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GAO: 

Performance And Accountability Report: 

Fiscal Year 2007: 

Serving the Congress and the Nation: 

United States Government Accountability Office: 

Accountability * Integrity * Reliability: 

[See PDF for Image] - graphic text: 

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. 

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 our reputation, and the GAO approach to 
work ensures it. 

Reliability: 

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

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. 

Source: GAO. 

[End of Figure] 

Table of Contents: 

Abbreviations: 

How to Use This Report: 

Introduction: 

From the Comptroller General: 

Financial Reporting Assurance Statements: 

About GAO: 

Mission: 

Strategic Planning Management Process: 

Organizational Structure: 

How We Measure Our Performance: 

Part I: Management's Discussion and Analysis: 

Promoting a Transparent and Accountable Government by Providing Fact- 
Based, Objective Information to the Congress and the Public: 

Focusing on Results: 

Focusing on Our Client: 

Focusing on Our People: 

Focusing on Our Internal Operations: 

Building and Sustaining Partnerships: 

GAO's High-Risk Program: 

General Counsel Decisions and Other Legal Work: 

Managing Our Resources: 

Strategies for Achieving Our Goals: 

Internal Management Challenges and Mitigating External Factors That 
Could Affect Our Performance: 

Part II: Performance Information: 

Performance Information by Strategic Goal: 

Goal 1 Overview: 

Financial Benefits: 

Nonfinancial Benefits: 

Testimonies: 

Goal 2 Overview: 

Financial Benefits: 

Nonfinancial Benefits: 

Testimonies: 

Goal 3 Overview: 

Financial Benefits: 

Nonfinancial Benefits: 

Testimonies: 

Goal 4 Overview: 

Data Quality and Program Evaluation: 

Verifying and Validating Performance Data: 

Program Evaluation: 

Part III: Financial Information: 

From the Chief Financial Officer: 

Overview of Financial Management and Controls 100: 

Financial Systems and Internal Controls: 

Audit Advisory Committee's Report: 

Independent Auditor's: 

Notes to Financial Statements: 

Part IV: From the Inspector General: 

From the Inspector General: 

Part V: Appendixes: 

1. Accomplishments and Contributions: 

2. GAO's Report on Personnel Flexibilities: 

3. GAO's FISMA Efforts: 

Image Sources: 

Providing Comments on This Report: 

Obtaining Copies of GAO Documents: 

[End of Table of Contents] 

Abbreviations: 

ACF: Administration for Children and Families: 

BEA: business enterprise architecture: 

BMDS: Ballistic Missile Defense System: 

CAO: Chief Administrative Officer and Chief Administrative Office: 

CBO: Congressional Budget Office: 

CBP: Customs and Border Protection: 

CDP: collection due process: 

CFO: Chief Financial Officer: 

CMS: Centers for Medicare & Medicaid Services: 

DHS: Department of Homeland Security: 

DI: disability insurance: 

DOD: Department of Defense: 

DOE: Department of Energy: 

DOT: Department of Transportation: 

DTV: digital television: 

EAC: Employee Advisory Council: 

EAS: Emergency Alert System: 

EBT: electronic benefit transfer: 

EEOC: Equal Employment Opportunity Commission: 

EPA: Environmental Protection Agency: 

ERMS: Electronic Records Management System: 

FAA: Federal Aviation Administration: 

FAS: Financial Audit System: 

FBI: Federal Bureau of Investigation: 

FDA: Food and Drug Administration: 

FCC: Federal Communications Commission: 

FCS: Future Combat System: 

FEMA: Federal Emergency Management Agency: 

FFMIA: Federal Financial Management Improvement Act: 

FHA: Federal Housing Administration: 

FICA: Federal Insurance Contributions Act: 

FISMA: Federal Information Security Management Act: 

FMFIA: Federal Managers' Financial Integrity act: 

FOIA: Freedom of Information Act: 

FSI: Forensic Audits and Special Investigations: 

FTA: Federal Transit Administration: 

FTE: full-time equivalent: 

FWS: Federal Wage System: 

GAO: Government Accountability Office: 

GOES-R: Geostationary Operational Environment Satellite-R series: 

GS: General Schedule: 

HHS: Department of Health and Human Services: 

HUD: Department of Housing and Urban Development: 

IDP: individual development plan: 

IED: improvised explosive device: 

IESS: Integrated Electronic Security System: 

IG: Inspector General: 

IFPTE: International Federation of Professional and Technical 
Engineers: 

HIP: Individual and Households Program: 

INTOSAI: International Organization of Supreme Audit Institutions: 

IRS: Internal Revenue Service: 

IS: information security: 

ISTS: Information Systems and Technology Services: 

IT: information technology: 

LEP: limited English proficiency: 

MCA: managerial cost accounting: 

MCC: Millennium Challenge Corporation: 

MDA: Missile Defense Agency: 

MSA: Metropolitan statistical areas: 

NASA: National Aeronautics and Space Administration: 

NCMEC: National Center for Missing and Exploited Children: 

NextGen: Next Generation Air Transportation System: 

NFC: National Finance Center: 

NIST: National Institute of Standards and Technology: 

NPOESS: National Polar-Orbiting Operational Environment Satellite 
System: 

NRC: Nuclear Regulatory Commission: 

NSPS: National Security Personnel System: 

O&M: operations and maintenance: 

OASI: Old Age and Survivors Insurance: 

OMB: Office of Management and Budget: 

OPM: Office of Personnel Management: 

PBC: performance-based compensation: 

PBGC: Pension Benefit Guaranty Corporation: 

PCA: private collection agency: 

PEO: Program Executive Office: 

PIN: personal identification number: 

PPA: Pension Protection Act of 2006: 

PRISM: Program Review Instrument for Systems Monitoring: 

PT: program and technical: 

QCI: Quality and Continuous Improvement: 

QDR: Quadrennial Defense Review: 

SAN: storage area network: 

SBA: Small Business Administration: 

SBI: Secure Border Initiative: 

SCHIP: State Children's Health Insurance Program: 

SEC: Securities and Exchange Commission: 

SLI: Space Launch Initiative: 

SNF: skilled nursing facility: 

SSA: Social Security Administration: 

SSI: Supplemental Security Income: 

SSN: Social Security number: 

TAP: Transition Assistance Program: 

TSA: Transportation Security Administration: 

TSCA: Toxic Substances Control Act: 

TSP: Thrift Savings Plan: 

UN: United Nations: 

USACE: U.S. Army Corps of Engineers: 

USAID: U.S. Agency for International Development: 

USDA: United States Department of Agriculture: 

USPS: United States Postal Service: 

US-VISIT: United States Visitor and Immigrant Status Indicator 
Technology: 

VA: Department of Veterans Affairs: 

[End of Abbreviations] 

How to Use This Report: 

This report describes the U.S. Government Accountability Office's (GAO) 
performance measures, results, and accountability processes for fiscal 
year 2007. In assessing our performance, we compared actual results 
against targets and goals that were set in our annual performance plan 
and performance budget and were developed to help carry out our 
strategic plan. Our complete set of strategic planning and performance 
and accountability reports is available on our Web site at [hyperlink, 
http://www.gao.gov/sp.html]. 

This report has an introduction, four major parts, and supplementary 
appendixes as follows: 

Introduction: 

This section includes the letter from the Comptroller General and a 
statement attesting to the reliability of our performance and financial 
data in this report and the effectiveness of our internal control over 
our financial reporting. This section also includes a summary 
discussion of our mission, strategic planning process, organizational 
structure, and process for assessing our performance. 

Management's Discussion and Analysis: 

This section discusses our agencywide performance results and use of 
resources in fiscal year 2007. It also includes information on the 
strategies we use to achieve our goals and the management challenges 
and external factors that affect our performance. 

Performance Information: 

This section includes details on our performance results by strategic 
goal in fiscal year 2007 and the targets we are aiming for in fiscal 
year 2008. It also includes an explanation of how we ensure the 
completeness and reliability of the performance data used in this 
report. 

Financial Information: 

This section includes details on our finances in fiscal year 2007, 
including a letter from our Chief Financial Officer, audited financial 
statements and notes, and the reports from our external auditor and 
audit advisory committee. This section also includes information on our 
internal controls and an explanation of the kind of information each of 
our financial statements conveys. 

From the Inspector General: 

This section includes our Inspector General's assessment of our 
agency's management challenges. 

