Reports News from the GAO http://www.gao.gov/browse/date/week Tue, 22 May 2012 04:00:22 -0400 GAO http://www.gao.gov/images/title_object.jpg http://www.gao.gov/ Feed provided by GAO. Click to visit. http://www.gao.gov/products/GAO-12-549?source=ra What GAO FoundFewer small employers claimed the Small Employer Health Insurance Tax Credit in tax year 2010 than were estimated to be eligible. While 170,300 small employers claimed it, estimates of the eligible pool by government agencies and small business advocacy groups ranged from 1.4 million to 4 million. The cost of credits claimed was $468 million. Most claims were limited to partial rather than full percentage credits (35 percent for small businesses) because of the average wage or full-time equivalent (FTE) requirements. 28,100 employers claimed the full credit percentage. In addition, 30 percent of claims had the base premium limited by the state premium average.One factor limiting the credit’s use is that most very small employers, 83 percent by one estimate, do not offer health insurance. According to employer representatives, tax preparers, and insurance brokers that GAO met with, the credit was not large enough to incentivize employers to begin offering insurance. Complex rules on FTEs and average wages also limited use. In addition, tax preparer groups GAO met with generally said the time needed to calculate the credit deterred claims. Options to address these factors, such as expanded eligibility requirements, have trade-offs, including less precise targeting of employers and higher costs to the Federal government.The Internal Revenue Service (IRS) incorporated practices used successfully for prior tax provisions and from IRS strategic objectives into its compliance efforts for the credit. However, the instructions provided to its examiners (1) do not address the credit’s eligibility requirements for employers with non-U.S. addresses and (2) have less detail for reviewing the eligibility of tax-exempt entities’ health insurance plans compared to those for reviewing small business plans. These omissions may cause examiners to overlook or inconsistently treat possible noncompliance. Further, IRS does not systematically analyze examination results to understand the types of errors and whether examinations are the best way to correct each type. As a result, IRS is less able to ensure that resources target errors with the credit rather than compliant claimants.Currently available data on health insurance that could be used to evaluate the effects of the credit do not match the credit’s eligibility requirements, such as information to convert data on number of employees to FTEs. Additional data that would need to be collected depend on the questions policymakers would want answered and the costs of collecting such data.Why GAO Did This StudyMany small employers do not offer health insurance. The Small Employer Health Insurance Tax Credit was established to help eligible small employers—businesses or tax-exempt entities—provide health insurance for employees. The base of the credit is premiums paid or the average premium for an employer’s state if premiums paid were higher. In 2010, for small businesses, the credit was 35 percent of the base unless the business had more than 10 FTE employees or paid average annual wages over $25,000.GAO was asked to examine (1) the extent to which the credit is claimed and any factors that limit claims, including how they can be addressed; (2) how fully IRS is ensuring that the credit is correctly claimed; and (3) what data are needed to evaluate the effects of the credit.GAO compared IRS data on credit claims with estimates of eligible employers, interviewed various credit stakeholders and IRS officials as well as academicians on evaluation, compared IRS credit compliance documents with the rules and practices used for prior tax provisions and IRS strategic objectives, and reviewed literature and data.What GAO RecommendsGAO recommends that IRS (1) improve instructions to examiners working on cases on the credit and (2) analyze results from examinations of credit claimants and use those results to identify and address any errors through alternative approaches. IRS agreed with GAO’s recommendations.For more information, contact James R. White at (202) 512-9110 or whitej@gao.gov. Mon, 21 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-490?source=ra What GAO FoundPublic housing agencies (PHA) that participate in the Moving to Work (MTW) program report annually on the performance of their activities, which include efforts to reduce administrative costs and encourage residents to work. But this performance information varies, and the Department of Housing and Urban Development’s (HUD) guidance does not specify that it be quantifiable and outcome oriented. Further, HUD has not identified the performance data that would be needed to assess the results of similar MTW activities or the program as a whole and has not established performance indicators for the program. The shortage of such analyses and indicators has hindered comprehensive evaluation efforts, although such evaluations are key to determining the success of any demonstration program. Further, while HUD has identified some lessons learned from the program, it has no systematic process to identify them and thus has relied primarily on ad hoc information. The absence of a systematic process for identifying lessons learned limits HUD’s ability to promote useful practices that could be more broadly implemented to address the purposes of the program.HUD generally follows its MTW monitoring policies and procedures, but they could be strengthened. HUD staff review and approve each MTW agency’s annual plan to ensure that planned activities are linked to program purposes and visit each MTW agency annually to provide technical assistance. But HUD has not taken key monitoring steps set out in internal control standards, such as issuing guidance that defines program terms or assessing compliance with all of the requirements. Without clarifying key terms and establishing a process for assessing compliance with statutory requirements, HUD lacks assurance that agencies are actually complying with the statute. Additionally, HUD has not done an annual assessment of program risks despite its own requirement to do so and has not developed risk-based monitoring procedures. Without taking these steps, HUD lacks assurance that it has identified all risks to the program. Finally, HUD does not have policies or procedures in place to verify the accuracy of key information that agencies self-report. For example, HUD staff do not verify self-reported performance information during their reviews of annual reports or annual site visits. Without verifying at least some information, HUD cannot be sure that self-reported information is accurate.Expanding the MTW program may offer benefits but also raises questions. According to HUD, affordable housing advocates, and MTW agencies, expanding MTW to additional PHAs would allow agencies to develop more activities tailored to local conditions and result in more lessons learned. However, data limitations and monitoring weaknesses raise questions about expansion. HUD recently reported that expansion should occur only if newly admitted PHAs structured their programs to permit high-quality evaluations and ensure that lessons learned could be generalized. Until more complete information on the program’s effectiveness and the extent to which agencies are adhering to program requirements is available, it will be difficult for Congress to know whether an expanded MTW would benefit additional agencies and the residents they serve. Some researchers and MTW agencies suggested alternatives to expansion, including implementing a program that was more limited in scope.Why GAO Did This StudyHUD’s MTW demonstration program gives participating PHAs the flexibility to create innovative housing strategies through their fiscal year 2018. MTW agencies must create activities linked to three statutory purposes—reducing costs, providing incentives for self-sufficiency, and increasing housing choices—and meet five statutory requirements. Congress is considering expanding MTW and has asked GAO to examine what is known about (1) the program’s success in addressing the three purposes, (2) HUD’s monitoring efforts, and (3) the potential benefits of and concerns about expansion. GAO analyzed the most current annual reports for 30 MTW agencies; compared HUD’s monitoring efforts with internal control standards; and interviewed agency officials, researchers, and industry officials.What GAO RecommendsGAO makes eight recommendations to HUD: that HUD improve its guidance on reporting performance information, develop a plan for identifying and analyzing standard performance data, establish performance indicators, systematically identify lessons learned, clarify key terms, implement a process for assessing compliance with statutory requirements, do annual assessments of program risks, and verify the accuracy of self-reported data. HUD generally or in part agreed with seven of them. HUD disagreed with our recommendation that it create overall performance indicators. GAO believes, however, that they are critical to demonstrating program results and thus maintains its recommendation.For more information, contact Mathew J. Scirè at (202) 512-8678 or sciremj@gao.gov. Mon, 21 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-528R?source=ra What GAO FoundDuring our audit of CFPB’s fiscal year 2011 financial statements, we identified seven internal control issues that could adversely affect CFPB’s ability to meet its internal control objectives. We do not consider these issues to represent material weaknesses or significant deficiencies in relation to CFPB’s financial statements. Nonetheless, we believe they warrant management’s attention and action. These issues concern necessary controls to ensurecomplete and finalized documentation of CFPB’s accounting processes and procedures,in relation to CFPB’s financial statements. Nonetheless, we believe they warrant management’s attention and action. These issues concern necessary controls to ensurean effective internal control assessment process supporting management’s internal control assertion,security over CFPB’s data and information systems,accurate calculation and timely recording of CFPB undelivered orders balances,accurate calculation and timely disbursement of CFPB payroll transactions,proper prior approval of CFPB travel transactions, andtimely recording of CFPB prepaid expenses as assets.These issues increase the risk of CFPB not preventing or promptly detecting and correcting (1) misappropriation of assets because of reliance on insufficient internal controls; (2) unauthorized access, modification, or both of its data; and (3) misstatements in its financial statements. At the end of our discussion of each of these issues in the sections that follow, we present our related recommendations. These recommendations are intended to improve management’s oversight and controls and minimize the risk of misappropriation of assets, misstatements in CFPB’s accounts and financial statements, and unidentified vulnerabilities over the security of its data.Why GAO Did This StudyIn November 2011, we issued our opinion on the Bureau of Consumer Financial Protection’s (CFPB) fiscal year 2011 financial statements. Our report also included our opinion on the effectiveness of CFPB’s internal control over financial reporting as of September 30, 2011, and our evaluation of CFPB’s compliance with provisions of selected laws and regulations for the fiscal year ended September 30, 2011.Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, referred to as the Consumer Financial Protection Act of 2010, created CFPB. The act charged it with the responsibility of regulating the offering and provision of consumer financial products or services under the federal consumer financial laws. The act also requires CFPB to annually prepare financial statements, and further requires GAO to audit these statements. The Full-Year Continuing Appropriations Act, 2011, also requires that GAO audit CFPB’s financial statements. While CFPB began operations in 2010, fiscal year 2011 was its first full year of operations. As a newly established entity, CFPB spent the majority of fiscal year 2011 forming its structure and commencing operations.The purpose of this report is to present additional information on the internal control and accounting procedure issues we identified during our audit of CFPB’s fiscal year 2011 financial statements and to provide our recommended actions to address those issues.What GAO RecommendsWe are making 10 recommendations for strengthening CFPB’s internal controls and accounting procedures.For more information, contact contact Steven J. Sebastian at (202) 512-3406 or sebastians@gao.gov or Gregory C. Wilshusen at (202) 512-6244 or wilshuseng@gao.gov. Mon, 21 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-582?source=ra What GAO FoundAlthough the Consumer Product Safety Commission (CPSC) enforces compliance with mandatory federal safety standards, it is also required by law to rely on voluntary safety standards when it determines that the standard adequately addresses the product hazard and is likely to have substantial compliance. Voluntary standards—developed by industry, consumer, and government participants through a consensus process—cover many of the thousands of types of products in CPSC’s jurisdiction. Compliance with voluntary standards is not routinely tracked, but it is generally considered to be high by industry participants. Compliance with these standards also depends on industry and legal factors, such as retailer requirements to demonstrate proof of compliance with voluntary safety standards and risk of liability in product liability lawsuits.Because voluntary standards do not have the force of law, CPSC cannot compel compliance with them. However, noncompliance with a voluntary standard can inform a determination of a substantial product hazard by the CPSC that in turn can lead to CPSC enforcement actions. CPSC has exercised its expanded authority to place a product on the substantial product hazards list. Specifically, it designated drawstrings from children’s upper outerwear and hair dryers without a ground fault circuit interrupter as hazardous products, and Customs has seized violative items at ports. CPSC also participates in standard development activities with industry and consumer representatives and monitors select voluntary standards. CPSC attends standard development meetings, supplies hazard and injury data and analysis, and provides input on draft standards. However, CPSC’s regulation prohibits staff from voting on the final standards or from participating in any meeting that excludes other groups, such as media or consumers. CPSC’s rationale for limiting involvement in standards development activity is to maintain its independence—such as not appearing to endorse a specific standard. Office of Management and Budget guidance gives agencies discretion to determine their level of participation in standard setting activities, including full involvement in discussions, serving in leadership positions, and voting on standards. A January 2012 White House memorandum states that the federal government may need to be actively engaged in standards development and implementation, including playing an active role in standard setting and assuming leadership positions in Standard Development Organization committees. Committee participants GAO spoke to value CPSC’s input but generally agreed that CPSC should participate earlier and take a more active role in standards development. These actions could enhance CPSC’s oversight, and may strengthen voluntary standards.Manufacturers that