired GAO and other auditors, and
thus, would not detract from or impact the service GAO provides to
Congress.
In a similar vein, to provide staff from other Federal agencies
with developmental experiences, GAO is requesting authority to accept
staff from other agencies on a non-reimbursable basis, who can learn
about GAO's work. This would allow people to develop expertise and gain
experience that will enhance their work at their own agencies.
gao recognized as one of the ``best places to work''
We take great pride in reporting that we continue to be recognized
as an employer of choice, and have been consistently ranked near the
top on ``best places to work'' lists. In 2013, we ranked third overall
among mid-sized Federal agencies on the Partnership for Public
Service's ``Best Places to Work'' list, and again ranked number one in
our support of diversity. Also, in November 2013, Washingtonian
Magazine named us as one of the ``50 Great Places to Work'' in the
Washington, D.C. region among public or private entities.
In addition, earlier this year, O.C. Tanner, a company that
develops employee recognition programs, cited us in its article, ``Top
10 Coolest Companies to Work for in Washington, D.C.'' Our management
continues to work with our union (IFPTE, Local 1921), the Employee
Advisory Council, and the Diversity Advisory Council to make GAO a
preferred place to work.
fiscal year 2015 requirements
GAO's fiscal year 2015 budget request will preserve staff capacity
and continue critical infrastructure investments. Offsetting receipts
and reimbursements primarily from program and financial audits and
rental income totaling $30.9 million are expected in fiscal year 2015.
The requested resources provide the funds necessary to ensure that GAO
can meet the highest priority needs of Congress and produce results to
help the Federal Government deal effectively with its serious fiscal
and other challenges. A summary of GAO's appropriations for our fiscal
year 2010 baseline and fiscal years 2013 to 2015 is shown in Figure 2.
FIGURE 2: FISCAL YEAR 2010 BASELINE AND FISCAL YEAR 2013 TO FISCAL YEAR 2015 SUMMARY OF RESOURCES
[Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
Fiscal Year 2010 Fiscal Year 2013 Fiscal Year 2014 Fiscal Year 2015
Actual Actual Estimated Request
Funding Source ---------------------------------------------------------------------------
FTE Amount FTE Amount FTE Amount FTE Amount
----------------------------------------------------------------------------------------------------------------
Salaries and Expenses Appropriation. ...... $556,325 ...... $479,407 ...... $505,383 ...... $525,116
Non-legislative-branchPappropriation ...... 21,804 ...... 345 ...... 70 ...... _
Reimbursements...................... ...... 10,214 ...... 13,460 ...... 10,980 ...... 6,700
Offsetting receipts................. ...... 10,892 ...... 25,922 ...... 26,950 ...... 23,750
Bid protest user fees............... ...... _ ...... _ ...... _ ...... 450
---------------------------------------------------------------------------
Total budget authority........ 3,347 $599,235 2,849 $519,134 2,945 $543,383 2,945 $556,016
----------------------------------------------------------------------------------------------------------------
Source: GAO.
Staff Capacity
The requested funding supports a staffing level of 2,945 FTEs, and
provides funding for mandatory pay costs, staff recognition and
benefits programs, and activities to support congressional engagements
and operations. These funds are essential to ensure GAO can address
succession planning challenges, provide staff meaningful benefits and
appropriate resources, and compete with other agencies, nonprofit
institutions, and private firms who offer these benefits to the talent
GAO seeks.
In order to address the priorities of Congress, GAO needs a
talented, diverse, high-performing, knowledgeable workforce. However, a
significant proportion of our employees are currently retirement
eligible, including 34 percent of our executive leadership and 21
percent of our supervisory analysts. Therefore, workforce and
succession planning remain a priority for GAO.
Moreover, for the first time in several years our budget allows us
to replenish the much needed pipeline of entry level and experienced
analysts to meet future workload challenges. In fiscal year 2014,
through a targeted recruiting GAO plans to hire entry-level staff and
student interns, boosting our staff capacity for the first time in 3
years to 2,945 FTE. This will allow GAO to reverse the downward trend
in our FTEs and achieve some progress in reaching our optimal staffing
level of 3,250 FTE, and develop a talent pool for the future.
Our fiscal year 2015 budget request seeks funding to maintain the
2,945 FTE level. In fiscal year 2015, pending final OPM guidance, we
also plan to implement a phased retirement program to incentivize
potential retirement eligible staff to remain with GAO and assist in
mentoring and sharing knowledge with staff.
Improving Internal Operations
Efforts to address challenges related to GAO's internal operations
primarily relate to our engagement efficiency, information technology
and building infrastructure needs.
--Engagement Efficiency
To better serve Congress and the public, we expanded our
presence in digital and social media, releasing GAO iPhone and
Android applications, and launching streaming video web chats
with the public. During the past year, 7,600 additional people
began receiving our reports and legal decisions through our
Twitter feed. More than 26,600 people now get our reports,
testimonies, and legal decisions daily on Twitter.
GAO remains focused on improving the efficiency of our
engagements through streamlining or standardizing processes
without sacrificing quality. In fiscal years 2012 and 2013, we
continued our improvements in this area. For example, with
active involvement from GAO's managing directors, we identified
changes to key steps and decision points in our engagement
process and now have a revised engagement process that we began
implementing on a pilot basis in January 2014. We also piloted
and revised a tool to help teams better estimate expected staff
days required for engagements. In fiscal year 2014, we plan to
implement a series of process changes that will transform the
management of engagements, the use of resources, and message
communication.
--More Efficient Content Creation, Review, and Publication
GAO will strive to dramatically improve the efficiency of our
content creation and management processes by standardizing,
automating, and streamlining the currently cumbersome and
manually intensive processes for creating, fact-checking, and
publishing GAO products. In fiscal year 2014, we plan to
request proposals to acquire a technical solution and phase
implementation in fiscal years 2014 and 2015. The proposed
system will automate document routing and approvals,
incorporate management and quality assurance steps, and
generate required documentation. To ensure our message is
available to both our clients and the public, the proposed
system capability will also enable GAO to routinely publish
content on GAO.gov, GAO's mobile site, and various social media
platforms.
--Greater Transparency of Engagement Information
To promote transparency, increase management capabilities,
and reduce duplicate data entry and costs, in fiscal year 2014
GAO will begin implementing a modernized, one-stop engagement
management system. This system automates key business rules and
decision points, improves resource management, eliminates
rework, and provides increased visibility for all participants.
In fiscal year 2015, we will retire legacy databases as the new
system becomes fully operational.
--Infrastructure Improvements
The fiscal year 2015 budget also provides funds to maintain
our information technology (IT) systems, which are a critical
element in our goal to maintain efficient and effective
business operations and to provide the data needed to inform
timely management decisions. Improvements to our aging IT
infrastructure will allow GAO to further streamline business
operations, reduce redundant efforts, increase staff efficiency
and productivity, improve access to information, and enhance
our technology infrastructure to support an array of engagement
management, human capital, and financial management systems.
GAO also plans to continue upgrading aging building systems
to ensure more efficient operations and security. To support
these requirements our fiscal year 2015 budget request includes
resources to:
-- begin upgrading the heating, ventilation, and air conditioning
system to increase energy efficiency and reliability;
-- repair items identified in our long-range asset management
plan, such as the water heater, chiller plant, and cooling
fans;
-- enhance continuity planning and emergency preparedness
capabilities; and
-- address bomb blast impact mitigation efforts.
concluding remarks
In conclusion, GAO values the opportunity to provide Congress and
the Nation with timely, insightful analysis. The fiscal year 2015
budget requests the resources to ensure that we can continue to address
the highest priorities of Congress.
Our request seeks an increase to maintain our staffing level and
provide employees with the appropriate resources and support needed to
effectively serve Congress. The funding level will also allow us to
continue efforts to promote operational efficiency, and begin
addressing long-deferred investments and maintenance.
This concludes my prepared statement. I appreciate, as always, your
continued support and careful consideration of our budget. I look
forward to discussing our fiscal year 2015 request with you.
Appendix I: Selected Testimony Topics for Fiscal Year 2013, by
Strategic Goal
Goal 1: Address Current and Emerging Challenges to the Well-being and
Financial Security of the American People
Processing Veterans' Disability Benefits
Science, Technology, Engineering, and Mathematics Education
Social Security Administration Management
School Lunch Nutrition Standards
Medicare and Medicaid High Risk Update
Export-Import Bank Management and Reporting
Veteran-owned Small Businesses
Patient Protection and Affordable Care Act
Water Infrastructure
Medicare Highest-Expenditure Part B Drugs
Community Bank Failures: Causes and Consequences
Transportation Issues and Management
Federal Real Property Management
U.S. Postal Service Financial Viability
Private Pensions Multiemployer Plans and PBGC
Chemical Regulation
California High Speed Passenger Rail
Federal Courthouse Construction
Goal 2: Respond to Changing Security Threats and the Challenges of
Global Interdependence
Intellectual Property: Effect of Counterfeited and Pirated Goods on
U.S. Economy
State Department: Diplomatic Security Challenges
DOD's POW/MIA Mission and Challenges
Personnel Security Clearances
DHS at 10 Years: Progress and Remaining Work
TSA Oversight of Alleged Misconduct
DHS's Overstay Enforcement Efforts
DOD Security Cooperation and Capacity Building
Trade Adjustment Assistance for Manufacturers and Service Firms
Naval Acquisition Risks: Littoral Combat Ship
Strategic Sourcing Potential Savings
DOD Acquisition Risks: F-35 Joint Strike Fighter
Modernizing the Nuclear Security Enterprise
Border Security Goals, Measures, and Resources
Goal 3: Help Transform the Federal Government to Address National
Challenges
Need for Federal IT Efficiency Implementation Initiatives
Need to Improve National Cybersecurity Strategy
Weaknesses in OPM IT Management and Incremental Improvements
Financial Performance and Management Challenges
GAO's 2013 High-Risk Series Update
VA and DOD Sharing of Electronic Health Records
Improved Mitigation Strategies Needed for Environmental Satellite
Coverage Gaps
Unknown Extent of Refund Fraud Using Stolen Identities
Progress Made by DHS in Addressing High-Risk Issues
Need to Eliminate Duplicative IT Investments
Source: GAO.
Additional information on selected testimonies can be found in Part
II of the 2013 Performance and Accountability Report at: http://
www.gao.gov/products/GAO-14-2SP.
Appendix II: GAO's 2013 High Risk List
Strengthening the Foundation for Efficiency and Effectiveness
Limiting the Federal Government's Fiscal Exposure by Better Managing
Climate Change Risks (new)
Management of Federal Oil and Gas Resources
Modernizing the U.S. Financial Regulatory System and Federal Role in
Housing Finance
Restructuring the U.S. Postal Service to Achieve Sustainable Financial
Viability
Funding the Nation's Surface Transportation System
Strategic Human Capital Management
Managing Federal Real Property
Transforming DOD Program Management
DOD Approach to Business Transformation
DOD Business Systems Modernization
DOD Support Infrastructure Management
DOD Financial Management
DOD Supply Chain Management
DOD Weapon Systems Acquisition
Ensuring Public Safety and Security
Mitigating Gaps in Weather Satellite Data (new)
Strengthening Department of Homeland Security Management Functions
Establishing Effective Mechanisms for Sharing and Managing Terrorism-
Related Information to Protect the Homeland
Protecting the Federal Government's Information Systems and the
Nation's Cyber Critical Infrastructures
Ensuring the Effective Protection of Technologies Critical to U.S.
National Security Interests
Revamping Federal Oversight of Food Safety
Protecting Public Health through Enhanced Oversight of Medical Products
Transforming EPA's Processes for Assessing and Controlling Toxic
Chemicals
Managing Federal Contracting More Effectively
DOD Contract Management
DOE's Contract Management for the National Nuclear Security
Administration & Office of Environmental Management
NASA Acquisition Management
Assessing the Efficiency and Effectiveness of Tax Law Administration
Enforcement of Tax Laws
Modernizing and Safeguarding Insurance and Benefit Programs
Improving and Modernizing Federal Disability Programs
Pension Benefit Guaranty Corporation Insurance Programs
Medicare Program
Medicaid Program
National Flood Insurance Program
Source: GAO.
Appendix III: GAO's Strategic Plan Framework
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Shaheen. Thank you very much.
Dr. Elmendorf.
CONGRESSIONAL BUDGET OFFICE
STATEMENT OF DOUGLAS W. ELMENDORF, PH.D., DIRECTOR
Dr. Elmendorf. Thank you, Madam Chair and Ranking Member
Hoeven.
I appreciate the opportunity to present CBO's budget
request for fiscal year 2015.
As you mentioned, Madam Chair, we are asking for
appropriations of $46.1 million, which would be an increase of
roughly $400,000, or less than 1 percent, from the $45.7
million provided to CBO for 2014.
The requested funding would enable us to achieve and
maintain staffing of 235 full-time equivalent positions. Two
hundred thirty-five FTEs is the level intended under the 2014
appropriation. Although we will be unable to fully attain it
this year, that 235 FTEs is also in line with what was funded
for CBO between 2004 and 2008.
For 2009 and 2010, the Congress approved significant
increases in our budget to support a step-up in staffing to
more than 250 FTEs. That step-up was intended primarily to
increase the agency's ability to analyze potential changes in
Federal healthcare policy while maintaining our capacity to
provide cost estimates and reports on other topics.
However, because of the budget constraints of recent years,
CBO's staffing has dropped to about 220 FTEs currently. With
the funding provided for 2014, we have sharply increased our
recruiting efforts in order to return our staffing to the
traditional level of 235 FTEs as quickly as possible so that we
can better serve the Congress.
As an economist, I pay a lot of attention to supply and
demand. It is not unusual for the demand for CBO's estimates
and analyses to exceed the quantity we can supply. But the
mismatch has been more acute than usual in the past several
years.
The enactment of the major healthcare legislation of 2010
has been followed by a high level of congressional interest in
our analysis of that legislation and also in proposals for
changes in Federal healthcare policy. In addition, the slow
recovery from the economic downturn has spurred interest in our
economic forecasts and in policies that might boost economic
growth and opportunity in the near term and also in the longer
term.
Moreover, the surge in Federal debt and the projected high-
level deficits in the long run have led to efforts to enact
fundamental changes in spending and tax policies. All of those
developments have strained CBO's resources, and we consult
regularly with the key committees and the leadership offices to
ensure that our resources are focused on the work that is of
the highest priority to Congress.
We are very grateful for the Congress' decision to restore
our staffing to its previous level so that we can say yes to
more requests and can respond more quickly.
As you know, our work encompasses the wide array of
subjects that Congress deals with and takes the form of many
different kinds of products. We produce regular projections of
the budget and economy under current law. We produce longer-
term projections. We do analyses of the President's budget each
year, and we present you with a wide range of options for
reducing budget deficits.
We produce about 500 formal written cost estimates each
year and thousands of preliminary informal estimates as
committees try to understand the budgetary impact of proposals
before they formally consider legislation. We produce about 130
scorekeeping tabulations each year for the appropriations
committees, including account-level detail for individual
appropriations acts and various summary tables and running
totals as the year goes on.