Appendixes: 

These sections include detailed write-ups about our most significant 
accomplishments and contributions recorded in fiscal year 2007 and 
information on certain human capital management flexibilities and on 
information security management efforts. 

[End of How to Use This Report] 

Introduction: From the Comptroller General: 

[See PDF for picture of David M. Walker, Comptroller of the United 
States] 

Source: GAO. 

[End of Figure] 

November 15, 2007: 

I am pleased to present our performance and accountability report for 
fiscal year 2007. We accomplished a great deal for the Congress and the 
American people with the resources we received. We continued to focus 
our efforts on increasing the transparency, efficiency, and 
accountability of federal operations by giving the Congress and the 
public the information they need to ensure that the federal government 
makes prudent decisions now and in the future. We performed our work in 
accordance with our strategic plan for serving the Congress, guided by 
our core values, and consistent with applicable professional standards. 
You can be assured that the information in this report is complete and 
reliable and meets our high standards. 

In fiscal year 2007 we exceeded the targets for five of our six key 
performance measures--financial benefits, nonfinancial benefits, past 
recommendations implemented, new products with recommendations, and 
testimonies--that gauge how well we produced results and served our 
client, the Congress. With this level of performance we were able to 
achieve a return on investment for the American people of about $94 for 
every dollar the Congress gave us. Specifically, we recorded $45.9 
billion in financial benefits from our work and 1,354 nonfinancial 
benefits, which helped improve government operations and better serve 
the public. We also documented that the Congress and federal agencies 
implemented 82 percent of the recommendations we made 4 years ago and 
that 66 percent of the new products we issued during the fiscal year 
contained recommendations that in time should have a positive impact on 
the efficiency and effectiveness of the federal government. Moreover, 
this was a banner year for us in testimonies. Our senior executives and 
I delivered testimonies at 276 hearings, 36 more hearings than in 
fiscal year 2006. In fact, our performance on this measure is the 
fourth highest over the last 25 years and an all-time high for us on a 
per capita basis. Though we issued our products on time 94 percent of 
the time, we fell short on our timeliness measure by 1 percentage 
point, just shy of our 95 percent target. 

We also met or exceeded five of the eight targets we set for our people 
measures--new hire rate, acceptance rate, retention rate with 
retirements, retention rate without retirements, and staff development. 
While these measures were largely similar to last year's results, we 
missed the performance targets for staff utilization, leadership, and 
organizational climate by 5 percentage points or less in spite of the 
challenges we faced internally. These challenges included meeting tight 
deadlines and being responsive to our clients when demand for our work 
was extremely high and budgetary and staffing resources were extremely 
constrained. During fiscal year 2007, we also had to manage a large 
workload in the wake of significant human capital transformation 
efforts and other changes within our agency, including a union 
organizing campaign. 

While supporting the Congress's oversight efforts with more than 1,200 
reports and testimonies we issued during the fiscal year, in November 
2006, we sent a letter to the incoming leadership of the new Congress 
suggesting three dozen areas for additional oversight. In addition, we 
welcomed the new congressional Members in January with several special 
publications to help them make the transition to their responsibilities 
as stewards of the federal purse. All of these publications--Fiscal 
Stewardship: A Critical Challenge Facing Our Nation (GAO-07-362SP, 
January 2007); Understanding Similarities and Differences between 
Accrual and Cash Deficits (GAO-07-117SP, December 2006); and 
Understanding the Primary Components of the Annual Financial Report of 
the United States Government (GAO-05-958SP, September 2005)--are 
available through our Web site at [hyperlink, http://www.gao.gov]. 
Though we received a clean opinion on our own financial statements, the 
federal government's books are not yet in order and will require 
focused leadership and sustained attention to get them there, 
especially in connection with the Department of Defense. 

The Congress needs information to make sound judgments that will 
benefit this nation in the short term and over the long run. Thus, to 
further assist our client with its oversight function and aid its 
insight and foresight, we revised our list of federal programs and 
areas at risk of fraud, waste, abuse, and mismanagement and in need of 
broad-based transformation and issued our biennial report card called 
High-Risk Series: An Update (GAO-07-310, January 2007). We continue to 
do this work to bring visibility and urgency to these areas and to 
prompt needed actions sooner rather than later. I also continued to 
speak around the country about the fiscal condition and long-term 
fiscal outlook of our country as part of the Fiscal Wake-Up Tour 
sponsored by the Concord Coalition--a nationwide, nonpartisan, 
grassroots organization dedicated to educating the public about the 
consequences of fiscal deficits and promoting a generationally 
responsible fiscal policy. The tour also involves the Brooking 
Institution and the Heritage Foundation and a range of other 
organizations. To date, the tour has held events in 24 states and the 
District of Columbia reaching thousands of people. The purpose of this 
effort is to state the facts and speak the truth about the fiscal 
challenges that this country faces if we continue to do business in the 
same way, increase public awareness about the consequences, and help 
create the impetus and support for appropriate federal, state, and 
local officials to take much needed and long overdue action. 

Closer to home, we updated our strategic plan to guide our own actions 
in the near future and ensure that we have the foresight needed to 
support the Congress. Our strategic plan includes bodies of work that 
address anticipated requests for evaluations of current and emerging 
issues and anticipated work related to government transformation 
efforts, especially in the areas of homeland security and defense. 
Seven broad themes provide the context for our strategic plan and we 
describe them in detail in Forces That Will Shape America's Future: The 
Themes from GAO's Strategic Plan (GAO-07-467SP, March 2007). We believe 
these themes will shape the many requests and mandates we expect to 
receive from the Congress over the next 3 years as well as the work we 
plan to do under my statutory authority as Comptroller General of the 
United States. 

An effective, transparent government requires a first-rate workforce 
and one of our agencywide goals is to create a model federal agency and 
world-class professional services organization. We want to continue to 
attract staff from a variety of disciplines who can gather the facts 
and develop innovative solutions to both old and new problems 
challenging the federal government. Thus, in fiscal year 2007 we 
improved our recruiting and hiring practices by clarifying our hiring 
goals and making it a priority to aggressively recruit at select 
colleges and universities. We also instituted an executive exchange 
program to help us tap talent outside of the federal government for 
short-term projects. In addition, we began a professional development 
program for entry-level administrative and professional support staff 
(similar to our development program for analyst staff), initiated a 
formal mentoring program, and continued to support employees working 
flexible schedules and telecommuting to help them balance the demands 
of work and home. I am very proud to say that we rated second among 
large federal agencies on the Partnership for Public Service's list of 
the Best Places to Work in the Federal Government for 2007, up from 
fourth place in 2005. Furthermore, in September 2007 we were named as 
one of Washington's top 60 employers by Washingtonian magazine. 

However, not all of our human capital initiatives have been easy--or 
without controversy, especially the 2006 restructuring of our midlevel 
(Band II) analyst workforce. Reforms that affect an employee's pay and 
job classification tend to be very controversial and this is 
particularly true in a workforce like ours that is highly educated and, 
by training and disposition, highly skeptical and analytical. In May 
2007 I testified at oversight hearings to discuss changes we made to 
many of our human capital policies and procedures over the last several 
years and other related issues. For example, employees' pay and 
compensation are now more directly tied to the market and to achieving 
results--measurable outcomes that further the agency's mission. Also, 
jobs for our employees are classified according to employees' roles and 
responsibilities, and pay is based on a employees' job as well as 
market-based conditions and their performance rather than longevity on 
the job. We believe we are the first major federal agency to adopt such 
an approach on an agencywide basis. At the same time, due to my concern 
regarding the trends in ratings differences associated with our 
performance appraisals over time, we also contracted with a private 
firm to assess the possible reasons for the differences and make 
related recommendations. 

For some staff, these changes are unsettling; thus listening and 
responding to employees' concerns and comments is particularly 
important during this time of change. I and the other executives 
encouraged employees to provide their input about the changes taking 
place and the direction the agency is headed--and we heard them. During 
fiscal year 2007, we made certain adjustments to our annual pay 
parameters and I proposed legislation known as the Government 
Accountability Act of 2007, which, if passed, will benefit our existing 
employees and will serve to further enhance our ability to attract, 
retain, and reward a top-flight workforce. For example, under one 
provision of the act, employees below the senior executive level would 
be able to include the bonus part of their performance awards in their 
high-three average salary for retirement purposes, which is not 
currently possible. 