fail to comply with voluntary standards can face consequences when CPSC has determined that noncompliance poses a significant risk of injury or death to consumers. CPSC can take corrective action against the manufacturer, including recalls, or take longer term action to ban the hazardous product. CPSC has focused much of its surveillance and compliance work on imported products. For fiscal years 2008 through 2011, 80 percent of CPSC recalls have been of imported products that may be subject to voluntary standards, highlighting challenges CPSC faces in helping to ensure the safety of consumer products.Why GAO Did This StudyGrowing numbers of recalls in 2007 and 2008, particularly of children’s products, focused increased attention on CPSC. Consumer products can be subject to mandatory or voluntary standards, or both. Questions have been raised about the level of compliance with voluntary standards and CPSC’s ability to encourage compliance. The Consolidated Appropriations Act of 2012 directed GAO to analyze manufacturers’ compliance with voluntary industry standards. This report evaluates (1) what is known about the extent to which manufacturers comply with voluntary standards for consumer products, (2) CPSC’s authority and ability to require compliance with voluntary standards, and (3) the consequences for manufacturers that fail to comply with voluntary standards.To do this, GAO reviewed CPSC’s statutory and regulatory authorities to encourage compliance with voluntary standards; reviewed agency documents and literature on consumer product safety; analyzed data on CPSC corrective actions; and met with representatives from national consumer, industry, legal, and standard-setting organizations who have expertise in developing consumer product safety standards.What GAO RecommendsTo strengthen the adequacy of voluntary standards, CPSC should review the policy for participating in voluntary standards development activities and determine the feasibility of assuming a more active, engaged role in developing voluntary standards. CPSC supported the recommendation.For more information, contact Alicia Puente Cackley at (202) 512-8678 or cackleya@gao.gov. Mon, 21 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-650R?source=ra What GAO FoundEmployee Performance Standards for the Timely Review of Medical Product Applications:Timeliness One Aspect of Employee Performance Assessments:FDA officials told us that,The timeliness of application reviews is one aspect of employee performance, and it is also important to balance timeliness with the agency’s standards for medical product safety and effectiveness.Assessing employee performance based solely on timeliness is inappropriate because, for example, more difficult applications could be associated with longer review times.Multiple employees are responsible for the review of a single application, and it is not any one employee’s responsibility to meet the goals related to the Prescription Drug User Fee Amendments (PDUFA) and the Medical Device User Fee Amendments (MDUFA).Timeliness Standards for Center Directors, Other Executive Employees, and Nonexecutive Employees:FDA officials told us that the Center Directors in the Center for Drug Evaluation and Research (CDER), the Center for Biologics Evaluation and Research (CBER), and the Center for Devices and Radiological Health (CDRH)—who are executive employees—are ultimately accountable for meeting the timelines related to the PDUFA and MDUFA performance goals—including the percentages of reviews conducted within designated time frames.Performance plans for two of three Center Directors explicitly included timeliness goals related to PDUFA or MDUFA. The performance plan for the CDRH Director included general language about timeliness.Performance plans for all three Center Directors included management standards that stated that the employees should hold themselves and others “accountable for measurable, high-quality, timely, and cost-effective results.”Timeliness standards were included in all 18 performance plans for other executive employees in CDER, CBER, and CDRH. Performance plans for two of these executive employees—one from CBER and the other from CDRH—explicitly stated that the employees are expected to meet timeliness goals associated with PDUFA or MDUFA.Employee timeliness is mentioned as one part of the performance plan templates that CDER provided for all 18 nonexecutive employee positions involved in the review of applications. .None of the templates explicitly stated that the employees are expected to meet timeliness goals associated with PDUFA. However, two templates referred to FDA guidance that explicitly mentions these timeliness goals.Employee timeliness is mentioned in the performance plan templates CBER provided for all five nonexecutive employee positions involved in the review of applications. Two of these templates explicitly stated that the employees are expected to meet timeliness goals associated with PDUFA or MDUFA.Employee timeliness is mentioned in the performance plan templates CDRH provided for all six nonexecutive employee positions involved in the review of applications. Four of these templates explicitly stated that the employees are expected to meet timeliness goals associated with MDUFA.Language from the MDUFA goals was included in the templates for some nonexecutive CDRH employees. The pattern in CDRH—with nonexecutive performance plan templates citing MDUFA goals, but the Center Director plan making no reference to the goal—is in contrast to the pattern in CDER, where the Center Director plan mentioned the PDUFA goals but the nonexecutive templates did not.Timeliness Standards for Commissioned Corps Officers:Commissioned Corps officers—who are not required to use performance plans—are assessed based on eight standards. These eight standards are: Leadership; Initiative and Growth; Communication Skills; Interpersonal Skills; Planning and Organization; Professional Competencies; Analysis, Judgment, and Decision-making; and Overall Effectiveness.Because all Corps officers are assessed on these eight standards regardless of where they are stationed, the standards do not include timeliness goals related to PDUFA and MDUFA. However, the Planning and Organization standard does include a general mention of timeliness.Why GAO Did This StudyThis report responds to the congressional request that we provide information on the standards that the Food and Drug Administration (FDA) considers when assessing the performance of its employees. Congress asked whether the agency’s timeliness goals for processing medical product applications are reflected in the performance standards for FDA employees who have a role in reviewing these applications. These timeliness goals are one aspect that FDA may consider in assessing employee performance. The extent to which these goals are reflected as explicit expectations in employee performance standards varies by an employee’s duties, level of responsibility, and organizational component. We provided the briefing to your staff on April 17, 2012.For more information, contact Marcia Crosse at (202) 512- 7114 or crossem@gao.gov. Fri, 18 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-545R?source=ra What GAO FoundOlder electricity generating units—those that began operating in or before 1978—provided 45 percent of electricity from fossil fuel units in 2010 but produced a disproportionate share of emissions, both in aggregate and per unit of electricity generated. Overall, in 2010 older units contributed 75 percent of sulfur dioxide emissions, 64 percent of nitrogen oxides emissions, and 54 percent of carbon dioxide emissions from fossil fuel units. For each unit of electricity generated, older units collectively emitted about 3.6 times as much sulfur dioxide, 2.1 times as much nitrogen oxides, and 1.3 times as much carbon dioxide as newer units. The difference in emissions between older units and their newer counterparts may be attributed to a number of factors. First, 93 percent of the electricity produced by older fossil fuel units in 2010 was generated by coal-fired units. Compared with natural gas units, coal-fired units produced over 90 times as much sulfur dioxide, twice as much carbon dioxide and over five times as much nitrogen oxides per unit of electricity, largely because coal contains more sulfur and carbon than natural gas. Second, fewer older units have installed emissions controls, which reduce emissions by limiting their formation or capturing them after they are formed. Among coal-fired units—which produce nearly all sulfur dioxide emissions from electric power generation—approximately 26 percent of older units used controls for sulfur dioxide, compared with 63 percent of newer units. Controls for nitrogen oxide emissions were more common among all types of fossil fuel units, but these controls vary widely in their effectiveness. Among older units, 14 percent had installed selective catalytic reduction (SCR) equipment, the type of control capable of reducing the greatest amount of nitrogen oxides emissions, compared with 33 percent of newer units. In addition, approximately 38 percent of older units did not have any controls for nitrogen oxides, compared with 6 percent of newer units. Third, lower emissions among newer units may be attributable in part to improvements in the efficiency with which newer units convert fuel into electricity. Nonetheless, older units remain an important part of the electricity generating sector, particularly in certain regions of the United States.Why GAO Did This StudyThis report responds in part to a Congressional request for information on electricity generation and emissions at U.S. electricity generating units and the implementation of NSR. Our objective is to provide information on how older fossil fuel electricity generating units compare with newer units in terms of their air emissions and electricity generation.The United States depends on a variety of fuels to generate electricity, including fossil fuels (coal, natural gas, and oil), nuclear power, and renewable sources. Power plants that burn fossil fuels provide about 70 percent of U.S. electricity, but they also produce substantial amounts of harmful air emissions. In particular, electricity generating units at fossil fuel power plants are among the largest emitters of sulfur dioxide and nitrogen oxides, which have been linked to respiratory illnesses and acid rain, as well as of carbon dioxide, the primary greenhouse gas contributing to climate change. Of the three fossil fuels, coal is the most widely used fuel in the United States, providing about 45 percent of electricity in 2010, followed by natural gas, which provided about 24 percent. Coal plays a critical role in the reliability of the electricity grid, especially in certain geographic areas, but coal-fired units also generally emit more air pollution than units burning natural gas or oil.Under the Clean Air Act, the Environmental Protection Agency (EPA) establishes national ambient air quality standards for six pollutants that states are primarily responsible for attaining. States attain these standards, in part, by regulating emissions of these pollutants from certain stationary sources, such as electricity generating units. Numerous Clean Air Act requirements apply to electricity generating units, including New Source Review (NSR), a permitting process established in 1977. Under NSR, owners of generating units must obtain a preconstruction permit that establishes emission limits and requires the use of certain pollution control technologies. NSR applies to (1) generating units built after August 7, 1977, and (2) to existing generating units—regardless of the date built—that seek to undertake a “major modification,” a physical or operational change that would result in a significant net increase in emissions of a regulated pollutant. Units built before August 7, 1977, are not required to undergo NSR unless they undertake a major modification. For the purposes of this report, we refer to units that began operation in or before 1978—the first full year after NSR was established—as “older units” and those that began operating after 1978 as “newer units.”In limiting NSR’s requirements to facilities built or undertaking major modifications after August 7, 1977, Congress allowed existing facilities to defer installation of pollution controls until they made a major modification, with the expectation that over time all facilities would either install such equipment or shut down, thereby lowering overall emissions. According to EPA data, 1,485 older units (43 percent of fossil fuel units) were still in operation in 2010. Some research suggests that many of these older units continue to operate without emissions controls, and in June 2002, we reported that older fossil fuel electricity generating units emitted air pollution at higher rates than newer units.For more information, contact David Trimble at (202) 512-3841 or trimbled@gao.gov or Frank Rusco at (202) 512-3841 or ruscof@gao.gov. Fri, 18 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-713T?source=ra What GAO FoundThe Temporary Assistance for Needy Families (TANF) block grant’s maintenance of effort (MOE) provisions include specified state spending levels and general requirements on the use of funds. For example, these provisions generally require that each state spend at least 80 percent (75 percent if the state meets certain performance standards) of the amount it spent on welfare and related programs in fiscal year 1994, before TANF was created. If a state does not meet its MOE requirements in any fiscal year, the federal government will reduce dollar-for-dollar the state’s federal TANF grant in the following year. In order to count state spending as MOE, funds must be spent on benefits and services to families with children that have incomes and resources below certain state-defined limits. Such benefits and services must generally further one of TANF’s purposes, which broadly focus on providing financial assistance to needy families; promoting job preparation, work, and marriage; reducing out-of-wedlock births; and encouraging the formation of two-parent families. Within these broad goals, states have significant flexibility to design programs and spend their funds to meet families’ needs.Total MOE spending reported by states remained relatively stable around the required minimum spending level of $11 billion through fiscal year 2005, and then increased to about $4 billion higher than this minimum in fiscal years 2009 and 2010. Several reasons likely accounted for these increases, including states’ reliance on MOE spending to help them meet TANF work participation rates. Work participation rates identify the proportion of families receiving monthly cash assistance that participate in allowable work activities for a specified number of hours each week. Federal law generally requires that at least 50 percent of families meet the work requirements; however, most states have engaged less than 50 percent of families in required activities in each year since TANF was created, according to HHS data. Various policy and funding options in federal law and regulations, including credit for state MOE expenditures that exceed required spending levels, have allowed most states to meet the rate requirements even with smaller percentages of families participating. States generally began relying on MOE spending to get credit toward meeting TANF work participation rates in fiscal year 2007 because of statutory changes to the rate requirements enacted in 2006. For example, for fiscal year 2009, the most recent data available, 16 of the 45 states that met the TANF work participation rate would not have done so without the credit they received for excess state MOE spending.The expanded role of MOE in