And we produce dozens of analytical reports and other
publications each year generally required by law or prepared in
response to requests from the chairman or ranking member of key
committees on a broad range of topics, including healthcare,
policies for increasing economic growth and opportunity,
changes in benefit programs, defense policy, energy policy,
infrastructure, and the Government's role in the financial
system.
Closing, I want to thank you, on behalf of myself and my
colleagues, for the support you provided to CBO for many years,
and we look forward to continuing to provide Congress with
careful, objective, nonpartisan analysis as you grapple with
the many challenging issues facing the Nation.
PREPARED STATEMENT
I am happy to answer any questions you have about our
budget or about the work that we are doing.
Thank you.
[The statement follows:]
Prepared Statement of Dr. Douglas W. Elmendorf
Madame Chair, Ranking Member Hoeven, and Members of the
Subcommittee, thank you for the opportunity to present the
Congressional Budget Office's (CBO's) budget request.
CBO requests appropriations of $46.1 million for fiscal year 2015.
That amount represents an increase of roughly $400,000, or less than 1
percent, from the $45.7 million provided to CBO for 2014.
The requested funding would enable CBO to achieve and maintain
staffing of 235 full-time-equivalent positions (FTEs), which is the
level contemplated in the 2014 appropriation and in line with the FTEs
funded between 2004 and 2008. After the budget constraints of recent
years, CBO's staffing dropped from a peak of 250 FTEs in fiscal year
2010 to about 220 FTEs now, and the agency is currently engaged in an
intensive effort to use the increased funding to bolster its staff so
that it can better serve the Congress. Of the requested funding for
2015, 91 percent would support pay and benefits, 6 percent would be for
information technology (IT), and 3 percent would go toward purchases of
data, training, office supplies, and other items.
cbo's funding history and its effects on staffing and output
Because such a large share of CBO's budget represents compensation,
the contours of the agency's budget and staffing levels have been and
will continue to be closely linked.
Between fiscal years 2002 and 2008, the number of authorized FTEs
at CBO held between 232 and 235 (see Figure 1). During that period,
CBO's budget generally rose slowly, as Federal employees received
salary increases and the cost of Federal benefits increased. For fiscal
years 2009 and 2010, the Congress approved larger increases in CBO's
budget to support a step-up in staffing. That step-up was intended
primarily to increase the agency's ability to analyze potential changes
in Federal healthcare policy while maintaining its capacity to provide
cost estimates and reports on other topics. CBO had sufficient funding
for 254 FTEs in 2010.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The increase in staffing enabled CBO to engage in analyses of
particularly complex issues and to provide substantially more estimates
and other analyses to the Congress. Among the accomplishments that were
facilitated by the larger staff were a significant expansion of
healthcare analysis, substantial enhancement of financial analysis,
considerable improvement in modeling the economic effects of Federal
tax and spending policies, the issuance of several reports with options
for changing Federal benefit programs, significant gains in the
transparency of CBO's analysis, and continued high quality of the
agency's cost estimates and analyses of numerous other topics.
However, constraints on CBO's funding (and on discretionary
appropriations as a whole) caused the agency's staffing to shrink in
fiscal years 2011 through 2013. The agency's appropriation for 2013 was
well below the amounts provided to the agency during the preceding
years (see Figure 2). Those cuts, combined with small increases in
average pay and rising costs of benefits and other items during those
years, required a drop in the number of FTEs to only 225 in 2013, the
lowest level in more than a dozen years. In addition, the agency had to
defer critical purchases of IT equipment and services and other items.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
CBO's appropriation for 2014 is significantly larger than its
appropriation for 2013. Accordingly, the agency has sharply increased
its recruiting efforts in order to return its staffing to the
traditional level of 235 FTEs as quickly as possible, and it is
catching up on deferred purchases.
cbo's funding request and its consequences for staffing and output
In fiscal year 2015, CBO will continue its mission of providing
objective, insightful, timely, and clearly presented budgetary and
economic information to the Congress. Funding of $46.1 million to
support 235 FTEs would allow CBO to provide the following estimates and
other analyses to the Congress:
--Reports presenting the outlook for the budget and the economy,
analyses of the President's budget, long-term budget
projections, and options for reducing budget deficits;
--More than 500 formal cost estimates, most of which will include not
only estimates of Federal costs but also assessments of the
cost of mandates imposed on State, local, and tribal
governments or the private sector;
--Thousands of preliminary, informal cost estimates, the demand for
which is very high as committees seek to have a clearer picture
of the budgetary impact of proposals and variants of proposals
before they formally consider legislation;
--About 130 scorekeeping tabulations, including account-level detail
for individual appropriation acts at all stages of the
legislative process and summary tables showing the status of
discretionary appropriations (by appropriations subcommittee)
and running totals on a year-to-date basis; and
--Roughly 85 analytical reports and other publications--generally
required by law or prepared in response to requests from the
chairmen and ranking members of key committees--on a broad
range of topics, including healthcare, policies for increasing
economic growth and opportunity, changes in benefit programs,
defense policy, infrastructure, energy policy, and the
Government's role in the financial system.
Those products would be the result of very hard work by CBO's
highly dedicated staff. Nevertheless, the agency expects that the
anticipated volume of estimates and other analyses will fall
considerably short of the number of congressional requests. The demands
on CBO remain intense: The enactment of major healthcare legislation in
2010 has been followed by a high level of congressional interest in
analysis of that legislation and numerous proposals for further changes
in Federal healthcare programs. In addition, the slow recovery from the
economic downturn has spurred interest in the agency's economic
forecasts and in policies that might boost economic growth and
opportunity in both the near term and the longer term. Moreover, the
surge in Federal debt and the high level of projected deficits have led
to ongoing congressional efforts to enact fundamental changes in
spending and tax policies, which have strained the agency's resources
in many areas. CBO regularly consults with committees and congressional
leadership to ensure that its limited resources are focused on the work
that is of highest priority to the Congress.
The requested funds would be used as follows:
--$31.4 million for pay of personnel--an increase of $1.5 million (5
percent) over the amount that will be spent in fiscal year
2014--to support the increase in FTEs for a full fiscal year.
(The ramp-up of staffing in 2014 will take some time, and CBO
anticipates that the agency will average about 225 FTEs for the
current year.) The additional staffing would be devoted to
analyzing critical budgetary and economic issues of interest to
the Congress, including healthcare, policies for increasing
economic growth and opportunity, and many other topics. The
increase would also cover performance-based salary increases
for current staff and an anticipated across-the-board increase
of 1.8 percent for employees making less than $100,000 (if such
an increase is authorized for executive branch agencies).
--$10.6 million for benefits of personnel--an increase of $0.6
million (6 percent) relative to the amount appropriated in
2014, to fund an increase in the cost of Federal benefits as
well as the benefits for the added staff members.
--$4.0 million for other purposes--a decrease of $1.7 million (30
percent) from the amount appropriated in 2014. The funds would
go toward purchases of information technology, data, training,
and other items. A decrease for 2015 is made possible in part
by the fact that the 2014 funding will allow CBO to catch up on
deferred purchases and to make some purchases this year that
will reduce future funding needs.
In closing, I would like to thank the Committee for the support it
has provided CBO over many years, enabling the agency to provide
timely, carefully thought-out nonpartisan budgetary and economic
analysis to the Congress as it addresses the critical issues facing the
Nation.
Senator Shaheen. Thank you both very much for your
testimony.
GAO STAFF LEVELS AND WORKLOAD
I am going to begin with you, Mr. Dodaro, and we have 7-
minute questioning rounds. Although with just Senator Hoeven
and I here, we will probably be able to exceed that however
much we want.
Mr. Dodaro, one of the things that you point out in your
testimony is that, ultimately, you would really like to be at
about 3,250 full-time equivalent staff. And we were able to
improve staffing levels, as you pointed out, in 2014, but you
still remain below that desired level of staffing by more than
200 employees.
And so, can you talk a little bit about changes that you
have made there to adapt to this new staffing level and how you
have tried to maintain the integrity and quality of the work
product that you produce?
Mr. Dodaro. Definitely. First of all, I have been very
clear with the committees that we deal with and this
subcommittee that we are going to do fewer audits. We are not
going to reduce the quality of our work nor the integrity of
our work products. It has been incumbent upon everyone to work
together, GAO working with the committees, to set proper
priorities.
As a result, the number of requests coming into GAO has
tapered off more commensurate with what we are able to do at
any given time. In my meetings with all the Committee Chairs
and Ranking Members, I talk about the need to set priorities,
to consult with us before mandates are put into law or
committee or conference reports. Also we track all bills that
are introduced in Congress with potential mandates for GAO.
Every week Congress is here, there are plenty of those that
happen.
We have also worked to repeal existing mandates that are in
law that we don't think are good use of our resources or have
outlived their usefulness. Last year, Congress repealed 16 of
those mandates. We have identified an additional 10 or 11 that
we think can be repealed as well.
So we are trying to manage the workflow better, prioritize
the work as best we can to get the maximum return on Congress'
highest priorities and opportunities that we think are
available for cost savings and revenue enhancements. The big
missing delta for me is if we had the additional people, we
could pursue more opportunities for cost savings and revenue
enhancements and create more recommendations for the Congress.
It is a matter of being limited by that. There are plenty
of things for us to do that would result in productive use of
those resources. I understand the current situation. As the
auditor of the Federal Government's financial statements, I
understand full well the Federal Government's financial
condition.
We need to do our part, but I think we are meeting the
highest priorities now. And I have made sure there is no
diminution of quality of our work by reducing the workload, and
working on the priorities. For me, that is important. Quality
is number one for GAO, and it is important for us. Congress
deserves no less, and neither do the American people.
PRIORITIES FOR GAO WORK
Senator Shaheen. Well, I would certainly agree that quality
is the top priority. And notwithstanding the efforts to get
committees to prioritize their needs, are there areas where you
think we really should have done work over the last several
years but were not able to because of the resource challenges?
Mr. Dodaro. I think we could do more work in the area of
improper payments, as an example. Right now, there is over $100
billion a year in the latest estimates on improper payments,
and that is not even a complete estimate. There are several
programs, such as the Temporary Assistance for Needy Families,
that are not providing estimates yet.
I am concerned about the growth in this area in healthcare.
Roughly half of the $100 billion is in Medicare and Medicaid,
which are the fastest-growing programs in the Federal
Government. They are expected to continue to grow at an
accelerated pace as the aging of our population continues, and
healthcare costs are still rising faster than the growth in our
economy.
Unless those improper payments can be prevented and
stopped, I expect this number potentially to increase, despite
the efforts of the administration and Congress. That would be
one area that I would like to dedicate more resources to as
just one example.
Another example is in the tax gap. Right now, according to
the latest annual estimate, based on 2006 data--IRS
periodically updates that--the gap between taxes owed and taxes
paid under our current system is $385 billion. We are still
only at about 84 percent compliance rate on our taxes.
We have identified a number of opportunities for IRS to get
better data to do comparisons and matches and increase
collections. So those are just two examples. There are many
other areas where I think we could stop bad investments
earlier. We do a lot of work in the weapon systems portfolios
and major IT investments. I would have liked us to be involved
earlier. I think we could have stopped bad investments and
prevented wasted funds.
IMPLEMENTATION OF GAO RECOMMENDATIONS
Senator Shaheen. And when you are talking about things like
improper payments, are there recommendations that GAO has made
to agencies to try and address that in a way that would improve
the situation, and what have been the challenges in getting
those implemented?
Mr. Dodaro. Yes, one of the challenges is agencies have
been slow to implement some of the technology recommendations.
Particularly in the healthcare area, there is a tremendous
volume of activity with small transactions in Medicare. For
example, we have an open recommendation that providers, before
they are enrolled and able to bill the Government, put up a
surety bond. If there are problems later, the Federal
Government can recoup the payments, have some money there, and
they are not just left holding the bag for bad payments that
have been billed to the Federal Government. That hasn't been
effectively implemented yet as well.
Some of the technology tools to detect or prevent improper
payments are taking too long to be put in place. The training
is taking too long. However, the agencies are working on this.
The administration has made it a priority. Congress has passed
several bills.
In the mid 1990s, there were no estimates of improper
payments in the Federal Government until we started doing the
estimates ourselves as part of the annual financial audits.
Then Congress legislated the agencies to do it. This is a
management challenge. There are still areas where we have
recommendations that they are not doing proper statistical
sampling, and so the methodologies for doing some estimates
aren't good.
Most importantly, they haven't identified a lot of the root
causes of the problem. That is the area where I think we could
do more work. We could go in and identify some of the root
causes of improper payments and try to stop that.
Also Medicaid and some of these other programs like TANF,
Temporary Assistance for Needy Families, are administered at
the State and local level. You have to go out and understand
the State's programs to really get at some of the root causes,
and we just can't do that with the resources we have right now.
Senator Shaheen. Senator Hoeven and I certainly understand
that challenge.
Senator Hoeven.
Mr. Dodaro. Yes, as former Governors, I am sure you do. It
is a fast-growing problem there, too. States are struggling, as
you know.
GAO BUDGET ISSUES
Senator Hoeven. Thank you, Madam Chairman.
I will start with you, Mr. Dodaro. If you have to find
savings in your budget, where would you do it? Where would you
go first? If we get a 302(b) that requires us to find more
savings, where would you go in your budget to try to find some
savings?
Mr. Dodaro. We have mined most of that activity in the past
3 years. Our budget decreased between 2010 and 2013 $80
million, and half of that we have accomplished through bringing
down our administrative costs. We have cut 20 percent. Our
travel costs are down 50 percent, and we have kept both of
these areas down over a period of time.
I am now looking at how to increase revenue for us by
maximizing the building. We have two big assets. One is the
building that we own. We have reconfigured the space, and we
have brought a new tenant in, which is giving us $2 million
more in revenue for maintaining the building.
I still think there are opportunities. We are trying to
save money both in the IT area and the building area, but most
of those savings we are trying to plow back into new
investments.
For example, in our IT program, our switches and routers
are 9 years old, and our laptop computers are over 5 years old.
They are at the end of their useful lives. When we give one of
our laptops to new people now, I expect it to have a band-aid
on it. We need to invest in computer resources for our staff.
Our building is over 60 years old. It hasn't had a major
renovation for a quarter of a century. We have been replacing
parts as they are breaking, and so we have additional repairs
and investments to make.
So 81 percent of our costs are personnel costs. If we don't
get the amount we have requested, we can try to find, and we
are continuing to try to find cost savings in other
administrative areas. The ultimate outcome will be less staff
for GAO.
Senator Hoeven. Right. Your employee level right now is how
many?
Mr. Dodaro. Last year we used 2,849 full-time equivalents.
Senator Hoeven. And your target is 2,945.
Mr. Dodaro. Twenty-nine forty-five for this year.
Senator Hoeven. Other than possibly some IT costs, although
I hear you because the IT world moves so fast.
Mr. Dodaro. Right.
Senator Hoeven. Stuff gets obsolete so quickly now. But it
just means personnel, right, really?
GAO RENTAL COSTS AND RENT COLLECTED
Mr. Dodaro. Yes. Eighty-one percent of the costs are
salaries and benefits. Now bringing down rental costs in the
field has helped. Last year, I talked about enhancing the pilot
that we had for telework in our field offices. Eight of the 11
field offices are on it now.