We hope to work through these human capital issues and our other 
management challenges related to physical and information security in 
partnership with the agency's recently elected employee's union, the 
International Federation of Professional and Technical Engineers, which 
will serve as the exclusive representative of entry and midlevel 
analysts as well as other employees in dealing with management on 
issues related to certain terms and conditions of employment. I and the 
rest of management will bargain in good faith with the union and hope 
to reach timely agreements on issues of mutual interest and concern. 

The challenge before us as servants of the Congress and the nation is 
to maintain a government that is effective, transparent, and relevant 
for this generation and generations to come. This agency has never 
wavered in its belief that the Congress and the public deserve to be 
fully informed about all major aspects of government operations. I am 
committed to ensuring that we will continue to "lead by example" in 
transforming government while providing the most professional, 
objective, fact-based, nonpartisan, nonideological, fair, and balanced 
information possible to the Congress and the American people. 

Signed by: 

David M. Walker: 
Comptroller General of the United States: 

[End of From the Comptroller General] 

Financial Reporting Assurance Statements: 

November 15, 2007: 

We, as GAO's executive committee, are responsible for preparing and 
presenting the financial statements and other information included in 
this performance and accountability report. The financial statements 
included herein are presented in conformity with U.S. generally 
accepted accounting principles; incorporate management's reasonable 
estimates and judgments, where applicable; and contain appropriate and 
adequate disclosures. Based on our knowledge, the financial statements 
are presented fairly in all material respects, and other financial 
information included in this report is consistent with the financial 
statements. 

We are also responsible for establishing and maintaining adequate 
internal control over financial reporting. We conducted an assessment 
of the effectiveness of our internal control over financial reporting 
consistent with the criteria in 31 U.S.C. 3512 (c), (d) (commonly 
referred to as the Federal Managers' Financial Integrity Act (FMFIA) 
and in Appendix A of Office of Management and Budget (OMB) Circular No. 
A-123, Management's Responsibility for Internal Control. Based on the 
results of this assessment, we have reasonable assurance that internal 
control over financial reporting as of September 30, 2007, was 
operating effectively and that no material weaknesses exist in the 
design or operation of the internal control over financial reporting. 

On the basis of our comprehensive management control program, we are 
pleased to certify, with reasonable assurance, the following: 

* Our financial reporting is reliable--transactions are properly 
recorded, processed, and summarized to permit the preparation of 
financial statements in conformity with U.S. generally accepted 
accounting principles, and assets are safeguarded against loss from 
unauthorized acquisition, use, or disposition. 

* We are in compliance with all applicable laws and regulations--
transactions are executed in accordance with laws governing the use of 
budget authority and other laws and regulations that could have a 
direct and material effect on the financial statements. 

* Our performance reporting is reliable-- transactions and other data 
that support reported performance measures are properly recorded, 
processed, and summarized to permit the preparation of performance 
information consistent with the criteria set forth in the Government 
Performance and Results Act of 1993 and related OMB guidance. 

We also believe that (1) these same systems of accounting and internal 
controls provide reasonable assurance that we are in compliance with 
the spirit of FMFIA and (2) we have implemented and maintained 
financial systems that comply substantially with federal financial 
management systems requirements, applicable federal accounting 
standards, and the U.S. Government Standard General Ledger at the 
transaction level consistent with the requirements in the Federal 
Financial Management Improvement Act (FFMIA) and OMB guidance. These 
are objectives that we set for ourselves even though, as part of the 
legislative branch of the federal government, we are not legally 
required to do so. 

Signed by: 

David M. Walker: 
Comptroller General of the United States: 

Signed by: 

Gene L. Dodaro: 
Chief Operating Officer: 

Signed by: 

Sallyanne Harper: 
Chief Financial Officer: 

Signed by: 

Gary L. Kepplinger: 
General Counsel: 

[End of Financial Reporting Assurance Statements] 

About GAO: 

We exist 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. 

GAO is an independent, nonpartisan, professional services agency in the 
legislative branch of the federal government. Commonly known as the 
"audit and investigative arm of the Congress" or the "congressional 
watchdog," we examine how taxpayer dollars are spent and advise 
lawmakers and agency heads on ways to make government work better. As a 
legislative branch agency, we are exempt from many laws that apply to 
the executive branch agencies. However, we generally hold ourselves to 
the spirit of many of the laws, including 31 U.S.C. 3512 (commonly 
referred to as the Federal Managers' Financial Integrity Act), the 
Government Performance and Results Act of 1993, and the Federal 
Financial Management Improvement Act of 1996.[Footnote 1] Accordingly, 
this performance and accountability report for fiscal year 2007 
supplies what we consider to be information that is at least equivalent 
to that supplied by executive branch agencies in their annual 
performance and accountability reports. 

Mission: 

Our mission is 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. The strategies and means that we use to accomplish 
this mission are described in the following pages. In short, we 
accomplish our mission by providing reliable information and informed 
analysis to the Congress, to federal agencies, and to the public, and 
we recommend improvements, when appropriate, on a wide variety of 
issues. Three core values--accountability, integrity, and reliability-
-form the basis for all of our work, regardless of its origin. These 
are described on the inside front cover of this report. 

GAO's History: 

The Budget and Accounting Act of 1921 required the President to issue 
an annual federal budget and established GAO as an independent agency 
to investigate how federal dollars are spent. In the early years, we 
mainly audited vouchers, but after World War II we started to perform 
more comprehensive financial audits that examined the economy and 
efficiency of government operations. By the 1960s, GAO had begun to 
perform the type of work we are noted for today—program 
evaluation—which examines whether government programs are meeting their 
objectives.

Strategic Planning and Management Process: 

To accomplish our mission, we use a strategic planning and management 
process that is based on a hierarchy of four elements (see fig. 1), 
beginning at the highest level with the following four strategic goals: 

* 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: 

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

Figure 1: GAO's Strategic Planning Hierarchy: 

[See PDF for Image] - graphic text: 

A four step pyramid that shows GAO's strategic planning hierarchy. 

Step 1: Strategic Goals (4); 
Step 2: Strategic Objectives (21); 
Step 3: Performance goals (93); 
Step 4: Key Efforts (300+). 

Source: GAO. 

[End of Figure] 

Our audit, evaluation, and investigative work is primarily aligned 
under the first three strategic goals, which span issues that are both 
domestic and international, affect the lives of all Americans, and 
influence the extent to which the federal government serves the 
nation's current and future interests (see fig. 2). 

Figure 2: Examples of How GAO Assisted the Nation: 

A Table listing GAO's strategic goals and what it accomplished to reach 
those goals. 

Strategic Goal 1: 

Description: 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: 

* highlight ways to address problems affecting the delivery of health 
and disability services for injured soldiers and veterans; 

* improve the Food and Drug Administration’s process for removing 
dangerous drugs from the marketplace; 

* identify physician practice patterns to improve efficiency in the 
Medicare program; 

* encourage the preservation of affordable housing; 

* identify Food Stamp Program areas vulnerable to payment errors and 
fraud; 

* improve the Small Business Administration’s timely delivery of 
disaster assistance; 

* outline various approaches used in the United States and abroad to 
negotiate drug prices; 

* assess the housing needs of low-income veterans; 

* focus attention on the Pension Benefit Guaranty Corporation’s premium 
structure; 

* evaluate the Federal Housing Administration’s role and modernizing 
efforts; 

* increase knowledge sharing about federal and state efforts to improve 
older driver safety; 

* highlight inadequacies in the management of federal oil and gas 
royalties; 

* raise awareness about the financial risks to the insurance industry 
posed by climate change; 

* improve transportation efficiency. 

Strategic Goal 2: 

Description: Provide timely, quality service to the Congress and the 
federal government to respond to changing security threats and the 
challenges of global interdependence: 

* identify key issues for congressional oversight of U.S. efforts to 
stabilize and rebuild Iraq; 

* improve the transparency of military compensation costs; 

* promote federal efforts to secure sensitive information; 

* identify the need for a Chief Management Officer to improve the 
Department of Defense’s business processes; 

* highlight challenges with securing energy commodity carrying tankers 
from terrorist attacks; 

* strengthen security at airport passenger screening checkpoints; 

* identify shortcomings in the Department of Homeland Security’s 
program to track the visa status of visitors and immigrants to the 
United States; 

* improve licensing procedures for radioactive materials; 

* enhance the sharing of federal homeland security information with 
states and localities; 

* contribute to congressional dialogue on the U.S. food aid provisions 
of the 2007 Farm bill; 

* improve oversight and procurement practices at the United Nations
improve financial literacy in the United States; 

* better protect consumers who purchase title insurance; 

* improve the financial supervision of holding companies. 

