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U.S. General Accounting Office:

Serving the Congress and the Nation: 

Performance Plan for Fiscal 2004:

Serving the Congress: 

Mission:

GAO exists to support the Congress in meeting its constitutional 
responsibilities and to help improve the performance and ensure the 
accountability of the federal government for the benefit of the 
American people.

Scope of Work:

GAO performs a range of oversight, insight, and foresight-related 
engagements, a vast majority of which are conducted in response to 
congressional mandates or requests. GAO's engagements include 
evaluations of federal programs and performance, financial and 
management audits, policy analyses, legal opinions, bid protest 
adjudications, and investigations.

Core Values:

Accountability:

We help the Congress oversee federal programs and operations to ensure 
accountability to the American people. GAO's analysts, auditors, 
lawyers, economists, information technology specialists, 
investigators, and other multidisciplinary professionals seek to 
enhance the economy, efficiency, effectiveness, and credibility of the 
federal government both in fact and in the eyes of the American people.

Integrity:

We set high standards for ourselves in the conduct of GAO's work. Our 
agency takes a professional, objective, fact-based, nonpartisan, 
nonideological, fair, and balanced approach to all activities. 
Integrity is the foundation of reputation, and the GAO approach to work 
ensures both.

Reliability:

We at GAO want our work to be viewed by the Congress and the American 
public as reliable. We produce high-quality reports, testimony, 
briefings, legal opinions, and other products and services that are 
timely, accurate, useful, clear, and candid.

From the Comptroller General:

July 2003:

This annual performance plan reflects the General Accounting Office's 
(GAO) fiscal 2004 budget proposal, which is now pending before the 
Congress. While it is based on our current strategic plan, which spans 
fiscal 2002 through 2007, we are in the process of updating our 
strategic plan now. As the research and discussions with the Congress 
proceed during the update, we may revise the goals and targets for 
fiscal 2004 described in this annual plan.

About 90 percent of our resources are devoted to current and 
anticipated congressional mandates and requests for our work. 
Consequently, this performance plan includes work on long-standing 
challenges of continuing interest to the Congress, such as the security 
of our nation and homeland, the educational needs of the nation's 
children, the long-term viability of Social Security and Medicare, the 
rising cost of health care and the millions of Americans who are 
uninsured, and the vulnerability of the government's computer systems 
to sabotage. At the same time, the plan recognizes the impact of new 
and unprecedented challenges for the federal government, such as 
securing the safety of Americans at home and abroad and monitoring the 
ability of government to effectively oversee financial markets in an 
era of diminished public confidence in certain corporate institutions. 
We also factored in information required for appropriations and 
oversight by the Congress and for major current and emerging 
congressional and executive branch initiatives. Furthermore, we plan to 
invest a small percentage of our resources in important discretionary 
research and development work to identify and help the Congress address 
emerging issues facing the nation and its citizens.

As detailed in our strategic plan, our work falls under the following 
four strategic goals:

* To provide timely, quality service to the Congress and the federal 
government to address current and emerging challenges to the well-being 
and financial security of the American people.

* To provide timely, quality service to the Congress and the federal 
government to respond to changing security threats and the challenges 
of global interdependence.

* To help transform the federal government's role and how it does 
business to meet 21ST century challenges.

* To maximize the value of GAO by being a model federal agency and a 
world-class professional services organization.

In achieving the first three of those strategic goals, our scope of 
work will include conducting evaluations of federal programs and 
performance, financial and management audits, policy analyses, legal 
opinions, bid protest adjudications, and investigations. We will 
achieve the fourth goal by engaging in a variety of initiatives that 
focus on significant internal management areas. All of our efforts will 
be driven by our three core values: accountability, integrity, and 
reliability. By subjecting the data we collect on GAO's performance to 
the verification and validation procedures this plan describes, we are 
confident that we will be able to provide complete and reliable data in 
our performance and accountability report for fiscal 2004.

In summary, fiscal 2004 promises to be a challenging year for us. I 
believe that our planned work will, as in past years, result in an 
excellent return on the taxpayers' investment in GAO.

David M. Walker 
Comptroller General of the United States:

Table of Contents:

From the Comptroller General:

Part I: Performance Measures and Goals:

Part II: Strategies and Means:

Part III: Verification and Validation of Performance Data:

Appendix: Information Security Plan:

Abbreviations and Acronyms:

Tables:

Table 1: Annual Performance Measures:

Table 2: Strategic Goal 1's Annual Performance Results and Targets:

Table 3: Strategic Goal 2's Annual Performance Results and Targets:

Table 4: Strategic Goal 3's Annual Performance Results and Targets:

Table 5: Agencywide Annual Performance Results and Targets:

Table 6: Resources by Funding Source:

Table 7: Resources by Strategic Goal:

Figures:

Figure 1: Organizational Structure:

Figure 2: GAO's Offices:

Figure 3: Strategic Planning Elements and Performance Measures:

Figure 4: Strategic Framework:

[End of Table of Contents]

Part I: Performance Measures and Goals:

In this first part of GAO's performance plan for fiscal 2004, we lay 
out the agency's performance goals and measures for what we intend to 
do to fulfill the agency's mission. Later parts of the plan discuss how 
we plan to achieve the goals and how we will verify and validate the 
data used to assess our progress. The Web guide at the end of this plan 
lists Internet addresses for one-click access to the various documents 
referred to in this performance plan--including the agency's current 
strategic plan and our most recent performance and accountability 
report on GAO's operations for fiscal 2002.

GAO Overview:

An independent, nonpartisan, professional services agency in the 
legislative branch, GAO is commonly regarded as the audit, evaluation, 
and investigative arm of the Congress. We examine the full breadth and 
scope of federal activities and programs, publish thousands of reports 
and other documents annually, study national and global trends to 
anticipate their implications for public policy, and provide a number 
of related services to aid decision makers and the general public. In 
the course of our work, we make recommendations to improve the 
accountability, operations, and services of government agencies, 
thereby contributing not only to the increased effectiveness of federal 
spending, but also to the enhancement of the taxpayers' trust and 
confidence in their government.

Unlike large executive branch departments that manage federal lands or 
maintain extensive facilities and systems across the country and, in 
some instances, around the world, GAO is a small agency that depends 
almost totally on one type of resource to achieve strategic goals and 
objectives: our people. GAO's staff, numbering about 3,300, are arrayed 
in 13 research, audit, and evaluation teams that are backed by several 
staff offices and mission support units (see fig. 1). Approximately 
three quarters of GAO's staff are based in the Washington, D.C., 
headquarters. The rest are deployed in field offices across the country 
(see fig. 2).

Figure 1: Organizational Structure:

[See PDF for image] --graphic text:

An organization chart showing GAO’s basic structure.

The agency’s top level of organization was the Executive Committee, 
which includes the Comptroller General, the Chief Operating Officer, 
the Chief Mission Support Officer, and the General Counsel.

Twenty-one units reported directly to the Comptroller General and the 
Chief Operating Officer. The units included the following staff 
offices: 

Public Affairs, Strategic Planning and External Liaison, Congressional 
Relations, Opportunity and Inclusiveness, Inspector General, Field 
Operations, Quality and Continuous Improvement, and Special 
Investigations.

The units also included the following teams that conduct audits, 
evaluations, and research: Acquisition and Sourcing Management; Applied 
Research and Methods; Defense Capabilities and Management; Education, 
Workforce, and Income Security; Financial Management and Assurance; 
Financial Markets and Community Investment; Health Care; Homeland 
Security and Justice; Information Technology; International Affairs 
and Trade; Natural Resources and Environment; Physical Infrastructure;
and Strategic Issues.

In addition, the following units reported to the Comptroller General 
and Chief Operating Officer through the chief mission support officer: 
Human Capital; Controller/Admin. Services; Information Systems; 
Professional Development Program; and Knowledge Services. 

[End of figure]


Figure 2: GAO's Offices:

[See PDF for image] --graphic text:

A map of the United States showing GAO’s headquarters in Washington 
D.C., and its field offices in Atlanta, Boston, Chicago, Dallas, 
Dayton, Denver, Huntsville, Los Angeles, Norfolk, San Francisco, and 
Seattle.

[End of figure]

Given the almost limitless number of highly complex issues the Congress 
must deal with each year, GAO's work is aligned under broad strategic 
goals that span both domestic and international issues that affect the 
lives of all Americans as well as the issues specific to governance 
that influence how well the nation's current and future interests are 
served by the U.S. government:

Strategic Goal 1: 
Provide Timely, Quality Service to the Congress and the Federal 
Government to Address Current and Emerging Challenges to the Well-
Being and Financial Security of the American People:

Strategic Goal 2: 
Provide Timely, Quality Service to the Congress and the Federal 
Government to Respond to Changing Security Threats and the Challenges 
of Global Interdependence:

Strategic Goal 3: 
Help Transform the Federal Government's Role and How It Does Business 
to Meet 21ST Century Challenges:

To achieve these three external strategic goals, GAO must maintain a 
workforce of highly trained professionals with degrees in many academic 
disciplines, including accounting, law, engineering, public and 
business administration, economics, and the social and physical 
sciences. To maximize their productivity and to help them develop and 
maintain the knowledge and skills the agency needs, GAO must make 
steady investments in information technology, training, and human 
capital practices. We must also ensure the safety and security of the 
agency's people, information, and assets. The strategies we will use to 
ensure that GAO has the human capital the agency needs to carry out our 
responsibilities and that our human capital, business processes, 
information technology, and other resources are well managed and secure 
are covered under the fourth strategic goal of this plan:

Strategic Goal 4: 
Maximize the Value of GAO by Being a Model Federal Agency and a World-
Class Professional Services Organization.

We revisit the focus and appropriateness of these four strategic goals 
at 2-year intervals as we update GAO's strategic plan, reassessing the 
needs of the Congress and the nation in light of rapidly changing 
trends and developments here at home and around the world. Guided by 
the strategic plan, we then develop three annual tactical documents to 
help us achieve our goals: a performance plan, a budget justification, 
and a performance and accountability report that compares our results 
for the fiscal year just ended with the expectations laid out in the 
performance plan and budget justification for that year.

Performance Measures:

The hierarchy of elements in our strategic plan establishes the 
structure we use in discussing our agency's performance (see fig. 3). 
At the top of the hierarchy are the four broad strategic goals just 
discussed. Each of the strategic goals is supported by a set of more 
specific strategic objectives--21 strategic objectives in all for the 
four strategic goals. Each strategic objective is, in turn, supported 
by performance goals that provide the specific strategies our staff 
will use to achieve the higher-level strategic goals and objectives. 
These performance goals, numbering roughly 100, are assessed every 2 
years by determining how adequately the more than 400 key efforts they 
call for have been addressed. The next assessment will be conducted at 
the end of fiscal 2005.

Figure 3: Strategic Planning Elements and Performance Measures:

[See PDF for image] - graphic text:

Pyramid with four levels and six items; (from the bottom up)

Item 1, bottom left; Key Efforts (400+):

Item 2, bottom right; Financial and Other Benefits; Past Recs 

Implemented; New Recs Made; Products with Recs; Testimonies;

Timeliness: 

Item 3, second level left; 2-Year Performance Goals (98):

Item 4, second level right; 1-Year Performance Measures (7 GAO-wide): 

Item 5, third level; Strategic Objectives (21):

Item 6, top level; Strategic Goals (4):

Source: GAO:

[End of figure] 


In addition to the biennial assessment of our 2-year performance goals, 
we also assess the agency's performance in meeting the strategic goals 
and objectives with seven annual measures. These measures show the 
degree to which our work is benefiting the Congress and the American 
people and whether we are laying a foundation for future benefits by 
providing the Congress with the most imminent and high-profile 
information it requests, developing ways to improve government, and 
tracking whether those improvements are made.