state TANF programs highlights the importance of having reasonable assurance that MOE spending reflects the intended commitment to low-income families and efficient use of federal funds. GAO’s previous work makes clear that MOE provisions are often difficult to administer and oversee, but can be important tools for helping ensure that federal spending achieves its intended effect. This work also points out that with appropriate attention to design, implementation, and monitoring issues, such provisions are one way to help strike a balance between the potentially conflicting objectives of increasing state and local flexibility while attaining certain national objectives.Why GAO Did This StudyThe $16.5 billion TANF block grant, created in 1996, is one of the key federal funding streams targeted to assist low-income families. While the block grant provides states with a fixed amount of federal dollars annually, it also includes state MOE requirements, which require states to maintain a significant portion of their own historic financial commitment to welfare-related programs. Over the last 15 years, this federal-state partnership has seen multiple program and fiscal changes, including a dramatic drop in the number of families receiving monthly cash assistance, as well as two economic recessions. To provide information for its potential extension or reauthorization, this testimony draws primarily on previous GAO work to focus on (1) the key features of the state MOE requirements and (2) how the role of state MOE spending has changed over time. To address these issues, GAO relied on its prior work on TANF block grant and state MOE spending issued between 2001 and 2010, including the May 2010 report examining how state MOE spending affects state TANF programs’ work participation rates. To develop the spending-related findings in this body of work, GAO reviewed relevant federal laws, regulations, and guidance, state TANF data reported to the U.S. Department of Health and Human Services (HHS), and related financial data from selected states. GAO also interviewed relevant officials from HHS and selected states.For more information, contact Kay E Brown at (202) 512-7215 or brownke@gao.gov. Thu, 17 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-360?source=ra What GAO FoundAt the end of fiscal year 2011, GAO identified more than $794 million in funding remaining in expired grant accounts—accounts that were more than 3 months past the grant end date and had no activity for 9 months or more—in the Payment Management System (PMS). GAO found that undisbursed balances remained in some grant accounts several years past their expiration date: $110.9 million in undisbursed funding remained unspent more than 5 years past the grant end date, including $9.5 million that remained unspent for 10 years or more. GAO also found $126 million in grant accounts in the Automated Standard Application for Payments (ASAP) for which there had been no activity for 2 years or more, including $11 million that remained inactive for 5 years or more. However, data from these two systems are not comparable because, unlike PMS, ASAP accounts can include multiple grant agreements between a federal agency and a grantee, only some of which may be eligible for closeout.GAO and agency inspectors general have raised concerns in audit reports about timely grant closeout. These reports found that some agencies lack adequate systems or policies to properly monitor grant closeout or did not deobligate funds from grants eligible for close out in a timely manner.OMB issued guidance to certain agencies at the direction of Congress for reporting undisbursed balances in expired grant accounts that instructed agencies to report on expired appropriations accounts rather than grant accounts eligible for closeout. By focusing on grants eligible for closeout, OMB could better direct agency management toward grants in need of more immediate attention. Grant closeout makes funds less susceptible to fraud, waste, and mismanagement; reduces the potential costs in fees related to maintaining grants; and may enable agencies to redirect resources to other projects.Why GAO Did This StudyIn 2008,GAO reported that about $1 billion in undisbursed funding remained in expired grant accounts in the largest civilian payment system for grants, PMS, operated by the Department of Health and Human Services’ Program Support Center. GAO was asked to update its 2008 analysis evaluating: (1) the amount of undisbursed funding remaining in expired grant accounts, including the amounts that have remained unspent for at least 5 years or more and for 10 years or more; (2) issues raised by GAO and federal inspectors general related to timely grant closeout by federal agencies; and (3) actions OMB and agencies have taken to track undisbursed balances in grants eligible for closeout. To do this, GAO analyzed data from two federal payment systems disbursing 79 percent of all civilian federal grant awards—PMS and the ASAP system, which is operated jointly by the Department of the Treasury and the Federal Reserve Bank of Richmond. In addition, GAO also reviewed audit reports that it and federal inspectors general issued; relevant OMB circulars and guidance; and performance reports from federal agencies.What GAO RecommendsGAO recommends that OMB revise future guidance to better target undisbursed balances in grants eligible for closeout and instruct agencies to take action to close out grants that are several years past their end date or have no undisbursed balances remaining. OMB staff said that they generally agreed with the recommendGAO recommends that OMB revise future guidance to better target undisbursed balances in grants eligible for closeout and instruct agencies to take action to close out grants that are several years past their end date or have no undisbursed balances remaining. OMB staff said that they generally agreed with the recommendations and will consider them as they review and streamline grant policy guidance.ations and will consider them as they review and streamline grant policy guidance.For more information, contact Stanley J. Czerwinski at (202) 512- 6806 or czerwinskis@gao.gov or Beryl H. Davis at (202) 512-2623 or davisbh@gao.gov. Thu, 17 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-534?source=ra What GAO FoundThe United States provided an estimated $13.9 billion for foreign police assistance during fiscal years 2009 through 2011. Funds provided by U.S. agencies rose and then fell between fiscal years 2009 and 2011. During fiscal years 2009 through 2011, the United States provided the greatest amount of its foreign police assistance to Afghanistan, Iraq, Pakistan, Colombia, Mexico, and the Palestinian Territories. Department of Defense (DOD) and State (State) funds constituted about 97 percent of U.S. funds for police assistance in fiscal year 2009 and 98 percent in fiscal years 2010 and 2011.DOD and State’s Bureau of International Narcotics and Law Enforcement Affairs (State/INL) have acknowledged limitations in their procedures to assess and evaluate their foreign police assistance activities and are taking steps to address them. DOD assesses the performance of the police forces it trains and equips in Afghanistan, Iraq, and Pakistan. However, the assessment process for Afghanistan does not provide data on civil policing effectiveness. DOD plans to expand its assessments to obtain data to assess the ability of these forces to conduct civil policing operations. In addition, recognizing that it had conducted only one evaluation of its foreign police assistance activities because it lacked guidelines, State/INL is developing an evaluation plan that is consistent with State’s February 2012 Evaluation Policy. This evaluation plan includes conducting evaluations for its largest programs in Iraq and Mexico.U.S. agencies have implemented various mechanisms to coordinate their foreign police assistance activities as part of wider foreign assistance activities, such as the National Security Council’s (NSC)-led interagency policy committees that coordinate policies at a high level and various working groups at the overseas posts. However, GAO noted some areas for improvement. Specifically, NSC has not defined agencies’ roles and responsibilities for assisting foreign police. Further, DOD and State do not consistently share and document information. For example, DOD did not provide copies of its capability assessments of the Iraqi police to State, which is now responsible for police development in Iraq, because it destroyed the database containing the assessments at the end of its mission to train the police. Further, some U.S. embassies, including the one in Bogotá, Colombia, do not publish agendas or minutes of their proceedings.Why GAO Did This StudyIn April 2011, we reported that the United States provided an estimated $3.5 billion for foreign police assistance to 107 countries during fiscal year 2009. We agreed to follow up that report with a review of the extent to which U.S. agencies evaluated and coordinated their foreign police assistance activities.As such, this report (1) updates our analysis of the funding U.S. agencies provided for foreign police assistance during fiscal years 2009 through 2011, (2) examines the extent to which DOD and State/INL assess or evaluate their activities for countries with the largest programs, and (3) examines the mechanisms U.S. agencies use to coordinate foreign police assistance activities. GAO focused on DOD and State because they have the largest foreign police assistance programs.GAO analyzed program and budget documents and interviewed officials from DOD, State, Energy, the U.S. Agency for International Development, Justice, the Treasury, and Homeland Security.What GAO RecommendsGAO recommends that (1) NSC complete its efforts to define agency roles and responsibilities, and (2) the Secretaries of Defense and State establish mechanisms to better share and document information among various U.S. agencies. NSC provided technical comments, but did not comment on our recommendation. DOD concurred and State partially concurred, noting the importance of interagency collaboration.For more information, contact Charles Michael Johnson Jr., at (202) 512-7331 or johnsoncm@gao.gov. Thu, 17 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-626?source=ra What GAO FoundThe Census Bureau’s (Bureau) early planning and preparation efforts for the 2020 Census are consistent with most leading practices in each of the three management areas GAO reviewed. For example, with respect to its effort to transform its decennial organization, top Bureau leadership has been driving the transformation, and the agency has focused on a key set of principles as it begins to roll-out the strategy to staff. Furthermore, the Bureau has created a timeline to build momentum and show progress. At the same time, however, the amount of change-related activity the Bureau is considering as part of its reorganization of its decennial directorate may not be aligned with the resources the Bureau has allocated to plan, coordinate, and carry it out, and, as a result, the planned transformation efforts may not be sustainable or successful.Similarly, the Bureau is taking steps consistent with many of the leading practices for long-term project planning, such as by, among other activities, issuing its series of 2020 planning memorandums in 2009 and 2010 that laid out a highlevel framework documenting goals, assumptions, and timing of the remaining four phases of the 2020 Census. The Bureau also created a high-level schedule of program management activities for the remaining phases, documented key elements such as the Bureau’s decennial mission, vision, and guiding principles, and produced a business plan to support budget requests, which is being updated annually. Still, the Bureau’s schedule does not include milestones or deadlines for key decisions needed to support transition between the planning phases, which could result in later downstream planning activity not being based on evidence from such sources as early research and testing. Furthermore, there has been little effective outreach to the Bureau’s congressional stakeholders about its reexamination of census processes and design, which could result in a lack of support on potentially complex or sensitive topics that can be crucial for creating a stable environment in which to prepare for a census.In the area of strategic workforce planning, the Bureau is taking steps consistent with leading practices such as by identifying current and future critical occupations with a pilot assessment of the skills and competencies of selected information technology 2020 Census positions. However, the Bureau has done little yet either to identify the goals that should guide workforce planning or to determine how to monitor, report, and evaluate its progress toward achieving them, which could help the Bureau identify and avoid possible barriers to implementing its workforce plans.The steps the Bureau has taken and has planned are positioning it well during this early phase of planning for the 2020 Census. Since much of the Bureau’s early progress is tied to additional planning and other activity needed over the coming months, equally important will be the need to execute these activities in a timely manner to maintain the Bureau’s early momentum toward a cost-effective 2020 Census.Why GAO Did This StudyGAO’s prior work has shown that it will be important for the Bureau to reexamine its management and culture as well as the fundamental design of the census in order to ensure a costeffective census. The Bureau recognizes this and has taken steps in at least three management areas toward achieving these goals. As requested, this report addresses the extent to which the Bureau is taking steps in accordance with selected leading practices that GAO identified for (1) organizational transformation, (2) long-term project planning, and (3) strategic workforce planning in preparing for the 2020 Census. To meet these objectives, GAO identified leading practices in these areas that are relevant to the Bureau’s 2020 Census planning, reviewed Bureau documents, and interviewed officials.What GAO RecommendsGAO recommends that the Census Director take a number of actions to make 2020 Census planning more consistent with key practices in the three management areas, such as examining planned transformation activity to ensure its alignment with resources, developing a more-detailed long-term schedule to smooth transition to later planning phases, implementing effective congressional outreach to ensure a stable planning environment, and setting workforce planning goals and monitor them to ensure their attainment.The Department of Commerce concurred with GAO’s findings and recommendations and provided minor clarifications, which were included in the final report.For more information, contact Robert Goldenkoff at (202) 512-2757 or goldenkoffr@gao.gov. Thu, 17 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-551?source=ra What GAO FoundU.S. Customs and Border Protection (CBP) detects and deters evasion of antidumping and countervailing (AD/CV) duties through a three-part process that involves (1) identifying potential cases of evasion, (2) attempting to verify if evasion is occurring, and (3) taking enforcement action. To identify potential cases of evasion, CBP targets suspicious import activity, analyzes trends in import data, and follows up on allegations from external sources. If CBP identifies a potential case of evasion, it can use various techniques to attempt to verify whether evasion is occurring, such as asking importers for further information, auditing the records of importers suspected of evasion, and inspecting shipments arriving at ports of entry. If CBP is able to verify evasion, its