Strategic Goal 3: 

Description: Help transform the federal government's role and how it 
does business to meet 21st century challenges: 

* identify the risks of relying on military and homeland security 
contractors; 

* alert the Congress to cost and schedule risks affecting major weapon 
systems; 

* uncover fraud, waste, and abuse in financial assistance payments to 
people affected by hurricanes Katrina and Rita; 

* promote a coordinated approach to improving standards and educating 
professionals in the accountability community; 

* identify multiple approaches needed to reduce the tax gap; 

* enlighten the public about the nation’s long-term fiscal challenges; 

* inform the Congress about the status of recovery and rebuilding 
efforts in the aftermath of hurricanes Katrina and Rita; 

* enhance national preparedness for an influenza pandemic; 

* gauge agencies’ progress with implementing the Freedom of Information 
Act; 

* ensure that individuals’ personal information is protected; 

* summarize progress and challenges and identify federal financial 
implications of rebuilding the Gulf Coast; 

* strengthen the Department of Defense’s business systems modernization 
program; 

* strengthen the oversight of an environmental satellite program. 

Strategic Goal 4: 

Description: Maximize the value of GAO by being a model federal agency 
and a world-class professional services organization; 

* inform the Congress and the public through our strategic plan about 
the forces that are likely to shape our nation’s future, its place in 
the world, and the changing role of the federal government; 

* develop and implement the Financial Audit System—an automated tool 
used to audit the financial statements of executive branch agencies. 

Source: GAO. 

[End of Figure] 

The fourth goal is our only internal one and is aimed at maximizing our 
productivity through such efforts as investing steadily in information 
technology (IT) to support our work; ensuring the safety and security 
of our people, information, and assets; pursuing human capital 
transformation; and leveraging our knowledge and experience. We revisit 
the focus and appropriateness of these four strategic goals each time 
that we update our strategic plan. We updated our strategic plan in 
March 2007. 

An Example of Our Strategic Planning Elements: 

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 Objective: A Safe, Secure, and Effective National Physical 
Infrastructure; 

Performance Goal: Assess the Federal Government’s Role in Fostering and 
Overseeing Telecommunications in the Public Interest; 

Key Efforts: 

* Assess the federal universal service program in promoting 
the availability and affordability of basic and advanced 
telecommunications services to all Americans; 

* Assess the effectiveness of key federal agencies in managing the 
technical resources needed to meet the growing demand for 
telecommunications services by government and commercial users; 

* Assess the ability of the Federal Communications Commission to 
respond to and resolve legal, regulatory, capacity, and policy issues 
that affect how the commercial telecommunication industry can develop 
and operate. 

The four strategic goals are supported by strategic objectives that are 
in turn supported by and achieved through numerous performance goals 
and key efforts. Our strategic planning framework for serving the 
Congress, which lists the strategic objectives under each goal, is 
depicted on page 12. 

Complete descriptions of the steps in our strategic planning and 
management process are included in our strategic plan for fiscal years 
2007 through 2012, which is available on our Web site at [hyperlink, 
http://www.gao.gov]. This site also provides access to our annual 
performance plans since fiscal year 1999 and our performance and 
accountability reports since fiscal year 2001. 

To ensure that we are well positioned to meet the Congress's current 
and future needs, we update our 6-year strategic plan every 3 years, 
consulting extensively during the update with our clients on Capitol 
Hill and with other experts (see our complete strategic plan on 
[hyperlink, http://www.gao.gov/sp/d04534sp.pdf]. Using the plan as a 
blueprint, we lay out the areas in which we expect to conduct research, 
audits, analyses, and evaluations to meet our clients' needs, and we 
allocate the resources we receive from the Congress accordingly. Given 
the increasingly fast pace with which crucial issues emerge and evolve, 
we design a certain amount of flexibility into our plan and staffing 
structure so that we can respond readily to the Congress's changing 
priorities. When we revise our plan or our allocation of resources, we 
disclose those changes in annual performance plans, which are posted-- 
like our strategic plan--on the Web for public inspection [hyperlink, 
http://www.gao.gov/sp.html]. 

In fiscal year 2007, we revised our strategic plan for the third time 
since we first issued a strategic plan in 2000. The broad goals and 
objectives of our strategic plan for 2007-2012 did not change 
significantly since our last update, but events such as the continuing 
war in Iraq and recent and predicted natural disasters account for some 
modification in emphasis. Seven broad issues or "themes" provide the 
context for our strategic plan (see GAO's Strategic Plan Framework on 
p. 12), many of which were raised repeatedly by our client and other 
stakeholders during our outreach efforts and discussions we initiated 
while preparing the plan. For more information about the themes see 
Forces That Will Shape America's Future: The Themes from GAO's 
Strategic Plan (GAO-07-467SP, March 2007). 

Figure 3: GAO's Strategic Plan Framework: 

[See PDF for Image] - graphic text: 

Serving the Congress and the Nation: 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: 

* Changing Security Threats; 

* Sustainability Concerns; 

* Economic Growth and Competitiveness; 

* Global Interdependency; 

* Societal Change; 

* Quality of Life; 

* Science & Technology; 

Goals & Objectives: 

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 related to...

* Health care needs; 

* Lifelong learning; 

* Work benefits and protections; 

* Financial security; 

* Effective system of justice; 

* Viable communities; 

* Natural resources use and environmental protection; 

* Physical infrastructure; 

Respond to Changing Security Threats and the Challenges of f Global 
Interdependence involving...

* Homeland security; 

* Military capabilities and readiness; 

* Advancement of U.S. interests; 

* Global market force; 

Help Transform the Federal Government’s Role and How It t Does Business 
to Meet 21st Century Challenges by assessing... 

* Roles in achieving federal objectives; 

* Government transformation; 

* Key management challenges and program risks; 

* Fiscal position and financing of the government; 

Maximize the Value of GAO by Being a Model Federal Agency and d a World-
Class Professional Services Organization in the areas of... 

* Client and customer satisfaction; 

* Strategic leadership; 

* Institutional knowledge and experience; 

* Process improvement; 

* Employer of choice; 

Core Values: 

* Accountability; 

* Integrity; 

* Reliability. 

Source: GAO. 

[End of GAO's Strategic Plan Framework] 

Each year, we hold ourselves accountable to the Congress and to the 
American people for our performance, primarily through the annual 
performance and accountability report. 

We have included some information about future plans in this report to 
provide as cohesive a view as possible of what we have done, what we 
are doing, and what we expect to do to support the Congress and to 
serve the nation. Last year, the Association of Government Accountants 
awarded us for the fifth consecutive year its Certificate of Excellence 
in Accountability Reporting for our fiscal year 2006 performance and 
accountability report. According to the association, this certificate 
means that we produced an interesting and informative report that 
achieved the goal of complete and fair reporting. We also received an 
award from Graphic Design USA for the Highlights version of our fiscal 
year 2006 report. (See fig. 4.): 

Organizational Structure: 

As the Comptroller General of the United States, David M. Walker is the 
head of GAO and is serving a 15-year term that began in November 1998. 
Three other executives join Comptroller General Walker to form our 
Executive Committee: Chief Operating Officer Gene L. Dodaro, Chief 
Administrative Officer/Chief Financial Officer Sallyanne Harper, and 
General Counsel Gary Kepplinger. 

To achieve our strategic goals, our staff is organized as shown in 
figure 5. For the most part, our 13 evaluation, audit, and research 
teams perform the work that supports strategic goals 1, 2, and 3--our 
three external strategic goals--with several of the teams working in 
support of more than one strategic goal. Also, our Forensic Audits and 
Special Investigations (FSI) unit, within our Financial Management and 
Assurance team, provides the Congress with high-quality forensic 
audits; investigates fraud, waste, and abuse; evaluates security 
vulnerabilities; and conducts other appropriate investigative services 
as part of its own assignments or in support of other teams. In 
addition, FSI follows up on engagements and referrals from our other 
teams when its special services are required to help determine whether 
legislative or administrative actions are necessary. FSI is composed of 
investigators, auditors who have experience with forensic audits, and 
staff in General Counsel who work with FraudNet--our online system 
designed to facilitate follow up of allegations of fraud, waste, abuse, 
or mismanagement of federal funds. 