We estimate we will save cumulatively $2 million in rental
costs. We are expanding the pilot to 3 more field offices. So
all our field offices will be in the telework pilot, and then
we are going to expand it to headquarters staff as well. But
there, since we own the building, our goal would be to try to
reconfigure it and maybe bring in an additional tenant or two.
Senator Hoeven. Do you get credit for the rent?
Mr. Dodaro. Yes.
Senator Hoeven. Or does that just go straight to Treasury
without it?
Mr. Dodaro. No, it comes to us.
Senator Hoeven. You do get it?
Mr. Dodaro. You have to appropriate it. It comes in
offsetting collections. Right now, we have $9 million for 2014,
$2 million from a Department of Justice entity, and the Army
Corps of Engineers headquarters is in the GAO building as well,
and their rent is about $7 million.
SAVINGS WITHIN CBO'S BUDGET
Senator Hoeven. Then, Dr. Elmendorf, I would have the same
question for you.
Dr. Elmendorf. Well, so, Senator, our budget is more than
90 percent staff, staff costs.
Senator Hoeven. Now you can't plagiarize somebody else's
answer.
Dr. Elmendorf. No, he is at 80 percent. So I am just
noting----
Mr. Dodaro. Eighty-one, Doug.
Dr. Elmendorf [continuing]. We have even less room to do--
to save money other ways. We have done a great deal of that. We
have counted how many newspaper subscriptions we need. We have
stopped ordering things we absolutely do not need.
But at the same time, it is crucial that we have the IT
technology to process large datasets that we use in
constructing cost estimates and other analyses for you. We need
to be sure that our people are receiving the training to keep
their skills at the forefront of their fields and to keep them
knowledgeable about what is happening in Government programs.
So our ability to save additional money outside of our
staffing level, I think, has been driven down close to nothing.
If we end up with less money, we will not move back up to the
235 FTEs that we are aiming for now.
CBO'S PROJECTED HIRING
Senator Hoeven. Well, you are essentially--aren't you
staying level pretty much with your FTEs this year?
Dr. Elmendorf. Well, so the amount of money that we have
been appropriated this year would pay for 235 FTEs. We are now
actually at about 220, and we can't fill that gap immediately
because we need people with a very specialized set of skills.
We are recruiting very aggressively. We have a number of
people who have accepted new positions since you provided that
funding for us. But we are not going to get to 235 in the next
few months. It will take a little time to get there.
So we hope to be up to 235 people in order to be at that
level throughout the next fiscal year, but we are on our upward
trajectory at this moment. But if you were to suggest that it
was likely we wouldn't have that higher level of funding for
next year, the funding to sustain those 235 people for next
year, then we would scale back our recruiting again and not try
to lure those people in.
You know, when we are recruiting, a lot of the recruiting
that we do is for people, as I said, with very specialized
skills. A number of the people we hire come out of graduate
programs. So we hire them now when they are looking for jobs,
but they will come to us in June or July or August or
September.
So we really are now doing the hiring we would need to be
at this higher level of strength throughout the next fiscal
year.
Senator Hoeven. So who do you typically hire? You know,
just give me a bit of a profile. And then are you getting to
your work requests in a timely way? Assess that.
Dr. Elmendorf. So we hire about 80 percent of our staff
have either master's degrees in public policy or doctorates
usually in economics. And then we have some lawyers and people
with other skills. But most of our people, most of our analysts
have Ph.D.s or master's degrees for the most part. And we have
very high standards for those people. So we don't just take the
first people whose applications come in the door when we start
to recruit.
Are we keeping up with the requests? No. We are keeping up
with the things that are most urgent and that are most
important to the Congress. But there are always unmet requests.
Most of the estimates that we do are for the chairmen and
ranking members of committees. We have very little time to do
estimates for proposals from other members of committees.
Now that is too bad, and we feel bad that we can't serve
more members more effectively. But those are just the
constraints that we face. And moving from 220 up to 235, which
is what we are in the process of doing now, will help that
problem. But I don't want to suggest it will solve that
problem. There will still be many, too many requests that we
won't be able to respond to appropriately.
PRIORITIZING REQUESTS
Senator Shaheen. Dr. Elmendorf, I want to pick up on that
line of questioning because it goes to the question that I
asked Mr. Dodaro, and as you point out, you are not able to
fulfill all the requests that you get from Congress. And given
the continued resource constraints that we have in Congress, it
is probably not going to improve a whole lot in the immediate
future.
So how do you prioritize requests, and how do you work with
the various committees in Congress to try and ensure that they
also are thinking about that as they put in their request to
you for the work they'd like to have done?
Dr. Elmendorf. So we are talking on an ongoing basis with
the leadership of the committees, both majority and minority,
and with the leadership of the Senate and, of course, also in
parallel form on the House side. We respond--our focus is on
the legislation that is moving through committees or moving to
the floor of the Senate or the House.
I think the risk is primarily that we won't do enough of
the underlying model building and analysis that we need to be
able to respond to future requests. So a pretty large fraction
of all the congressional testimonies that we have done this
year have come to us with very short notice, but been based on
reports that we wrote last year.
For example, we have written a set of reports about
different Federal benefit programs. We have written about the
SNAP, food stamps. We have written about Social Security
Disability Insurance. We have written about Pell grants and
others. But there are other reports--other important benefit
programs that we have not been able to write.
We have not been able to go through and help you and your
colleagues understand the sources of growth in those programs
and your options for dealing with them as much we would like
to. So I worry that we will get to next year, and you will ask
quite legitimately what can we do about a certain program, and
I will forced to say, ``Well, I am sorry, that wasn't at the
top of the list. We haven't gotten to it yet.''
This is especially true in some of the very complicated
analytical work we do on healthcare and in the Government's
financial obligations. As I said, we are using more large
datasets to understand what is happening in the healthcare
system, partly in terms of people's demand for healthcare
through health insurance, but also in how providers are
responding, how their behavior is changing.
And that is model-building work we need to keep doing to be
ready to give you accurate estimates of the legislation that
will come before us in 6 months and 12 months and 18 months and
2 years from now.
ANALYTICAL MODELS
Senator Shaheen. And so, you are working on those models
now in anticipation of what may come up in the future with
healthcare, the economy. Are there other models that you are
looking at?
Dr. Elmendorf. Yes, so we use different models for
different purposes. We have models in healthcare. We have also
spent a lot of time in the last few years, particularly when we
had this higher level of staffing a few years ago, in improving
our modeling of how the Federal taxes and Federal spending
affect the economy, both in the short term during this very
weak recovery we are going through, but also later in this
decade and beyond.
And again, it is very technical work, but with enough
people, we can give you a much better sense of how the policy
choices you are making will effect economic growth and jobs and
opportunity for people down the road.
Senator Shaheen. Do you have modeling in the energy area?
Dr. Elmendorf. We do modeling of most of the topics that
the Congress considers, of course. If there are budgetary
implications or significant economic implications, we are doing
modeling in the area.
So we work on alternative energy policies. We are doing
work right now on the effects of fracking on the economy. That
is a crucial input to our projections of economic growth and,
thus, the projections of what Federal revenues will be.
And we have done some work, but that work has not
proceeded--like many of these things, has not proceeded as
rapidly as it would have if we had more staff. And I hope that
with the extra staffing that you have provided for this year,
we can move along more quickly.
SCORING ENERGY SAVINGS PERFORMANCE CONTRACTS
Senator Shaheen. Well, one area that I have been very
interested in and worked on when I was in the Governor's office
was the benefits of energy savings performance contracts, also
referred to as ESPCs. As long as we are in a committee hearing,
we want to make sure we get all the acronyms in.
What I have found challenging is trying to figure out how
CBO scores those ESPCs and why in some cases it is okay to
actually build in the cost savings from those and why in other
cases it is not, and how we can make better use of those
contracts, which I think are very real ways to save taxpayer
dollars.
So can you talk a little bit about the scoring of those
performance contracts and how it can be improved?
Dr. Elmendorf. Yes, I can. So we understand, Madam Chair,
why you and many other Members of Congress think that this tool
can be an important way to cut Federal energy costs. I think
from the point of view of our estimates, there are two issues
that often come into play.
One is that when a contract of this sort is signed, that
creates a commitment for the Federal Government to make future
payments, and it is a longstanding part of our estimating
process to assess a cost when the decision is made, when the
commitment is made. So the cost of those contracts we would
generally assess as occurring now.
The savings would be realized later essentially because
Congress would be able to appropriate less money to a certain
agency for energy costs and still have the buildings heated or
cooled as well and still have the other activities take place.
But because those appropriations actions are not being taken
right away, they are kept track of separately in the budget
process.
This is not like a particular rule of CBO's. This is a
longstanding part of how the budget committees work and
interact with the other committees in Congress.
I think a second issue that comes up is that, as you know,
the savings can come over longer periods of time. The
Department of Energy estimated a few years ago that the average
payoff time for contracts of this general sort was 17 years. So
there can be some savings during that time and more savings
later, and our estimates don't always go out as far as might be
useful to capture those savings.
So these are not--you raised the concern that we do
different things in different circumstances. I would emphasize
that we have really a quite consistent set of principles that
we follow. But depending on how legislation is written, there
can be different budgetary consequences, and we are very happy
to work with you and your staff at trying to help explain why
we are doing what we are doing and to help you look for ways to
design legislation that would have more--that would show more
directly the budgetary effects you have in mind.
Senator Shaheen. Well, my time is up. I want to pursue this
a little more because I still think the underlying concern is
how do we realize those savings in a way that makes sense for
us in Federal agencies and yet doesn't violate the budget
rules. So maybe we need to change the budget rules. But anyway,
we can pursue that a little bit.
Senator Hoeven.
ECONOMIC PROJECTIONS ON HYDRAULIC FRACTURING
Senator Hoeven. Thanks, Madam Chairman.
You say you are doing some work on hydraulic fracturing on
the value to the country? Is that right?
Dr. Elmendorf. Yes. So our economic projections for the
next decade and beyond need to take onboard developments that
are happening in the economy. This is obviously a very
important development in the last few years, and we are trying
to be sure that our projections are taking it fully into
account.
So we have done some work in this area. We have talked with
outside experts, and we hope to--and we will use that to inform
our future economic projections. But we will also, when we
finish this, which I hope will be soon, lay this out for you
and your colleagues so you can see our view.
Senator Hoeven. Well, we will have to get you up to North
Dakota. Then we can show you hydraulic fracturing.
Dr. Elmendorf. I would love to come to your State, Senator.
TRAINING OF ANALYSTS
Senator Hoeven. Field trip. I am glad you are working on
it.
Just to finish up on the line of questioning, the trail I
was going down before we stopped here just a minute ago. So you
hire folks then, and you said mostly public policy master's
degree. And then----
Dr. Elmendorf. Or Ph.D.s in economics.
Senator Hoeven. Or Ph.D. Okay. So I was going to ask that.
And then do you have a training program? In other words, how do
you then indoctrinate them into your methodology and your
modeling and so forth?
Dr. Elmendorf. So we take the hiring and training of people
very seriously. We understand that what makes CBO is the skills
of the people who are there.
So when we look to hire people, we spread the word very
wide that we are looking so we get the strongest possible pool
of applicants.
Senator Hoeven. And do you get a strong applicant pool for
your----
Dr. Elmendorf. We get a strong applicant pool. We are very
choosy in that pool. We read people's resumes, of course. We
have them in, and we ask them a lot of hard questions for a
number of hours. We talk with people who have worked with them,
their advisers in graduate school or colleagues for people who
are coming from other jobs.
And then we bring in the ones who we think can do what we
need them to do. And if we can't find somebody right away who
meets our standards, then we don't hire them. We wait until we
can strengthen the pool in some way, and then we hire them. So
it is just a nonnegotiable part of this to hire people who are
above some pretty high standard.
But then that is not the end of their education. They have
a lot usually to learn, and they do this in various ways at
CBO. We do a lot of mentoring of younger analysts from older,
more experienced analysts, people who have been at CBO for a
while and seen the work that we do.
We have a lot of oversight of the estimates and reports
that we write. You don't see numbers that have not been looked
at by a number of people at CBO, and through that process, our
analysts learn to check their own assumptions, to make sure
they are talking with the right outside people.
Of course, we talk with a lot of people around the
Government and in the private sector when we are constructing
estimates. Our analysts need to learn how to do that
effectively, how to get the information without falling for
some particular line that somebody might be trying to push on
us.
We send people for formal training in statistical
techniques, in writing to make sure that our presentations are
clear. And we send them to conferences and seminars so they can
understand what people, other people in their fields are
thinking, what the latest ideas are.
Senator Hoeven. So is there a primary way of learning the
methodology and the modeling by working with the mentors?
Dr. Elmendorf. Primarily learning as they are working, yes.
I mean, again, as people come with 4 years of college and
usually 2 or 4 or more years of graduate school beyond that.
But then, as you say, there is a tremendous amount they need to
learn about how to apply that education to our specific tasks,
and people learn that through working with more experienced
people.
Senator Hoeven. Right. Because you probably haven't had
somebody who has spent years out in the oil patch doing
hydraulic fracturing, right? Or developing the process or----
Dr. Elmendorf. That is right.
Senator Hoeven [continuing]. By running an oil company that
generates that revenue. But they are going to create a model or
a methodology that is going to determine the value, which is
going to affect not only the laws that may go directly to the
energy world, but even to the underlying financial
underpinnings of what we are doing from a budgetary standpoint.
So that is what I am asking. So they get that mentoring and
training and specialized knowledge to develop that modeling and
come up with a number how? From mentoring primarily?
Dr. Elmendorf. So the techniques, the modeling techniques,
to the extent they have not learned them in graduate school,
they learn them through--mostly through on-the-job training
with more experienced analysts. But for any given question, I
mean, our experienced analysts also have not worked in oil
fields. So for any given question, we reach out very frequently
to outside experts with a range of views. So, and that is
across the topics we work on.
Senator Hoeven. And that means--excuse me. And that means
not just going to the agency involved, but actually----
Dr. Elmendorf. Right.
Senator Hoeven [continuing]. Going outside to the ``real
world'' or the people that are doing this in private enterprise
and talking to those experts, right?
Dr. Elmendorf. Yes.
Senator Hoeven. And I am just using hydraulic fracturing as
an example, albeit one I am very interested in. There are many
others, you know, where you are dealing with something very
specialized.
Dr. Elmendorf. Yes. That is absolutely right. So we do
this----
Senator Hoeven. You don't just go back to the agency and
say, ``Hey, you tell us kind of how life is.'' You go beyond
that?
Dr. Elmendorf. No, as I said, we talk to people running
Government programs, and we also talk quite a bit to people in
the private sector. So it depends on the issue at hand.
When we are trying to understand what is happening in
Medicaid, for example, we talk to people who are participating
and running the Medicaid program, but we also talk to State
Medicaid directors. When it comes to work on hydraulic
fracturing, we are talking to people who are analyzing,
analysts in that area, and also people who are participants in
that work.