options for taking enforcement action include (1) pursuing the collection of evaded duties, (2) imposing civil penalties, (3) conducting seizures, and (4) referring cases for criminal investigation. For example, between fiscal years 2007 to 2011, CBP assessed civil penalties totaling about $208 million against importers evading AD/CV duties.Two types of factors affect CBP’s efforts to detect and deter AD/CV duty evasion. First, CBP faces several external challenges in attempting to gather conclusive evidence of evasion and take enforcement action against parties evading duties. These challenges include (1) the inherent difficulty of verifying evasion conducted through clandestine means; (2) limited access to evidence of evasion located in foreign countries; (3) the highly specific and sometimes complex nature of products subject to AD/CV duties; (4) the ease of becoming an importer of record, which evaders can exploit; and (5) the limited circumstances under which CBP can seize goods evading AD/CV duties. Second, gaps in information sharing also affect CBP efforts. Although communication between CBP and the Department of Commerce (Commerce) has improved, CBP lacks information from Commerce that would enable it to better plan its workload and help mitigate the administrative burden it faces in processing AD/CV duties—an effort that diminishes its resources available to address evasion. Additionally, CBP has encouraged the use of larger bond amounts to protect AD/CV duty revenue from the risk of evasion, but CBP has neither a policy nor a mechanism in place for a port requiring a larger bond to share this information with other ports in case an importer withdraws its shipment and attempts to make entry at another port to avoid the higher bond amount.While CBP has made some performance management improvements, it does not systematically track or report key outcome information that CBP leadership and Congress could use to assess and improve CBP’s efforts to deter and detect AC/CV duty evasion. First, CBP cannot readily produce key data, such as the number of confirmed cases of evasion, which it could use to better inform and manage its efforts. Second, CBP does not consistently track or report on the outcomes of allegations of evasion it receives from third parties. As GAO reported in March 2011, the Government Performance and Results Modernization Act of 2010 underscores the importance of ensuring that performance information will be both useful and used in decision making. Without improved tracking and reporting, agency leadership, Congress, and industry stakeholders will continue to have little information with which to oversee and evaluate CBP’s efforts to detect and deter evasion of AD/CV duties..Why GAO Did This StudyThe United States imposes AD/CV duties to remedy unfair foreign trade practices, such as unfairly low prices or subsidies that cause injury to domestic industries. Examples of products subject to AD/CV duties include honey from China and certain steel products from South Korea. Importers that seek to avoid paying appropriate AD/CV duties may employ methods of evasion such as illegally transshipping an import through a third country to disguise its true country of origin or falsifying the value of an import to reduce the amount of duties owed, among others. AD/CV duty evasion can harm U.S. companies and reduces U.S. revenues. CBP, within the Department of Homeland Security, leads efforts to detect and deter AD/CV duty evasion.GAO was asked to examine (1) how CBP detects and deters AD/CV duty evasion, (2) factors that affect CBP’s efforts, and (3) the extent to which CBP tracks and reports on its efforts. To address these objectives, GAO reviewed CBP data and documents; met with government and private sector representatives in Washington, D.C.; and conducted fieldwork at three domestic ports.What GAO RecommendsTo enhance CBP’s efforts to address AD/CV duty evasion and facilitate oversight of these efforts, GAO makes several recommendations, including that CBP create a policy and a mechanism for information sharing among ports regarding the use of higher bond amounts and develop and implement a plan to track and report on these efforts. CBP and the Department of Commerce generally concurred with GAO’s recommendations.For more information, contact Alfredo Gomez at (202) 512-4101 or gomezj@gao.gov. Thu, 17 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-499R?source=ra What GAO FoundDuring our audit of FHFA’s fiscal years 2011 and 2010 financial statements, we identified one internal control issue and a continuing issue related to information systems controls that could adversely affect FHFA’s ability to meet its internal control objectives. We do not consider these issues to represent material weaknesses or significant deficiencies in relation to FHFA’s financial statements. Nonetheless, we believe they warrant management’s attention and action.Specifically, we found:FHFA did not establish effective controls to assess the risk of errors by its payroll service provider and determine if any compensating controls were necessary to ensure the accuracy of payroll calculations.FHFA had not yet fully implemented its information security program, resulting in weaknesses in four information security control areas.These issues increase the risk to FHFA that 1) misstatements in its financial statements may not be promptly detected and corrected, 2) errors in the calculation of its payroll amounts may not be identified, 3) contractors or other users with privileged access could gain unauthorized access to or improperly use agency financial systems, applications, and information, and 4) unauthorized system changes could be implemented without FHFA’s knowledge.Why GAO Did This StudyIn November 2011, we issued our opinion on the Federal Housing Finance Agency’s (FHFA) fiscal years 2011 and 2010 financial statements. Our report also included our opinion on the effectiveness of FHFA’s internal control over financial reporting as of September 30, 2011, and our evaluation of FHFA’s compliance with provisions of selected laws and regulations for the fiscal year ended September 30, 2011.The Housing and Economic Recovery Act of 2008 (HERA) created FHFA and assigned it responsibility for, among other things, the supervision and regulation of the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), the 12 federal home loan banks, and the Office of Finance. Specifically, FHFA was assigned responsibility for ensuring that the regulated entities operate in a fiscally safe and sound manner, including maintenance of adequate capital and internal controls, in carrying out their housing and community development finance mission. HERA requires FHFA to annually prepare financial statements, and requires GAO to audit these statements.The purpose of this report is to present additional information on the financial reporting-related internal control issue we identified during our audit of FHFA’s fiscal year 2011 financial statements and to provide our recommended action to address that issue. This report also discusses a continuing issue with respect to FHFA’s information security that resulted in new weaknesses in information security control areas. In addition, we are providing an update on the status of recommendations we made to address internal control issues identified during our audits of FHFA’s fiscal years 2010 and 2009 financial statements as reported in our related management reports on internal controls and accounting procedures and our fiscal year 2009 report on controls related to information security.What GAO RecommendsWe present our recommendation for strengthening FHFA’s internal controls. Our recommendation is intended to improve management’s oversight and controls and minimize the risk of misstatements in FHFA’s accounts and financial statements.For more information, contact Steven Sebastian at (202) 512-3406 or sebastians@gao.gov or Gregory Wilshusen at (202) 512-6244 or wilshuseng@gao.gov. Wed, 16 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-484?source=ra What GAO FoundIRS has taken initial steps to implement FATCA requirements in line with leading implementation practices, including establishing a team to manage the implementation process and issuing guidance and proposed regulations. IRS has involved external stakeholders in the implementation process, which has helped inform IRS’s implementation plans and regulations. IRS has also communicated initial information to IRS staff. However, although IRS assessed the risks of some aspects of FATCA implementation, it has not consolidated existing risk assessment information or future risk assessment plans into an overall risk assessment. Without a consolidated assessment, there is less assurance that all risks have been comprehensively identified. FATCA officials told us they had not documented a consolidated risk assessment because they were awaiting the release of final regulations, which will increase their ability to develop an overall risk assessment. Officials also cited the challenge of conducting a full risk assessment for a multiphased program still in its early stages. While we recognize this difficulty, we believe it is still important to lay the foundation for these plans. GAO’s internal control standards suggest that risk assessments can and should evolve as short-term and long-term forecasting occur and therefore should be reviewed on an ongoing basis.IRS plans to compare multiple sources of information to identify U.S. taxpayers and FFIs failing to comply with the FATCA requirements and, more broadly, taxpayers failing to report their overseas income. IRS has begun to discuss how it will use information to improve compliance, but it has not yet completed or fully documented a broader strategy for doing so, which we identified as a leading implementation practice in our prior work. For example, it has not developed key internal milestones for accomplishing the tasks necessary to enable it to use FATCA information to improve taxpayer compliance or performance measures to assess the cost and benefits of its compliance efforts. IRS officials told us that many of these decisions are contingent on areas of program design that have not yet been finalized. If IRS does not document a broad strategy, it risks negatively affecting FATCA implementation. Given that IRS’s implementation of FATCA is in its early stages, the strategy may be a high-level road map with timelines that could evolve over time.IRS has developed its initial resource estimate for FATCA implementation, specifically for IT systems. For its IT resource estimate, IRS has taken steps to incorporate leading practices for a well-documented resource estimate, as identified in GAO’s CostEstimating and Assessment Guide. However, IRS has not developed a comprehensive resource estimate for FATCA implementation. Comprehensiveness is another resource estimation leading practice. Without a timeline to develop the estimate, IRS may not be able to develop a reliable cost estimate and therefore risks not communicating key cost information to Congress and IRS management in time for them to make decisions affecting the implementation of FATCA. Given that IRS is in the early stages of implementing the FATCA requirements, it would be difficult for IRS to develop a comprehensive cost estimate at this time. However, IRS can take steps that would help ensure that it produces a timely, comprehensive estimate, such as establishing a timeline for completing the estimate. IRS told us that it does not have a timeline for a comprehensive estimate because some design details will not be known until later in the implementation process.Why GAO Did This StudyGiven the mobility of money and proliferation of foreign financial institutions (FFI), the potential for U.S. taxpayers to evade taxes on funds held in offshore accounts is greater than ever. To improve tax compliance for foreign accounts and entities, and cross-border transactions, Congress passed the Foreign Account Tax Compliance Act (FATCA) as part of the Hiring Incentives to Restore Employment Act of 2010. FATCA requires certain U.S. taxpayers to report to the Internal Revenue Service (IRS) their overseas assets and requires U.S. entities to withhold a portion of certain payments made to FFIs that have not entered into an agreement with IRS to report certain information with respect to the FFI’s U.S. accounts. FATCA is an effort to reduce tax evasion by creating greater transparency and accountability with respect to offshore accounts and entities held by U.S. taxpayers and by providing IRS with tools to further enforce tax laws. IRS believes that implementing these new requirements will increase tax compliance, which will help close the gap between taxes owed and taxes paid. IRS recently estimated a net tax gap of $385 billion for tax year 2006, though IRS has not estimated the percentage of the tax gap specifically attributable to offshore accounts. Implementing FATCA will provide IRS with a substantial amount of new information. However, that new information could be challenging to manage.Congress asked us to review IRS’s FATCA implementation plans. Our objectives were to (1) assess IRS’s approach for implementing the FATCA requirements, (2) assess the extent to which IRS has developed plans to use the information from FATCA to improve tax compliance, and (3) determine the extent to which IRS is incorporating leading practices to develop its resource estimate for implementing FATCA.What GAO RecommendsIn order to improve FATCA implementation, but recognizing that IRS is phasing in implementation, we recommend that the Commissioner of Internal Revenue take the following three actions, which may evolve over time:develop a consolidated risk assessment;complete a broad strategy, including a timeline and performance measures, for how IRS intends to use information collected based on the FATCA requirements to improve tax compliance; andestablish and document a timeline for completing a comprehensive FATCA cost estimate.For more information, contact James R. White at (202) 512-9110 or whitej@gao.gov. Wed, 16 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-133?source=ra What GAO FoundSince GAO’s 2007 review, the Army has taken steps to improve its use of reset in targeting equipment shortages. In 2007, GAO noted that the Army’s reset implementation strategy did not specifically target shortages of equipment on hand among units preparing for deployment to Iraq and Afghanistan in order to mitigate operational risk. GAO recommended that the Army act to ensure that its reset priorities address equipment shortages in the near term to ensure that the needs of deploying units could be met. The Department of Defense (DOD) did not concur, and stated that there was no need to reassess its approaches to equipment reset. However, in 2008, the Army issued its Depot Maintenance Enterprise Strategic Plan, noted that filling materiel shortages within warfighting units is a key challenge facing the depot maintenance enterprise, and called for changes in programs and policies to address materiel shortages within warfighting units. Further, recognizing that retrograde operations—the return of equipment from theater to the United States—are essential to facilitating depot level reset and redistribution of equipment, the Army in 2010 developed the retrograde, reset, and redistribution (R3) initiative to synchronize retrograde, national depot-level reset efforts, and redistribution efforts. In March 2011, the Army issued an R3 equipment priority list, and revised and reissued an updated list at the end of fiscal year 2011 with full endorsement from all Army commands. The R3 initiative has only begun to be fully implemented this year, and thus it is too early to tell whether it will provide a consistent and transparent