Senior executives in charge of the teams manage a mix of engagements to 
ensure that we meet the Congress's need for information on quickly 
emerging issues as we also continue longer-term work efforts that flow 
from our strategic plan. To serve the Congress effectively with a 
finite set of resources, senior managers consult with our congressional 
clients and determine the timing and priority of engagements for which 
they are responsible. 

As described below, General Counsel supports the work of all of our 
teams. In addition, the Applied Research and Methods team assists the 
other teams on matters requiring expertise in areas such as economics, 
research design, and statistical analysis. Staff in many offices, such 
as Strategic Planning and External Liaison, Congressional Relations, 
Opportunity and Inclusiveness, Quality and Continuous Improvement, 
Public Affairs, and the Chief Administrative Office, support the 
efforts of the teams. This collaborative process, which we refer to as 
matrixing, increases our effectiveness, flexibility, and efficiency in 
using our expertise and resources to meet congressional needs on 
complex issues. 

Figure 4: GAO's Performance and Accountability Report 2006 Awards: 

[See PDF for Image] - graphic text: 

Scanned copies of: 

1. AGA Certificate of Excellence in Accountability Reported presented 
to the U.S. Government Accountability Office. 

In recognition of your outstanding efforts preparing GAO's Performance 
and Accountability Report for the fiscal year ended September 30, 2006. 

A Certificate of Excellence in Accountability is presented by AGA to 
federal government agencies whose annual Performance and Accountability 
Reports achieve the highest standards demonstrating accountability and 
communicating results. 

Signed by: 

John H Hammel: 
Chair, Certificate of Excellence in Accountability Reporting Director: 

Signed by: 

Relmond R. Van Daniker, Executive Director, AGA: 

2. 2007 Graphic Design USA presents an American Inhouse Design Award to 
Government Accountability Office for Performance and 
Accountability Report 2006. 

3. Cover of the Government Accountability Office's Performance and 
Accountability Report for Fiscal Year 2006. 

4. Cover of the Government Accountability Office's Performance and 
Accountability Highlights for Fiscal Year 2006. 

Source: GAO. 

[End of Figure] 

General Counsel is structured to facilitate the delivery of legal 
services to the teams and staff offices that support our four strategic 
goals. This structure allows General Counsel to (1) provide legal 
support to our staff offices and audit teams concerning all matters 
related to their work and (2) produce legal decisions and opinions for 
the Comptroller General. Specifically, the goal 1, goal 2, and goal 3 
groups in General Counsel are organized to provide each of the audit 
teams with a corresponding team of attorneys dedicated to supporting 
each team's needs for legal services. In addition, these groups prepare 
advisory opinions to committees and members of the Congress on agency 
adherence to laws applicable to their programs and activities. General 
Counsel's Legal Services group provides in-house support to our 
management on a wide array of human capital matters and initiatives and 
on information management and acquisition matters and defends the 
agency in administrative and judicial forums. Finally, attorneys in the 
Procurement Law and the Budget and Appropriations Law groups prepare 
administrative decisions and opinions adjudicating protests to the 
award of government contracts or opining on the availability and use of 
appropriated funds. 

For strategic goal 4--our fourth and only internal strategic goal-- 
staff in our Chief Administrative Office take the lead. They are 
assisted on specific key efforts by the Applied Research and Methods 
team and by staff offices such as Strategic Planning and External 
Liaison, Congressional Relations, Opportunity and Inclusiveness, 
Quality and Continuous Improvement, and Public Affairs. In addition, 
attorneys in General Counsel, primarily in the Legal Services group, 
provide legal support for goal 4 efforts. 

We 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. About three-quarters of our approximately 3,200 
employees are based at our headquarters in Washington, D.C; the rest 
are deployed in 11 field offices across the country. Staff in these 
field offices are aligned with our research, audit, and evaluation 
teams and perform work in tandem with our headquarters staff in support 
of our external strategic goals. 

GAO Field Locations: 

Atlanta; 
Boston; 
Chicago; 
Dallas; 
Dayton; 
Denver; 
Huntsville; 
Los Angeles; 
Norfolk; 
San Francisco; 
Seattle. 

Figure 5: 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 
Administrative Officer/Chief Financial Officer, and the General 
Counsel. Twenty-three units report 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, and Inspector 
General, which report to the Comptroller General; and Quality and 
Continuous Improvement, which reports to the Chief Operating Officer. 

Other units that report to the Chief Operating Officer include teams 
and field operations that conduct audits, evaluations, and research. 
These teams perform work primarily supporting one of our three external 
strategic goals but several teams perform work in support of multiple 
strategic goals. Generally the teams fall under the following goals: 

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. 

* Education, Workforce, and Income Security; 
* Financial Markets and Community Investment; 
* Health Care; 
* Homeland Security and Justice; 
* Natural Resources and Environment; 
* Physical Infrastructure; 

Goal 2: 

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

* Acquisition and Sourcing Management; 
* Defense Capabilities and Management; 
* International Affairs and Trade; 

Goal 3: 

Help transform the federal government’s role and how it does business 
to meet 21st century challenges. 

* Applied Research and Methods; 
* Financial Management and Assurance; 
-Forensic Audits and Special Investigations; 
* Information Technology; 
* Strategic Issues; 
-Federal Budget and Intragovernmental Relations; 

Goal 4: 

Five units that report to the Chief Administrative Officer support our 
fourth goal; which is to maximize the value of GAO by being a model 
federal agency and a world-class professional services organization. 
These are: 

* Controller; 

* Human Capital Office: 
- Chief Human Capital Officer; 

* Information Systems and Technology Services: 
- Chief Information Officer; 

* Knowledge Services: 
- Chief Knowledge Services Officer; 

* Professional Development Program. 

General Counsel's structure largely mirrors the agency's goal 
structure, and attorneys assigned to a goal work with teams on specific 
engagements. General Counsel has support or advisory relationship with 
the goals and teams rather than a direct reporting relationship. 
General Counsel provides audit and other legal support services for all 
goals and staff offices and manages GAO’s procurement law and bid 
protest work. 

Source: GAO. 

Note: General Counsel's structure largely mirrors the agency's goal 
structure, and attorneys who are assigned to goals work with the teams 
on specific engagements. Thus, the dotted lines in this figure indicate 
General Counsel's support of or advisory relationship with the goals 
and teams rather than a direct reporting relationship. 

[End of Figure] 

[End of Organizational Structure] 

How We Measure Our Performance: 

We measure our performance using annual quantitative measures. 
Together, these indicators help us to determine how well we are meeting 
the needs of the Congress and maximizing our value as a world-class 
organization. 

For several years, we assessed our performance annually using 
quantitative performance measures that are related to our work results 
and the usefulness of those results to our primary client--the 
Congress. We subsequently expanded our focus to include a more balanced 
set of performance measures that focus on four key areas--results, 
clients, people, and internal operations.[Footnote 2] These categories 
of measures are briefly described below. 

* Results. Focusing on results and the effectiveness of the processes 
needed to achieve them is fundamental to accomplishing our mission. To 
assess our results, we measure financial benefits, other (nonfinancial) 
benefits, recommendations implemented, and percentage of new products 
with recommendations. Financial benefits and nonfinancial benefits 
provide quantitative and qualitative information, respectively, on the 
outcomes or results that have been achieved from our work. They often 
represent outcomes that occurred or are expected to occur over a period 
of several years. The remaining measures are intermediate outcomes in 
that they often lead to achieving outcomes that are ultimately captured 
in our financial and nonfinancial benefits. 

For financial benefits and nonfinancial benefits, we first set targets 
for the agency as a whole and then we set targets for each of the 
external goals--that is, goals 1, 2, and 3--so that the sum of the 
targets for the goals equals the agencywide targets. For past 
recommendations implemented and percentage of products with 
recommendations, we set targets and report performance for the agency 
as a whole because we want our performance on these measures to be 
consistent across goals. We track our performance by strategic goal in 
order to understand why we meet or do not meet the agencywide target. 
We also use this information to provide feedback to our teams on the 
extent to which they are contributing to the overall target and to help 
them identify areas in which they need to improve. 