The following are GAO's current annual performance measures:

* Financial benefits--GAO produces financial benefits when the agency's 
work contributes to actions taken by the Congress or the executive 
branch to (1) reduce annual operating costs of federal programs or 
activities; (2) lessen the costs of multiyear projects or entitlements; 
or (3) increase revenues from debt collection, asset sales, and changes 
in tax laws or user fees. The funds made available in response to GAO's 
work may be used to reduce government expenditures or may be 
reallocated by the Congress to other priority areas. To claim that 
financial benefits have been achieved, staff must document the 
connection between GAO's work and the financial benefits reported. 
Staff must also obtain estimates of the benefits' value from 
independent third parties. The length of time over which benefits can 
accrue before they are claimed varies with the nature of the benefits 
themselves. GAO's work can, for instance, lead to reductions in the 
costs of projects and entitlements over a multiyear period or to 
increased revenues from asset sales or changes in tax laws or user 
fees. Staff can claim up to 5 years of benefits accruing from this type 
of work. For other types of accomplishments, however, GAO believes the 
5-year period is too long. Experience has shown that the impact of some 
changes is less sustained than that of those placed under the 5-year 
limit. Consequently, staff can claim no more than 2 years of benefits 
generated by changes made to federal agencies' operations. Financial 
benefits are presented in net present value terms because $1 next year 
is not worth the same as $1 today. Present value accounting converts 
future and past values into current values for accurate comparison. (We 
set targets for this measure for each external strategic goal--that is, 
goals 1, 2, and 3--and for the agency as a whole.):

* Other benefits--We also tally the benefits for the American people 
that flow from our work but that cannot be measured in dollar terms. To 
do so, we document the instances in which we (1) provided information 
to the Congress that resulted in statutory or regulatory changes, (2) 
recommended actions that cause federal agencies to improve services to 
the public, or (3) improved core business processes throughout the 
government. (We set targets for this measure for each external 
strategic goal and for the agency as a whole.):

* Past recommendations implemented--One way we measure our impact in 
improving the government's accountability, operations, and services is 
by tracking the percentage of recommendations that have been 
implemented. Because the implementation of our recommendations paves 
the way toward more benefits for the American people in future years, 
we monitor agencies' progress on an ongoing basis. We then assess the 
implementation rate at the end of 4 years. Thus, the fiscal 2004 
implementation rate is the percentage of recommendations made in fiscal 
2000 products that were implemented by the end of fiscal 2004. We use 
the 4-year interval because experience has shown that while agencies 
need time to implement recommendations, if a recommendation has not 
been implemented after 4 years it is not likely to be. (We set targets 
for this measure for each external strategic goal and for the agency as 
a whole.):

* New recommendations made--Because developing recommendations that can 
be implemented is an important part of our work for the Congress and 
helps to improve how the government functions, we track the number of 
new recommendations made each year. (We set targets for this measure 
for each external strategic goal and for the agency as a whole.):

* New products with recommendations--This measure recognizes that a 
report containing a single broad recommendation may have as much impact 
as a report containing a dozen specific ones. We also understand that 
our congressional clients often want products that are purely 
informational and contain no recommendations. Hence, the target 
provides ample leeway for responding to requests for informational 
products. (We set targets for this measure only for the agency as a 
whole.):

* Testimonies--One essential way through which we seek to fulfill our 
mission of supporting the Congress is by providing information directly 
to congressional committees that are conducting oversight or 
deliberating legislation. We assess our ability to meet that challenge 
by tracking the number of hearings at which GAO experts testify in 
response to committee requests. Responding to requests for testimony 
requires us to rapidly prepare relatively brief but information-rich 
presentations that are useful to experts but understandable to the 
general public. To do so, our people must be truly in touch with our 
congressional clients' upcoming needs because they must have a body of 
relevant work completed or well on the way to completion before 
hearings are even scheduled. (We set targets for this measure for each 
external strategic goal and for the agency as a whole.):

* Timeliness--Because our work is more valuable if it is timely, we 
chart the percentage of our products that are delivered on the date 
arranged with our congressional clients. (We set targets for this 
measure only for the agency as a whole.):

Table 1 shows how each of the annual measures serves to answer an 
important question about how GAO is performing.

Table 1: Annual Performance Measures:

Measure: Financial benefits; Question measure answers: Has our work 
provided financial benefits for the American people in the form of 
reduced costs or higher revenues?

Measure: Other benefits; Question measure answers: Has our work 
produced tangible benefits for the American people in the form of 
better government operations or services?

Measure: Past recommendations implemented; Question measure answers: 
Are most of our recommendations being implemented?

Measure: New recommendations made; Question measure answers: Do we 
develop ways of improving the conditions we uncover in our work?

Measure: New products with recommendations; Question measure answers: 
Does an appropriate percentage of our products provide recommendations 
for improvements while we continue to meet our congressional clients' 
requests for purely informational products?

Measure: Testimonies; Question measure answers: How many times did we 
meet our congressional clients' information needs by filling requests 
for what typically is high-profile, fast-turnaround, expertly 
distilled information?

Measure: Timeliness; Question measure answers: Do we deliver most of 
our products to our requesters when agreed?

[End of table]

To establish targets, we assess what we have been able to achieve in 
the past and the external factors that influence our work (those 
factors are discussed in part III of this plan). The teams and offices 
that are directly engaged in the work forward their views of what must 
be accomplished in the upcoming fiscal year to GAO's top executives, 
who then establish targets that may closely track with the teams and 
offices' views, but at times, may require them to reach higher than 
they proposed. Once approved by the Comptroller General, the targets 
become final and are published in GAO's annual performance plan. If 
circumstances require that we adjust the targets after they are 
published, we post the modified targets on the Internet in a revised 
final performance plan.

In the next sections, we look at how GAO's hierarchy of strategic 
planning elements and performance measures play out for each of the 
agency's strategic goals and then, collectively, for the agency as a 
whole. The diagram below provides an at-a-glance summary of the 
strategic goals and objectives.

SERVING THE CONGRESS: 

[See PDF for image]--Graphic Text

Figure: 

A diagram summarizing the key elements of GAO's strategic plan, which
are: GAO's mission, the themes that help frame GAO's work, strategic goals 
and objectives, and GAO's core values. 

Serving the Congress: GAO's Strategic Plan Framework.

Mission: GAO exists to support the Congress in meeting its 
constitutional responsibilities and to help improve the performance 
and ensure the accountability of the federal government for the 
benefit of the American people. 

Themes: GAO works with an awareness of forces that are likely to shape
American society, the United States' place in the world, and the role 
of the federal government. These forces are assessed through seven 
themes discussed in GAO's strategic plan: security and preparedness, 
globalization, changing economy, demographics, science and technology, 
quality of life, and governance. 

Goals and objectives: Each of GAO's four strategic goals is supported 
by a specific set of strategic objectives. 

GAO's first strategic goal is to provide timely, quality service to the
Congress and the federal government to address current and emerging
challenges to the well-being and financial security of the American 
people. To achieve this goal, GAO will provide information and 
recommendations on the following eight strategic objectives: health 
care needs and financing, education and protection of children, work 
opportunities and worker protection, retirement income security, 
homeland security and justice, viable communities, natural resources use 
and environmental protection, and physical infrastructure. 

GAO's second strategic goal is to provide timely, quality service to 
the Congress and the federal government to respond to changing 
security threats and the challenges of global interdependence. To 
achieve this goal, GAO will provide information and recommendations on 
the following four strategic objectives: diffuse security threats, 
military capabilities and readiness, advancement of U.S. interests, 
and global market forces. 

GAO's third strategic goal is to help transform the federal 
government's role and how it does business to meet 21st century 
challenges. To achieve this goal, GAO will provide information and 
recommendations on the following four strategic objectives: roles in 
achieving federal objectives; human capital and other capacity for 
serving the public; progress toward results oriented, accountable, and 
relevant government; and fiscal position and financing of the 
government. 

GAO's fourth strategic goal is to maximize the value of GAO by being a 
model federal agency and a world-class professional services 
organization. To achieve this goal, GAO will fulfill the following 
five strategic objectives: client and customer service, leadership and 
management focus, institutional knowledge and experience, process 
improvement, and employer of choice. 

Core values: The foundation for GAO's efforts to meet these strategic 
goals and objectives is the agency's three core values of 
accountability, integrity, and reliability.

[End of Figure]

Strategic Goal 1:

Provide Timely, Quality Service to the Congress and the Federal 
Government to Address Current and Emerging Challenges to the Well-Being 
and Financial Security of the American People:

In keeping with our mission to support the Congress in carrying out its 
constitutional responsibilities, our first strategic goal focuses on 
several aspirations of the American people that were defined by the 
founders: to "establish justice, insure domestic tranquility, . . . 
promote the general welfare, and secure the blessings of liberty to 
ourselves and our posterity. . . ." The nation's aging and more diverse 
population, rapid technological change, and Americans' desire to 
improve their quality of life have major policy and budgetary 
implications for the federal government. In particular, growing 
commitments to the elderly will crowd the capacity of a proportionately 
smaller generation of workers to finance the competing needs and wants 
brought to the federal doorstep. GAO's objectives for this strategic 
goal are to support congressional and federal efforts on:

* the health needs of an aging and diverse population;

* the education and protection of the nation's children;

* the promotion of work opportunities and the protection of workers;

* a secure retirement for older Americans;

* homeland security and justice;

* the promotion of viable communities;

* the responsible stewardship of natural resources and the environment; 
and:

* a secure and efficient national physical infrastructure.

These objectives are discussed in more detail in the sections that 
follow; the 2-year performance goals for each objective are listed as 
well. The results achieved for strategic goal 1 under GAO's annual 
performance measures during the last 4 fiscal years are shown in table 
2, along with the goal's targets for fiscal 2003 and 2004.

Table 2: Strategic Goal 1's Annual Performance Results and Targets:

Performance measure: Financial benefits (dollars in billions); 1999 
Actual: $13.8; 2000 Actual: $14.1; 2001 Actual: $8.9; 2002 Actual: 
$24.1; 2003 Target: $21.2; 2004 Target: $21.3.

Performance measure: Other benefits; 1999 Actual: 140; 2000 Actual: 
182; 2001 Actual: 210; 2002 Actual: 226; 2003 Target: 208; 2004 
Target: 216.

Performance measure: Past recommendations implemented; 1999 Actual: 
72%; 2000 Actual: 72%; 2001 Actual: 71%; 2002 Actual: 72%; 2003 
Target: 77%; 2004 Target: 77%.

Performance measure: New recommendations made; 1999 Actual: 350; 2000 
Actual: 435; 2001 Actual: 396; 2002 Actual: 524; 2003 Target: 363; 
2004 Target: 363.

Performance measure: Testimonies; 1999 Actual: 123; 2000 Actual: 131; 
2001 Actual: 73; 2002 Actual: 111; 2003 Target: 85; 2004 Target: 90.

Note: We changed our methodology for tabulating financial benefits 
after fiscal 2001 to ensure that criteria were uniformly applied and to 
use net present value in calculating benefits. These changes in 
methodology resulted in part of the increase shown for fiscal 2002, 
increasing the agencywide total by about 11 percent.

[End of table]

The Health Needs of an Aging and Diverse Population:

Several issues form the context of our work on health care. Federal 
health care spending has grown at an average annual rate twice that of 
the rest of the federal budget over the last 20 years. Expenditures on 
health-related programs are now one of the largest components of 
federal spending, totaling about $433 billion in fiscal 2001, about 23 
percent of all federal spending. The Medicare Hospital Insurance Trust 
Fund is projected to begin running a deficit in 2016 and to be depleted 
by 2029. The Department of Veterans Affairs' (VA) $21 billion-a-year 
health system has many obsolete facilities with excess capacity, and 
the size and requirements for the Department of Defense's (DOD) health 
system also are at issue.

The efficiency and effectiveness of the government's public health 
programs are other areas of concern, including those administered by 
the National Institutes of Health, the Food and Drug Administration, 
the Centers for Disease Control and Prevention, and the Health 
Resources and Services Administration. These programs support and 
conduct research and provide grants to states for public health 
programs, such as maternal and child health services and acquired 
immunodeficiency syndrome (AIDS) prevention and treatment. They also 
conduct regulatory oversight of the United States' new drug and medical 
device research.

The number of bioterrorism incidents, some of them hoaxes, increased 
following September 11, 2001, and included reports of anthrax in 
Florida, New York, and Washington, D.C. Concerns about preparedness for 
bioterrorism have placed additional strain on a public health 
infrastructure that was already experiencing difficulties in responding 
to community demand for public health services, heightening concern 
about the adequacy of trained personnel, laboratory capacity, disease 
surveillance systems, and coordinated communication systems among state 
and local emergency responders.

Finally, the baby-boom generation will undoubtedly place increasing 
pressure on the federal/state Medicaid program to help pay for nursing 
home and other community-based forms of long-term care services. At the 
other end of the population spectrum are millions of uninsured children 
whose families have no health insurance. Accounting for and overseeing 
Medicaid and the State Children's Health Insurance Program, which help 
cover the health insurance costs of these low-income Americans, 
represent a formidable challenge for the federal government because of 
the variation in state policies, procedures, and delivery systems.