process for addressing the Army’s current or future equipping needs.GAO found that the Army’s monthly reports to Congress do not include expected future reset costs or distinguish between planned and unplanned reset of equipment. GAO has reported that agencies and decision makers need visibility into the accuracy of program execution in order to ensure basic accountability and to anticipate future costs. However, the Army does not include its future reset liability in its reports to Congress, which DOD most recently estimated in 2010 to be $24 billion. Also, the Army reports to Congress include the number of items that it has repaired in a given month using broad categories, such as Tactical Wheeled Vehicles, which may obscure progress on equipment planned for reset. For example, GAO’s analysis of Army data showed that 4,144 tactical wheeled vehicles were planned for reset in fiscal year 2010, while 3,563 vehicles were executed. According to the Army’s current reporting method, this would result in a reported completion rate of 86 percent, but GAO’s analysis showed that only approximately 40 percent of the equipment that was reset had been planned and programmed. This reporting method may also restrict visibility over the Army’s multiyear reset liability. For example, both the M1200 Knight and the M1151 HMMWV are categorized as Tactical Wheeled Vehicles, but anticipated reset costs for the M1200 are significantly higher. In 2010 more M1200s were repaired than planned, thus accounting for a larger share of the budgeted reset funds. With fewer funds remaining, some equipment planned and budgeted for repair was not reset, pushing that workload to future fiscal years. These differences are not captured in the Army’s monthly reports, and thus Congress may not have a complete picture of the Army’s short- and long-term progress in addressing reset.Why GAO Did This StudyFrom 2007 to 2012, the Army received about $42 billion to fund its expenses for the reset of equipment—including more than $21 billion for depot maintenance—in support of continuing overseas contingency operations in Southwest Asia. Reset is intended to mitigate the effects of combat stress on equipment by repairing, rebuilding, upgrading, or procuring replacement equipment. Reset equipment is used to supply non-deployed units and units preparing for deployment while meeting ongoing operational requirements. In 2007, GAO reported that the Army’s reset strategy did not target equipment shortages for units deploying to theater. For this report, GAO (1) examined steps the Army has taken to improve its equipment reset strategy since 2007, and (2) determined the extent to which the Army’s reset reports to Congress provide visibility over reset costs and execution. To conduct this review, GAO reviewed and analyzed DOD and Army documentation on equipment reset strategies and monthly Army reports to Congress, and interviewed DOD and Army officials.What GAO RecommendsGAO recommends that the Army revise its monthly congressional reset reports to include its future reset liability and status information on equipment reset according to the initial reset plan by vehicle type. DOD did not concur. DOD stated that the Army would report its reset liability annually instead of monthly. Because DOD did not agree to report its reset status by vehicle type, GAO included a matter for congressional consideration to direct the Army to report this information.For more information, contact Cary Russell at (404) 679-1808 or russellc@gao.gov. Tue, 15 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-724T?source=ra What GAO FoundUnemployment rates for workers of all ages have risen dramatically since the start of the recent recession in December 2007, and workers age 55 and over have faced particularly long periods of unemployment. The seasonally unadjusted unemployment rate for older workers increased from 3.1 percent in December 2007 to a high of 7.6 percent in February 2010, before it decreased to 6.0 percent in April 2012. As in prior recessions, smaller percentages of workers age 55 and over became unemployed in comparison with younger workers. Some researchers attribute older workers’ lower unemployment rates to the fact that older workers tend to have longer job tenure, and are consequently less likely to be laid off than younger workers.Focus group participants told us that they believed employer reluctance to hire older workers was their primary reemployment challenge, and several cited job interview experiences that convinced them that age discrimination was limiting their ability to find a new job. Moreover, many experts, one-stop career center staff, and other workforce professionals we interviewed said that some employers are reluctant to hire older workers. Because of legal prohibitions against age discrimination, employers are unlikely to explicitly express a lack of interest in hiring older workers; however, one workforce professional told us that local employers had asked her to screen out all applicants over the age of 40.Job loss can result in fewer years of work over a worker’s lifetime, which can lower the worker’s retirement income in several ways. For example, fewer years of work can prevent a worker who is covered by a traditional DB plan from having enough years of work with an employer to vest in (that is, earn a nonforfeitable right to receive) employer-funded retirement benefits. And even if a worker who is covered by a traditional DB plan has enough years of work to earn a right to the benefits, fewer years of work can reduce a worker’s final retirement benefit if the number of years worked is used in the formula for calculating retirement benefits. For workers with DC plans, having fewer years of work can limit the amount of yearly employee and employer contributions that accumulate in a worker’s account. Moreover, Social Security retirement benefits may be reduced as a result of fewer years of work because the benefits are based, in part, on a calculation of the worker’s average monthly earnings over 35 years. The 35 years used for the calculation are those with the worker’s highest earnings, adjusted for changes in wage levels. If a worker has less than 35 years of earnings, then zeros would be used for earnings in the missing years, and this will result in a lower calculated benefit.At the same time, long-term unemployment can motivate older workers to file for early Social Security retirement benefits. Many unemployed older workers in our focus groups said that they were planning to claim Social Security retirement benefits as soon as they were eligible or had already done so because they needed a source of income to help pay for living expenses. Moreover, a 2012 study found that high unemployment increases Social Security retirement claims among men with limited education.Why GAO Did This StudyThis testimony discusses the status of unemployed older workers. The most recent recession, which began in 2007 and ended in 2009, was the worst since the Great Depression, and has been characterized by historically high levels of long-term unemployment. While it is crucial that the nation help people of all ages return to work, long-term unemployment has particularly serious implications for older workers (age 55 and over). Job loss for older workers threatens not only their immediate financial security, but also their ability to support themselves during retirement.Today's testimony summarizes a report that we prepared for this committee and released today. This testimony focuses on (1) how the employment status of older workers age 55 and over has changed since the recession, (2) older workers’ challenges in finding new jobs, (3) how periods of long-term unemployment might affect older workers’ retirement income, and (4) what other policies might help unemployed older workers regain employment and what steps the Department of Labor (Labor) has taken to help unemployed older workers.For more information, contact Charles Jeszeck (202) 512-7215 or jeszeckc@gao.gov. Tue, 15 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-445?source=ra What GAO FoundAs with many other demographic groups, older workers’ unemployment overall and long-term unemployment rates have increased dramatically since the recession began in 2007. In December 2011, the unemployment rate for older workers was 6.0 percent, up from 3.1 at the start of the recession, but down from its peak of 7.6 percent in February 2010. In particular, long-term unemployment rose substantially, and at a greater rate for older than younger workers. By 2011, 55 percent of unemployed older workers had been actively seeking a job for more than half a year (27 weeks or more). Meanwhile, the long-term trend of rising labor force participation rates among older workers has continued, with the recession possibly amplifying this trend.Long-term unemployment can put older workers at risk of deferring needed medical care, losing their homes, and accumulating debt. The experts and staff GAO interviewed at some one-stop career centers, as well as the unemployed older workers who participated in GAO’s focus groups, identified employer reluctance to hire older workers as a key challenge that older workers face in finding reemployment. They also identified out-of-date skills, discouragement and depression, and inexperience with online applications as reemployment barriers for older workers. Some one-stop staff who serve older workers told GAO that providing the type of assistance some older workers need to address these unique challenges can be very time-consuming. (For audio clips from GAO’s focus groups with unemployed older workers, use this link: http://www.gao.gov/multimedia/video/#video_id=590295)Long-term unemployment can substantially diminish an older worker’s future retirement income in several ways. First, it can force a worker to stop working and stop saving for retirement earlier than the worker had planned. Second, long-term unemployment can lead individuals to draw down their retirement savings to cover living expenses while they are unemployed, which was a common life experience described by GAO’s focus group participants. GAO illustrated how a hypothetical worker who had $70,000 in retirement savings at age 55 and withdrew 50 percent of those savings during a 2 year period of unemployment, would need about another 5 ½ years of work and saving to rebuild the retirement account to the level it had been before unemployment began. In addition, long-term unemployment can motivate older workers to claim early Social Security retirement benefits, which will result in lower monthly benefits for workers and their survivors for the rest of their lives.Experts GAO interviewed selected various policies that have been proposed to help address unemployed older workers’ reemployment challenges. Experts selected these policies from a broad list GAO compiled from previous academic studies. For example, two of the policies that experts selected would provide incentives such as temporary wage or training subsidies for employers to hire long-term unemployed older workers. In the current context of high unemployment and slow job creation, the impact of most of these policies is likely to be muted by limited job openings. After an interagency Taskforce issued its report on the aging of the American workforce in 2008, Labor implemented several strategies the report recommended, but since the recession started, Labor shifted focus to responding to increased demand for services. As the economy improves, Labor could refocus on older job seekers and consider what additional strategies would help address their unique reemployment challenges, in light of recent economic and technological changes.Why GAO Did This StudyThe number of workers age 55 and over experiencing long-term unemployment has grown substantially since the recession began in 2007. This raises concerns about how long-term unemployment will affect older workers’ reemployment prospects and future retirement income.In light of these developments, GAO examined (1) how older workers’ employment status has changed since the recession, (2) what risks unemployed older workers face and what challenges they experience in finding reemployment, (3) how long-term unemployment could affect older workers’ retirement income, and (4) what other policies might help them return to work and what steps the Department of Labor (Labor) has taken to help unemployed older workers.To conduct this work, GAO analyzed nationally representative datasets, led focus groups of unemployed older workers, modeled how job loss affects retirement income, and interviewed experts and federal and local officials.What GAO RecommendsTo foster the employment of older workers, we recommend that the Secretary of Labor consider what strategies are needed to address the unique needs of older job seekers, in light of recent economic and technological changes.Labor agreed with our recommendation. GAO received technical comments on a draft of this report from Labor and the Social Security Administration, and incorporated them as appropriate.For more information, contact Charlie Jeszeck at (202) 512-7215 jeszeckc@gao.gov. Tue, 15 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-548?source=ra What GAO FoundMany State Partnership Program stakeholders, including State Partnership Program Coordinators, Bilateral Affairs Officers, and combatant command officials, cited benefits to the program, but the program lacks a comprehensive oversight framework that includes clear program goals, objectives, and metrics to measure progress against those goals, which limits the Department of Defense’s (DOD) and Congress’ ability to assess whether the program is an effective and efficient use of resources. The benefits described by all stakeholders focused on the program’s contributions to meeting their specific missions, such as building security relationships, providing experience to guardsmen, and supporting combatant commands’ missions. Goals, objectives, and metrics to measure progress are necessary for management oversight, and National Guard Bureau officials told GAO that they recognize the need to update the program’s goals and develop metrics and have initiated efforts in these areas. Officials expect completion of these efforts in summer 2012. Until program goals and metrics are implemented, DOD cannot fully assess or adequately oversee the program.State Partnership Program activity data are incomplete as well as inconsistent and funding data are incomplete for fiscal years 2007 through 2011; therefore GAO cannot provide complete information on the types and frequency of activities or total funding amounts for those years. GAO found that the multiple data systems used to track program activities and funding are not interoperable and users apply varying methods and definitions to guide data inputs. The terminology used to identify activity types is inconsistent across the combatant commands and the National Guard Bureau. Further, funding data from the National Guard Bureau and the combatant commands were incomplete, and while the National Guard Bureau provided its total spending on the program since 2007, it could not provide information on the cost of individual activities. Although the National Guard Bureau has initiated efforts to improve the accuracy of its own State Partnership Program data, without common agreement with the combatant commands on what types of data need to be tracked and how to define activities, the data cannot be easily reconciled across databases.The most prominent challenge cited by State Partnership Program stakeholders involved how to fund activities that include U.S. and foreign partner civilian participants. Activities involving civilians, for example, have included subject-matter expert exchanges on military support to civil