* Clients. To judge how well we are serving our clients, we measure the 
number of times we are asked to present expert testimony at 
congressional hearings as well as our timeliness in delivering products 
to the Congress. Our strategy in this area draws upon a variety of data 
sources (e.g., our client feedback survey and in-person discussions 
with congressional staff) to obtain information on the services we are 
providing to our congressional clients. 

We set a target at the agencywide level for the number of testimonies 
and then assign a portion of the testimonies as a target for each of 
the external goals--that is, goals 1, 2, and 3--based on their expected 
contribution to the agencywide total. As in measuring the results of 
our work, we track our progress on this measure at the goal level in 
order to understand why we met or did not meet the agencywide target. 
We set agencywide targets for timeliness because we want our 
performance on these measures to be consistent across goals. 

* People. As our most important asset, our people define our character 
and capacity to perform. A variety of data sources, including an 
internal survey, provide information to help us measure how well we are 
attracting and retaining high-quality staff and how well we are 
developing, supporting, using, and leading staff. We set targets for 
these measures at the agencywide level. 

* Internal operations. Our mission and people are supported by our 
internal administrative services, including information management, 
building management, knowledge services, human capital, and financial 
management services. Through an internal customer satisfaction survey, 
we gather information on how well our internal operations help 
employees get their jobs done and improve employees' quality of work 
life. Examples of surveyed services include providing secure Internet 
access and voice communication systems, performance management, and 
benefits information and assistance. Fiscal year 2007 is only the 
second year in which we reported how well we performed against the 
targets we set for our internal operations measures. We set targets for 
these measures at the agencywide level. 

Setting Performance Targets: 

To establish targets for all of our measures, we examine what we have 
been able to achieve in the past (for example, by looking at our 4-year 
rolling averages for most of our results measures (see p. 23) and the 
external factors that influence our work (see p. 60). The teams and 
offices that are directly engaged in the work discuss their views of 
what must be accomplished in the upcoming fiscal year with our top 
executives, who then establish targets for the performance measures. 

Once approved by the Comptroller General, the targets become final and 
are presented in our annual performance plan and budget.[Footnote 3] We 
may adjust these targets after they are initially published when our 
expected future work or level of funding provided warrant doing so. If 
we make changes, we include the changed targets in later documents, 
such as this performance and accountability report, and annotate that 
we have changed them. In part II, we include detailed information on 
data sources that we use to assess each of these measures, as well as 
the steps we take to verify and validate the data (see pp. 78-95). 

On the pages that follow, we assess our performance for fiscal year 
2007 against our previously established performance targets. We also 
present our financial statements, the independent auditor's report, and 
a statement from GAO's Inspector General. 

[End of About GAO] 

[End of Introduction] 

Part I: Management's Discussion and Analysis: 

Promoting a Transparent and Accountable Government by Providing Fact- 
Based, Objective Information to the Congress and the Public: 

The work we did in fiscal year 2007, as well as some of our past work, 
contributed greatly to our performance on our results and client 
measures shown in table 1. We surpassed our financial benefits target 
of $40 billion by almost $6 billion this fiscal year and exceeded our 
annual target for nonfinancial benefits by about 23 percent. Our 
financial benefits of $45.9 billion represent about a $94 return on 
every dollar invested in us. While our financial benefits for fiscal 
year 2007 were lower than what we achieved last fiscal year, due to 
various reasons such as legislation pending at the close of the fiscal 
year, our financial benefits have continued to increase on average over 
the last 4 years as shown in table 2. Also, the more than 1,300 
nonfinancial benefits resulting from our work helped to improve the 
efficiency and effectiveness of government programs that serve the 
public. In addition, we exceeded our targets for past recommendations 
implemented and new products with recommendations by 2 percentage 
points and 6 percentage points, respectively. 

We believe we served the Congress very well during fiscal year 2007. 
Our senior executives delivered testimony at 276 hearings, exceeding 
our target of 185 by 49 percent. Many of these testimonies focused on 
Iraq reconstruction and stabilization efforts, fraudulent activity and 
mismanagement associated with the Hurricane Katrina relief effort, and 
the global war on terrorism (see p. 35 for a list of other topics we 
testified on during fiscal year 2007). Though we missed our timeliness 
target of 95 percent by 1 percentage point, our performance indicates 
that 94 percent of congressional staff responding to our client 
feedback survey either strongly or generally agreed that our written 
products were delivered on time. We discuss the client feedback survey 
in detail part II of this report. 

Concerning our eight people measures, we met or exceeded our targets 
for five of them--new hire rate, acceptance rate, retention rate with 
retirements, retention rate without retirements, and staff development-
-but did not meet the remaining three measures--staff utilization, 
leadership, and organizational climate. We missed our target of 78 
percent for staff utilization by 5 percentage points. We also missed 
our leadership and organizational climate targets by very small 
margins--1 and 2 percentage points, respectively. 

Table 1: Agencywide Summary of Annual Measures and Targets: 

Performance Measure: Results: Financial benefits (dollars in billions); 
2003 Actual: $35.4 billion; 
2004 Actual: $44.0 billion; 
2005 Actual: $39.6 billion; 
2006 Actual: $51.0 billion; 
2007 Target: $40.0 billion; 
2007 Actual: $45.9 billion; 
Met/Not Met: Met; 
2008 Target: $40.0[A] billion. 

Performance Measure: Results: Nonfinancial benefits; 
2003 Actual: 1,043; 
2004 Actual: 1,197; 
2005 Actual: 1,409; 
2006 Actual: 1,342; 
2007 Target: 1,100; 
2007 Actual: 1,354; 
Met/Not Met: Met; 
2008 Target: 1,150. 

Performance Measure: Results: Past recommendations implemented; 
2003 Actual: 82%; 
2004 Actual: 83%; 
2005 Actual: 85%; 
2006 Actual: 82%; 
2007 Target: 80%; 
2007 Actual: 82%; 
Met/Not Met: Met; 
2008 Target: 80%. 

Performance Measure: Results: New products with recommendations;  
2003 Actual: 55%; 
2004 Actual: 63%; 
2005 Actual: 63%; 
2006 Actual: 65%; 
2007 Target: 60%; 
2007 Actual: 66%; 
Met/Not Met: Met; 
2008 Target: 60%. 

Performance Measure: Client: Testimonies; 
2003 Actual: 189; 
2004 Actual: 217; 
2005 Actual: 179; 
2006 Actual: 240; 
2007 Target: 185; 
2007 Actual: 276; 
Met/Not Met: Met; 
2008 Target: 220. 

Performance Measure: Client: Timeliness[B]; 
2003 Actual: N/A[C]; 
2004 Actual: 89%; 
2005 Actual: 90%; 
2006 Actual: 92%; 
2007 Target: 95%; 
2007 Actual: 94%; 
Met/Not Met: Not met; 
2008 Target: 95%[C]. 

Performance Measure: People: New hire rate; 
2003 Actual: 98%; 
2004 Actual: 98%; 
2005 Actual: 94%; 
2006 Actual: 94%; 
2007 Target: 95%; 
2007 Actual: 96%; 
Met/Not Met: Met; 
2008 Target: 95%. 

Performance Measure: People: Acceptance rate; 
2003 Actual: 72%; 
2004 Actual: 72%; 
2005 Actual: 71%; 
2006 Actual: 70%; 
2007 Target: 72%; 
2007 Actual: 72%; 
Met/Not Met: Met; 
2008 Target: 72%. 

Performance Measure: People: Retention rate: with retirements; 
2003 Actual: 92%; 
2004 Actual: 90%; 
2005 Actual: 90%; 
2006 Actual: 90%; 
2007 Target: 90%; 
2007 Actual: 90%; 
Met/Not Met: Met; 
2008 Target: 90%. 

Performance Measure: People: Retention rate: Without retirements; 
2003 Actual: 96%; 
2004 Actual: 95%; 
2005 Actual: 94%; 
2006 Actual: 94%; 
2007 Target: 94%; 
2007 Actual: 94%; 
Met/Not Met: Met; 
2008 Target: 94%. 

Performance Measure: People: Staff development; 
2003 Actual: 67%; 
2004 Actual: 70%; 
2005 Actual: 72%; 
2006 Actual: 76%; 
2007 Target: 75%; 
2007 Actual: 76%; 
Met/Not Met: Met; 
2008 Target: 76%. 