And that is true across from our work in defense to
agriculture to water resources to energy to the environment to
tax policy, across the board.
Senator Hoeven. Thank you. And again, I am just using that
as an example. I think it is so important you go beyond just
the agency you are working with in terms of just, well, what
does the agency think?
Good. I understand you have to do that and get that. But I
really think it is important to go beyond that.
Dr. Elmendorf. Yes. We do, too, Senator.
Senator Hoeven. And I would come to Mr. Dodaro. Same thing.
And I know I am running tight on time, but I am going to ask
some indulgence from our chairman because I do have to leave
after this question. So if I could go for just a couple of
minutes? Because I want to go really down the same line.
And the question actually that I was going to combine with
it is so if you had some more resources, what would you do? I
am thinking, Dr. Elmendorf, you are saying probably more people
and salary. Roughly correct?
Dr. Elmendorf. Yes. That is right.
GAO'S HIRING PROGRAM
Senator Hoeven. Okay. So same thing, hiring people, how do
you train them up? And I know that you go beyond the agency
because of the way you do things, but where would you put some
additional resources if you had them?
Mr. Dodaro. Sure. First, we are a very multidisciplinary
organization. We hire not only people that have public policy
degrees, but also accountants for financial auditing. We hire
economists, as well as people in science and technology areas,
both information technology and the physical sciences. We are
trying to hire a couple more actuaries right now.
We also hire subject area experts in healthcare and
defense, et cetera. We have a wide range of technical
disciplines and subject areas. Like CBO, most of our people
have master's degrees or doctorate degrees in those areas.
We also have a very robust or at least we did--we are
trying to reinstitute it now--internship program, where we
bring people in from colleges and universities. In fact, that
is how we get about half of our new hires for the entry-level
program. They come in as interns. They will work on audits, and
we see how they do. They get a chance to know our methods and
get some experience, and then we can make offers to them for
permanent positions.
We also hire at all levels. We hire people at mid level and
upper level from the private sector or other agencies with
specialized experience.
If we had additional resources, there are several things I
would do. Number one, we need to continue to replace our entry-
level program. Even though this year we are going to increase
it, we normally have in years past about 400 people in this
program.
It is a structured 2-year training program. They get
classroom training and on-the-job training. We move them around
to different areas within GAO's work so they get a breadth of
experience. We place them in one of our mission teams after the
2-year program, if they graduate from the program successfully.
Right now, our pipeline of people entering GAO through this
program has been depleted. Last year, I mentioned I felt like a
college football coach where all the seniors were graduating,
and there were no freshmen and sophomores coming in. But now,
thanks to your support, in 2014, we will be continuing our
entry level hiring. But we won't be at the level we need to be.
Our age profile and demographics are just like the rest of
the country in that we are going to have a lot of people
retire. A third of our senior executives are able to retire
right now and 21 percent of our senior managers. So we need to
replenish the pipeline going forward.
Our biggest value to the Congress is deep institutional
knowledge and experience in these programs. We need to bring
these people in, give them the training, and move up in the
critical skill areas.
SCIENCE AND TECHNOLOGY CAPACITY
The other area that I would put more resources in is a new
center that we have developed for science and technology
issues. I believe this is the next big evolution of what GAO
needs to build its capacity in. We are getting asked now to
look at satellite programs, space programs. Weapon systems are
becoming more sophisticated.
For the energy issues and the environmental issues, we need
people who understand science and technology. You know, not to
do basic research, but to understand, for example as you are
saying, in the hydraulic fracturing area, you want to bring
people in who actually have experience in the field doing these
things. That is what we have been doing and hope to expand in
the science and technology area.
We have just held a forum on nanomanufacturing technology.
I want to hold one on additive technologies, which hold
tremendous potential for producing spare parts for DOD, rather
than to buy spare parts and store them and incur the cost of
that.
So there are a lot of developments in science and
technology that I think are very important for us to be able to
advise the Congress. This is really important, because the
Congress used to have an Office of Technology Assessment. That
office hasn't been funded since the mid 1990s.
Congress has increasingly turned to us to do technology
assessments, which we have developed the capability to do.
Those would be the areas: replenish our entry-level pipeline
for succession planning purposes as well as target investments
in science and technology. We would be in much stronger
position to continue to support the Congress now and in the
future.
We just developed our strategic plan for serving the
Congress from 2014 to 2019, and we identified all these areas
and trends, including science and technology, national security
issues and others. Then, after vetting that with the Congress
and the committees, we use that to shape our workforce for the
future, and to make sure we have the right talent to deliver
those type of assessments.
Senator Hoeven. Again, my thanks to both of you for what
you do. Appreciate it very much.
Dr. Elmendorf. Thank you, Senator.
Mr. Dodaro. Thank you, Senator.
Senator Shaheen. Thank you very much, Senator Hoeven.
Mr. Dodaro, you will be interested to know I just visited a
company in New Hampshire, where they are refurbishing a radar
system from a ship for DOD to put back on a new installation.
So it is impressive to see that going on already.
ENERGY EFFICIENCY IN THE GAO BUILDING
Senator Coons.
Senator Coons. Thank you, Chair Shaheen.
And let me, if I might, just follow up on some of the areas
of investment you have laid out, Comptroller General Dodaro. In
the GAO facilities, if I understand correctly, one of your
areas of concern is energy efficiency.
Mr. Dodaro. Right.
Senator Coons. Have you considered an ESPC as one of the
vehicles that in the private sector and public sector has been
shown to be a cost-effective and predictable way to achieve
savings and energy efficiency?
Mr. Dodaro. You mean for the GAO building itself?
Senator Coons. Correct.
Mr. Dodaro. I know we have consulted with outside
contractors. I will have to give you the details for the
record, Senator. I am confident that our people are looking at
technology to achieve energy efficiency.
[Note: See in the ``Additional Committee Questions'' at the
end of the hearing for the Government Accountability Offices's
response to Senator Coon's question above.]
One of the things we do in GAO is we are looking at the
rest of the Federal Government and doing research in the
private sector. Whatever best practices we find in our audit,
we plow them back into our internal management areas. So I am--
--
ENERGY EFFICIENCY
Senator Coons. Well, I suspect you will find that one of
the highest rate of return investments you can make will over
the short run and the long run be investments in energy
efficiency. Senator Shaheen earlier highlighted a concern that
I also share. When I was in the private sector, and this is now
nearly 20 years ago, as in-house counsel for a manufacturing
company, we used an energy performance contract to
significantly save on our operating costs.
And then when I was a county executive in county
government, we also--we were trying to balance a capital and an
operating budget, and we found ways that we were able to
significantly reduce our capital investment by financing it off
of future savings, which were legal obligations under the
contract.
The broader point I am trying to make is that there are
billions of dollars in identified savings in energy efficiency
in Federal buildings, billions, that are not being achieved
because of how it is scored. And so, some of the frustration or
concern that you have heard from myself and from Senator
Shaheen, and I think there were 28 Senators who actually signed
a bipartisan letter to the President, urging that these
vehicles, ESPCs, be used by the executive branch.
There is a little frustration because it, frankly, puts
Americans to work. Typically, energy efficiency projects employ
local contractors and servicemen. Typically uses American
technology and is often some of the easiest ways to save
operating dollars.
I understand, Director Elmendorf, your explanation that it
is dependent on future appropriations for there to be the
spending on energy against which you will be making savings.
But I would be grateful if we could figure out a path forward
where perhaps there is some way, short of amending the budget
laws. But there has got to be some way to take advantage of
these tools that are so widely used in the private sector and
public sector, everywhere but the Federal Government, to
achieve positive outcomes in terms of employment and savings.
Dr. Elmendorf. So, Senator, we are happy to talk with you
and your staff about why we do what we do now and whether there
are ways that we can be more helpful to the Congress. As I
mentioned earlier, there is the issue, as you noted, of the
future appropriations being the place where the savings
actually occur.
The other issue I mentioned earlier is that a number--a lot
of these savings tend to happen over long time horizons, and
our estimates tend not to go out maybe as far as would be
useful to show that. But we are happy to work with you.
We are not trying, obviously, to stand in the way of
effective management of the Government's resources. And if we
think that there is information we can provide that would be
more helpful to you and your colleagues, then we can work to do
that.
10-YEAR BUDGET WINDOW
Senator Coons. Across a dozen projects that I was directly
involved in managing, we prioritized those investments that had
a payback timeline less than 10 years. There are some that go
out 17 or 20 or more, but you know, typically, in any Federal
building, any other than the most recently built and any other
than the most modern, you have got some investments that have a
payoff timeline of 3 to 7 years. That is, frankly, where the
sweet spot is in most energy efficiency investments.
But that leads to another question that I think is of some
value for all of us. We typically look at a 10-year budget
window. We look to you for analysis that is very helpful as we
make decisions, but there are some pernicious consequences to
having a 10-year window, and you can sometimes see, as we are
looking at offsets and so forth, you ask a question, well, why
this? Well, because it really hits in years 11, 12, 13, 14. You
know, we are trying to strike balances here.
In the immigration bill, there was a second 10-year window
added in terms of the scoring, and a lot of the decisions we
are considering here have a time horizon of fiscal impact that
significantly accelerates in the second and third decade. What
sort of opportunities and challenges would there be, in your
view, in terms of our being able to make fiscally sound
decisions if we had optional second and third decade scoring
windows?
Understandably, the accuracy with which you can make
predictions on rate of growth of healthcare costs or rate of
growth in the economy gets weaker and weaker as you go out, and
you don't want to put out projections that you know are
unlikely to be sound. But what would be the benefits and what
would be the risks of having second and third decade
projections?
Dr. Elmendorf. So, Senator, I think you summarized them as
well or better than I can. The advantage of looking out over
longer periods is to give you and your colleagues a clearer
sense about what policy will do over time. And immigration was
an example where the way the bill was structured and the time
lag for various things to happen, the effects in the second
decade of the Senate-passed immigration bill were very
different from the effects in the first decade.
And so, I think that was an appropriate case for us to look
further out. But the costs, I guess there were two. One is it
is simply more time consuming and more complicated. But
secondly and I think most importantly, as you say, the crystal
ball that we use gets awfully hazy as you look out further.
Even over 5 years or 10 years, our estimates have a great
deal of uncertainty in most cases. And we don't want--as you
said, we don't want to just give you numbers because we can add
rows to the spreadsheet. We want to stop at the point where we
think we don't have more real information to give you.
But there is nothing magic about 10 in that sense, and
there are some cases like immigration, like the healthcare
legislation in 2010 where we did look out to a second decade.
So I don't view this as a religious matter that we can only
talk about 10 years, and if there are particular other cases
where you and your colleagues think it would be more useful for
us to look out further, we can try to do that.
But it is important that everybody understand how the
uncertainty mounts because it is really substantial enough in
the first decade for the estimates that we do and can be much
more uncertain as you look further into the future.
Senator Coons. Well, thank you. I appreciate your answers,
and while I have other questions, I am going to defer to my
friend, the Senator from Arkansas.
Senator Shaheen. Senator Boozman.
SKEWED FINDINGS UNDER CURRENT LAWS
Senator Boozman. Thank you, Madam Chair.
And we do appreciate both of you all and your hard work.
Dr. Elmendorf, Senator Coons and Senator Hoeven had
questions about methodology, whether it was energy or whatever.
Are there areas that under present law--and I say this in an
effort to try and be helpful. Are there areas under current law
that make it such that the law is such that it does skew your
findings?
Dr. Elmendorf. I don't think our--I don't know of cases
where our findings are skewed, Senator. What I would say
instead is that we don't--if we had more time and more people
and could do more analysis, we would give you more accurate
estimates. We would be able to keep track of more different
repercussions of legislation that you are considering.
If we think there is a reason we are going to not be in the
middle of the distribution, that is crucial for us to try to
correct as best we can. I am more worried about all the various
ways in which legislation can matter in the world that we just
can't keep track of.
Senator Boozman. So it is not a methodology problem then
that we make you do. It is just that sometimes you don't have
the resources to or the knowledge perhaps and personnel in
certain areas----
Dr. Elmendorf. I think that is right, Senator. I mean,
there are--as you know, there are conventions of our estimates.
For example, longstanding convention to keep track separately
of mandatory spending, mostly of benefit programs, and of
discretionary spending, which is appropriated every year. But
that distinction comes from a fundamental difference in how the
Congress works.
Some programs are set in place for longer periods of time,
and some things you vote on each year. So that is not--and our
conventions are not created by us. They are created really by
the budget committees many, many years ago to try to meet the
way the--to help us line up with the way the Congress is making
these decisions.
And I think where there are particular cases where we think
that some convention might be misleading, then we try to step
outside that. So the immigration legislation was an example of
that, and some of our healthcare work has been an example of
that.
So although we focus on 10 years, if we think there is some
clear reason to expect that the second decade might have rather
different effects because of the way a law would be unfolding,
then we will try to give you information about that second
decade. It is usually explicitly a rougher approximation.
Senator Boozman. Sure.
Dr. Elmendorf. But we try to do that. So we try to make
sure we are giving you real information and not being--not just
being hung up on particular rules.
Senator Boozman. When you have major changes by executive
order, like the ability to keep your plan or delaying
implementation, do you score that? I mean, does that become
part of the baseline then going forward?
Dr. Elmendorf. It becomes part of our baseline going
forward. We don't generally produce separate estimates of
administrative actions. There are many, many of them. And our
way we use them and our focus is on estimating the effects of
legislation that you and your colleagues are considering.
But every time we produce a new baseline, that will take
onboard all of the administrative actions to date. And in fact,
when the administration----
Senator Boozman. So that is factored in then as you make
predictions?
Dr. Elmendorf. That is right. That is right. And in fact,
when the administration makes an action, that immediately will
affect our scoring of--if it is a formal change, that
immediately affects our scoring of legislation. So the recent
decision by the administration to put forward this proposal for
changing the way Medicare Part D works in some ways, and then
their decision more recently to not make those changes----
Senator Boozman. Right.
Dr. Elmendorf [continuing]. That affects our estimate of
legislation that I think the House was taking up today, an
estimate we provided last night.
IMPLEMENTATION OF GAO RECOMMENDATIONS
Senator Boozman. Good. That is good to know.
Mr. Dodaro, you all do a lot of great work in coming up
with recommended actions to help us save money and make
agencies more efficient. What are some of the obstacles, and
how can we help as far as actually getting those very valuable
recommendations, valuable in every sense of the word.
How can we help you in actually getting some of those
things? A lot of them are done, but how can we be helpful in
getting implementation?
Mr. Dodaro. Well, first of all, on average, about 80
percent of our recommendations are adopted by the executive
branch or by the Congress in law. So I think the most important
thing is providing venues in the Congress for oversight and
allowing us to come forward in areas where the executive branch
in particular hasn't voluntarily agreed to implement the
recommendation, and then to elevate that to a matter for
congressional consideration.
We have done that in these annual reports we now do on
overlap and duplication in the Federal Government. We have made
389 specific recommendations over the first 3 years. We are
getting ready to issue our fourth report. About 323 of those
recommendations have gone to the executive branch, but about 66
have gone to Congress.
Congress so far has acted upon about 15 percent of those
recommendations. So I keep mentioning it to the committees, and
we have a public scorecard we keep for overlap and duplication.