To support efforts by the Congress and the federal government to 
address these issues, GAO has adopted the following 2-year performance 
goals:

* evaluate Medicare reform, financing, and operations;

* assess trends and issues in private health insurance coverage;

* assess actions and options for improving VA's and DOD's health care 
services;

* evaluate the effectiveness of federal programs to promote and protect 
the public health;

* evaluate the effectiveness of federal programs to improve the 
nation's preparedness for the public health and medical consequences of 
bioterrorism;

* evaluate federal and state program strategies for financing and 
overseeing chronic and long-term health care; and:

* assess states' experiences in providing health insurance coverage for 
low-income populations.

The Education and Protection of the Nation's Children:

Educating and protecting children are key to the continued vitality of 
the nation's democratic society and to its long-term ability to compete 
in a global marketplace. To this end, the federal government invests 
more than $90 billion a year on programs that foster the development, 
education, and protection of children from childbirth through 
postsecondary education. In spite of these investments, there is 
concern about program fragmentation, overlap, and effectiveness. The 
United States places a high priority on educating its children at the 
elementary and secondary levels and has increased the federal 
investment from over $20 billion in fiscal 2000 to nearly $30 billion 
in fiscal 2002. The increased investment is accompanied by an increased 
emphasis on accountability for schools to raise all students to 
proficient levels in math and reading. With reauthorization of the 
Elementary and Secondary Education Act, the Congress has placed 
additional requirements on states, beyond those in the 1994 act.

There are also concerns about protecting children and ensuring families 
are financially able to provide for their needs. While responsibility 
in these areas falls primarily to state child protective service 
agencies, the federal government invests approximately $6 billion 
annually in related areas.

Beyond preparing for basic educational needs, a competitive national 
economy depends on effectively preparing workers to compete in the 
labor workforce. To this end, the federal government currently supports 
over $50 billion annually to enhance students' access to postsecondary, 
vocational, and adult education. A major concern with the nation's 
investment in postsecondary education is its exposure to significant 
losses. To support the Congress and the federal government in 
addressing these matters, our 2-year performance goals are to:

* analyze the effectiveness and efficiency of early childhood education 
and care programs in serving their target populations;

* assess options for federal programs to effectively address the 
educational and nutritional needs of elementary and secondary students 
and their schools;

* determine the effectiveness and efficiency of child support 
enforcement and child welfare programs in serving their target 
populations; and:

* identify opportunities to better manage postsecondary, vocational, 
and adult education programs and deliver more effective services.

The Promotion of Work Opportunities and the Protection of Workers:

A strong national economy depends, in part, on effectively preparing 
workers to compete in the labor force, efficiently helping employers 
locate qualified job candidates, providing a work environment that 
promotes productivity, and finding ways to help workers when they 
become underemployed. To this end, the federal government currently 
invests more than $50 billion annually to help new entrants to the 
workforce, support those who have become dislocated from their jobs and 
assist them to become reemployed, rehabilitate disabled and injured 
workers, help employers obtain adequate supplies of high-quality 
skilled labor, as well as protect employees' rights to fair and safe 
workplaces without unduly burdening employers. In addition, federal 
policies for providing income support for the low-income population 
have increasingly focused on promoting work in exchange for government 
assistance.

Technology is redefining the labor market for workers and employers, 
and federal employment support and worker protection programs must deal 
with these new challenges. New technologies, increased marketplace 
competition, and very tight labor markets have prompted employers to 
downsize, change employment patterns, move abroad, or seek qualified 
foreign workers to meet their needs. To support the Congress and the 
federal government in addressing this challenge, our 2-year performance 
goals are to:

* assess the effectiveness of federal efforts to help adults enter the 
workforce and to assist low-income workers;

* analyze the impact of programs designed to maintain a skilled 
workforce and ensure employers have the workers they need;

* assess the success of various enforcement strategies to protect 
workers while minimizing employers' burden in the changing environment 
of work; and:

* identify ways to improve federal support for people with 
disabilities.

A Secure Retirement for Older Americans:

Social Security has long served as the foundation of the nation's 
retirement income system. About 39 million people receive Social 
Security retirement and survivor benefits, and for nearly one-fifth of 
the elderly, Social Security is the sole source of retirement income. 
Yet, Social Security expenditures are expected to exceed payroll tax 
revenues beginning in 2017, with the trust fund being depleted by 2041. 
Also, tens of millions of U.S. workers have no individual pension 
coverage. Of those with pensions, some workers are increasingly being 
enrolled in a new kind of plan--defined contribution plans. Further, 
some employers are shifting to "hybrid" systems that retain the defined 
benefit structure while adopting certain features of defined 
contribution plans. These changes pose new challenges to workers, 
government regulators, and policymakers. Accordingly, to help the 
Congress and the federal government provide a secure retirement for 
older Americans, our 2-year performance goals are to:

* assess the implications of various Social Security reform proposals;

* identify opportunities to foster greater pension coverage, increase 
personal saving, and ensure adequate and secure retirement income; and:

* identify opportunities to improve the ability of federal agencies to 
administer and protect workers' retirement benefits.

Homeland Security and Justice:

The November 2002 legislation creating the Department of Homeland 
Security (DHS) provides a historic and unique opportunity for 
government to transform a disparate group of agencies with multiple 
missions, values, and cultures into a strong and effective cabinet 
department to protect U.S. borders, improve intelligence and 
information sharing, and prevent and respond to potential terrorist 
acts. DHS combines 22 agencies specializing in various disciplines, 
such as law enforcement, aviation security, and disaster mitigation, to 
create the third largest government agency with an anticipated fiscal 
2003 budget of almost $40 billion and over 170,000 employees. Yet with 
this opportunity come significant risks and challenges, particularly 
since implementation of DHS will take considerable time, key component 
agencies already face a wide array of existing challenges, and failing 
to effectively carry out DHS's mission exposes the nation to extremely 
severe consequences.

Recognizing the significant change in priorities and reallocation of 
resources for homeland security, and the critical importance of DHS's 
mission, we realigned our own resources to create the Homeland Security 
and Justice Team. With this combination of our existing expertise from 
the former Tax Administration and Justice team, the former National 
Preparedness team, and the Physical Infrastructure team taking the 
lead, our 2-year performance goals are to:

* assess efforts to strengthen the justice system to more effectively 
address crime, illegal drug use, illegal immigration, and judiciary and 
prison operations;

* assess progress in securing the nation's borders and citizens against 
terrorists and weapons of mass destruction;

* facilitate information sharing and analysis to enhance coordination 
among governments, the private sector, and communities;

* evaluate efforts to protect critical infrastructure; and:

* identify ways to increase emergency preparedness and capacity to 
respond to and recover from natural or man-made disasters, through 
effective use of federal tools of government, including grants and 
training programs.

The Promotion of Viable Communities:

Federal commitment to strong and stable communities is demonstrated 
through the diversity of federal economic development assistance 
programs. More than 100 federal programs provide direct economic 
development assistance in the form of grants, loans, loan guarantees, 
and other types of assistance for community and economic development 
involving billions of dollars each year. The federal government 
supports housing finance through various programs, incentives, and 
requirements. America's small businesses also play a critical role in 
the nation's economy. In addition, the federal government also provides 
assistance to victims of disasters and emergencies. To aid the Congress 
and the federal government in the decision-making process on these 
issues, our 2-year performance goals are to:

* assess federal economic development assistance and its impact on 
communities;

* assess how the federal government can balance the promotion of home 
ownership with financial risk;

* assess the effectiveness of federal initiatives to assist small and 
minority-owned businesses;

* assess federal efforts to enhance national disaster preparedness and 
capacity to prevent and respond to natural or man-made disasters; and:

* assess how well federally supported housing programs meet their 
objectives and affect the well-being of recipient households and 
communities.

Responsible Stewardship of Natural Resources and the Environment:

The nation's natural resources and the systems associated with their 
use are under unprecedented stress, generating intense debate and 
posing daunting challenges to policymakers at all levels of government. 
In part, this is the consequence of the country's growing population 
and economy, but other stress factors exist as well, such as the 
globalization of the world's economy and political tensions. Most 
glaringly, the tragic events of September 2001 revealed the nation's 
vulnerability to hostile acts, mandating heightened protection of its 
critical natural resources, including the air we breathe, the water we 
drink, the food we consume, and the energy supplies that keep the 
economy going.

Even before 2001's tragic events, however, part of the country faced an 
energy crisis. The chaos in California's electricity market underscored 
the difficulties of crafting energy policies and regulatory approaches 
that adequately protect against price volatility and supply 
disruptions. Stress is also evident in the management of the country's 
lands and waters, where difficult choices must be made on balancing the 
demands of often competing objectives--namely, economic growth for 
today versus natural resource protection for the future. Food safety 
lies at the forefront of concerns about the country's agricultural 
resources, an urgent matter given the potential for agricultural 
bioterrorism.

The increasing globalization of natural resource issues also affects 
pollution control matters, as seen in the federal government's 
discussions with other governments about global warming and what should 
be done about it. Such discussions add a new layer of complexity to the 
already difficult question of how to sustain economic growth when the 
engines of that growth--factories, cars and trucks, fertilizers, 
electricity generating plants--can adversely affect our air and water 
quality. Finally, significant challenges remain in cleaning up the 
country's hazardous and nuclear waste sites. To support the Congress 
and help the federal government carry out its land management and 
environmental protection responsibilities, our 2-year performance 
goals are to:

* assess the nation's ability to ensure reliable and environmentally 
sound energy for current and future generations;

* assess federal strategies for managing land and water resources in 
sustainable fashion for multiple uses;

* assess federal programs' ability to ensure a plentiful and safe food 
supply, provide economic security for farmers, and minimize 
agricultural environmental damage;

* assess federal pollution prevention and control strategies; and:

* assess efforts to reduce the threats posed by hazardous and nuclear 
wastes.

A Secure and Effective National Physical Infrastructure:

The nation's economic vitality and the safety of its citizens are 
heavily dependent on a physical infrastructure comprising, among other 
things, transportation networks, telecommunications systems, water 
supply systems, wastewater treatment and solid waste disposal 
facilities, and postal facilities. The nation faces important 
infrastructure challenges as federal, state, and local governments 
confront aging systems, new demands created by changes in demographics, 
technology, and life-styles and the infrastructure's vulnerability to 
terrorist threats. How the nation responds to these challenges holds 
important consequences for our future because of the effects on our 
quality of life and the significant costs. To support the Congress in 
addressing these challenges, our 2-year performance goals are to:

* assess strategies for identifying, evaluating, prioritizing, 
financing, and implementing integrated solutions to the nation's 
infrastructure needs;

* assess the impact of transportation and telecommunications policies 
and practices on competition and consumers;

* assess efforts to improve safety and security in all transportation 
modes;

* assess the Postal Service's transformation efforts to ensure its 
viability and accomplish its mission; and:

* assess federal efforts to plan for, acquire, manage, maintain, 
secure, and dispose of the government's real property assets.

Strategic Goal 2:

Provide Timely, Quality Service to the Congress and the Federal 
Government to Respond to Changing Security Threats and the Challenges 
of Global Interdependence:

As the world grows increasingly interconnected through more open 
markets and rapidly developing technology, the globalization of markets 
has created new opportunities for the nation as a whole and for 
American producers and consumers. At the same time, the United States 
is facing threats to its security and economy from sources that range 
from terrorism to regional conflicts to instability sparked by adverse 
economic conditions, corruption, ethnic hatreds, nationalism, and 
disease. Consequently, while seeking to anticipate and address diffuse 
threats to the nation's security and economy, the federal government 
also tries to promote foreign policy goals, sound trade policies, and 
other strategies to advance the interests of the United States and 
those of U.S. trading partners and allies in every corner of the world. 
In light of the globalization, technology, and security trends, our 
second strategic goal is to help the Congress and the federal 
government respond to changing security threats and the challenges of 
global interdependence. GAO's specific strategic objectives are to 
support congressional and federal efforts to:

* respond to diffuse threats to national and global security,

* ensure military capabilities and readiness,

* advance and protect U.S. international interests, and:

* respond to the impact of global market forces on U.S. economic and 
security interests.