Performance Measure: People: Staff utilization[D]; 
2003 Actual: 71%; 
2004 Actual: 72%; 
2005 Actual: 75%; 
2006 Actual: 75%; 
2007 Target: 78%; 
2007 Actual: 73%; 
Met/Not Met: Not met; 
2008 Target: 75%[E]. 

Performance Measure: People: Leadership; 
2003 Actual: 78%; 
2004 Actual: 79%; 
2005 Actual: 80%; 
2006 Actual: 79%; 
2007 Target: 80%; 
2007 Actual: 79%; 
Met/Not Met: Not met; 
2008 Target: 80%. 

Performance Measure: People: Organizational climate; 
2003 Actual: 71%; 
2004 Actual: 74%; 
2005 Actual: 76%; 
2006 Actual: 73%; 
2007 Target: 76%; 
2007 Actual: 74%; 
Met/Not Met: Not met; 
2008 Target: 75%[F]. 

Performance Measure: Internal operations[G]: Help get job done; 
2003 Actual: 3.98; 
2004 Actual: 4.01; 
2005 Actual: 4.10; 
2006: Actual: 4.10; 
2007: Target: 4.00; 
2007: Actual: N/A[C]; 
Met/Not Met: N/A[C]; 
2008 Target: 4.00. 

Performance Measure: Internal operations[E]: Quality of work life; 2002 
Actual: N/A; 
2003 Actual: 3.86; 
2004 Actual: 3.96; 
2005 Actual: 3.98; 
2006 Actual: 4.00; 
2007 Target: 4.00; 
2007 Actual: N/A; 
Met/Not Met: N/A; 
2007 Target: 4.00. 

Source: GAO. 

Note: Information explaining all of the measures included in this table 
appears on pages in the Data Quality and Program Evaluations section in 
part II of this report. 

[A] Our fiscal year 2008 target for financial benefits differs from the 
target we reported for this measure in our fiscal year 2008 performance 
budget in January 2007. Specifically, we decreased our financial 
benefits target by $1._ billion based on (1) our assessment of our past 
recommendations that are likely to be implemented by federal agencies 
and the Congress in the coming fiscal year and (2) the impact that our 
constrained budget could have on the work that leads to financial 
benefits. We are currently operating under a continuing resolution 
which is only slightly higher than our fiscal year 200_ funding level. 
See pages 44 to 48 for more information about our budget. 

[B] Since fiscal year 2004 we have collected data from our client 
feedback survey on the quality and timeliness of our products, and in 
fiscal year 2006 we began to use the independent feedback from this 
survey as a basis for determining our timeliness. 

[C] N/A indicates that the data are not available yet or are not 
applicable because we did not collect the data during this period. 

[D] Our employee feedback survey asks staff how often the following 
occurred in the last 12 months (1) my job made good use of my skills, 
(2) GAO provided me with opportunities to do challenging work, and in 
general, I was utilized effectively. 

[E] Our fiscal year 2008 target for staff utilization differs from the 
target we reported for this measure in our fiscal year 2008 performance 
budget in January 2007. We lowered the staff utilization target by 3 
percentage points because we determined that, based on our past 
performance, the target was unrealistic, and we reset it at a level 
that is still challenging but more likely to be achieved. 

[F] Our fiscal year 2008 target for organizational climate differs from 
the target we reported for this measure in our fiscal year 2008 
performance budget in January 2007. We decreased the organizational 
climate target by 1 percentage point because we determined that based 
on our past performance, the target was unrealistic, and we reset it at 
a level that is still challenging but more likely to be achieved. 

[G] For our internal operations measures, we will report actual data 
for fiscal year 2007 once data from our November 2007 internal customer 
satisfaction survey have been analyzed. Information explaining all of 
the measures included in this table appears in the Data Quality and 
Program Evaluations section in part II of this report. 

[End of Table] 

Concerning our two internal operations measures, we will assess our 
performance related to how well our internal administrative services 
(e.g., computer support, mail service, and Internet service) help 
employees get their jobs done or improve employees' quality of work 
life once data from our November 2007 annual customer satisfaction 
survey have been analyzed. These measures are directly related to our 
goal 4 strategic objectives of continuously enhancing our business and 
management processes and becoming a professional services employer of 
choice. There will always be a lag in reporting on this measure because 
our customer feedback survey is distributed after we issue the 
performance and accountability report. In fiscal year 2006, we exceeded 
our target of 4.0 by a tenth of a percentage point for our help get job 
done measure and met our 4.0 target for our quality of work life 
measure. These scores indicate that our employees were generally very 
satisfied with the internal administrative services they used during 
their work day. The survey asked staff to rank the importance of each 
service to them and indicate their satisfaction with it on a scale from 
1 to 5. 

To help us examine trends over time, we also look at 4-year averages 
for our results and client measures except the percentage of past 
recommendations implemented--because it is a composite that is drawn 
from a number of years rather than an annual percentage--and 
timeliness--because we have no trend data for our current timeliness 
measure. Calculating 4-year rolling averages for the other measures 
minimizes the effect of an atypical result in any given year. We 
consider this calculation, along with other factors, when we set our 
performance targets. Table 2 shows that from fiscal year 2003 through 
fiscal year 2007 financial benefits, nonfinancial benefits, and new 
products with recommendations have increased steadily during this 
period. The average number of hearings at which we testified has 
climbed since 2004 with a significant increase from fiscal year 2006 to 
2007. 

Though we consider our 4-year rolling averages and our past performance 
when setting our target for the number of hearings at which our senior 
executives testify, we base our testimonies target largely on the 
cyclical nature of the congressional calendar. Our experience has shown 
that during the fiscal year in which an election occurs, generally the 
Congress holds fewer hearings, which provide fewer opportunities for us 
to be invited to testify, because the congressional members are 
reorganizing during the months after the election. However, in fiscal 
year 2007--the year after an election--the new Congress held many more 
hearings than we anticipated and seemed especially interested in our 
work. 

Table 2: Four-Year Rolling Averages for Selected GAO Measures: 

Performance measure: Results: Financial benefits(billions); 
2003: $30.7 billion; 
2004: $35.9 billion; 
2005: $39.2 billion; 
2006: $43.0 billion; 
2007: $45.1 billion. 

Performance measure: Results: Nonfinancial benefits; 
2003: 884; 
2004: 986; 
2005: 1,139; 
2006: 1,248; 
2007: 1,325. 

Performance measure: Results: New products with recommendations; 
2003: 48%; 
2004: 54%; 
2005: 58%; 
2006: 61%; 
2007: 64%. 

Performance measure: Client: Testimonies; 
2003: 205; 
2004: 193; 
2005: 200; 
2006: 206 
2007: 228. 

Source: GAO. 

[End of Table] 

Focusing on Results: 

Focusing on outcomes and the efficiency of the processes needed to 
achieve them is fundamental to accomplishing our mission. The following 
four annual measures--financial benefits, nonfinancial benefits, past 
recommendations implemented, and new products containing 
recommendations--indicate that we have fulfilled our mission and 
delivered results that benefit the nation. 

Financial Benefits and Nonfinancial Benefits: 

We describe many of the results produced by our work as either 
financial or nonfinancial benefits. Both types of benefits result from 
our efforts to provide information to the Congress that helped to (1) 
change laws and regulations, (2) improve services to the public, and 
(3) promote sound agency and governmentwide management. In many cases, 
the benefits we claimed in fiscal year 2007 are based on work we did in 
past years because it often takes the Congress and agencies time to 
implement our recommendations or to act on our findings. 

To claim either type of benefit, our staff must document the connection 
between the benefits reported and the work that we performed. We can 
claim benefits within 2 years of when the Congress or an agency takes 
action on our recommendations. 

Financial Benefits: 

Our findings and recommendations produce measurable financial benefits 
for the federal government after the Congress acts on or agencies 
implement them and the funds are made available to reduce government 
expenditures or are reallocated to other areas. The monetary effect 
realized can be the result of 

* changes in business operations and activities; 

* the structure of federal programs; or entitlements, taxes, or: 

* user fees. 

Financial benefits result if, for example, the Congress were to reduce 
the annual cost of operating a federal program or lessen the cost of a 
multiyear program or entitlement. Financial benefits could also result 
from increases in federal revenues--because of changes in laws, user 
fees, or asset sales--that our work helped to produce. 