The extent to which you can provide additional support for the
open recommendations that haven't been acted upon yet, that
would be very helpful.
And of course, you know, providing necessary funding for us
to keep replenishing those recommendations. We try to have--
usually, we have about 1,500, in some cases maybe 2,000 new
recommendations every year.
PRIORITIZATION OF GAO WORK
Senator Boozman. How do you determine the time sensitive?
What is your mechanism for deciding how to go forward with
time-sensitive requests?
Mr. Dodaro. Well, we will----
Senator Boozman. There is what we perceive as time
sensitive and what you perceive is different. I guess, that
is----
Mr. Dodaro. One way is to have good communication with the
committees on which are their most important priorities. We try
to get at this several ways. One is by planning ahead. I
mentioned earlier we have a strategic plan for work we are
going to do from 2014 to 2019 that we just issued last month.
That was based upon consultation with the committees.
We try to start that work that is time sensitive as best as
committee people can tell. That way we are ready when the
Congress is ready to take up reauthorizations or to take up
specific issues.
Secondly, if a request from Congress comes in that is new
that wasn't anticipated, we will talk to the committees about
reprioritizing the work we are already doing for them. In some
cases, we will stop some of the work and begin other work. In
other cases, depending upon the issue, we may have already done
a lot of work. So we will be able to meet time-sensitive
requests that way.
And lastly, I would say we can phase the work that we are
doing to meet the most time-sensitive needs as the work
proceeds and keeping people well informed in briefings. So we
are very sensitive to that.
Senator Boozman. Thank you. Thank you, Madam Chair.
Senator Shaheen. Thank you.
Senator Coons has to leave for another meeting. So I am
going to turn it over to him for a final question before I go
back to asking a series of questions that I have.
Senator.
DEBT-FINANCED INVESTMENTS AND OPERATING BUDGETS
Senator Coons. Thank you very much, Madam Chair. I
appreciate your graciousness and your leadership of this
subcommittee.
And I will just for the record, the bipartisan letter I
referenced from more than 20 Senators, it was Senator Boozman
who was the co-leader, which I should have recognized before.
There is broad interest here on ESPCs and scoring and how to
make them apply.
Now many of us have prior service in the State or county
government, and we are used to having a capital and an
operating budget. We are used to having debt-financed
investments in things that lasted for long periods of time and
operating budgets that balanced.
What are the reasons, what are the barriers to moving in
that direction for the Federal budget? I think any of us, as
new legislators here, are puzzled by the complexities of
explaining to folks having the capital and the operating
intertwined.
And frankly, our deficits are so significant, it is much
easier to articulate to the general public why we are borrowing
money overseas or why we are borrowing money in the bond
markets to build a library or a sewer system or facilities that
will last for 20 years. It is much harder to explain to anyone
why we are borrowing at a record clip simply to fund the
ongoing operations of Government.
Dr. Elmendorf. So, Senator, I understand that point. I have
trouble explaining that myself to people. I think the--and this
is not an issue in which CBO has an official position. We don't
make recommendations about this.
I think people who have considered capital budgets before,
people who have been opposed to the Federal Government moving
in that direction have mentioned a number of issues. One is the
difficulty of defining what constitutes a capital expenditure
and what isn't.
So some things are pretty clear. If you build a bridge,
that seemed like a piece of capital. If you invest in
somebody's education through Pell grants, for example, does
that count as investment or not?
And one can tell a story in economic terms about that is an
investment in what economists call ``human capital,'' and one
can tell the story in which that is not investment. But the
Congress would need to decide, and it would need to then
presumably enforce efforts to take things that are not, in some
people's judgment, capital investments and have them be called
capital investments in order for them to receive a different
budgetary treatment.
I think a second issue that people have raised is concerns
about the transparency of the Federal budget. Almost all of the
Federal budget operates on a cash basis, and that is not the
way most entities would keep track of some of those flows, but
it has the virtue of being comparatively transparent. Money
that comes in counts as revenues or, in some cases, collections
of other sorts. And the money goes out as spending.
And the exceptions to this cash treatment are quite limited
primarily in Federal credit programs, where there is a more
complicated accounting. So I think some people have worried
about making the Federal budget more of a black box if there
were more different budget categories.
I am not suggesting that those are--those are the winning
arguments necessarily, but those are some of the arguments that
have been raised in the past for why moving to a capital budget
would not be a good idea, despite the advantages that you have
mentioned.
Senator Coons. Well, thank you.
If there has been a GAO study on the subject in the past, I
would certainly welcome it. I am grateful for your work in
identifying high-risk and high-reward areas and look forward to
working with you on that and to working on manufacturing and on
areas where we could reduce duplication manufacturing.
And Madam Chair, again I want to thank you for
accommodating my request. Thank you.
Senator Shaheen. Thank you very much.
Dr. Elmendorf, I think there are a lot of people who might
disagree with the idea that the Federal budget is transparent.
But I understand the point you are making, and I am not
engaging here----
Dr. Elmendorf. On relative terms, Madam Chair.
Senator Shaheen. Yes, I don't want to be argumentative.
GAO'S COORDINATION WITH INSPECTOR GENERAL
Mr. Dodaro, the Congress has tasked GAO with producing a
biannual report on Federal agencies and programs that are most
vulnerable to fraud, waste, abuse, and mismanagement and also
known as the ``high-risk list.'' And one of those agencies that
has been regularly on that high-risk list is DOD's contract
management programs.
I have to say I had the benefit of chairing a subcommittee
last week in the Armed Services Committee on readiness, where
we had someone from GAO talking about the IT dashboard, and the
benefits that it provides. Can you talk about how you view that
high-risk list and the intersection of that and work that the
special inspectors general are doing or have done in Iraq and
now in Afghanistan? And how they overlap or if they overlap,
and what kind of benefits there are from your perspective in
the work that goes on by the special inspectors general?
Mr. Dodaro. Yes. First of all, I place a high priority on
making sure we are coordinating our work with all the inspector
generals, including the special inspector generals. In fact,
last week, I hosted our annual coordination meeting that we
have, and over 50 of the IGs were there. And we talked about
common challenges and other issues.
We coordinate all our work with them. I mean, both in a
work planning standpoint and before we start each engagement.
Senator Shaheen. Can I just ask you to----
Mr. Dodaro. Sure. Yes.
Senator Shaheen [continuing]. Expand on that a little bit?
When you say you coordinate your work with them, do you meet
regularly? Do you share information on a regular basis? How do
you do that coordination?
Mr. Dodaro. Yes. Well, each of our teams that has
responsibility for our relationship with individual departments
and agencies meets with the inspector general offices on a
regular basis. Some of them do it annually. Some of them do it
quarterly.
Also when we start each engagement, we make sure when we
get a request from the Congress, that we have checked with the
IGs to make sure they are not already doing something or plan
to do something. If so, then we have a dialogue with the
committees about that issue.
That is the type of regular coordination that goes on all
the time, both from a planning standpoint of a work plan for
the next year and also on an engagement-by-engagement basis as
we get requests from the Congress and start our work.
The big difference between GAO and the Inspectors General
at large, but also particularly the special IGs, is they have a
greater proportion of their work on investigations and criminal
investigations. We have a very small investigative operation
that covers the entire Federal Government. They have thousands
of people that do that. We have fewer than 20 investigators.
We do more program audits, and more of our work now covers
multiple agencies at the same time, where we are looking
Governmentwide or we may be looking at the relationship between
DOD programs and State Department/USAID programs, for example.
Therefore we have more of a cross-cutting nature in most of the
work that we do, although we do work in individual departments
and agencies, too, and our skill sets are a little broader than
the IGs. As I mentioned, the multidisciplinary workforce that
we have, most of the inspectors general don't have anywhere
near the range of disciplines and expertise that we have across
the breadth of what the Federal Government does.
CHALLENGES TO IMPLEMENTING GAO RECOMMENDATIONS
Senator Shaheen. You make recommendations for more
efficient and effective operation of Government, and short of
congressional oversight to pick up on those recommendations,
there isn't any real opportunity to go back to those agencies
and say, ``Okay, GAO made these 20 recommendations, and they
have adopted 3 of them. Who is doing the other 17, and why
haven't they been done?''
Mr. Dodaro. Right. Sometimes I notice a pattern, for
example, as we did at the Veterans Administration, where they
actually agreed with a lot of the recommendations, but they
weren't implementing them as fast we thought they should.
I met with Secretary Shinseki, and we talked about that,
and we put in place a dialogue between our two agencies. I do
outreach with the committee chairs and ranking members. I also
do outreach with the top leadership in the executive
departments and the agencies and try to encourage them to
implement some of those recommendations.
That is another avenue that I use. Really, the Congress is
the most important part of it because of the continuity,
particularly in the appropriations process, to get some things
in place that will get the agency's attention. And so, we share
our open recommendations as much as we can with the committees.
But if they are not going to voluntarily implement our
recommendations, and they are not going to take congressional
direction through the appropriations and oversight committees,
you have really run out of tools at that point. I try to
convince them as much as we can with the power of our work.
Senator Shaheen. Sure.
Mr. Dodaro. Having the Congress' support behind our work is
really the difference. There is no compulsory requirement that
agencies implement our recommendations. They do have to provide
Congress with regular reports on what they are doing, and we
follow up on all the recommendations.
That is why, for this work we are doing annually now on
overlap and duplication, we have a public Web site that tracks
the status of all the recommendations so that the public has a
view, as well as having that information available to the
Congress.
DOD AND VA'S NEW INTEGRATED HEALTH RECORDS SYSTEM
Senator Shaheen. It is interesting that you mention DOD and
the VA because that is one area where, obviously, there have
been a number of issues that have been raised, and the fact
that both the VA and DOD are now scheduled to deploy a new
system to deal with their integrated records, health records is
an example of where we have not done a very good job in the
Government. And it has led to a lot of concerns in the public
with veterans with backlog.
Given that this is one area that you have been working on,
do you feel like they are back on track at this point to
address the goal of trying to make sure they have got an
integrated health record system between DOD and the VA?
Dr. Dodaro. We have real doubt about that. We just issued a
report basically saying that DOD and VA haven't provided enough
of a business case to say that this new direction that they are
going in is going to be better than the integrated approach
they were pursuing previously.
So we have been tracking this for a number of years. I know
it is very frustrating. It has been frustrating to us as well
as the Congress. I do think they need to provide better
justification for the approaches that they are taking. We have
been very explicit in questioning whether they have the
business case to justify how they are going to pursue separate
efforts and still have them interoperable at the time.
The track record here is not very good.
Senator Shaheen. Thank you.
Senator Boozman.
REQUIREMENTS BY STATUTE
Senator Boozman. Thank you, Madam Chair.
Dr. Elmendorf, I know you all have a lot of things that you
have to update by statute, a lot of requests. Is there the
opportunity that perhaps we could help by--help reduce your
workload by sunsetting some of this stuff that we all agree has
just been there forever and it has always been done, but really
isn't either of use anymore or simply not being utilized?
Dr. Elmendorf. So, Senator, I think we have been in some
cases in that situation, but the Congress actually did relieve
some of that burden. There were reports that we were doing on
the effects of the Recovery Act of 2009 and on the effects of
the TARP. The Congress reduced the frequency, really cut back a
lot on what we had to do. So that was very useful for us.
Senator Boozman. And that is big stuff. Have you got a lot
of little stuff in that regard, or is that really not much of a
factor?
Dr. Elmendorf. No, that isn't that much of a factor. The
number of things that are required of us by statute are
actually fairly limited. The challenge for us is simply that
you and your colleagues have a whole range of very interesting
and complicated ideas for legislation that we need to run fast
to try to keep up with or not fall even further behind of.
But it is not so much the things that are in law. It is
just the range of interests and the complexity of a lot of the
analysis of the proposals that you and your colleagues are
bringing to us.
WORKLOAD BALANCE
Senator Boozman. How do you balance your workload? I know
towards the end of the year this year we have got an election,
and then at some point, it might be right before the election,
maybe after the election, that we put together lots of
budgeting aspects and stuff, which is really going to be a
very, very busy time for you.
Is there a mechanism that you have of kind of looking
forward? Do you try and--what do you do, I guess, is what I am
saying. It is kind of like the storm that is going to come in
for you all. You know it is going to come. There is various
times of the year.
Dr. Elmendorf. Right.
Senator Boozman. What do you do to put in place to try and
alleviate that?
Dr. Elmendorf. Well, we sit down with the managers at the
CBO in each area once a quarter to review systematically all
the projects that are under way in that area and to make sure
that they are the highest priority projects and that we are
making sufficient progress on them to be ready for whatever we
view as the next storm in some area. And that can come because
particular programs are due for reauthorization, because the
fiscal year is ending and new appropriations will be made,
because a new Congress is coming in. So we are very sensitive
to all of those things.
On an ongoing basis, I mean literally every week, we are in
touch with leadership in the Senate and the House and with the
leadership of the key committees to be sure that we are doing
the things that are right now--they are necessary right now.
But then we also take pains to be sure we are building the
tools that we will need, doing analysis we will need for you
all at the end of the year or next year or after that. And it
is very important for us to devote significant energy to that
so that we are ready.
And I mentioned at some point earlier that a fair number of
the testimonies that we have done to Congress this year have
been--have come on very short notice, but we had done the work
previously. We had written the report we could then draw on
when it was needed by Congress, and it is our job to be in
close enough touch with the committees and leadership to know
not just where you are going this month and next month, but
later this year and next year.
Having said that, there is only so much we can do. We can
build the analytic tools to be ready. But nonetheless, when the
storm comes and there are many proposals to be looked at--at
once, we need to do that work then. And my colleagues are
extremely committed to serving the Congress as best we can, and
we work very hard all the time, and we work whatever hours are
needed when the Congress needs us to deal with legislation that
it has to push through.
FEDERAL IT PROJECTS
Senator Boozman. Mr. Dodaro, why is IT such a challenge for
the Government?
Mr. Dodaro. Well, there are a couple factors. One is that
the agencies have great difficulty defining the requirements
that they want. The requirements are always changing, which
creates a lot of problems. We have identified that whether we
are talking about weapon system or information system, the
requirement-setting process is continually changing, and that
creates difficulty.
Second, there are not well-disciplined best practices put
in place on a routine basis. One way to make better decisions
on a regular basis is to use modular development, where
agencies are learning and developing the projects over a long
time, as opposed to trying to design a big system. There is an
endgame, including interim projects and demonstrations of
functionality throughout project development.
This is particularly true in weapon systems. New
technologies aren't mature enough to be ready to put into
production and deployment, and we have sort of raised our hand
and said we don't think you are ready yet. There is a lot of
concurrent production and technology development going on that
leads to later problems and suboptimal investments.
There are not good disciplined approaches in place.
Congress has passed legislation requiring best practices to be
implemented. Many agencies have them embedded in their policies
and principles but don't effectively implement them over time.
As you know, I mentioned earlier if we had additional
resources, I think we could stop more of these investments
earlier. That has been our goal to try to make sure we get
involved early.