authorities and maritime border security. Although DOD guidance does not prohibit civilian involvement in activities, many stakeholders have the impression that the U.S. military is not permitted to engage civilians in State Partnership Program activities and some states may have chosen not to conduct any events with civilians due to the perception that it may violate DOD guidance. DOD and the National Guard Bureau are working on developing additional guidance and training in this area. Until these efforts are completed, confusion may continue to exist and hinder the program’s full potential to fulfill National Guard and combatant command missions.Why GAO Did This StudyThe National Guard’s State Partnership Program is a DOD security cooperation program that matches state National Guards with foreign countries to conduct joint activities—including visits between senior military leaders and knowledge sharing in areas such as disaster management—that further U.S. national security goals. The program has partnerships between 52 U.S. state and territory National Guards and 69 countries. In fiscal year 2011, program expenditures were at least $13.2 million. The 2012 National Defense Authorization Act directed GAO to study the program. GAO determined (1) the extent to which State Partnership Program activities are meeting program goals and objectives; (2) the types and frequency of activities and funding levels of the program; and (3) any challenges DOD faces in the program’s implementation. GAO collected written responses to questions from State Partnership Program Coordinators at the state level, Bilateral Affairs Officers at the U.S. embassies in the partner nations, and officials at the combatant commands, reviewed documents, and interviewed DOD officials.What GAO RecommendsGAO recommends that DOD complete its comprehensive oversight framework for the State Partnership Program, develop guidance to achieve reliable data on the program, and issue guidance and conduct additional training on the appropriate use of funding for program activities, including those involving civilians. DOD concurred with all recommendations.For more information, contact John Pendleton at (202) 512-3489 or pendletonj@gao.gov. Tue, 15 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-575R?source=ra What GAO FoundInformation on the overall effectiveness (or impact) of the CDBG and HOME programs is limited. According to HUD officials, the agency has faced challenges in evaluating the impact of CDBG and HOME because, among other things, such an evaluation would have to compare neighborhoods that received program assistance with those that did not. Our previous work has also identified the difficulties of evaluating the impact of block grant programs that do not represent a uniform package of activities or desired outcomes across the country, as well as the common problem of attributing differences in communities’ outcomes to the effect of a program in the absence of controls for other explanations. As a result, few comprehensive studies on the impact of the CDBG and HOME programs exist, but studies that focused on specific activities have generally found that each of the programs has made positive contributions. We identified two studies that attempted to examine the overall impact of the CDBG program on communities, but both studies encountered evaluation challenges due to the program’s design. For example, a 1995 study that HUD considers the most comprehensive evaluation of CDBG suggests that, at that time, the program played a role in neighborhood stabilization and revitalization in a number of U.S. cities included in the study. However, the study states that it did not attempt to isolate the impact of CDBG-funded activities in these communities, in part because of the variability of CDBG activities at the community level. The three additional CDBG studies we identified focused on specific aspects of the program, such as disaster assistance, rather than the entire program. Similarly, we identified five studies of the HOME program. Two of these studies described implementation in the first 5 years of the program (fiscal years 1992–1996). The remaining three studies examined specific aspects of HOME and suggested some positive contributions of the program but did not evaluate its overall impact. For example, a 2008 study examined the foreclosure and delinquency rates among HOME-assisted homebuyers. It found that compared with homebuyers whose mortgages were insured by the Federal Housing Administration (FHA)—a group with a similar population of lower-income, first-time homebuyers—foreclosure rates were slightly lower for buyers who received HOME assistance from 2001 to 2005.HUD collects performance information for both the CDBG and HOME programs, but the information varies. Using a performance measurement system that HUD activated in 2006, grantees are to select and report the objective, intended outcome, and outputs (direct products or services delivered by the programs) of each activity they undertake. In fiscal years 2007–2011, HUD collected data for the following types of activities funded under the CDBG program: public services, economic development, rehabilitation and construction of rental or homeowner housing, and homebuyer assistance. For example, for CDBG activities related to economic development, grantees reported on the total number of businesses assisted and total number of jobs created or retained. The data HUD collects for the HOME program using this performance measurement system are not as detailed as those it collects for CDBG because, according to HUD officials, the agency already collected accomplishment data for HOME prior to development of the system and there are fewer eligible activities. According to HUD officials, they also use this accomplishment data to assess the performance of the HOME program. Specifically, for fiscal years 2007–2011, HUD used the performance measurement system to report data such as the number of units assisted with HOME funds and the number of units occupied by households with income that is less than 80 percent of the area median income. In addition, HUD has collected other information since program inception, including the amount of other funds leveraged with HOME funds and the per-unit cost of HOME units. According to HUD officials and others, one of the challenges associated with creating outcome-oriented performance measures that can be uniformly applied to all CDBG and HOME activities is the grantees’ flexibility to design and implement activities tailored to meet local needs and priorities. Another challenge for measuring the outcomes of CDBG is grantees’ ability to undertake a broad range of activities.HUD officials and others have identified promising practices for the CDBG and HOME programs that relate to program management practices and use of funds. HUD officials have identified program management practices that they believe assist CDBG and HOME grantees to implement successful programs. These practices include developing a local performance measurement system and internal operating procedures for effectively managing subrecipients. According to HUD officials, the agency has encouraged grantees to develop local performance measurement systems because of challenges in developing outcome-oriented performance measures for the programs as a whole resulting from the wide discretion provided to grantees. For example, a 2005 HUD study on promising practices in grantee performance measurement noted practices such as measuring outcomes as well as outputs and efficiency measures and choosing outcomes that tie to goals. In addition, HUD and national organizations with whom we spoke have identified a number of projects as examples of how grantees have successfully utilized CDBG and HOME funds. For example, in 2005 and 2011, HUD gave awards for a number of HOME-funded projects under various categories, including neighborhood revitalization, innovative design, reaching underserved populations, and producing sustainable housing.Why GAO Did This StudyIn fiscal year 2012, Congress appropriated about $3.4 billion for the Community Development Block Grant (CDBG) program and $1 billion for the HOME Investment Partnerships (HOME) program. The CDBG and HOME programs, which are administered by the Department of Housing and Urban Development’s (HUD) Office of Community Planning and Development (CPD), are the federal government’s largest block grant programs for community development and affordable housing production, respectively. Both programs give grantees discretion to fund a wide range of allowable activities; in particular, CDBG funds can be used for 26 eligible activities. Block grants typically devolve substantial authority for setting priorities to state or local governments, and state and local officials bear the primary responsibility for monitoring and overseeing the planning, management, and implementation of activities financed with federal grant funds. However, federal agencies have oversight responsibilities and are expected to ensure that block grant funds are used effectively.Section 231 of the Consolidated and Further Continuing Appropriations Act for fiscal year 2012 directed us to review the effectiveness of the block grant programs administered by CPD. As part of this review, we were to examine performance metrics used by HUD and best practices utilized by program grantees. This report focuses on the CDBG and HOME programs. Specifically, this report discusses (1) what is known about the effectiveness (or impact) of the CDBG and HOME programs, (2) the performance measures HUD has in place for the CDBG and HOME programs and any challenges HUD faced in developing these measures, and (3) promising practices HUD and others have identified for the CDBG and HOME programs.For more information, please contact William B. Shear at (202) 512-8678 or shearw@gao.gov. Tue, 15 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-682?source=ra What GAO Found In accordance with section 107 of the Congressional Award Act, as amended (2 U.S.C. § 807), we are responsible for conducting audits of the Congressional Award Foundation’s (the Foundation) financial statements. In our audits of the Foundation’s financial statements for fiscal years 2011 and 2010, we foundthe financial statements are presented fairly, in all material respects, in conformity with U.S. generally accepted accounting principles;no material weaknessesno reportable noncompliance with laws and regulations we tested.Why GAO Did This StudyThis report presents the results of our audits of the financial statements of the Congressional Award Foundation (the Foundation) as of and for the fiscal years ending September 30, 2011, and 2010. These financial statements are the responsibility of the Foundation. This report contains our (1) unqualified opinions on the Foundation’s financial statements, (2) results of our consideration of the Foundation’s internal control over financial reporting, and (3) conclusion that our tests of the Foundation’s compliance with selected provisions of laws and regulations disclosed no instances of reportable noncompliance during fiscal year 2011. The report also discusses a significant matter related to the Foundation’s fiscal year 2010 annual federal information return filing.For additional information, contact Steven J. Sebastian at sebastians@gao.gov or 202-512-9521. Tue, 15 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-740T?source=ra What GAO FoundIn its October 2010 report, GAO noted that oil shale development presents the following opportunities for the United States:Increasing domestic oil production. Tapping the vast amounts of oil locked within U.S. oil shale formations could go a long way toward satisfying the nation’s future oil demands. Oil shale deposits in the Green River Formation are estimated to contain up to 3 trillion barrels of oil, half of which may be recoverable, which is about equal to the entire world’s proven oil reserves.Socioeconomic benefits. Development of oil shale resources could lead to the creation of jobs, increases in wealth, and increases in tax and royalty payments to federal and state governments for oil produced on their lands. The extent of these benefits, however, is unknown at this time because the ultimate size of the industry is uncertain.In addition to these opportunities and the uncertainty of not yet having an economical and environmentally viable commercial scale technology, the following challenges should also be considered:Impacts on water, air, and wildlife. Developing oil shale and providing power for oil shale operations and other activities will require large amounts of water and could have significant impacts on the quality and quantity of surface and groundwater resources. In addition, construction and mining activities during development can temporarily degrade air quality in local areas. There can also be long-term regional increases in air pollutants from oil shale processing and the generation of additional electricity to power oil shale development operations. Oil shale operations will also require the clearing of large surface areas of topsoil and vegetation which can affect wildlife habitat, and the withdrawal of large quantities of surface water which could also negatively impact aquatic life.Socioeconomic impacts. Oil shale development can bring an influx of workers, who along with their families can put additional stress on local infrastructure such as roads, housing, municipal water systems, and schools. Development from expansion of extractive industries, such as oil shale or oil and gas, has typically followed a “boom and bust” cycle, making planning for growth difficult for local governments. Moreover, traditional rural uses would be displaced by industrial uses and areas that rely on tourism and natural resources would be negatively impacted.GAO’s 2010 report found that federal research efforts on the impacts of oil shale development did not provide sufficient data for future monitoring and that there was a greater need for collaboration among key federal stakeholders to address water resources and research issues. Specifically, Interior and DOE officials generally have not shared information on their oil shale research efforts, and there was a need for the federal agencies to improve their collaboration and develop more comprehensive baseline information related to water resources in the region. GAO made three recommendations to Interior, which the department generally concurred with and has already begun to take actions to address.Why GAO Did This StudyFossil fuels are important to both the global and U.S. economies, and “unconventional” oil and gas resources—resources that cannot be produced, transported, or refined using traditional techniques—are expected to play a larger role in helping the United States meet future energy needs. With rising energy prices one such resource that has received renewed domestic attention in recent years is oil shale. Oil shale is a sedimentary rock that contains solid organic material that can be converted into an oil-like product when heated. About 72 percent of this oil shale is located within the Green River Formation in Colorado, Utah, and Wyoming and lies beneath federal lands managed by the Department of the Interior’s Bureau of Land Management, making the federal government a key player in its potential development. In addition, the Department of Energy (DOE), advances energy technology, including for oil shale, through its various offices, national laboratories, and arrangements with universities.GAO’s testimony is based on its October 2010 report on the impacts of oil shale development (GAO-11-35). This testimony summarizes the opportunities and challenges of oil shale development identified in that report and the status of prior