These objectives are discussed in more detail in the sections that 
follow; the 2-year performance goals for each objective are listed as 
well. The results achieved for strategic goal 2 under GAO's annual 
performance measures during the last 4 fiscal years are shown in table 
3, along with the goal's targets for fiscal 2003 and 2004.

Table 3: Strategic Goal 2's Annual Performance Results and Targets:

Performance measure: Financial benefits (dollars in billions); 1999 
Actual: $3.0; 2000 Actual: $5.5; 2001 Actual: $10.5; 2002 Actual: 
$8.4; 2003 Target: $6.8; 2004 Target: $5.6.

Performance measure: Other benefits; 1999 Actual: 80; 2000 Actual: 
129; 2001 Actual: 188; 2002 Actual: 218; 2003 Target: 200; 2004 
Target: 200.

Performance measure: Past recommendations implemented; 1999 Actual: 
65%; 2000 Actual: 84%; 2001 Actual: 81%; 2002 Actual: 83%; 2003 
Target: 77%; 2004 Target: 77%.

Performance measure: New recommendations made; 1999 Actual: 255; 2000 
Actual: 376; 2001 Actual: 618; 2002 Actual: 618; 2003 Target: 521; 
2004 Target: 521.

Performance measure: Testimonies; 1999 Actual: 37; 2000 Actual: 56; 
2001 Actual: 34; 2002 Actual: 38; 2003 Target: 36; 2004 Target: 43.

[End of table]

Respond to Diffuse Threats to National and Global Security:

The United States and other nations face increasingly diffuse threats 
in the post-cold war era. Adversaries have demonstrated that they are 
more likely to strike vulnerable civilian or military targets in 
nontraditional ways to avoid direct confrontation with U.S. military 
forces on the battlefield. Porous borders and rapid technological 
change make such threats more viable. At risk are the nation's values, 
way of life, and the personal security of its citizens. In response, 
the Congress has established the Department of Homeland Security to 
develop and coordinate a national homeland security strategy. This 
strategy will require a concerted effort to improve threat information 
from foreign and domestic sources, to understand the nature of the 
threats to vulnerable assets and processes, and to protect the nation's 
population and most critical infrastructures--including computer and 
telecommunications systems. Internationally, the United States and its 
allies will have to bolster their efforts to prevent the proliferation 
of dangerous weapons that can be used to carry out threats to security. 
To support the Congress and the federal government in addressing these 
important issues, our 2-year performance goals are to:

* analyze the effectiveness of the federal government's approach to 
providing for homeland security;

* assess U.S. efforts to protect computer and telecommunications 
systems supporting critical infrastructures in business and government; 
and:

* assess the effectiveness of U.S. programs and international efforts 
to prevent the proliferation of nuclear, biological, chemical, and 
conventional weapons and sensitive technologies.

Ensure Military Capabilities and Readiness:

To ensure readiness to respond to major regional conflicts as well as 
diffuse threats, both today and in the future, the Congress has called 
for increased defense spending. After a decade of decline in defense 
spending, DOD's budget has been on an upswing in recent years. The 
President's fiscal 2002 budget of about $331 billion represented the 
largest increase in defense spending in recent years, and came amidst 
growing concerns over the readiness of U.S. forces. The budget included 
additional resources for operational maintenance, quality of life 
programs, pay raises, and improvements to crumbling facilities. The 
most recent Quadrennial Defense Review charts a new defense strategy 
emphasizing homeland security, military transformation, joint 
operations, and advanced capabilities related to information technology 
(IT), intelligence, and space operations. Requests for significant 
additional increases in defense spending have been planned for fiscal 
2003 and beyond. The debate about what capabilities DOD must maintain 
and develop, where they should exist, and to what extent additional 
defense spending is required will be significantly shaped by the debate 
over the military's role in homeland security and the augmentation of 
the civilian agencies' roles in the fight against terrorism. To support 
the Congress and the federal government's efforts to improve military 
capabilities and readiness, our 2-year performance goals are to:

* assess the ability of DOD to maintain adequate readiness levels while 
addressing the force structure changes needed in the 21ST century;

* assess overall human capital management practices to ensure a high-
quality total force;

* identify ways to improve the economy, efficiency, and effectiveness 
of DOD's support infrastructure and business systems and processes;

* assess the National Nuclear Security Administration's efforts to 
maintain a safe and reliable nuclear weapons stockpile;

* analyze and support DOD's efforts to improve budget analyses and 
performance management;

* assess whether DOD and the services have developed integrated 
procedures and systems to operate effectively together on the 
battlefield; and:

* assess the ability of weapon system acquisition programs and 
processes to achieve desired outcomes.

Advance and Protect U.S. International Interests:

Although U.S. leaders agree on the ultimate goal of promoting global 
peace, prosperity, and stability, intense debate is occurring over how 
to achieve that goal. Military and humanitarian interventions to make 
or keep the peace, stabilize and rebuild failed states, and deal with 
humanitarian emergencies have become major activities for the United 
States. Countries in transition to democracies and private market 
structures are critical to U.S. economic and security interests. 
Strategic alliances established decades ago are undergoing changes to 
better reflect current and future needs and priorities. Conducting 
foreign affairs is becoming more complicated as the lines between 
domestic and international issues blur and the threat of terrorist 
attacks on U.S. facilities and personnel overseas changes how America 
does business. To help the Congress and the federal government advance 
and protect U.S. international interests, our 2-year performance goals 
are to:

* analyze the plans, strategies, costs, and results of the U.S. role in 
conflict interventions;

* analyze the effectiveness and management of foreign aid programs and 
the tools used to carry them out;

* analyze the costs and implications of changing U.S. strategic 
interests;

* evaluate the efficiency and accountability of multilateral 
organizations and the extent to which they are serving U.S. interests; 
and:

* assess the strategies and management practices for U.S. foreign 
affairs functions and activities.

Respond to the Impact of Global Market Forces on U.S. Economic and 
Security Interests:

Globalization is increasing the interdependence of the world's 
economies while affecting U.S. national security and the economic well-
being of the American people. Trade agreements are increasing in number 
and in their importance to the U.S. economy. The globalization of the 
defense industry, driven by the drop in the government's military 
investments worldwide, is following patterns similar to those found in 
commercial sectors. Global financial health and the maintenance of the 
global financial and trade systems are critical to long-term U.S. 
objectives and are cornerstones of U.S. foreign policy. The U.S. 
financial services industry is experiencing unprecedented growth and 
change, both in the size of institutions and the range and impact of 
services being provided to customers. Daily, millions of households 
collectively have trillions of dollars flow through the nation's 
financial institutions and markets. To help the Congress and the 
federal government respond to the impact of global market forces on 
U.S. economic and security interests, our 2-year performance goals are 
to:

* analyze how trade agreements and programs serve U.S. interests;

* improve understanding of the effects of defense industry 
globalization;

* assess how the United States can influence improvements in the world 
financial system;

* assess the ability of the financial services industry and its 
regulators to maintain a stable and efficient global financial system;

* evaluate how prepared financial regulators are to respond to change 
and innovation; and:

* assess the effectiveness of regulatory programs and policies in 
ensuring access to financial services and deterring fraud and abuse in 
financial markets.

Strategic Goal 3:

Help Transform the Federal Government's Role and How It Does Business 
to Meet 21ST Century Challenges:

The federal government faces an array of challenges, including the 
national response to terrorism, transition to a knowledge-based 
economy, rapid technological and scientific advances, and changing 
demographics. These challenges require a fundamental reexamination of 
the government's priorities, processes, policies, and programs to 
effectively address shifting public expectations, needs, and fiscal 
pressures. To achieve results, the federal government must work better 
with other governments, nongovernmental organizations, and the private 
sector--both domestically and internationally. Because the public 
expects demonstrable results from the federal government, government 
leaders need to increase strategic planning, address management 
challenges and high-risk issues, use integrated approaches, enhance 
their agencies' results orientation, and ensure accountability. 
Examining existing programs and operations for potential cost-savings 
can create much needed fiscal flexibility to address emerging needs. 
Moreover, addressing today's priorities must be balanced against the 
long-term fiscal pressures of financing existing programs and 
operations. To ensure that GAO helps transform the role of government 
and how it does business to meet 21ST century challenges, we have 
established strategic objectives to:

* analyze the implications of the increased role of public and private 
parties in achieving federal objectives;

* assess the government's human capital and other capacity for serving 
the public;

* support congressional oversight of the federal government's progress 
toward being more results-oriented, accountable, and relevant to 
society's needs; and:

* analyze the government's fiscal position and approaches for financing 
the government.

These objectives are discussed in more detail in the sections that 
follow; the 2-year performance goals for each objective are listed as 
well. The results achieved for strategic goal 3 under GAO's annual 
performance measures during the last 4 fiscal years are shown in table 
4, along with the goal's targets for fiscal 2003 and 2004.

Table 4: Strategic Goal 3's Annual Performance Results and Targets:



Performance measure: Financial benefits (dollars in billions); 1999 
Actual: $4.5; 2000 Actual: $5.1; 2001 Actual: $7.0; 2002 Actual: $5.2; 
2003 Target: $4.6; 2004 Target: $8.1.

Performance measure: Other benefits; 1999 Actual: 414; 2000 Actual: 
503; 2001 Actual: 401; 2002 Actual: 462; 2003 Target: 392; 2004 
Target: 404.

Performance measure: Past recommendations implemented; 1999 Actual: 
78%; 2000 Actual: 77%; 2001 Actual: 85%; 2002 Actual: 82%; 2003 
Target: 77%; 2004 Target: 77%.

Performance measure: New recommendations made; 1999 Actual: 335; 2000 
Actual: 413; 2001 Actual: 549; 2002 Actual: 808; 2003 Target: 366; 
2004 Target: 366.

Performance measure: Testimonies; 1999 Actual: 100; 2000 Actual: 105; 
2001 Actual: 42; 2002 Actual: 65; 2003 Target: 52; 2004 Target: 60.

[End of table]

Analyze the Implications of the Increased Role of Public and Private 
Parties in Achieving Federal Objectives:

As the federal government has sought to address more complex and 
pervasive societal needs, the traditional "bright lines" among the 
public, private, and nonprofit sectors, as well as between the federal 
government and other public sector institutions have become 
increasingly blurred. In fact, since the 1930s there has been a largely 
overlooked revolution in which the traditional hierarchical federal 
agency model--that is, a federal agency's implementing a program 
through annually appropriated funding--has been essentially replaced by 
an incredibly diverse and blended service-delivery model involving many 
different parties and tools of intervention (for example, grants, tax 
expenditures, regulations, loans, loan guarantees, and insurance). 
Nowhere does this revolution become more evident and more confounding 
than in federal agencies' efforts to become more results-oriented. In 
the 21ST century, federal agencies' performance and accountability 
will, to an ever greater extent, be seen as a function of nonfederal 
entities and involve tools that are typically not subject to the same 
level of annual or even periodic oversight and reexamination as more 
traditional federal programs and activities.

To inform the Congress of the implications of the increased role of 
public and private parties in achieving federal objectives, we have 
established 2-year performance goals to:

* analyze the modern service-delivery system environment and the 
complexity and interaction of service-delivery mechanisms,

* assess how involvement of state and local governments and 
nongovernmental organizations affect federal program implementation 
and achievement of national goals, and:

* assess the effectiveness of regulatory administration and reforms in 
achieving government objectives.

Assess the Government's Human Capital and Other Capacity for Serving 
the Public:

The federal government requires a mixture of critical resources--such 
as human capital, IT, and financial systems--to fulfill its roles and 
achieve intended results. Unfortunately, over the last decade, the 
federal government has missed opportunities to make needed investments 
in these resources effectively. For example, agencies have only 
recently started the analysis necessary to link their human capital 
policies and practices to their missions and goals. This situation puts 
the government at risk because an increasing number of federal 
employees will become eligible to retire over the next several years.

In addition, numerous poorly managed IT systems have produced 
multimillion-dollar cost overruns, schedule slippages, and poor 
results, and now the government's IT and management infrastructure 
faces security threats. Similarly, the federal government's financial 
management has suffered from neglect, and its financial systems have 
serious shortcomings.

While it is important to enhance the government's use of new 
technologies to improve the collection and dissemination of government 
information, it is also important that this information, especially 
that collected for statistical purposes, meet the current needs of 
federal programs and policymakers. Finally, despite recent reforms to 
transform the federal acquisition process, the government still does 
not have a world-class purchasing system. All too often, many of the 
products and services the government buys cost more than expected, are 
delivered late, or fail to perform as expected.