You can tell where the warning signs are and where things
are going to be off track if you have the time to go in and
look up front. There are clear ways to do this properly, and
there are many examples of where good practices are not being
followed.
Senator Boozman. Again, thank you all. That is really all I
have, Madam Chair.
But I do want to thank you all. I know that you and your
agencies work really hard in a very nonpartisan way to try and
get the information that we need. And it is very, very helpful,
and we do appreciate your hard work, and I hope that we can
communicate back and forth so that we can give you the
resources that you need.
Thank you.
Mr. Dodaro. Thank you, Senator.
Dr. Elmendorf. Thank you, Senator.
Senator Shaheen. Thank you, Senator Boozman.
And thank you especially for that IT question because I
think that is a puzzle that all of us share, why we can't get
better at those IT contracts.
I have lots more questions and we could go on a lot longer,
but unfortunately, I also have to leave shortly. But I do have
a couple of final questions that I would like to pose to both
of you.
One is following up on the accountability and transparency
and oversight that I think all of us would like to see within
Federal programs. One of the areas where I think we have got to
do a better job is with the budget process.
As we have seen, as you all have experienced pretty
dramatically, over the last several years, we have been
operating on continuing resolutions. Too often it has created
uncertainty, which has affected the economy. It has made it
difficult to operate at the Federal level, and one of the
things that I have looked at with Senator Isakson is the idea
of changing our budget process from an annual to a biannual
budget.
Now I am not going to ask either of you to comment on
whether you think that is a good idea or not, but I want to ask
you, Mr. Dodaro, is whether you think under the current budget
process that we have in place, whether Congress adequately is
able to focus on recommendations that GAO offers on a regular
basis and whether you think we could do that better if we were
able to devote more time to that oversight piece?
Mr. Dodaro. We provide all of our information in formal
reports. We also provide the appropriation committees services
evaluating the agencies' budget requests and have a way to
provide them with our recommendations in that process. We are
in a pretty regular pattern working with the appropriations
committees.
Now, of course, they have been a little disadvantaged
because the President's budget submission has been late, and so
that gets the whole process off to a late start. So I think we
have good communications with the appropriations committees and
the authorizing committees when they have reauthorizations to
approve, particularly in the defense area, and a lot of our
requirements for our work come through the defense
authorization bills and the appropriation bills for work that
they want done in time for next year's cycle to be considered
over a period of time.
The Federal Government's budget used to be on a June to
July--or July to June basis, like a lot of the States are. They
couldn't get the budget passed on time there. So they decided
to move it until September to have more time to be able to get
it in place.
There is really no set process. We haven't had a budget
resolution every year to guide the appropriation decisions. We
have gotten behind.
So I think a lot of things would be better if we were able
to stick to regular order with regard to budgets and
appropriations. If it works the way it is supposed to work, our
work is synced to provide Congress with the right type of
information at the right time for them to consider those
findings.
Senator Shaheen. I certainly think all of us would
appreciate going back to regular order. I think the challenge
is how to do that. And given that we are in a situation where
we have only really passed two budgets according to our annual
process since Ronald Reagan was President, I question whether
we are actually ever going to get back to a point where we can
get the budgets done in a way that provides that certainty for
regular order.
Mr. Dodaro. I agree with you. But on the other hand, I am
saying there is an allure of going to a different approach,
which we have done many times. You know, most of the last 30
years have had continuing resolutions. But if the Congress
doesn't stick with whatever new process they are going to come
up with, there will be other types of problems that will come
up, in my opinion.
Now I have been watching this for over 40 years now, and
the real issue is sticking with what the Congress has put in
place as the process. It is just like a reorganization issue.
Some people think if you reorganize, you are going to solve
your problem. And sometimes you do, but many times you really
don't.
And so, I think it is just a matter of discipline and
sticking with the process. I know what the difficulties have
been, but I don't think changing the process will be a
particular solution to solving that particular problem.
CHANGING BUDGET PROJECTIONS' RULES
Senator Shaheen. No. I certainly agree that there is no
magic solution, but I do think it would provide more time for
oversight in a way that would be very helpful as we look at how
to address some of the inefficiencies, some of the
recommendations that GAO has made for improving the operations
of Government.
Dr. Elmendorf, I wonder, I think it was Mr. Dodaro who said
that the rules around how we operate--or maybe it was you--were
set some time ago, and given that, are there areas where we
should be reviewing and considering changing the rules around
how we do budget projections? We are in a much different world
now than we were 10, 15, 20 years ago.
Dr. Elmendorf. So I think this--so you are right. Of
course, a lot of specific issues have evolved. It is not
evident to me that the scorekeeping rules, the rules governing
baseline projections that we follow need to be changed. I
wanted to emphasize before that these are not things that we
have invented now, that they were following longstanding
custom.
I don't want to suggest that that is necessarily perfect,
the things that were set in place before. But I don't think
that the fundamental issues that you and your colleagues face
are really around, at least in general around those procedural
issues.
I mean, we have--as you well understand, we have a
fundamental disconnect between the benefits that the Government
has committed to pay under current law, the cost of those
things, given the aging of the population and rising cost for
healthcare, a disconnect between that and the revenues that we
are used to collecting.
And specific ways we do projections would change some
details of that, but the basic problem I think is actually
fairly clear. It is difficult, though, to make the policy
changes to address it.
So I don't want to sound like we were against changes in
procedures, but I don't--when I wake up at night worrying, it
is not about the procedures. It is really about the underlying
issues that you and your colleagues face.
MEDICARE SAVINGS
Senator Shaheen. On the other hand, in Medicare, for
example, there are projections now of hundreds of billions of
dollars in savings to the cost of Medicare because of
healthcare costs leveling out, and yet we are not able to
capture those savings as we look at how we score Medicare in
the future, as I understand. Maybe I am incorrect about that?
Dr. Elmendorf. Well, so, Senator, we have brought down our
projections of Medicare spending considerably over the past few
years. Relative to our projections of 4 years ago, we have
lowered Medicare, projected Medicare spending in, say, 2020 by
about 15 percent, and we have lowered projected Medicaid
spending in 2020 by about 15 percent.
We brought down our projection of the cost of the coverage
expansion of the Affordable Care Act for that reason, although
there are other factors that matter as well. So we are
certainly very attentive to new evidence necessarily.
We did ourselves a very thorough examination of what is
happening in Medicare far beyond anything that anybody outside
of CBO has done in that area. And based on that evidence is
partly why we brought down our projections.
So we are very attentive to that, but the world is a very
uncertain place. And there have been past slowdowns in
healthcare cost growth that have not--that have lasted for a
little while, and then growth rates have picked up again.
So we don't want to be too far behind the news, but we also
don't want to take a few years and extrapolate them
indefinitely. In the case of healthcare now, the slowdown has
been sufficiently long lasting and pervasive across Medicare
and Medicaid, in the private sector and within Medicare, across
regions of the country, across high- and low-cost patients,
across types of procedures and so on that something very
important is going on, we think, and we have made significant
changes in our projections.
But as I say, we don't want to extrapolate 10 years, 20
years beyond based on the experience of half a dozen years. So
we are taking it seriously but trying not to overreact at the
same time.
Senator Shaheen. Well, thank you. Thank you both very much.
As I said, I am sure we could spend another couple of
hours, but I appreciate not only your testimony today, but the
work that you and your agencies do to try and ensure that
Government operates more effectively for taxpayers.
And I know that, Mr. Dodaro, you have referred to this a
couple of times, and I think you did, too, Dr. Elmendorf, that
one of the things you are trying to do also is to make the work
that you do more transparent for people in this country. And I
think that is also very important.
So thank you very much.
ADDITIONAL COMMITTEE QUESTIONS
We will leave the record open until a week from today at
noon for any other questions or comments that might be
submitted by members of the committee or other Senators for the
record.
[The following questions were not asked at the hearing, but
were submitted to the Departments for response subsequent to
the hearing:]
Questions Submitted to Gene L. Dodaro
Questions Submitted by Senator Jeanne Shaheen
Question. The Government Accountability Office (GAO) is currently
in the process of developing a fee-based system to offset the cost of
GAO's reviews of ``bid protests.'' Considering the limited resources of
small businesses, how does GAO plan to ensure that small businesses
maintain a level playing field in bid protests?
Answer. On March 18, GAO provided a status report to the committee,
as required by report language associated with the Consolidated
Appropriations Act, 2014, and we plan to submit an update in late June.
GAO has convened an interdisciplinary team within GAO to examine
functional requirements, acquisition strategy, and fee structure, and
to conduct outreach to stakeholders. Our outreach to stakeholders is
ongoing and, with regard to small businesses, includes congressional
committees with jurisdiction regarding small businesses, the Small
Business Administration, and organizations representing small
businesses. GAO has made progress in each of these areas, and has
released a Request for Information to industry in order to complete our
analysis of potential options for this system and their costs. Since
the proposed filing fee is to offset the cost of a system that has not
yet been established, we do not yet have information that will allow us
to predict the amount of a fee.
We are conscious of the potential effects of the system on small
business and we will carefully consider the amount of the proposed fees
in that context. We are also focused on assuring that the filing system
will be easy for all parties involved in a bid protest to use. We will
continue to consult with the appropriations committees as our team
makes decisions about how to implement the docketing system
Question. How does GAO ensure its work is up to industry
standards--that is, who audits the auditors? And how often?
Answer. For GAO, the industry standard is embodied in the Generally
Accepted Government Auditing Standards. These standards, along with our
audit and reporting policies, are consistent with international
auditing standards.
The standards require that, in addition to a rigorous annual
internal monitoring program, audit entities undergo an external peer
review every 3 years. To assure independence, GAO's peer reviews have
been conducted by international teams made up of representatives from
national audit offices.
Peer review is a comprehensive examination of GAO's system of
quality control. It is conducted to assess whether GAO's quality
assurance system is suitably designed and operating effectively. This
comprehensive examination consists of:
--interviews with senior leaders to establish their commitment to
quality;
--interviews with staff to establish their knowledge of standards and
policy; and
--a detailed examination of a sample of engagements and reports.
GAO has received clean opinions in our three successive peer
reviews (for 2004, 2007, and 2010 work). We post the reports from these
peer reviews on our Web site. In addition to the clean opinions, all of
the reports have cited a number of exemplary practices at GAO. For
example, the 2010 report cited--among other things--GAO's strong
corporate culture that supports quality and contributes to its
effectiveness in improving Government operations. In essence, these
reviews serve to assure the Congress and the American people that they
can have confidence that GAO's work is independent, objective, and
reliable.
The current peer review of our 2013 work is underway--led by Norway
and supported by Canada, the United Kingdom, Denmark, and the Bahamas.
The peer review is scheduled for completion by September 30, 2014.
Question. How does GAO ensure that GAO materials are readily
accessible to the public, beyond posting reports on the GAO Web site?
Answer. In addition to finding GAO's reports and other products on
our Web site, anyone can sign up for daily emails that list and provide
links to GAO's new reports--either all reports or reports on specific
subjects. For social media, we use Twitter to share daily report
releases, announce our subject matter experts' testimonies, and help
inform conversations around news and current events. On our Facebook
page, we try to provide a glimpse into at least one of the reports
published each day, using an image and a few short sentences to convey
the message. We also use Facebook to announce events such as our
AskGAOLive webchats. For example, we recently had a webchat between the
report's author and the public regarding our report on veterans' use of
education benefits. In addition, we have a presence on the professional
networking website, LinkedIn, where we publish select job
announcements, as well as other employment-related content.
The digital media we use include platforms such as YouTube and
Flickr to share video and images from our reports. We also produce
podcasts--in which we interview GAO officials on significant issues or
recent reports--and these can be downloaded or listened to from our Web
site.
Because we recognize that our audiences are often on the go, we
have also developed apps for Android and Apple devices, which are
available on iTunes and Google Play. Bloggers and developers can also
share GAO content with their readers by using our sharing widgets.
We hope that having GAO's information available on these social and
digital media platforms will make it easier for our audiences to find
and use the results of our work.
Question. Does GAO conduct a review of each report to make sure it
is understandable for a general audience, rather than just for subject
matter experts?
Answer. GAO audits often require in-depth research and
sophisticated analyses of complex and technically challenging issues.
In reporting on the results, GAO tries to strike the appropriate
balance between the needs of the informed lay reader and subject matter
experts. To achieve this objective, GAO assigns experts in written and
visual communication to each report to enhance clarity of presentation.
We also provide regular training in written communication to our
analysts. Our inclusion of a Highlights page that summarizes key
findings and recommendations also enhances the accessibility of our
reports to a variety of audiences.
We use a two-step senior executive level review for each product.
The Senior Executive who has directed the engagement, and who will sign
the report and serve as the primary contact, assesses the draft
report's responsiveness to stated objectives; consistency with
reporting standards; completeness and clarity of presentation;
soundness of the evidence, logic, and balance leading to findings,
conclusions, and recommendations; and adequacy in treating affected
party comments. To the extent these Senior Executives have any
concerns, they work with GAO staff to revise the draft report and
resolve them. These Senior Executives then approve the draft report for
final review.
A Senior Executive in GAO's Audit Policy and Quality Assurance
Office provides a final check of the draft report and reexamines the
First Partner's judgment. Approval is given to issue the report when
that Senior Executive is satisfied that the product is consistent with
professional standards and GAO's core values.
Question. Are there common hurdles GAO and Inspector Generals (IGs)
face in obtaining the information and access you need from Federal
agencies and other entities to conduct a thorough analysis and make
realistic recommendations? How can we work to reduce those hurdles?
Answer. GAO and the IGs face some common hurdles in access to data
from Federal agencies. We also are conscious of making the best use of
our resources with regard to supporting Congress and making
recommendations to Federal agencies and coordinate to try to assure our
work is complementary.
With regard to GAO's access to information, it is essential to our
ability to report on issues of importance to the Congress and the
American people. Executive departments and agencies are generally very
cooperative in providing access. It is somewhat rare for an agency to
deny us access to information, and rarer for an agency to refuse to
work toward an accommodation that will allow us to carry out our work.
We devote a high level of attention to monitoring and aggressively
pursuing access issues as they arise. We appreciate the interest of
Congress in helping to ensure that we obtain access to information and
the efforts by agencies to cooperate with our requests.
However, over time we have experienced access issues at certain
departments and agencies. We actively pursue access issues as they
arise and we are engaged in discussions across the executive branch to
enhance our access. For example, the Department of Justice (DOJ), in
consultation with GAO, instituted new protocols that were designed to
improve DOJ's timeliness in responding to our requests for information,
and to improve communication between DOJ and GAO. The protocols include
target timeframes for providing documents and scheduling meetings,
among other things.
Another issue related to access to information is in the context of
the intelligence community (IC). The Director of National Intelligence,
in consultation with the Comptroller General, issued a written
directive in 2011 governing our access to information from elements of
the intelligence community, known as Intelligence Community Directive
(ICD) 114. ICD 114 is designed to address the historic challenges that
GAO has faced in gaining access to information in the IC and contains
provisions promoting constructive interaction such as establishing a
presumption of cooperation between the IC and GAO. It is crucial that
these terms and the overall Directive be carefully implemented and
monitored to ensure we are able the assist the Congress in its
oversight responsibilities, including requests from the Committees on
Appropriations, Armed Services, Judiciary, Homeland Security and
Government Affairs, as well as the Intelligence Committees.