GAO recommendations that Interior take actions to better prepare for the possible future impacts of oil shale development.For more information, contact Anu K. Mittal at (202) 512-3841 or mittala@gao.gov. Thu, 10 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-556?source=ra What GAO FoundThe Department of Defense (DOD) has taken steps to establish its concept for conducting security force assistance, including broadly defining the term and identifying actions needed to plan for and prepare forces to execute these activities. For example, in October 2010, the department issued an instruction that broadly defines security force assistance and outlines responsibilities for key stakeholders, including the geographic combatant commands and military services. DOD also identified gaps in key areas of doctrine, organization, and training related to the implementation of security force assistance and tasks needed to address those gaps. The tasks include reviewing joint and service-level doctrine to incorporate security force assistance as needed and developing measures to assess progress in partner nations. Citing a need to clarify the definition of security force assistance beyond the DOD Instruction, DOD published a document referred to as a Lexicon Framework in November 2011 that included information to describe how security force assistance relates to other existing terms, such as security cooperation.The geographic combatant commands conduct activities to build partner nation capacity and capability, but face challenges planning for and tracking security force assistance as a distinct activity. Notwithstanding DOD’s efforts to present security force assistance as a distinct and potentially expansive activity and clarify its terminology, the commands lack a common understanding of security force assistance, and therefore some were unclear as to what additional actions were needed to meet DOD’s intent. Specifically, officials interviewed generally viewed it as a recharacterization of some existing activities, but had different interpretations of what types of activities should be considered security force assistance. Further, some command officials stated that they were not clear as to the intent of DOD’s increased focus on security force assistance and whether any related adjustments should be made in their plans and scope or level of activities. As a result, they do not currently distinguish security force assistance from other security cooperation activities in their plans. DOD intended the Lexicon Framework to provide greater clarity on the meaning of security force assistance and its relationship to security cooperation and other related terms. However, some officials said that they found the distinctions to be confusing and others believed that additional guidance was needed. GAO’s prior work on key practices for successful organizational transformations states the necessity to communicate clear objectives for what is to be achieved. Without additional clarification, the geographic combatant commands will continue to lack a common understanding, which may hinder the department’s ability to meet its strategic goals. Moreover, the system that the commands are directed to use to track security force assistance activities does not include a specific data field to identify those activities. The commands also face challenges planning for and executing long-term, sustained security force assistance plans within existing statutory authorities, which contain some limitations on the types of activities that can be conducted.The services are taking steps and investing resources to organize and train general purpose forces capable of conducting security force assistance based on current requirements. For example, to conduct activities with partner nation security forces, the Army and the Air Force are aligning certain units to geographic regions, and the Marine Corps has created tailored task forces. However, the services face certain challenges. Due to a lack of clarity on how DOD’s increased emphasis on security force assistance will affect future requirements, they are uncertain whether their current efforts are sufficient or whether additional capabilities will be required. Further, services face challenges in tracking personnel with security force assistance training and experience, particularly in identifying the attributes to track.Why GAO Did This StudyDOD is emphasizing security force assistance (e.g., efforts to train, equip, and advise partner nation forces) as a distinct activity to build the capacity and capability of partner nation forces. In anticipation of its growing importance, DOD has identified the need to strengthen and institutionalize security force assistance capabilities within its general purpose forces. Accordingly, a committee report accompanying the Fiscal Year 2012 National Defense Authorization Act directed GAO to report on DOD’s plans. GAO evaluated: (1) the extent to which DOD has established its concept for conducting security force assistance, including defining the term and identifying actions needed to plan for and prepare forces to execute it; (2) the extent to which the geographic combatant commands have taken steps to plan for and conduct security force assistance, and what challenges, if any, they face; and (3) what steps the services have taken to organize and train general purpose forces capable of conducting security force assistance, and what challenges, if any, they face. GAO reviewed relevant documents, and interviewed officials from combatant commands, the services, and other DOD organizations.What GAO RecommendsGAO recommends DOD clarify its intent for security force assistance, including how combatant commands should adjust their current planning efforts and provide a means to track activities. DOD partially concurred, stating that recent guidance addresses planning requirements. GAO continues to believe that more specific direction is needed.For more information, contact Sharon Pickup, (202) 512-9619, pickups@gao.gov. Thu, 10 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-663R?source=ra What GAO FoundPCORI received an unqualified audit opinion on its 2011 and 2010 financial statements. In its audit of PCORI’s financial statements, the IPA found that the financial statements were presented fairly, in all material respects, and there was no reportable noncompliance with selected provisions of laws and regulations the IPA tested as part of its audit. However, the IPA identified a deficiency in PCORI’s internal control over financial reporting related to PCORI reporting on its receipt of appropriated funds. The IPA determined the deficiency to be significant enough to constitute a material weakness. We found no instances in which the IPA did not comply, in all material respects, with U.S. generally accepted auditing standards and generally accepted government auditing standards in the conduct of the financial statement audit. In e-mailed comments from PCORI’s Director of Finance, PCORI stated that the identified deficiency in financial reporting related to appropriations received resulted from uncertainty over differences between the federal government’s and PCORI’s fiscal years and cited action taken to adjust its records to correct the deficiency.Why GAO Did This StudyThis report presents the results of our review of the Patient-Centered Outcomes Research Institute’s (PCORI) 2011 and 2010 financial statement audit. PCORI was created by the Patient Protection and Affordable Care Act (PPACA) as a federally funded, nonprofit corporation that is neither an agency nor establishment of the United States government. PCORI’s purpose is to assist patients, clinicians, purchasers, and policymakers in making informed health decisions by advancing the quality and relevance of evidence concerning the manner in which diseases, disorders, and other health conditions can effectively and appropriately be prevented, diagnosed, treated, monitored, and managed through research and evidence synthesis that considers variations in patient subpopulations, and the dissemination of research findings with respect to the relative health outcomes, clinical effectiveness, and appropriateness of the medical treatments, services, and other items. PPACA requires PCORI to provide for the conduct of its financial audits on an annual basis by a private entity with expertise in conducting financial audits, and requires the Comptroller General of the United States to annually perform a review of the audit of such financial statements. We are required to report the results of our review to the Congress annually. This is the first year PCORI has prepared financial statements and contracted with an independent public accountant (IPA) to conduct the financial statement audit, and consequently, the first year in which we have reviewed the audit.For more information, contact Steven J. Sebastian at (202) 512-3406 or sebastians@gao.gov. Thu, 10 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-491?source=ra What GAO FoundHomelessness programs are fragmented across multiple agencies and some show evidence of overlap. In fiscal year 2010, eight federal agencies obligated roughly $2.8 billion to administer 26 homelessness programs. Three agencies—the Departments of Health and Human Services (HHS), Housing and Urban Development (HUD), and Veterans Affairs (VA)—are responsible for the majority of programs and dollars, 22 of 26 programs, and 89 percent of total funds. GAO found that these agencies and the Department of Labor (Labor) have multiple programs that offer similar services to similar beneficiaries. Fragmentation of services and overlap in some programs is partly due to their legislative creation and partly due to programs evolving to offer services that meet the variety of needs of persons experiencing homelessness. Fragmentation and overlap can lead to inefficient use of resources. For example, both HHS and VA have programs that provide similar services, but each agency separately manages its programs under different administrative units. In addition, some local service providers told us that managing multiple applications and reporting requirements was burdensome, difficult, and costly. Moreover, according to providers, persons experiencing homelessness have difficulties navigating services that are fragmented across agencies.While almost all targeted programs maintain performance information (including data on the number of homeless served), few targeted programs have conducted evaluations to assess how effectively the programs are achieving their objectives. While performance information can be helpful for monitoring whether programs were achieving desired results, evaluations allow for comprehensive assessments. According to GAO’s questionnaire, 2 of the 26 programs reported they had a program evaluation within the last 5 years. Information from program evaluations can help agencies fully assess what is working and how improvements can be made. Moreover, understanding program performance and effectiveness is key to determining in which programs and interventions to strategically invest limited federal funds.The U.S. Interagency Council on Homelessness (Interagency Council) is required to coordinate the federal response to homelessness and has taken several steps to coordinate efforts and promote initiatives across federal agencies. Federal coordination efforts have increased in recent years and included issuing the first federal strategic plan, increasing coordination at the state and local levels by focusing on the creation of state interagency councils on homelessness, and taking steps to develop a common vocabulary for discussing homelessness and related terms. The strategic plan serves as a useful and necessary step in increasing agency coordination and incorporates some elements of an effective strategy, but lacks key characteristics desirable in a national strategy. For example, the plan does not list priorities or milestones and does not discuss resource needs or assign clear roles and responsibilities to federal partners. In order for the Interagency Council and its members to effectively translate the goals and objectives of the plan into actions and measure their own progress in implementing them, these elements must be made transparent to help ensure accountability and measure the plan’s progress.Why GAO Did This StudyFederal programs for those experiencing or at risk for homelessness generally are designed to provide housing assistance and other services such as health care, job training, or food assistance. This report responds to the statutory requirement that GAO identify federal programs, agencies, offices, and initiatives that have duplicative goals or activities and addresses (1) the number of and funding levels for federal homelessness programs and the extent to which fragmentation, overlap, and duplication exists; (2) whether the programs have been evaluated; and (3) actions of the Interagency Council and federal agencies to coordinate efforts and the extent to which the federal strategic plan to prevent and end homelessness is an effective strategy. To address these objectives, GAO sent questionnaires to10 federal agencies and obtained and analyzed data for a range of programs.What GAO RecommendsThe Interagency Council and the Office of Management and Budget––in conjunction with HHS, HUD, Labor, and VA, should further analyze the degree and effects of overlap and fragmentation. VA agreed with this recommendation. HHS, HUD, Labor, and the Council did not explicitly agree or disagree. We also recommended that the Council incorporate additional elements into updates to the federal strategic plan or in implementation and planning documents. The Council stated it has been setting priorities and measuring progress, but was unable to provide documentation. GAO maintains its position and that the implementation of the federal strategic plan be made more transparent.For more information, contact Alicia Puente Cackley at (202) 512-8678 or cackleya@gao.gov. Thu, 10 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-480R?source=ra What GAO FoundDOD is estimating and publishing approximate costs for selected types of internally and externally required reports, but in some cases its approach is not fully consistent with relevant cost estimating best practices and cost accounting standards. Specifically, DOD entities have been directed to use the cost estimating tool to capture marginal costs of activities associated with completing a report or study that would not have been performed otherwise. These costs consist of certain manpower costs (such as the prorated salaries of military and civilian personnel based on the time they spent) and nonlabor costs (such as contract services, travel, or printing). In comparing DOD’s approach to (1) GAO’s Cost Estimating and Assessment Guide—which states that high-quality, reliable cost estimates should be comprehensive, well documented, and accurate—and (2) relevant accounting standards, we found the following.Comprehensive. GAO’s cost guide states that cost estimates should include all costs, but allows flexibility for the estimates to exclude costs where information is limited as long as steps are taken to clearly define and document what costs are included or excluded. DOD’s guidance on using the tool defines and documents decisions to include certain manpower and all nonlabor costs in its calculation. In addition, it documents the decision to exclude other manpower costs, such as those for health care and training expenses. It also provides broad examples of some types of activities to consider in estimating costs, but leaves it up to the discretion of the individuals generating the cost estimate to decide which types of activities to include or exclude. As a result, based on the nine