To assess the government's capacity to better deliver public services, 
GAO has adopted the following 2-year performance goals:

* identify and facilitate the implementation of human capital practices 
that will improve federal economy, efficiency, and effectiveness;

* identify ways to improve the financial management infrastructure 
capacity to provide useful information to manage for results and costs 
day-to-day;

* assess the government's capacity to manage information technology to 
improve performance;

* assess efforts to manage the collection, use, and dissemination of 
government information in an era of rapidly changing technology;

* assess the effectiveness of the federal statistical system in 
providing relevant, reliable, and timely information that meets federal 
program needs; and:

* identify more businesslike approaches that can be used by federal 
agencies in acquiring goods and services.

Support Congressional Oversight of the Federal Government's Progress 
toward Being More Results-Oriented, Accountable, and Relevant to 
Society's Needs:

During the past decade, the Congress has sought to instill a greater 
focus on results and accountability by enacting a statutory framework 
with the Government Performance and Results Act as its centerpiece. 
However, GAO has reported that performance improvements do not take 
place merely because a set of management requirements has been 
established and that building organizational cultures that help create 
and sustain a focus on results remains a work in progress. In GAO's 
governmentwide surveys, for example, federal managers have reported 
that their top leaders still do not show a consistently strong 
commitment to achieving results. In addition, although the government 
has been made more accountable, much remains to be done. The 
President's Management Agenda also seeks to instill a greater focus on 
governmental results, presenting a number of governmentwide 
initiatives, including human capital goals, and program-specific 
initiatives intended to improve federal management and to deliver 
results. For example, consistent with GAO's position, the agenda 
identified improving financial performance as an important initiative 
to reduce erroneous benefit and assistance payments and to ensure that 
agencies supply reliable, accurate, and timely information for decision 
making to enhance accountability to the American people. And among the 
specific initiatives is the development of better criteria for federal 
investment in science and technology.

Also, today, there are widespread concerns about the accountability 
profession's role in serving the public's interest. GAO assists the 
Congress in this important area, assessing the governance of the 
auditing profession, setting the standards auditors use to perform 
audits of federal funds and activities, and working collaboratively 
with the inspectors general to issue a methodology for conducting 
federal financial statement audits.

To support congressional oversight of the federal government's progress 
toward being more results-oriented, accountable, and relevant to 
society's needs, we have established 2-year performance goals to:

* analyze and support efforts to instill results-oriented management 
across the government,

* highlight the federal programs and operations at highest risk and the 
major performance and management challenges confronting agencies,

* identify ways to strengthen accountability for the federal 
government's assets and operations,

* provide accountability in the federal acquisition process,

* assess the management and results of the federal investment in 
science and technology and the effectiveness of efforts to protect 
intellectual property,

* identify ways to improve the quality of evaluative information, and:

* develop new resources and approaches that can be used in measuring 
performance and progress on the nation's 21ST century challenges.

Analyze the Government's Fiscal Position and Approaches for Financing 
the Government:

The federal budget is the principal annual vehicle through which the 
Congress and the President balance competing views about the allocation 
of federal resources, accountability for those resources, and the 
allocation of responsibility between the public and private sectors and 
among levels of government. After many years of attempting to balance 
the federal budget in the face of chronic deficits and mounting federal 
debt, federal fiscal policy in recent years focused on saving surpluses 
and reducing debt. In the past year, however, the near-term budget 
outlook has worsened with deficits projected for the next few years. 
GAO's long-term budget model has consistently suggested that without 
changes for the major retirement and health care programs, large 
deficits and mounting debt will emerge over the long term. It will be 
difficult to address today's urgent need to deal with terrorism and to 
increase national preparedness without unduly exacerbating the nation's 
long-term fiscal challenges.

American taxpayers annually pay more than $2 trillion in taxes to fund 
the federal government. The federal tax system includes numerous tax 
provisions intended to influence taxpayers' behavior throughout the 
economy, but little is known about the effects of many of these 
provisions. Given the size and complexity of the federal tax code, the 
Congress remains interested in tax reform, particularly simplification. 
As the nation's chief tax collector, the Internal Revenue Service (IRS) 
interacts with more Americans than any other government agency, and 
compliance with tax laws is a significant burden imposed on businesses 
and individuals. IRS is in the midst of implementing major 
legislatively mandated reforms in how the nation's tax system is 
administered, and congressional interest remains focused on what 
progress IRS is making.

Congressional attention will also continue to focus on controlling 
spending. A key to making resource decisions is having reliable, 
useful, and timely financial information routinely available. Such 
information is also necessary to ensure accountability and to improve 
the economy, efficiency, and effectiveness of government actions that 
have a direct impact on achieving a more results-oriented government.

To analyze the government's fiscal position and identify ways to 
strengthen approaches for financing the government, GAO has adopted the 
following 2-year performance goals:

* analyze the long-term fiscal position of the federal government,

* analyze the structure and information for budgetary choices and 
explore alternatives for improvement,

* contribute to congressional deliberations on tax policy,

* support congressional oversight of IRS's modernization and reform 
efforts, and:

* assess the reliability of financial information on the government's 
fiscal position and financing sources.

Strategic Goal 4:

Maximize the Value of GAO by Being a Model Federal Agency and a World-
Class Professional Services Organization:

To successfully carry out its responsibilities to the Congress for the 
benefit of the American people, GAO's work must be professional, 
objective, fact-based, nonpartisan, nonideological, fair, and 
balanced. GAO should also lead by example. The focus of goal 4 is to 
make GAO a model organization--one that is client and customer driven; 
exhibits the characteristics of leadership and management excellence; 
leverages its institutional knowledge and experience; is devoted to 
ensuring quality in its work processes and products through continuous 
improvement; and is regarded as an employer of choice. Among the 
efforts incorporated into goal 4 is the work we must do to address the 
management challenges GAO faces (which are discussed in part II of this 
plan).

To accomplish GAO's goal of being a model federal agency and a world-
class professional services organization, the strategic objectives are 
to:

* sharpen GAO's focus on clients' and customers' requirements,

* enhance leadership and promote management excellence,

* leverage GAO's institutional knowledge and experience,

* continuously improve GAO's business and management processes, and:

* become the professional services employer of choice.

These objectives are discussed in more detail in the sections that 
follow; the 2-year performance goals for each objective are listed as 
well. The annual performance measures used with GAO's three external 
strategic goals do not apply to this fourth, internal goal. Progress 
here is assessed solely by reviewing the work done under its 2-year 
performance goals.

Sharpen GAO's Focus on Clients' and Customers' Requirements:

GAO interacts and works with a diverse set of external clients and 
internal customers. GAO's principal client is the Congress and our 
beneficial client is the American public. Our work is also important to 
other stakeholders, including federal and nonfederal agencies and 
organizations and international institutions. GAO's internal customers 
are the agency's staff who, in turn, deliver quality services to our 
clients. Therefore, being a model agency depends on both determining 
and meeting the requirements of our external clients and our internal 
customers.

For external clients, we plan to continually update our understanding 
of their needs and expectations through expanded outreach efforts and 
strategic planning. We also plan to develop and use high-quality 
measurement systems and feedback mechanisms to obtain external clients' 
views on GAO's products and services. In addition, to complement 
congressional protocols, GAO will develop protocols for each major 
stakeholder groupæagencies and international organizationsæto help 
govern interactions and manage expectations.

For internal customers, GAO plans to identify their needs and 
expectations through expanded outreach and planning efforts. GAO will 
identify and develop high-quality measurements to assess customer 
satisfaction, business processes, and accomplishment of the agency's 
strategic direction. In addition, we will develop policies and 
procedures to guide how GAO's work responds to customers' needs.

To support our objective to deliver exceptional service in meeting 
clients' and customers' needs, GAO has adopted the following 2-year 
performance goals:

* continuously update client requirements,

* develop and implement stakeholder protocols and refine client 
protocols, and:

* identify and assess customer requirements and measures.

Enhance Leadership and Promote Management Excellence:

We intend to improve on GAO's results-oriented management practices to 
establish GAO as a leader among high-performing professional services 
organizations. To accomplish this objective, we will build on our 
established base of strategic planning, performance management, sound 
financial management, IT best practices, and leadership initiatives. We 
will also institute new ways of doing business to create management and 
leadership systems that are practical, flexible, and enable managers to 
use resources efficiently to solve problems. We will lead by example.

To support the objective to enhance leadership and promote management 
excellence, GAO has adopted the following 2-year performance goals:

* foster an attitude of stewardship to ensure a commitment to GAO's 
mission and core values,

* implement an integrated approach to strategic management;

* continue to provide leadership in strategic human capital management 
planning and execution,

* maintain integrity in financial management,

* provide a safe and secure workplace, and:

* provide leadership in IT planning and management practices.

Leverage GAO's Institutional Knowledge and Experience:

GAO is a knowledge-based professional services organization that needs 
to use a wide and expanding variety of media to communicate the results 
of our work to our congressional clients and to the public. GAO also 
needs to preserve information from our work for the long term and to 
share knowledge among our staff and with others so that we can improve 
service to our clients, the executive branch, taxpayers, and other 
governments, both domestic (state and local) and international.

To support the objective to leverage GAO's institutional knowledge and 
experience, we have adopted the following 2-year performance goals:

* improve GAO's Web-based knowledge tools;

* develop a framework to manage the collection, use, distribution, and 
retention of organizational knowledge; and:

* strengthen relationships with other national and international 
accountability and professional organizations.

Continuously Improve GAO's Business and Management Processes:

GAO, as the federal government's accountability organization, evaluates 
the economy, efficiency, and effectiveness of a wide range of federal 
policies and programs to assist the Congress for the benefit of the 
American people. By continuously assessing and improving our products, 
as well as our business and management processes, we can determine 
whether GAO's operations are aligned with the agency's strategic 
direction and comply with applicable professional standards in the 
conduct of GAO's work.

To support the objective to continuously improve GAO's business and 
management processes, we have adopted the following 2-year performance 
goals:

* improve internal business and administrative processes,

* improve GAO's product and service lines to better meet client needs,

* improve GAO's job management processes, and:

* use enabling technology to improve GAO's crosscutting business 
processes.

Become the Professional Services Employer of Choice:

To be a model organization, GAO hopes to build and maintain a diverse 
work environment that is conducive to performance excellence; 
encourages full participation by the workforce; and supports personal, 
professional, and organizational growth. GAO wants to be regarded as an 
employer of choice--one that recruits and retains excellent employees 
and that is considered to be one of the best places to work. The agency 
is committed to treating all employees fairly, respecting their 
diversity, and valuing their contributions. GAO's human capital 
initiatives should enable employees to develop and use their full 
potential, as aligned with agency objectives.

To become the professional services employer of choice, GAO has adopted 
the following 2-year performance goals:

* maintain an environment that is fair, unbiased, family-friendly, and 
promotes and values opportunity and inclusiveness;

* improve compensation and performance management systems;

* develop and implement a training and professional development 
strategy targeted toward competencies; and:

* provide GAO's people with tools, technology, and a working 
environment that is world class.

Agencywide:

Making progress toward the four strategic goals is fundamental to 
carrying out GAO's mission. While we assess our progress by strategic 
goal, we also assess the performance of the agency as a whole and set 
targets on an agencywide basis. At the agency level, we use two 
additional performance measures, tracking the percentage of new 
products containing recommendations and our timeliness in delivering 
our products. The results achieved agencywide during the last 4 fiscal 
years are shown in table 5, along with the agencywide targets for 
fiscal 2003 and 2004.

Table 5: Agencywide Annual Performance Results and Targets:

Performance measure: Financial benefits (dollars in billions); 
1999 Actual: $20.1; 2000 Actual: $23.2; 2001 Actual: $26.4; 
2002 Actual: $37.7; 2003 Target: $32.5; 2004 Target: $35.0.

Performance measure: Other benefits; 1999 Actual: 607; 2000 Actual: 788; 
2001 Actual: 799; 2002 Actual: 906; 2003 Target: 800; 2004 Target: 820.

Performance measure: Past recommendations implemented; 1999 Actual: 70%; 
2000 Actual: 78%; 2001 Actual: 79%; 2002 Actual: 79%; 
2003 Target: 77%; 2004 Target: 77%.