We have experienced other access issues at certain agencies due to
long-standing and erroneous interpretations of our statutory access
authority. In some cases agencies have interpreted language in program
statutes that limit disclosure of certain information as also
restricting GAO's access. Legislation passed in the House this session
(H.R. 1162) and that is currently pending in the Senate would confirm
our access rights in these instances.
In terms of common hurdles for GAO and the IGs, we do work together
to identify and address them. For example, last year we convened a
Joint Forum on Data Analytics for Oversight and Law Enforcement which
involved the Council of Inspectors General for Integrity and Efficiency
(CIGIE) and the Recovery Board. The Forum focused on the importance of
access to agency databases and the use of data-matching in reviewing
programs and identifying errors and fraud.
We also have an annual coordination meeting between CIGIE and GAO
that identifies and addresses issues of common concern, including any
access issues. CIGIE is represented, along with GAO, in a number of
other cross-cutting activities and organizations, such as the National
Intergovernmental Audit Forum--an annual conference of Federal, State,
and local auditors focused on emerging issues and opportunities for
coordination. Finally, coordination with IGs is a standard practice as
GAO begins all of our engagements.
Question. As part of GAO's fiscal year 2015 budget, GAO requests
authority to establish a ``Center for Audit Excellence.''
(a). Comptroller General Dodaro's testimony stated that there
is a large demand for GAO's expertise--both domestically and
internationally. Who does GAO receive requests from, and how
often?
Answer. The global demand for GAO's assistance is evident in the
requests we receive for international study visits to GAO, of various
length and composition, totaling 383 in fiscal year 2013, as well as
multiple requests for GAO staff to help train the staff of our
international counterparts either at GAO or in their home countries.
Many look to GAO as a model, and request our knowledge and experience
as they try to strengthen their respective audit capacities. Some
specific, recent examples include:
--A request for assistance in establishing a training center for a
National Audit Office in Africa;
--A request from an Asian National Audit Office asking to send its
new staff to GAO for two-week entry-level training;
--A request to send an expert on capacity building efforts to another
National Audit Office in Asia to help them improve staff
capabilities;
--A request for comparative best practices and benchmarking
information by a National Audit Office in planning a
performance audit; and
--A request for a GAO executive from our Forensic Audit and
Investigative Service team to visit a National Audit Office in
the Middle East to share knowledge and experience.
There are also other indicators that demand is high for capacity
building support of GAO's counterpart national audit offices, commonly
referred to as supreme audit institutions (SAIs). In 2010, a survey of
192 SAIs sought to obtain a broad understanding of the nature and
extent of needs across its community, and received a 90 percent
response rate. Seventy-two percent of the respondents identified
capacity development support needs as medium to high. The survey also
identified that there is substantial demand by SAIs for high quality
support from their peers, and that there is an added value in receiving
peer support as compared to other service providers.
A Global Call for Proposals in 2011 focused on the needs of SAIs in
developing countries. Fifty-five proposals were submitted, underscoring
the magnitude of the capacity development needs in the international
audit community as identified in the 2010 survey. Just under half of
the 55 proposals had funding approved or were at the implementing stage
as of the fall, 2013, with the assistance of the International
Organization of Supreme Audit Institutions (INTOSAI--which includes
most SAIs). A second call for proposals was launched in 2013 and
preliminary response indicates a similar number of proposals being
submitted.
GAO is also called upon domestically for assistance at the State
and local levels of government auditing. For example, we recently
received a request for assistance in building performance auditing
capacity in a State audit office. Similarly, a local audit office
sought report writing assistance and training. Given that GAO
promulgates both Generally Accepted Government Auditing Standards
(GAGAS) and standards for internal control in the Federal Government,
we are often called upon for training specific to the standards as they
are applied in Government and also in the private sector for those that
receive Government awards.
Question. As part of GAO's fiscal year 2015 budget, GAO requests
authority to establish a ``Center for Audit Excellence.''
(b). Comptroller Dodaro's testimony states that the Center
would operate entirely on fees, with no cost to the taxpayer.
However, staffing the Center would require a time commitment
from existing GAO staff. How would GAO ensure that the new
Center would not detract from GAO's service to Congress?
Answer. GAO intends to staff the Center by using the fees charged
for training and technical assistance to hire staff expressly for the
purpose of providing these services. Under current law we cannot accept
or retain such fees. Other than the initial startup and planning for
the Center, as a general rule we do not plan to use our existing staff
for the purpose of staffing the Center or providing services, and thus
do not anticipate that the Center will detract from GAO's service to
Congress.
______
Question Submitted by Senator Christopher A. Coons
[Note.--The question below was asked during the hearing by Senator
Coons to Mr. Dodaro. No response was given by Mr. Dodaro at that time.
Below is the response that was later given by the Government
Accountability Office to the Senate Subcommittee on the Legislative
Branch of the Committee on Appropriations.]
Question. Does the Government Accountability Office (GAO) have an
Energy Saving Performance Contract (ESPC), in connection with an energy
improvements, and if not, please provide a few sentences on other
efforts or investments GAO has undertaken to improve energy efficiency.
Answer. GAO does not currently have an ESPC but considers their use
when developing energy efficiency projects. In 2010, GAO used a Utility
Energy Service Contract (UESC), similar to an ESPC, to fund a $3.7
million project to install gas powered boilers.
GAO regularly conducts energy audits to help identify areas for
potential energy savings. The last energy audit was conducted in 2012
and the next energy audit will be conducted in 2014. GAO has undertaken
several energy efficiency projects in the last few years, including
lighting and system upgrades. GAO is currently replacing eight of the
building's original air handlers with five new high efficiency units.
GAO has reduced the energy consumption of its building by 13 percent
compared with the 2003 baseline of the Energy Act. This energy
reduction provided GAO a cost avoidance in fiscal year 2013 of an
estimated $1 million.
______
Questions Submitted by Senator John Hoeven
progress of bid protest system
Question. In the fiscal year 2014 omnibus, Government
Accountability Office (GAO) was allowed authority for a new electronic
docketing system financed by fees charged to companies filing bid
protests. GAO has been meeting with small business holders and other
technical representatives to examine commercially available IT systems,
cost-benefit analysis and fee structure.
In fiscal year 2015, you anticipate $450,000 in bid protest fees.
What is the current progress of the bid protest system and what is
being done to mitigate the financial costs to small businesses?
Answer. On March 18, GAO provided a status report to the committee,
as required by report language associated with the Consolidated
Appropriations Act, 2014, and we plan to submit an update in late June.
GAO has convened an interdisciplinary team within GAO to examine
functional requirements, acquisition strategy, and fee structure, and
to conduct outreach to stakeholders. Our outreach to stakeholders is
ongoing and includes congressional committees with jurisdiction
regarding small businesses, the Small Business Administration, and
organizations representing small businesses. GAO has made progress in
each of these areas, and has released a Request for Information to
industry in order to complete our analysis of potential options for
this system and their costs, including whether to implement the system
internally, or to contract for a system as a service. Since the
proposed filing fee is to offset the cost of a system that has not yet
been established, we do not yet have information that will allow us to
predict the amount of a fee.
We are conscious of the potential effects of the system on small
business and we will carefully consider the amount of the proposed fees
in that context. We are also focused on assuring that the filing system
will be easy for all parties involved in a bid protest to use. We will
continue to consult with the appropriations committees as our team
makes decisions about how to implement the docketing system.
workforce
Question. The fiscal year 2014 omnibus was enacted a quarter into
the fiscal year. Many agencies have reported difficulties in hiring up
to the original full-time employee (FTE) goal derived at the beginning
of the fiscal year. They cite the lengthy cycle time of the Government
hiring process.
Your FTE target for fiscal year 2014 is 2,945. Do you anticipate
meeting the fiscal year 2014 target?
Answer. Since receiving our appropriation in mid-January 2014, we
have been pursuing a multi-pronged approach to hire about 300 permanent
staff and 200 interns. Because we were already a quarter into the year,
we do not anticipate burning 2,945 FTE this fiscal year. However, we
are hiring as quickly as we can to attain 3,030 staff on board by
August 2014, and importantly, position ourselves to hit the 2,945 FTE
target for fiscal year 2015. GAO's Executive Committee is actively
monitoring hiring and other workforce activity to ensure that we
achieve our goals.
Question. Should you not meet your goal, how will you use the funds
originally planned for salaries?
Answer. GAO would pursue targeted investments which have been
deferred for several years, including upgrading aged information
technology (IT) equipment, replacing computers and work stations, and
addressing inefficient building systems. GAO's current laptops and
workstations, which were first deployed in 2008, have reached the end
of life. These investments will help preserve our infrastructure,
increase operational reliability, and enhance the effectiveness and
efficiency of our staff and work processes.
Question. With the increase in FTEs from the fiscal year 2013
level, what capabilities will be enhanced?
Answer. The increase from fiscal year 2013 to fiscal year 2015 will
allow GAO to bolster our staff capacity, provide an appropriate mix of
staffing levels to support our work, rebuild our entry level
Professional Development Program, and address succession planning. We
will reinvigorate our student intern program, which serves as an
important source of entry-level staff in the following years.
GAO will also build capacity in science and technology, and replace
critical skills gaps lost over the last several years due to limited
hiring in areas, including:
--Auditors/Accountants in our financial audit work,
--Information Technology specialists/analysts in related audits and
operations,
--Economists with expertise in financial and domestic programs, and
--Attorneys that provide legal support to all audits and evaluations
and the procurement law area, to handle bid protest.
Question. Will you be able to fulfill more congressional requests?
Answer. Yes. The planned increase in GAO's staff capacity will
enhance our ability to meet the demand from Congress, including
reducing the delay in starting work on congressional requests;
enhancing our ability to provide more timely responses and analyses to
support congressional oversight; and increasing the number of requests
that we can undertake. It should be noted, however, that the resources
needed to fulfill an individual congressional request can vary
significantly depending upon the scope of the request, the complexity
of the issues, the number and areas of expertise of the staff needed to
conduct the engagement, and the extent of GAO's existing body of work
related to the topic.
workload management
Question. GAO sets and follows the standards for conducting high
quality audits. Conducting these thorough reviews could take up to a
year to complete. GAO provides other options that can be conducted in a
shorter timeframe, including technical guidance and congressional
briefings.
How does GAO manage requests that are time-sensitive? The very
nature of GAO's rigorous standards requires time for thorough analysis.
Answer. GAO uses several approaches to manage time-sensitive
requests while assuring that our reports meet quality standards as
established in the Generally Accepted Government Auditing Standards and
related GAO policies.
First, GAO's Congressional Protocols establish a priority for
assigning resources. The top priority is requirements established in
statute, or Conference or Committee reports. These requirements
frequently establish a date by which GAO must communicate the results
of our work, and thus, can be time-sensitive. GAO works closely with
the committees to agree on an appropriate scope of work that can be
accomplished within the required deadline. Depending on the complexity
and scope of required work, in some cases GAO meets these due dates
through briefings to the relevant House and Senate committees, with a
report to follow.
Second, our next priority in the Congressional Protocols is
requests from senior congressional leaders and committee and
subcommittee leaders. When the request is time-sensitive, GAO managers
will discuss with committee leaders the scope of the work and whether
it can be appropriately completed within the desired timeframe while
also meeting quality standards. If not, we may recommend a different
scope of work or another source of information. GAO's Congressional
Protocols also contemplate requests from individual members, but we
have not had the resources to devote to these requests in recent years.
Third, GAO also works with committee leaders to establish their
priorities when they have submitted multiple requests or statutory
requirements. We will discuss which reports are most time-sensitive,
and sequence our work through agreement with the committee leaders and
staff.
For those instances where GAO cannot issue a report which would
meet the timing needs of Congress while also upholding quality
standards, we often find that GAO's previous reports provide
information that is useful and relevant. In those cases, we offer to
brief on those reports and make our program experts available to answer
questions. We may also be able to provide quick followup on our
previous work and provide those results as technical assistance.
______
Questions Submitted to Dr. Douglas W. Elmendorf
Questions Submitted by Senator Jeanne Shaheen
Question. Does Congressional Budget Office (CBO) routinely look
back at previous cost estimates and compare those to actual outcomes?
Answer. Yes, CBO routinely monitors the budgetary effects of
enacted legislation to help improve projections of spending and
receipts under current law, as well as to improve cost estimates for
new legislative proposals. However, it is often difficult or impossible
to determine, even in retrospect, the incremental impact on the budget
of a particular piece of legislation. CBO regularly prepares cost
estimates for legislation when bills are reported by committees of the
House of Representatives or the Senate. In some cases, such legislation
is changed before enactment. Although CBO often provides updated cost
estimates (especially for direct spending provisions) prior to the
enactment of legislation, proposals are sometimes amended after cost
estimates are prepared. Moreover, in many cases the actual costs or
savings resulting from enacting legislation cannot be identified; they
may be a small part of a large budget account or revenue stream, and
there may be no way to know for certain what would have happened if the
legislation was not enacted. In fact, most of the cost estimates that
CBO completes are for legislative proposals that are not enacted, so it
is not possible to determine their accuracy.
Nonetheless, CBO attempts to look back at previous estimates to
discern as much as possible how such estimates compare with actual
outcomes after legislation is enacted. A description of the agency's
process and a few specific examples are provided below.
A Regular Review Process. Because it is often not possible to
determine how close the impact of a particular piece of legislation is
to CBO's initial projections, it is hard to make a general statement
about the accuracy of the agency's estimates. Nonetheless, CBO analysts
undertake a detailed review of Treasury-reported outlays and receipts
after the end of each fiscal year to learn as much as possible about
how those actual results compare with both the original cost estimates
for individual pieces of legislation (when possible) and the current-
law baseline projections (which reflect all legislation previously
enacted). In addition, CBO updates its baseline projections a few times
each year, and during those exercises, the agency carefully tracks and
reports on changes from the previous baseline by separately
categorizing and explaining changes derived from legislation, economic
revisions, and other (technical) adjustments.
That annual process is useful in helping CBO prepare better
projections going forward, even though it is sometimes not possible to
discern exactly how much of a given year's estimating error for a given
program is directly attributable to a specific piece of legislation.
Following are a few examples of cases in which it is possible to match
up results with earlier projections for particular pieces of
legislation.
Medicare Part D. The prescription drug program known as Medicare
Part D is a relatively rare example in which actual spending can be
directly compared with the projections contained in the CBO cost
estimate. In most cases, legislation modifies existing programs; it is
often not possible after enactment of such legislation to determine how
spending for a modified program has changed specifically as a result of
that legislation, or how much of future spending would have occurred
even without the change in law. In contrast, the legislation that
created Part D established a new component of Medicare with a system of
new benefit payments, associated administrative costs, and payments
from premiums and States.