reports we reviewed, we found inconsistencies in the types of activities individuals decided to include when developing their cost estimates. For example, we found that for six of the nine reports we reviewed, some individuals calculated the manpower costs for activities associated with coordinating the report through the final review while others did not. In addition, according to relevant accounting standards, appropriate procedures and practices should be established to enable, among other things, the interpretation and communication of cost information. However, when presenting the cost estimate on the front cover of a report or study, the language DOD uses does not provide information on what costs are included or excluded. Specifically, it does not indicate that the estimate reflects only certain marginal manpower and nonlabor costs. Without further explanation, this wording could be subject to misinterpretation such that recipients of the reports or studies may assume that all costs are included in the estimate when that is not the case.Well documented. GAO’s Cost Estimating and Assessment Guide states that cost estimates should be easily traceable to source documents. While DOD’s guidance on using the tool states that individuals should be prepared to explain how they developed the cost estimate, it does not include a requirement for individuals to retain source documentation. In practice, we found that of the nine reports we reviewed, individuals were able to easily retrieve documentation for the estimates prepared for three reports, but not for the other six. As a result, DOD may not have the information needed so that others can understand how a cost estimate was derived and readily replicate it.Accurate. GAO’s Cost Estimating and Assessment Guide further states that cost estimates should have all cost inputs checked to verify that they are accurate. However, we found that DOD’s guidance on using the tool has no requirement to independently verify the costs used to generate the cost estimate. In practice, the individual generating the cost estimate is responsible for ensuring its accuracy. As a result, without independent verification, DOD cannot ensure that cost estimates are accurate and reliable.DOD currently lacks a means to ensure that organizations are developing cost estimates for all required types of reports and studies, but is taking steps to enhance its ability to monitor the preparation of reports and studies to satisfy reporting requirements, including those for which a cost estimate is required to be generated. DOD’s guidance on using the tool identified 10 specific types of reports or studies that require a cost estimate. The guidance states that the DOD component preparing a report or study is responsible for ensuring that a cost estimate, if required, is included. However, the guidance does not include any process or requirement to track whether organizations are developing required cost estimates. According to CAPE officials who developed the tool, they were not directed to ensure that cost estimates have been developed for all required reports and studies, and they added that the cost estimating tool was not designed to track reports and studies that require a cost estimate. These same officials noted that the magnitude of DOD’s reporting requirements makes it challenging to identify the universe of these requirements and to track the completion of reports and studies to meet them, including whether cost estimates have been generated. In the past year, DOD has initiated efforts to improve its visibility over its internal and external reporting requirements. In March 2011, the Secretary of Defense issued a memorandum requiring the Assistant Secretary of Defense for Legislative Affairs to enhance that office’s database capability and further automate the process of tracking external reports to Congress and required the Office of the Director of Administration and Management to track internal reports. The Office of Legislative Affairs enhanced its Congressional Hearings and Reporting Requirements Tracking System by adding a data field to record the estimated costs of reports or studies generated by DOD components. To gain greater visibility of internal reporting requirements, the Office of the Director of Administration and Management tasked Washington Headquarters Services with developing a repository for tracking internal reports. According to a Washington Headquarters Services official, the repository has a field to capture whether an internal report or study has a cost estimate. Currently, the repository is in development and has been populated with reports that date back 3 years.DOD has not evaluated and currently does not plan to evaluate the usefulness of its efforts to estimate the costs of selected reports and studies as one of the means for achieving the Secretary of Defense’s intended purpose of increasing the transparency of costs, reducing or eliminating reporting requirements, and instilling a culture of cost consciousness across DOD. According to GAO’s Standards for Internal Control in the Federal Government, activities such as assessments need to be established to monitor performance, and managers need to compare actual performance against targets and then analyze any significant differences so that appropriate action can be taken to ensure that organizational goals are met. However, under current guidance, no requirement exists for DOD to evaluate the impact of its cost estimating efforts, such as whether these efforts have prompted internal or external decision makers to consider cost as a factor in deciding whether to establish a reporting requirement for DOD. Without evaluating the impact of its efforts, including seeking the views of internal and external decision makers, DOD does not have the information it needs to assess whether the time and effort it is investing to develop cost estimates is having the desired effect of achieving greater transparency, reducing reporting requirements, and raising cost consciousness, as intended by the Secretary.Why GAO Did This StudyCiting long-term fiscal challenges affecting the federal government, in May 2010, the Secretary of Defense directed the Department of Defense (DOD) to undertake a departmentwide initiative to assess how the department is staffed, organized, and operated with the goal of reducing excess overhead costs and reinvesting these savings in sustaining DOD’s current force structure and modernizing its weapons portfolio. The Secretary’s initiative targeted both shorter- and longer-term improvements and set specific goals and targets for achieving cost savings and efficiencies. The initiative was organized along four tracks, each of which had a different focus. The fourth track focused on specific areas where DOD could take immediate action to reduce inefficiencies and overhead, in particular, to reduce headquarters and support bureaucracies and to instill a culture of cost consciousness and restraint in the department. As part of the fourth track, the Secretary of Defense announced a number of specific initiatives, including actions intended to address the need to reduce or eliminate reporting requirements for DOD reports and studies. For example, in his August 9, 2010, speech announcing the overall efficiency initiative, the Secretary of Defense stated that the department is “awash in taskings for reports and studies” and directed several specific actions that, according to the press release accompanying the announcement, were intended to “combat the enormous amounts of taskings for reports and studies.” In his remarks, the Secretary noted that there is little basis to determine whether the value gained is worth the considerable time and resources expended to generate reports and studies. With respect to specific actions, the Secretary directed DOD and its components to track the approximate cost of preparing DOD reports and studies and publish the cost on the front cover of each report or study. He also called for a comprehensive review of all oversight reports and use of the results to reduce the volume of reports and studies generated internally while engaging with Congress on ways to meet their needs while working together to reduce the number of reports.In September 2010, the Secretary of Defense tasked DOD’s Cost Assessment and Program Evaluation (CAPE) office with implementing the Secretary’s requirement to publish the cost of preparing DOD reports and studies. By November 2010, the CAPE office had developed a cost estimating tool and corresponding guidance on using the tool, which described the categories of costs to be estimated and identified the types of reports and studies for which costs were to be estimated. The following month, the Secretary of Defense issued a memorandum requiring the use of the tool beginning on February 1, 2011.In House Report Number 112-78, which accompanied a bill for the National Defense Authorization Act for Fiscal Year 2012, the House Committee on Armed Services commended DOD for implementing a process for collecting an estimate of resources required to generate internally and externally required reports and agreed that additional transparency would be useful for decision makers when determining the utility of various reporting requirements. The committee also observed that any tool used to collect costs was only as useful as the inputs received and directed GAO to conduct an assessment of DOD’s methodology and tools for collecting cost data on both internally and externally required reports and to submit a report, including any recommendations needed to improve the data collection, transparency, and utility of the tool. Specifically, we evaluated DOD’s approach to estimate the costs of selected reports and studies, including (1) whether DOD entities are capturing and presenting costs in a manner consistent with relevant cost estimating best practices; (2) the status of DOD’s efforts to track whether organizations are developing cost estimates for all required types of reports and studies; and (3) whether DOD has evaluated the usefulness of its efforts to estimate the costs of reports and studies as one of the means for achieving the Secretary’s intended purpose of increasing the transparency of costs, reducing or eliminating reporting requirements, and instilling a culture of cost consciousness across DOD.What GAO RecommendsWe are making a recommendation to the Secretary of Defense to take steps to evaluate DOD’s effort to estimate costs to determine whether that effort is having the desired effect of achieving greater transparency, reducing or eliminating reporting requirements, and raising cost awareness. Based on the results of this evaluation, if DOD plans to continue the effort to estimate costs for selected reports and studies, we recommend that the Secretary modify the current guidance or otherwise take steps to improve DOD’s cost estimating approach. In commenting on a draft of our report, DOD partially concurred with our recommendations, except it disagreed with one of the steps we recommended to improve its cost estimating approach.For more information, please contact Sharon L. Pickup at (202) 512-9619 or pickups@gao.gov. Thu, 10 May 2012 13:00:00 -0400 http://www.gao.gov/products/GAO-12-329?source=ra What GAO FoundLittle research exists on the effect of workplace safety incentive programs and other workplace safety policies on workers' reporting of injuries and illnesses, but several experts identified a link between certain types of programs and policies and reporting. Researchers distinguish between rate-based safety incentive programs, which reward workers for achieving low rates of reported injuries or illnesses, and behavior-based programs, which reward workers for certain behaviors, such as recommending safety improvements. Of the six studies GAO identified that assessed the effect of safety incentive programs, two analyzed the potential effect on workers’ reporting of injuries or illnesses, but they concluded that there was no relationship between the programs and injury and illness reporting. Experts and industry officials, however, suggest that rate-based programs may discourage reporting of injuries and illnesses. Experts and industry officials also reported that certain workplace polices, such as post-incident drug and alcohol testing, may discourage workers from reporting injuries and illnesses. Researchers and workplace safety experts also noted that how safety is managed in the workplace, including employer practices such as fostering open communication about safety issues, may encourage reporting of injuries and illnesses. In 2010, from its survey, GAO estimated that 25 percent of U.S. manufacturers had safety incentive programs, and most had other workplace safety policies that, according to experts and industry officials, may affect injury and illness reporting. GAO estimated that 22 percent of manufacturers had rate-based safety incentive programs, and 14 percent had behavior-based programs. Almost 70 percent of manufacturers also had demerit systems, which discipline workers for unsafe behaviors, and 56 percent had post-incident drug and alcohol testing policies according to GAO’s estimates. Most manufacturers had more than one safety incentive program or other workplace safety policy and more than 20 percent had several. Such programs and policies were more common among larger manufacturers.Although the Occupational Safety and Health Administration (OSHA) is not required to regulate safety incentive programs, it has taken limited action to address the potential effect of such programs and other workplace safety policies on injury and illness reporting. These programs and policies, however, are not addressed in key guidance such as OSHA's field operations manual for inspectors. OSHA has cooperative programs that exempt employers with exemplary safety and health management systems from routine inspections. One such program prohibits participants from having rate-based safety incentive programs, but guidance on OSHA’s other cooperative programs does not address safety incentive programs. Similarly, OSHA inspectors and outreach specialists provide information to employers about the potential benefits and risks of safety incentive programs, but the guidance provided to inspectors in its field operations manual does not address these programs.Why GAO Did This StudyOSHA relies on employer injury and illness records to target its enforcement efforts. Questions have been raised as to whether some safety incentive programs and other workplace safety policies may discourage workers' reporting of injuries and illnesses. GAO examined (1) what is known about the effect of workplace safety incentive programs and other workplace safety policies on injury and illness reporting, (2) the prevalence of safety incentive programs as well as other policies that may affect reporting, and (3) actions OSHA has taken to address how safety incentive programs and other policies may affect injury and illness reporting. GAO reviewed academic literature, federal laws, regulations, and OSHA guidance; surveyed a nationally representative sample of manufacturing worksites; and interviewed federal and state occupational safety and health officials, union and employer representatives, and researchers.What GAO RecommendsGAO recommends that OSHA provide guidance about safety incentive programs and other workplace safety policies consistently across the agency's cooperative programs, and add language about safety incentive programs and other workplace safety policies to the guidance provided to inspectors in its field operations manual. OSHA agreed with the recommendations, and noted its plans to address them.For more information, contact Revae Moran at (202) 512-7215 or moranr@gao.gov. Wed, 09 May 2012 13:00:00 -0400