Performance measure: New recommendations made; 1999 Actual: 940; 
2000 Actual: 1,224; 2001 Actual: 1,563; 2002 Actual: 1,950; 
2003 Target: 1,250; 2004 Target: 1,250.

Performance measure: New products with recommendations; 1999 Actual: 33%; 
2000 Actual: 39%; 2001 Actual: 44%; 2002 Actual: 53%; 
2003 Target: 50%; 2004 Target: 50%.

Performance measure: Testimonies; 1999 Actual: 229; 2000 Actual: 263; 
2001 Actual: 151; 2002 Actual: 216; 2003 Target: 180; 2004 Target: 200.

Performance measure: Timeliness; 1999 Actual: 96%; 2000 Actual: 96%; 
2001 Actual: 95%; 2002 Actual: 96%; 2003 Target: 98%; 2004 Target: 98%.

Notes: Agencywide totals may differ from the sum of the amounts on the 
tables for strategic goals 1, 2, and 3 because when multiple units 
participate in an engagement, credit may be reflected under more than 
one of the goals. Also, the fiscal 2003 target for testimonies includes 
seven testimonies not assigned to goals.

We changed our methodology for tabulating financial benefits after 
fiscal 2001 to ensure that criteria were uniformly applied and to use 
net present value in calculating benefits. These changes in methodology 
resulted in part of the increase shown for fiscal 2002, increasing 
the agencywide total by about 11 percent.

[End of table]

[End of section]

Part II: Strategies and Means:

The second part of this performance plan discusses the strategies, 
processes, skills, technologies, and resources GAO will need to achieve 
the performance goals and targets outlined in part I.

Strategies for Achieving the 2004 Goals:

As the audit, evaluation, and investigative arm of the Congress, GAO 
has a unique role to play. Within the legislative branch, we are the 
only agency with staff in the field, conducting performance analyses 
and financial accounting, among other congressionally requested 
activities, and reporting our findings not only to our congressional 
clients but also to the public. While we work with the Inspectors 
General at every federal agency, our engagements differ from theirs in 
that ours are often more strategic and longer-range in nature, 
governmentwide in scope, and initiated by requests from the Congress.

Achieving our goals and objectives rests, for the most part, on 
providing professional, fact-based, balanced, nonpartisan information. 
To do so, we will develop and present this information in a number of 
ways to support the Congress in carrying out its constitutional 
responsibilities by:

* evaluating federal policies and the performance of agencies;

* overseeing government operations through financial and other 
management audits to determine whether public funds are spent 
efficiently, effectively, and in accordance with applicable laws;

* investigating whether illegal or improper activities are occurring;

* analyzing the financing for government activities;

* conducting constructive engagements in which we work proactively with 
agencies, when appropriate, to provide advice that may assist their 
efforts toward positive results;

* providing legal opinions that determine whether agencies are in 
compliance with applicable laws and regulations;

* conducting policy analyses to assess needed actions and the 
implications of proposed actions; and:

* providing additional assistance to the Congress in support of its 
oversight and decision-making responsibilities.

The 2-year qualitative performance goals listed in part I of this plan 
lay out the work we intend to complete by the end of fiscal 2005 using 
the strategies above. Those goals may be revised as we complete the 
update, now in progress, of our strategic plan. We will post the final 
version of the goals along with the associated key efforts for each of 
them on the Web once the updated strategic plan is published.

Because achieving our strategic goals and objectives also requires 
strategies for coordinating with other organizations with similar or 
complementary missions, we:

* use advisory panels and other bodies to inform GAO's strategic and 
annual work planning, and:

* initiate and support collaborative national and international audit, 
technical assistance, and other knowledge-sharing efforts.

Those two types of strategic working relationships allow us to extend 
our institutional knowledge and experience, and, in turn, to improve 
our service to the Congress and the American people. Our Strategic 
Planning and External Liaison office takes the lead and provides 
strategic focus for the work with crosscutting organizations, while our 
research, audit, and evaluation teams lead the work with most of the 
issue-specific organizations.

These groups include the Comptroller General's Advisory Board, made up 
of 40 members from the public and private sectors who have broad 
expertise in areas pertinent to our strategic objectives. The board 
meets with GAO's leadership annually to share its views on the agency's 
strategic direction and specific initiatives. Through the National 
Intergovernmental Audit Forum, chaired by the Comptroller General, and 
10 regional intergovernmental audit forums, GAO consults regularly with 
federal Inspectors General and state and local auditors. In addition, 
through the Domestic Working Group, the Comptroller General and the 
heads of 18 federal, state, and local audit organizations exchange 
information and seek opportunities to collaborate.

We also work with a number of issue-specific and technical panels to 
improve our strategic and work planning, including the following:

* the Advisory Council on Government Auditing Standards, which provides 
guidance to GAO on promulgating auditing standards;

* the Accountability Advisory Council, made up of experts in the 
financial management community, which provides advice on GAO's audit of 
the U.S. government's consolidated financial statements and emerging 
issues involving financial management and accountability reporting;

* the Executive Council on Information Management and Technology, whose 
21 members are experts from the public and private sectors and 
representatives of related professional organizations; and:

* the Comptroller General's Educators' Advisory Panel, composed of 
deans, professors, and other academics from prominent universities 
across the United States, which advises GAO on recruiting, retaining, 
and developing staff.

Internationally, GAO participates in the International Organization of 
Supreme Audit Institutions (INTOSAI)--the professional organization of 
the national audit offices of 184 countries. GAO chairs INTOSAI's 
accounting standards committee and is an active member of the auditing 
standards, internal control standards, and public debt committees. GAO 
publishes INTOSAI's quarterly International Journal of Government 
Auditing (www.intosai.org/2_IJGA_.html) in five languages to further 
the global understanding of standards, best practices, and technical 
issues.

In addition, GAO chairs the public sector committee of the 
International Federation of Accountants to help ensure that public 
sector perspectives are reflected in that committee's accounting 
standards, and--to build capacity in national audit offices around the 
world--we conduct an international fellows training program each year 
for mid-to senior-level staff from other countries. The Comptroller 
General also leads the Global Working Group, which convenes the heads 
of GAO's counterparts from 15 countries each year to discuss mutual 
challenges, share experiences, and identify opportunities for 
collaboration with each other.

Mitigating External Factors that Could Affect Our Performance:

During fiscal 2004, several external factors could affect the 
achievement of our performance goals, including unpredictable national 
and international developments. As the Congress focuses on emerging and 
rapidly evolving events--such as the global threats posed by 
sophisticated terrorist networks, international financial crises, and 
natural disasters--the mix of work we are asked to undertake may 
change, diverting our resources from some strategic objectives and 
performance goals. We can and do mitigate the impact of these events on 
the achievement of our goals in various ways:

* We are alert to possibilities that could shift the Congress's and, 
therefore, our priorities.

* In our products and meetings with the Congress, we identify 
conditions that could trigger new priorities.

* When appropriate, we quickly redirect our resources so that we can 
deal with major changes that do occur.

* We maintain broad-based staff expertise so that we can readily 
address emerging needs.

Meeting the fiscal 2004 performance targets in this report and 
achieving our 2-year performance goals are contingent on receiving the 
resources we are requesting from the Congress. Once actual funding is 
known, we may adjust our targets and performance goals to ensure that 
key congressional priorities are met.

Another external factor that could affect the achievement of our 
performance goals is the limitations imposed on our work by other 
organizations. Historically, GAO's auditing and information gathering 
has been limited where the intelligence community is concerned. Nor 
have we had the authority to access or inspect records or other 
materials held by other countries or by multinational institutions the 
United States works with to protect its interests. These limitations 
may hamper our ability to fully assess what progress is being made in 
addressing issues such as homeland security, and some of our reports 
may be subjected to greater classification reviews than in the past, 
thus limiting their public dissemination. Moreover, the current 
administration has shown a tendency not to share certain information 
that has been shared in the past with GAO and the Congress. We will 
work with the Congress to identify both legislative and nonlegislative 
opportunities for strengthening GAO's access authority as necessary and 
appropriate.

A third external factor that could affect the achievement of our 
performance goals is limitations on the abilities of executive branch 
agencies to make the improvements GAO recommends. Three of our annual 
performance measures gauge the extent to which agencies have 
implemented our recommendations and what financial and other benefits 
can be documented as a result of implementation. Should shifting 
priorities and budgetary resources limit the agencies' abilities to 
implement GAO recommendations, implementation may be interrupted, 
delayed, or avoided. To mitigate this external factor, we will work 
with agency officials as needed to encourage implementation of our 
recommendations whenever feasible.

Addressing Management Challenges that Could Affect Our Performance:

At GAO, management challenges are identified by the Comptroller General 
and the agency's senior executives through the agency's strategic 
planning, management, and budgeting processes. Our progress in 
addressing the challenges is monitored through our annual performance 
and accountability process. Under GAO's strategic goal 4, we establish 
performance goals focused on each of our management challenges (see 
part I of this plan), track our progress in completing the key efforts 
for those performance goals quarterly, and report whether the 
performance goals have been met or not met at 2-year intervals. We have 
also asked GAO's Inspector General for an annual review of management's 
assessment of the challenges and the agency's progress in addressing 
them, and will include the Inspector General's findings in GAO's annual 
performance and accountability report.

In fiscal 2004, we believe three management challenges may affect GAO's 
performance. We have reported in the past on our efforts to address two 
of these challenges--human capital and physical security. Although we 
have made progress with both of these challenges, we still have work to 
do. The third challenge, information security, was added in fiscal 
2003. It replaced a previous challenge, information technology (IT), 
because we had completed our work on that original management 
challenge. Independent reviews of our information security program, 
however, indicated that we need to further tighten IT security. 
Moreover, the potential for harm and threats to IT systems and 
information assets has never been greater, nor has there ever been a 
greater need for planning for disaster recovery and continuity of 
operations given continuing terrorist threats and events.

The Human Capital Challenge:

Given GAO's role as a key provider of information and analyses to the 
Congress, maintaining the right mix of technical knowledge and 
expertise as well as general analytical skills is vital to achieving 
our mission. We spend about 80 percent of our resources on our people, 
but without excellent human capital management, we could still run the 
risk of being unable to meet the expectations of the Congress and the 
nation. In 1999, after an extended hiring freeze, GAO's workforce was 
sparse at the entry level, and we faced succession planning issues as a 
large number of our senior managers and analysts became eligible to 
retire. The development and training of our senior executives had been 
curtailed for funding reasons. And at the same time, more of our staff 
needed enhanced technical skills if they were to assist the Congress 
effectively. In all those respects, GAO was little different from the 
government as a whole. We have addressed these issues in a variety of 
ways and are continuing to do so. For example, we:

* developed a recruitment program that allowed us to hire about 430 
permanent staff during fiscal 2002,

* doubled the proportion of our workforce at the entry level,

* revamped and modernized the performance appraisal system for analysts 
and attorneys,

* implemented a succession-planning program,

* conducted an agencywide assessment and inventory of our workforce's 
knowledge and skills, and:

* completed an organizational realignment and resource reallocation.

Over the next several years, we need to continue to address skill gaps, 
maximize staff productivity and effectiveness, and reengineer our human 
capital processes to make them more user-friendly. We plan to address 
skill gaps by further refining our recruitment and hiring strategies to 
target gaps identified through our workforce planning efforts, while 
taking into account the significant percentage of our workforce 
eligible for retirement. We will reengineer our human capital systems 
and practices to increase their efficiency and to take full advantage 
of technology. We will also ensure that our staff have the needed 
skills and training to function in this reengineered environment. In 
addition, we are developing a competency-based performance system for 
our mission support employees.

In 2000, with the passage of Public Law 106-303, the Congress provided 
GAO with human capital flexibilities that were carefully focused to 
help us ensure that we have the right staff, with the right skills, in 
the right locations to better meet the needs of the Congress and the 
American people. In 2003, we provided the Congress with an assessment 
of our implementation of the law and the results achieved. (The report 
is online at www.gao.gov/cgi-bin/getrpt?GAO-03-954SP.) During the 
108th Congress, we will work with our appropriations and oversight 
committees toward the enactment of legislation that builds on GAO's 
flexibilities. In a legislative proposal sent to the Congress in June 
2003, we have, among other things, identified additional flexibilities 
that would aid our continuing efforts to develop a more performance-
based compensation system and realign our workforce to best accomplish 
GAO's mission.