The actual net cost of Medicare Part D has been much lower than CBO
originally projected. For example, in its 2003 cost estimate for the
legislation creating the program, CBO projected that Part D costs
through 2013 would be $552 billion (the administration's estimate at
that time was higher), whereas the agency now estimates those costs
totaled $354 billion through 2013. The roughly 35 percent difference
between the initial projection and actual results recorded thus far
arises largely because, in preparing the estimate, CBO observed that
recent growth rates for drug spending had been higher than the long-
term trend and anticipated that growth would remain above the long-term
trend for most of the 10-year period following the creation of Part D.
However, that growth rate dropped below its prior long-term average
even before the new program was implemented in 2006--probably because
patents expired for a substantial number of brand-name drugs (so
consumption of those drugs shifted to lower-priced generic versions)
and relatively few new brand-name drugs were introduced. In addition,
enrollment in Part D has been lower than what CBO initially projected.
Over the past several years, as actual data have been reported, CBO
has significantly reduced its baseline projections of future spending
for the Part D benefit, and its cost estimates for new legislation
related to Part D have similarly reflected experience with actual
spending under the program.
Recovery Act Spending. The American Recovery and Reinvestment Act
of 2009 (ARRA) provided funding for a broad range of new and existing
Federal programs and reduced revenues through changes in Federal tax
law. Most of ARRA's effects on Federal spending and revenues have now
occurred, and they have been roughly in line with the original
estimates prepared by CBO and the staff of the Joint Committee on
Taxation (JCT) at the time the legislation was considered by the
Congress in early 2009.
CBO has closely monitored actual spending under ARRA for the past 5
years to help determine where the agency's estimates of outlays
(including their timing) were too high or too low--both in total and
for individual years and programs. Estimates for many of the individual
years following the enactment of the Recovery Act were generally quite
accurate. For example, the actual spending in 2009 of funds provided by
ARRA differed by only 1 percent from CBO's estimate for that year.
Through fiscal year 2013, the outlays resulting from ARRA totaled
$596 billion, about $49 billion (or 9 percent) above CBO's original
estimate of $546 billion for the 2009-2013 period. (Additional spending
will occur over the next several years. In addition, JCT estimated that
ARRA would reduce Federal revenues by about $210 billion over 10 years,
with most of that impact falling in 2009 and 2010.) Most of the
underestimate in spending under ARRA is accounted for by provisions
related to unemployment insurance, nutrition assistance, and refundable
tax credits; those costs were boosted by the weaker-than-expected
economic recovery.
Some estimates were particularly close to the recorded results for
the 5 years following the enactment of ARRA. For example, spending for
the Department of Health and Human Services totaled $130 billion
through 2013, which is about 1 percent below CBO's original estimate
for that period. Estimates of education and transportation spending
under ARRA were within 4 percent and 6 percent, respectively, of the
actual five-year totals (which were $94 billion for the Department of
Education and $40 billion for the Department of Transportation).
Spectrum Auction Receipts. Legislation enacted in the past 20 years
directed the Federal Communications Commission (FCC) to use competitive
bidding (auctions) for licenses to use the electromagnetic spectrum
when more than one party seeks such licenses. Spectrum auctions under
such legislation have generated more than $50 billion in net offsetting
receipts to the Treasury since 1994.
CBO's estimates of spectrum auction proceeds under legislation
enacted over the past two decades have sometimes been too high and
sometimes too low. When estimating the budgetary impact of the Balanced
Budget Act of 1997, for example, CBO projected that FCC auctions would
generate about $25 billion in proceeds. Actual collections resulting
from that legislation were about one-third less than projected. CBO
also estimated spectrum receipts of about $25 billion from the auctions
authorized by the Deficit Reduction Act of 2005, but the agency
underestimated receipts for that legislation: Collections resulting
from the 2005 act have been about 30 percent higher than the estimate.
Spectrum values fluctuate for several reasons, including changes in
technology, market conditions, and the financial and strategic
interests of individual wireless companies. Projections of receipts
also reflect uncertainty about the quantity of spectrum that will be
available for auction. CBO's estimates attempt to reflect those
uncertainties by representing the middle of the range of most likely
outcomes.
Spending for Unemployment Insurance. In 2008, lawmakers enacted the
Emergency Unemployment Compensation program (EUC), which has been
altered numerous times over the past several years. Under current law,
that program expires at the end of December 2013. The EUC program
expired at the end of 2013. Adding together its estimates for the 12
laws that enacted and subsequently expanded and extended EUC, CBO
estimated that benefits under the program would total $228 billion
through December 2013. According to the Department of Labor, the actual
cost of EUC benefits has been $230 billion through December 2013, a
difference of less than 1 percent.
The relatively low net error overall reflects both overestimates
and underestimates in CBO's original cost estimates for the many pieces
of EUC legislation enacted in recent years. In general, estimates for
EUC tended to be lower than the actual outlays in 2009 and 2010 because
the effects of the recession turned out to be much worse than CBO
anticipated. During that time, the unemployment rate rose sharply and
stayed higher than the rate CBO used for estimating the costs of
legislation. In addition, people remained unemployed much longer than
they had in previous recessions, thus increasing the time that people
collected benefits, adding to the total costs of such benefits. In more
recent years, the opposite has been true: the unemployment rate has
fallen at a slightly faster pace than CBO projected; hence, more recent
estimates of benefit payments have tended to be higher than actual
costs. In addition, actual benefit payments were reduced by mandatory
sequestration, the effects of which were not reflected in the original
estimates.
Question. Does CBO adjust or inform its methodologies in response
to lessons learned from previous estimates?
Answer. When spending for a Government program turns out to be
higher or lower than CBO had expected after a legislative change, it is
generally unclear whether the error should be attributed to the
previous baseline projection for spending under that program or to the
agency's estimate of the effects of the new legislation. Nonetheless,
CBO carefully scrutinizes errors in its projections, reviews data on
the spending patterns for Federal programs, and consults with outside
experts on those programs in order to improve its estimating
methodologies.
As noted in the previous answer, CBO conducts a thorough review of
actual outlays and revenues each year (as reported by the Department of
the Treasury). The direct result of that review is a continual fine-
tuning of estimates in the forward-looking baseline projections. That
process begins late in the fall of each year, and updated estimates are
reflected in the Budget and Economic Outlook that is published early in
the next calendar year. Moreover, CBO then uses the updated estimating
assumptions that underlie such baseline projections when it prepares
cost estimates for new legislation considered during the ongoing
congressional session.
Similarly, when CBO is presented with new legislation to estimate,
it generally begins that process by reviewing available data for
historical spending patterns stemming from prior legislation. In
addition, when appropriate, it modifies the methodology that was used
for previous estimates to reflect any lessons learned from observing
how programs created or changed in prior legislation unfolded over
time. For example, sometimes funds appropriated for a given program
have been spent more slowly or more quickly than CBO had estimated, so
when new proposals for additional funding for the program arise, the
agency may adjust its estimates of the pace of such spending.
In other cases, CBO may learn that agencies or States participating
in a program have been implementing the program somewhat differently
than it had expected when preparing a previous estimate. As above, CBO
takes such information into account in estimating the cost of new
legislation that would affect that program.
Question. Does CBO share its cost methodologies with academic and
financial researchers, or other experts, for independent evaluation?
What about other budget offices at the local, State, or international
level that have similar responsibilities in terms of projections and
cost estimates?
Answer. CBO considers the transparency of its analyses to be a
basic value of the agency. Although much of the analysis that CBO
undertakes is very technical in nature, the agency works hard to
explain the basis for its findings so that Members of Congress, their
staff, and outside analysts can understand the results and question the
methodologies used.
To that end, CBO discloses its methodology and the reliability of
its methodology in numerous ways:
--The agency makes its cost estimates for public pieces of
legislation and reports presenting other analyses available
immediately on the website to all Members of Congress, their
staff, and the public.
--The agency`s normal cost estimates include descriptions of the
basis for the estimates.
--Many of the agency`s reports include substantial discussions of the
relevant research literature and CBO's modeling approaches--in
the text, in special boxes, or in appendixes. Examples include
the following:
--Analyses of the economic impact of the President's budget,
released annually.
--The projections of long-term growth in the costs of healthcare
used for the Long-Term Budget Outlook, released annually.
--Estimates of the effects on output and employment of the American
Recovery and Reinvestment Act.
--Reports on the distribution of household income and Federal
taxes, released periodically.
--Updated estimates for the insurance coverage provisions of the
Affordable Care Act, released periodically.
--Estimates of the economic impact of alternative fiscal policies.
--A report on the budgetary effects of raising the cigarette tax.
--A report on the effects of raising the minimum wage.
--The regular updates to the agency`s baseline budget projections
include an accounting and explanation of the sources of
revisions to those projections.
--The agency releases data and other technical information with some
of the key reports. Examples include extensive spreadsheets
released with the thrice-annual budget projections and with the
annual report on the long-term budget outlook, as well as with
a report on the fair-value cost of Federal credit programs.
--The agency releases regular analyses of the accuracy of its
economic forecasts.
--The agency releases background reports to provide details about its
analyses for nonexperts, and working papers to provide
technical descriptions of its analyses for experts. Some
examples include these:
--A background paper, a working paper, and another working paper
describing the agency's analysis of the responsiveness of
the labor supply to changes in tax rates.
--A background report describing the main features of the
microsimulation model used for long-term analysis of Social
Security.
--A working paper on the tax elasticity of capital gains.
--A working paper on the short-term effects on output of changes in
Federal fiscal policies.
--A report on how CBO projects income.
--Working papers on wages and on benefits and total compensation in
the Federal Government and private sector.
--Working papers on Medicare`s demonstration projects on disease
management and on value-based payment.
--The agency undertakes and publishes analyses of the sensitivity of
its estimates to key parameters. For example, the analyses of
the economic effects of fiscal policies include alternative
estimates based on ranges of assumptions about the short-term
stimulus from lower taxes or higher Government spending, the
response of the labor supply to changes in tax rates, and the
effects of budget deficits on private saving and international
capital flows. The agency`s report on employment-based health
insurance under the Affordable Care Act showed how alternative
assumptions would alter the estimates.
--When the agency revises its view of key aspects of its analyses, it
explains the rationale for those revisions. Examples include
reports explaining the agency's revised view of the effects of
several policy options: the effectiveness of malpractice reform
in reducing healthcare costs, the effect of prescription drug
use on Medicare's spending for other healthcare services, and
the effect of raising the age of eligibility for Medicare to 67
on the budget deficit.
--The agency responds to letters from Members of Congress requesting
additional information on methodology. Examples include reviews
of how CBO views the budgetary impact of long-term agreements
by the Federal Government to purchase electric power and the
budgetary impact of opening more Federal lands to oil and gas
leasing.
--Members of CBO`s staff present information about how the agency
does its analyses and the results of those analyses at academic
and professional conferences so as to encourage input from
outside experts.
--CBO`s analysts spend a great deal of time explaining details
underlying the cost estimates and reports in phone calls and
meetings with interested Members of Congress and their staff.
CBO also seeks input from outside experts, including professors,
analysts at think tanks, private-sector experts, and employees at
various government agencies when reports and analyses are being
prepared. Some of those consultations occur during regular meetings of
CBO's Panel of Economic Advisers (which reviews the agency's economic
forecast) and Panel of Health Advisers; many more consultations occur
on an informal, ongoing basis.
For cost estimates, for example, CBO staff routinely consult with
knowledgeable program staff at Federal agencies that would be involved
in implementing a legislative proposal. In many cases, that
consultation extends to officials in State and local governments. For
example, legislation in the areas of healthcare, income security
programs, environmental regulation, education assistance, and
infrastructure spending is often implemented (at least in part) at the
State level, and CBO staff can and do learn a great deal by discussing
estimating methodologies, program parameters, and historical data with
staff in State agencies (as well as local governments as appropriate).
CBO's analysts frequently contact outside experts in academia and
elsewhere to obtain their insight about the potential effects of
legislation, to obtain useful data, or to discuss estimating
methodologies. For example, when developing models involving insurance
risks to the Federal Government that are similar to those faced by the
private sector, CBO consults with academic researchers and private-
sector experts to understand the concepts involved in estimating
insured losses. CBO has prepared several cost estimates for proposals
related to the authorization of terrorism risk insurance that relied
heavily on information from insurance industry actuaries and models
used by private-sector firms for the terrorism component of property
and casualty insurance that they offer. CBO also consults outside
experts in the agriculture community (including Federal, academic, and
private-sector experts) by holding an annual baseline review conference
to seek input and feedback on the agency's preliminary projections of
supply and demand for various agricultural commodities.
More generally, CBO staff review the work of others' independent
analyses and conduct literature reviews to identify relevant research
findings that can inform their estimating methodologies.
At the international level, CBO staff have participated in annual
meetings of parliamentary budget officials organized by the
Organisation for Economic Co-operation and Development, as well as
meetings of other international groups. Those forums have provided an
avenue for exchange of information, including learning about the
analytical methodology and budgeting approaches taken by governments in
different countries. CBO also frequently hosts visiting delegations
from other countries to discuss the work that it does for the U.S.
Congress and to learn about budget-related experiences in other
countries.
______
Questions Submitted by Senator John Hoeven
full-time employees (ftes)
Question. Last year, Dr. Elmendorf testified that if the
Congressional Budget Office's (CBO's) budget request of $45.7 million
was met, the agency would be able to hire 235 full-time equivalents
(FTEs). Since the omnibus was enacted mid-year, many agencies may not
be able to reach their goal FTE. As a result, there may be money left
over from their initial estimates.
What is the current level of FTEs at CBO, and do you expect to
reach 235 FTEs by the end of the current fiscal year? If you are not
able to reach that goal, how will money designated for salaries be
reallocated?
Answer. CBO is currently operating with about 222 FTEs. After the
2014 appropriation was set, we began an aggressive recruitment effort
to bolster the staff, and we have made offers to, and received
acceptances from, another 10 people. We are continuing to recruit for
other positions. Taking into account some anticipated attrition, we
expect to end fiscal year 2014 with about 230 employees on board. As a
result, some of the funds allocated in the budget request for payroll
will not be spent for that purpose; as reflected in our 2015 budget
request, we reallocated such funds to cover the cost of information
technology purchases that had been deferred from previous years.
work load
Question. One of CBO's priorities for fiscal year 2014 was for
deferred information technology (IT) purchases. In fiscal year 2015,
CBO indicates that they will need less money for IT. Since scoring
legislation involves complex calculations, IT systems may assist
analysts.
Last year, you mentioned that under sequestration, it forced
deferment of IT purchases. Have those needs been addressed, and if so,
how are they assisting CBO with the current workload?
Answer. Yes, CBO's pressing needs for information technology were
addressed by the 2014 appropriation. For example, the funding enabled
us to acquire greater storage capacity and advanced servers designed
for sophisticated statistical analysis and modeling undertaken by an
increasingly wide swath of the agency. The funding also enabled us to
replace aging computers and other hardware and to enhance remote access
capabilities for CBO staff, made necessary by increasingly compressed
legislative timeframes. Finally, the funding allowed us to buy software
that will improve our analytical capabilities.
SUBCOMMITTEE RECESS
Senator Shaheen. So thank you very much.
I declare this hearing adjourned.
Mr. Dodaro. Thank you.
Dr. Elmendorf. Thank you, Madam Chair.
[Whereupon, at 4:11 p.m., Tuesday, March 11, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]