The Physical Security Challenge:

In the aftermath of the September 11 terrorist attacks and subsequent 
anthrax incidents, GAO's ability to provide a safe and secure workplace 
emerged as a challenge for our agency. Protecting our people and our 
assets is critical to our ability to carry out our mission. We have 
devoted additional resources to this area and have implemented measures 
such as reinforcing vehicle and pedestrian entry points, installing an 
additional x-ray machine, adding more security guards, reinforcing 
windows, and relocating air sources. We are in the process of 
researching and designing other projects to better control building 
access and security around the building. We plan to implement these 
projects over the next several years.

The Information Security Challenge:

Ensuring information systems security and disaster recovery systems 
that allow for continuity of operations is a critical requirement for 
GAO. The risk is that in an emergency, our information could be 
compromised and we would be unable to respond to the needs of the 
Congress. In light of this risk, and in keeping with our goal of being 
a model federal agency, we are implementing a program to protect the 
security of our information systems. GAO's information security plan in 
the appendix provides a concise update of the agency's progress in this 
area and provides more specifics on improvements planned for fiscal 
2004, among them:

* continued deployment of technology to help detect intruders, plus 
tools that will facilitate early detection and response to any 
suspicious activity and that will identify trends to help us enhance 
GAO's security architecture;

* extension of the strong (two-factor) secure user authentication 
system--now in use by almost all staff when accessing GAO's general 
support system--to GAO's remote access and internal wireless links;

* continued refinement of GAO's disaster recovery plan and the 
strategic positioning of critical backup computing assets at a remote 
location along with the integration of a new network storage technology 
into GAO's disaster recovery infrastructure; and:

* establishment of an encrypted wireless subnetwork within the GAO 
building for staff using portable computing equipment to access GAO's 
network.

See the appendix for GAO's information security plan, which discusses 
these matters more fully.

Resources Needed to Achieve the Goals for Fiscal 2004:

In January 2003, we submitted GAO's fiscal 2004 budget request to the 
Congress. Subsequently, the Congress provided supplemental fiscal 2003 
funds for priority initiatives included in our fiscal 2004 budget 
request to ensure the safety and security of GAO staff, facilities, and 
information systems. This supplemental funding allowed us to reduce 
GAO's requested fiscal 2004 budget authority from $472.6 million to 
$467.8 million. This funding level will allow us to maintain current 
operations for serving the Congress as outlined in our strategic plan, 
continue initiatives to enhance our human capital and support business 
processes, and maintain our authorized level of 3,269 full-time 
equivalent (FTE) personnel. Our revised budget request includes $461.8 
million in direct appropriations and authority to use estimated revenue 
of $6 million from reimbursable audit work and rental income. Our 
requested increase of $8.7 million in direct appropriations represents 
a 1.9 percent increase to cover mandatory pay and uncontrollable costs. 
Our revised budget request also includes savings of $13.2 million from 
nonrecurring fiscal 2003 investments that we propose to use in fiscal 
2004 to offset mandatory pay and uncontrollable costs and to fund 
further investments and operating costs of $5.9 million in critical 
areas, such as information technology, knowledge services, and human 
capital. Table 6 presents our fiscal 2003 and revised fiscal 2004 
request by funding source.

Table 6: Resources by Funding Source:

Dollars in thousands:

Funding source: Total budget authority; Fiscal 2003 revised: $456,032; 
Revised fiscal 2004 request: $467,778; Change from fiscal 2003 to 
2004: Amount: $11,746.  

Funding source: Less: Estimated review; Fiscal 2003 revised: -2,981; 
Revised fiscal 2004 request: -6,006; Change from fiscal 2003 to 2004: 
Amount: -3,025.  

Funding source: Direct appropriation; Fiscal 2003 revised: $453,051; 
Revised fiscal 2004 request: $461,772; Change from fiscal 2003 to 
2004: Amount: $8,721; Change from fiscal 2003 to 2004: Percentage: 
1.9.

[End of table]

Almost 80 percent of our revised fiscal 2004 budget request provides 
for employee compensation and benefits to support GAO's greatest asset: 
our staff. The next largest component of our budget request--about $51 
million--is for contract services supporting both GAO's mission work 
and administrative operations, including IT, training, and building 
maintenance and operations services. About $12 million will be spent on 
travel and transportation, which are critical components in 
accomplishing GAO's mission to follow the federal dollar across the 
country and throughout the world and in ensuring the quality of our 
work. The remaining funds will be used for office equipment and space 
rentals; telephone, videoconferencing, and data communications 
services; and other operating expenses, including supplies and 
materials, printing and reproduction, and furniture.

Table 7 summarizes the revised fiscal 2004 budgetary and human capital 
resource allocations among GAO's four strategic goals.

Table 7: Resources by Strategic Goal:

Fiscal 2004:

Strategic goal: Goal 1; Provide timely, quality service to the 
Congress and the federal government to address current and emerging 
challenges to the well-being and financial security of the American 
people; Full-time equivalents: 1,275; Amount (in thousands): $181.5.

Strategic goal: Goal 2; Provide timely, quality service to the 
Congress and the federal government to respond to changing threats and 
the challenges of global interdependence; Full-time equivalents: 854; 
Amount (in thousands): 122.4.

Strategic goal: Goal 3; Help transform the federal government's role 
and how it does business to meet 21st century challenges; Full-time 
equivalents: 985; Amount (in thousands): 143.7.

Strategic goal: Goal 4; Maximize the value of GAO by being a model 
federal agency and a world-class professional services organization; 
Full-time equivalents: 155; Amount (in thousands): 20.2.

Total; Full-time equivalents: 3,269; Amount (in thousands): $467.8.

[End of table]

During fiscal 2004, we plan to sustain our investments in GAO's human 
capital. To ensure our ability to attract, retain, and reward high-
quality staff, we plan to devote additional resources to our employee 
training and development program. We will target resources to continue 
initiatives to address skill gaps, maximize staff productivity, and 
increase staff effectiveness by updating our training curriculum to 
address organizational and technical needs and training new staff. In 
addition, we will continue to focus our hiring efforts in fiscal 2004 
on recruiting talented entry-level staff, and to enhance our 
recruitment and retention of staff, we will continue to offer the 
student loan repayment program and the transit subsidy benefit 
established in fiscal 2002. We also plan to continue initiatives 
designed to further increase employees' productivity, facilitate 
knowledge-sharing, maximize the use of technology, and enhance employee 
tools available at the desktop. We will continue to devote resources to 
reengineering the IT systems that support GAO's business processes--
such as our engagement tracking system--and our human capital 
operations.

[End of section]

Part III: Verification and Validation of Performance Data:

In verifying and validating GAO's performance data, we adhere to the 
same professional standards and internal policies and procedures 
applied to GAO's audit, evaluation, and research work. And management's 
routine use of our performance information further helps to ensure its 
quality and validity. The data are provided to managers for use in 
decision making, and their feedback on these data helps to ensure that 
the data are properly recorded.

To assess GAO's performance in fiscal 2004, we will be able to use 
complete, actual performance data (rather than projections) for all of 
our performance measures. The specific sources of our performance data 
and procedures for independently verifying and validating the data for 
each of our performance measures are described in this third part of 
GAO's plan. We expect the data to be reliable because we will follow 
the verification and validation procedures described here to ensure the 
data's quality. The data limitations are also explained here for each 
measure. Most of them result in conservative estimates of our actual 
performance. We continue to explore ways to strengthen our procedures 
to ensure data integrity.

Financial Benefits:

Background and context: GAO's findings and recommendations may produce 
measurable financial benefits for the federal government when the 
Congress or agencies act on them to reduce annual operating costs or 
the costs of multiyear projects and entitlements or to increase 
revenues from asset sales and changes in tax laws or user fees. The 
funds made available in response to our work may be used to reduce 
government expenditures or may be reallocated to other areas. To claim 
that financial benefits have been achieved, GAO's staff must document 
the cause-and-effect relationship between the benefits reported and 
work GAO did, and they must obtain estimates of the benefits' monetary 
value from independent third parties.

Prior to fiscal 2002, GAO limited the period over which the benefits 
from an accomplishment could be accrued to no more than 2 years. 
Beginning in fiscal 2002, GAO extended the period to 5 years for types 
of accomplishments known to have multiyear effects: those associated 
with longer-term changes embodied in law, program terminations, or 
sales of government assets yielding multiyear savings. GAO is retaining 
the 2-year maximum for all other accomplishments. Also in fiscal 2002, 
GAO began requiring benefits to be calculated in net present value 
terms. Not every financial benefit from our work can be readily 
estimated or documented as attributable to GAO's work. As a result, the 
amount of financial benefits is a conservative estimate.

Data sources: GAO staff wishing to claim that their work has created 
financial benefits must file an accomplishment report backed by 
documentation linking their work to the benefits and providing an 
independent third party's estimate of the benefits' monetary value. The 
third party is typically the agency that acted on GAO's work, a 
congressional committee, or the Congressional Budget Office. Once 
accomplishment reports are approved, they are compiled by the Quality 
and Continuous Improvement (QCI) office, which annually tabulates total 
benefits by goal and agencywide.

Verification and validation: Policies and procedures guide the 
estimation of financial benefits and their attribution to GAO. 
Estimates must be based on independent sources and reduced by any 
identifiable offsetting costs. All accomplishment reports filed by 
staff wishing to claim that benefits have resulted from their work are 
reviewed by a member of staff not involved in the work, by the senior 
executive in charge of the unit, and by QCI. Accomplishment reports 
claiming benefits of $100 million or more must also be approved by QCI. 
Beginning in fiscal 2003, accomplishment reports claiming benefits of 
$500 million or more are also reviewed by GAO's Inspector General. In 
previous years, GAO's Inspector General reviewed only those reports 
claiming benefits of $1 billion or more. QCI provides summary data on 
financial benefits approved by the reviewers to unit managers, who 
check the data on a regular basis to make sure that approved 
accomplishments from their staff have been accurately recorded.

Data limitations: Estimates are from independent third parties but are 
based on both objective and subjective data, and as a result, 
professional judgment is required in reviewing accomplishment reports.

Other Benefits:

Background and context: The other benefits that GAO reports reflect 
instances in which (1) information GAO provided to the Congress 
resulted in statutory or regulatory changes, (2) agencies took actions 
in response to GAO's findings and recommendations to improve government 
services and operations, or (3) GAO's work led to improvements in 
agencies' core business processes or to the advancement of 
governmentwide management reforms. These benefits cannot be expressed 
in monetary terms, but to claim that these benefits have occurred, 
GAO's staff must file accomplishment reports that document the actions 
that have been taken and the cause-and-effect relationship between the 
actions and GAO's work.

Data sources: GAO staff wishing to claim that their work has created 
other benefits must file an accomplishment report backed by 
documentation linking their work to the benefits. Once accomplishment 
reports are approved, they are compiled by QCI, which annually 
tabulates total benefits by goal and agencywide.

Verification and validation: Policies and procedures require 
accomplishment reports to record the other benefits of our findings and 
recommendations. All accomplishment reports filed by staff wishing to 
claim that benefits have resulted from their work are reviewed by a 
member of staff not involved in the work, by the senior executive in 
charge of the unit, and by QCI to ensure the appropriateness of the 
claimed accomplishment, including attribution to GAO's work. QCI 
provides summary data on other benefits to unit managers, who check the 
data on a regular basis to make sure that approved accomplishments from 
their staffs have been accurately recorded.

Data limitations: A direct cause-and-effect relationship between GAO's 
work and benefits it produced cannot always be documented. As a result, 
the number of other benefits is a conservative measure of our overall 
contribution toward improving government.

Past Recommendations Implemented:

Background and context: GAO makes recommendations designed to improve 
the operations of the federal government. For GAO's work to produce 
financial or other benefits, the Congress or other federal agencies 
must implement these recommendations.

As part of our audit responsibilities under generally accepted 
government auditing standards, we follow up on recommendations we have 
made and report to the Congress on their status.

Past experience has shown that it takes time for some recommendations 
to be implemented. For this reason, this measure is the percentage rate 
of implementation of recommendations made 4 years prior to a given 
fiscal year. In other words, the fiscal 2004 implementation rate is the 
percentage of recommendations made in fiscal 2000 products that were 
implemented by the end of fiscal 2004. For example, of the 
recommendations made in fiscal 1998 (the most recent year for which 4 
years of results are currently available), 44 percent were implemented 
by the end of the first year (fiscal 1999); 62 percent by the end of 
the second year; 69 percent by the end of the third year; and 79 
percent by end of the fourth year (fiscal 2002). Prior experience has 
shown that if a recommendation has not been implemented within 4 years, 
it is not likely to be implemented.

Data sources: GAO's document database records recommendations as they 
are issued. As GAO's staff monitors implementation, they submit updated 
information to the database. GAO reports annually to the Congress on 
recommendations that have not been implemented and maintains a publicly 
available database of open recommendations, which is updated daily.

Verification and validation: The database of GAO's recommendations is 
maintained by the staff of an external contractor, who review all GAO 
products distributed through a formal process to identify all 
recommendations made and then enter them into a database.

Policies and procedures specify that staff must verify, with sufficient 
supporting documentation, that an agency's reported actions are 
adequately being implemented. Our staff may interview agency officials, 
obtain agency documents, access agency databases, or obtain information 
from the agency's Office of the Inspector General.

GAO staff update the status of the recommendations on a periodic basis. 
Recommendations that are reported as implemented are reviewed by the 
senior executive in charge of the unit and by QCI. Summary data are 
provided to the units that issued the recommendations. The units check 
the data regularly to make sure the recommendations they have reported 
as implemented have been accurately recorded.

Data limitations: Affected agencies and GAO sometimes differ on a 
recommendation's status. For example, agencies may report actions in 
response to our recommendations, but we may determine that these 
actions are insufficient or do not adequately implement our 
recommendations. In these cases, recommendations are recorded as not 
implemented even though the agency has proposed or taken some actions.

New Recommendations Made and New Products with Recommendations:

Background and context: GAO makes recommendations that specify actions 
that can be taken to improve federal operations or programs. We strive 
for recommendations that are directed at resolving the cause of 
identified problems; that are addressed to parties who have the 
authority to act; and that are specific, feasible, and cost-effective.

We track the number of recommendations made and the percentage of our 
written products that contain recommendations. The latter indicator 
recognizes that the number of recommendations alone is not necessarily 
a predictor of effect. For example, a product with a single 
recommendation can help bring about significant financial or other 
benefits. Together, these two measures provide a picture of the extent 
to which we are providing decision makers with information that will 
help improve government.

Data sources: GAO's document database records recommendations as they 
are issued.

Verification and validation: Through a formal process, an external 
contractor reviews all GAO products distributed, prepares summaries 
that identify products containing recommendations, and verifies this 
information through our recommendation follow-up system.

GAO managers are provided with reports on the recommendations being 
tracked to help ensure that all recommendations have been captured and 
that each recommendation has been completely and accurately stated.

Data limitations: These measures are a conservative estimate of the 
extent to which GAO assists the Congress and federal agencies because 
not all products and services we provide lead to recommendations. For 
example, the Congress may request information on federal programs that 
is purely descriptive or analytical and does not lend itself to 
recommendations.

Testimonies:

Background and context: The Congress may request that GAO testify at 
hearings on various issues. Testimony is one of our most important 
forms of communication with the Congress, and the number of hearings at 
which we testify reflects the importance and value of our institutional 
knowledge in assisting congressional decision making.

Data sources: The data on hearings at which GAO testified are compiled 
in our congressional hearing system.

Verification and validation: The units responding to requests for 
testimony are responsible for entering data in GAO's congressional 
hearing system. After a GAO witness has testified at a hearing, GAO's 
Congressional Relations office verifies that the data in the system are 
correct and records the hearing as one at which we testified. 
Congressional Relations provides weekly status reports to unit 
managers, who check to make sure the data are complete and accurate.

Data limitations: The measure may be influenced by factors other than 
the quality of GAO's performance in any specific year. The number of 
hearings held each year depends on the Congress's agenda, and the 
number of times GAO is asked to testify may reflect congressional 
interest in work completed that year, the previous year, or work in 
progress. The number of testimonies actually provided by GAO witnesses 
may be understated because we count statements from multiple GAO 
witnesses at a hearing as a single testimony.

Timeliness:

Background and context: The likelihood that GAO's products will be used 
is enhanced if they are delivered when needed to support congressional 
and agency decision making. To determine whether GAO's products are 
timely, we measure the proportion of our products that are issued by 
the dates agreed to with our clients or, for our research and 
development (R&D) work, by the dates agreed to internally. We have made 
several improvements to clarify our guidance and controls covering our 
timeliness measure. We clarified the criteria for changing target 
dates. Initial target dates may be changed because the scope of an 
assignment is changed by its congressional requesters or, in the case 
of R&D work, by GAO's senior leadership. Target dates may also change 
because of external factors beyond GAO's control. In addition, senior 
executives are responsible for approving any changes and ensuring that 
the changes are clearly documented.

Data sources: The data supporting this measure are from GAO's Mission 
and Assignment Tracking System, which is used to monitor our progress 
on assignments.

Verification and validation: GAO staff enter the data supporting this 
measure into our Mission and Assignment Tracking System. Aggregate and 
assignment-specific timeliness data are given to units monthly. Their 
staff advise of any anomalies. When an assignment is completed, data on 
its target and completion dates are reported to the project manager, 
who reviews and signs the report to confirm its accuracy.

Data limitations: We measure the timeliness of most external products. 
A small percentage of our products--staff studies and guidance, for 
example--that are not part of our main product lines are excluded.

2-Year Qualitative Performance Goals:

Background and context: Assessing the extent to which we achieve 2-year 
qualitative performance goals helps focus our efforts on issues of 
critical importance and provides a tool for holding ourselves 
accountable for the resources the Congress provides. For each 
performance goal, we identify the key efforts that must be addressed if 
we are to achieve the goal. At the start of fiscal 2004, GAO will be 
initiating a new 2-year cycle and will evaluate the agency's progress 
toward the cycle's performance goals at the conclusion of fiscal 2005. 
We also plan to institute revised assessment criteria for these 
performance goals.

In the past, to determine whether a performance goal was met, the 
responsible GAO manager assessing performance under one of the agency's 
external strategic goals, that is, strategic goals 1, 2, or 3--which 
focus on supporting the Congress and improving the federal government-
-had to document that GAO had issued reports and recommendations under 
at least 75 percent of a performance goal's key efforts in order for 
the performance goal to be considered "met." To assess performance 
under the fiscal 2004-2005 performance goals, we will supplement the 
criteria to better reflect the full range of GAO's work, not just the 
issuance of reports and recommendations. Under strategic goal 4--which 
focuses on improving GAO--a performance goal has been and will continue 
to be considered met if the agency completed at least 75 percent of the 
goal's key efforts.

Data source: The data supporting this measure are from GAO managers' 
assessments, which are supported by documentation, of work completed 
under performance goals' key efforts. For performance goals under 
strategic goals 1, 2, and 3, the supporting documentation comes from 
our automated Mission and Assignment Tracking System and document 
database. For performance goals under strategic goal 4, the supporting 
documentation comes from reports produced by the managers responsible 
for each key effort.

Verification and validation: We consult with our congressional clients 
and other outside experts in setting our 2-year performance goals. As 
mentioned above, in the past, the assessment of each 2-year performance 
goal under strategic goals 1, 2, and 3 was supported by documentation 
showing, by key effort, the number of reports issued and 
recommendations made during the assessment period. QCI will provide 
information to GAO's managers several times a year so that they could 
check its accuracy. For the fiscal 2004-2005 goals, however, we will 
establish new criteria. These criteria will be developed in tandem with 
the update of GAO's strategic plan currently in progress and will be 
reported fully in our revised final performance plan for fiscal 2004. 
The assessment of the performance goals under strategic goal 4 will be 
supported, as in the past, by documentation showing the work completed 
under each key effort. QCI will review the assessments and supporting 
documentation for all performance goals to ensure that criteria are 
consistently applied and that requirements are met.

Data limitations: Professional judgment must be applied when assessing 
the work done under each performance goal and when reviewing those 
assessments.

[End of section]

Appendix:

Information Security Plan:

GAO is implementing an information security program that is consistent 
with requirements in the Government Information Security Reform Act and 
the Federal Information Security Management Act (which was included in 
the E-Government Act of 2002 and is commonly known as "FISMA"). 
Although GAO is not obligated by law to comply with either act, we have 
in principle followed their security requirements to help ensure that 
GAO establishes an effective information security program and to help 
fulfill our goal of being a model federal agency.

To assess the status of GAO's information security program, we 
considered the results of internal reviews by program offices and 
security staff, independent evaluations of our major financial 
applications by a public accounting firm, and testing of information 
technology (IT) controls for our general support system by GAO's IT 
auditors, who are independent of GAO's IT support function. These 
reviews and evaluations identified no material weaknesses in GAO's 
financial applications or general support system. They also showed that 
GAO is making substantial progress in implementing information security 
requirements consistent with the Government Information Security Reform 
Act through its efforts to:

* implement a risk-based, agencywide security program;

* develop essential policies and reporting mechanisms to ensure that 
GAO's program managers, the Chief Information Officer, and the 
Comptroller General implement and maintain security requirements;

* provide security training and awareness;

* enhance the agency's capability to respond to computer security 
incidents;

* integrate security into GAO's capital investment control process;

* identify GAO's critical assets within our enterprise architecture;

* ensure the security of services provided by a contractor or another 
agency;

* develop and implement an enterprise disaster recovery solution; and:

* implement secure wireless computing technology.

In addition, GAO continues to provide separate funding for IT security 
initiatives and training to upgrade the skills of our IT security 
staff. GAO augments its security staff through contractor support, as 
necessary.

Along with indicating our progress, the reviews and evaluations also 
identified areas needing improvement. GAO is taking corrective action 
for these areas and, in particular, has undertaken several projects 
that will significantly improve our information security program during 
fiscal 2004. Among these projects are the following:

* Host-based intrusion detection--GAO has loaded host-based intrusion 
detection software to protect many of its internal servers during 
fiscal 2003, already having loaded it on its external servers. We will 
continue to apply this technology to our servers in fiscal 2004 as 
needed and to add complementary tools. These tools will facilitate the 
early detection of and response to any suspicious activity and identify 
trends that can help us to enhance our security architecture.

* Strong user authentication--During fiscal 2003, we have delivered a 
strong (two-factor) authentication system to virtually all of GAO's 
staff who access GAO's general support system. The strong user 
authentication system combines a personal identification number that 
staff select with a multidigit code that changes randomly every 60 
seconds on each person's unique handheld authentication device. This 
system provides a high degree of certainty that each user accessing 
GAO's general support system is legitimate. We are currently working to 
extend this technology to implement a single sign-on for GAO staff, 
allowing them access to various computing resources without repeated 
log-ins. By fiscal 2004, we will have extended this technology to all 
of GAO's remote access and internal wireless links.

* IT disaster recovery--We have been continually refining our disaster 
recovery plan and conducted some limited testing exercises during 
fiscal 2003 to ensure the viability of the plan. We are strategically 
positioning critical backup computing assets at a remote location and 
have established essential telecommunications links for GAO's client-
server-based systems. In addition, we are implementing a new network 
storage technology that we expect to integrate into our disaster 
recovery infrastructure during fiscal 2004.

* Secure wireless computing--We are establishing an encrypted wireless 
subnetwork within the GAO building allowing the GAO staff certain 
flexibilities when using portable computing equipment in conference, 
team, and training rooms and in accessing GAO's network. This 
technology will deploy the latest in security features that are 
designed to prevent unauthorized access into it. We plan to have most 
of the secure wireless nodes in place and operating by fiscal 2004.

Abbreviations and Acronyms:

AIDS: acquired immunodeficiency syndrome:

DHS: Department of Homeland Security:

DOD: Department of Defense:

FISMA: Federal Information Security Management Act:

FTE: full-time equivalent [personnel]

GAO: General Accounting Office:

INTOSAI: International Organization of Supreme Audit Institutions:

IRS: Internal Revenue Service:

IT: information technology:

QCI: Quality and Continuous Improvement:

R&D: research and development:

VA: Department of Veterans Affairs:

www.gao.gov:

This plan and related GAO publications, including the agency's current 
strategic plan and the most recent performance and accountability 
report are available free of charge through GAO's Web site at 
www.gao.gov/sp.html.

Other free resources on GAO's Web site.

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Image Sources: The cover montage is composed of images provided by GAO 
(the flag), Digital Stock (the Capitol), and the Library of Congress's 
Historic American Engineering Record by Jet Lowe (the Statue of 
Liberty).