In fiscal year 2007, our work generated $45.9 billion in financial 
benefits (see fig. 6), exceeding our target by about 15 percent. We 
exceeded the target primarily as a result of a few unexpected and large 
financial accomplishments. Thus, we believe our target of $40.0 billion 
for fiscal year 2008 (shown on p. 21) is reasonable and achievable. Of 
the total amount documented in fiscal year 2007, about $21.1 billion 
(or approximately 46 percent) resulted from changes in laws or 
regulations (see fig. 7). 

Figure 6: Financial Benefits GAO Recorded in Fiscal Year 2007: 

[See PDF for image] - graphic text: 

Bar graph with six items: 

2003 Actual: $35.4 billion; 
2004 Actual: $44.0 billion; 
2005 Actual: $39.6 billion; 
2006 Actual: $51.0 billion; 
2007 Target: $40.0 billion; 
2007 Actual: $45.9 billion. 

Source: GAO. 

[End of Figure] 

Figure 7: Types of Financial Benefits Recorded in Fiscal Year 2007 from 
Our Work: 

[See PDF for image] - graphic text: 

Pie chart with three slices, representing a total of $45.9 billion in 
financial benefits. 

Information GAO provided to the Congress resulted in statutory or 
regulatory changes: $21.1 billion (46%); 

Agencies acted on GAO information to improve services to the public: 
$8.5 billion (18.5%); 

Core business processes improved at agencies and governmentwide 
management reforms advanced by GAO's work: $16.3 billion (35.5%). 

Source: GAO. 

[End of Figure] 

Financial benefits included in our performance measures are net 
benefits--that is, estimates of financial benefits that have been 
reduced by the costs associated with taking the action that we 
recommended. We convert all estimates involving past and future years 
to their net present value and use actual dollars to represent 
estimates involving only the current year. Financial benefit amounts 
vary depending on the nature of the benefit, and we can claim financial 
benefits over multiple years based on a single agency or congressional 
action. To ensure conservative estimates of net financial benefits, 
reductions in operating cost are typically limited to 2 years of 
accrued reductions, but up to 5 fiscal years of financial benefits can 
be claimed if the reductions are sustained over a period longer than 2 
years. Multiyear reductions in long-term projects, changes in tax laws, 
program terminations, or sales of government assets are limited to 5 
years. Estimates come from non-GAO sources. These non-GAO sources are 
typically the agency that acted on our work, a congressional committee, 
or the Congressional Budget Office. 

To document financial benefits, our staff complete reports documenting 
accomplishments that are linked to specific products or actions. All 
accomplishment reports for financial benefits are documented and 
reviewed by (1) another GAO staff member not involved in the work and 
(2) a senior executive in charge of the work. Also, a separate unit, 
our Quality and Continuous Improvement office, reviews all financial 
benefits and approves benefits of $100 million or more, which amounted 
to about 94 percent of the total dollar value of benefits recorded in 
fiscal year 2007. The GAO Inspector General (IG) also performed an 
independent review of all accomplishment reports claiming benefits of 
$500 million or more in fiscal year 2007. 

Figure 8 lists several of our major financial benefits for fiscal year 
2007 and briefly describes some of our work contributing to financial 
benefits. 

Figure 8: GAO's Selected Major Financial Benefits Reported in Fiscal 
Year 2007: 

Description: Helped to ensure funding for United States Postal Service 
(USPS) retirement-related health care benefits. For many years we have 
reported on USPS’s significant liabilities and obligations, including 
tens of billions of dollars in post-retirement health care benefits 
that were not yet funded. In December 2006, the Postal Accountability 
and Enhancement Act (Pub. L. No. 109-435) was enacted, which created 
the Postal Service Retiree Health Benefits Fund into which USPS is to 
make a series of 10 annual payments to fund its retiree health care 
obligations. In fiscal year 2007, USPS made the first of its annual 
payments into the fund. This $5.4 billion payment, funded through 
additional January 2006 and May 2007 postal service rate increases, 
helped to avoid requiring the federal government to finance this 
substantial obligation. (Goal 3); 
Amount: $5.4. 

Description: Improved the Internal Revenue Service’s (IRS) methodology 
for pursuing delinquent taxes. Our previous financial audit work 
determined that IRS did not have systems or procedures in place to 
allow it to identify and actively pursue cases with collection 
potential. We recommended that IRS improve its capacity
to assess the collectibility of delinquent taxes as a way to better 
target debt collection resources. In 2004, IRS began implementing 
sophisticated modeling technology to differentiate between more and 
less productive cases in order to make better resource allocation 
decisions. In 2007, we reported that IRS’s actions
in response to our recommendations increased its collections of 
delinquent taxes using approximately the same level of resources by 
about $4.2 billion or almost 20 percent in fiscal year 2006 from fiscal 
year 2003 levels. (Goal 3); 
Amount: $4.2. 

Description: Encouraged the National Aeronautics and Space 
Administration’s (NASA) decision to terminate the space launch 
initiative (SLI). In a September 2002 report, we questioned NASA’s 
overall acquisition strategy to develop a new generation of space 
transportation vehicles—the SLI. We reported that NASA faced 
considerable challenges defining basic requirements for SLI. We also 
noted that most of the key technologies under consideration by SLI were 
very immature and that management controls necessary to estimate cost 
and gauge progress were not in place. We recommended that the NASA 
Administrator take several steps, including completing the reassessment 
of NASA’s Integrated Space Transportation Plan, before moving forward 
with SLI. NASA concurred and in November 2002 took action to delay 
decisions regarding future launch vehicles and refocused SLI on 
conducting basic research on advanced launch technologies
and developing a vehicle to service the International Space Station. In 
2005, NASA terminated the entire SLI program and redirected $3.7 
billion in funding originally programmed for SLI toward future 
exploration activities. (Goal 3); 
Amount: $3.7. 

Description: Helped to reduce food stamp fraud and abuse. Since 1994, 
we repeatedly reported and testified on reducing fraud and abuse in the 
Department of Agriculture’s (USDA) Food Stamp Program by reducing the 
trafficking of benefits. In our 1994 and 1995 reports, we found that 
USDA’s reliance on paper coupons to provide food stamp benefits had 
resulted in fraud and abuse through trafficking, counterfeiting, and 
mail theft. To reduce this fraud and abuse, we supported the use of 
electronic benefit transfer (EBT) systems to replace the coupon-based 
system that states were using. In response, the Congress passed 
legislation that required that each state implement EBT for the Food 
Stamp Program by October 1, 2002, unless the Secretary
of Agriculture granted a waiver. USDA reported in December 2006 that 
the Food Stamp Program’s integrity had substantially improved, 
estimating that trafficking had diverted only about $241 million per 
year between 2002 and 2005—or about 1 cent of each food stamp 
dollar—compared with an estimated $660 million per year—or about 3-1/2 
cents of each food stamp dollar—diverted between 1996 and 1998. USDA 
found that the decline in food stamp trafficking corresponded with the 
increased use of EBT. This will result in an estimated $3.4 billion in 
cumulative financial benefits between fiscal years 2005 and 2009. Also, 
in fiscal year 2007 we recommended that USDA use its electronic data to 
perform risk assessments of retailers most likely to traffic in food 
stamp benefits and develop a strategy to increase penalties for this 
offense. USDA responded by proposing new penalties and expedited 
processes. (Goal 1); 
Amount: $3.4. 

Description: Recommended that the Department of Housing and Urban 
Development (HUD) track and reallocate unspent housing funds. We 
recorded about $2.19 billion in financial benefits based on our work 
involving the HUD recaptured fiscal year 2005 unexpended balances. 
Prior to 2002 HUD did not routinely review its unexpended fund balances 
to determine whether these funds could be recaptured. In 2001, we 
expressed concerns over unexpended balances in a briefing to the 
incoming Administration and testified before the Subcommittee on 
Housing and Transportation, Senate Committee on Banking Housing and 
Urban Affairs, about long-standing problems HUD had in the management 
and oversight of its unexpended balances. Using the Public Housing 
Capital fund as an example, we stated, and HUD agreed, that it did not 
have the information it needed to routinely quantify unexpended 
balances that might be available for recapture. Given the importance of 
this information in formulating and justifying budget requests, we 
recommended that HUD (1) develop systems that routinely provide timely 
and reliable information on the status of its unexpended balances to 
quantify amounts available for recapture or rescission, (2) incorporate 
this information into the management of its programs, and (3) use this 
information in formulating budget requests. In response to our 
recommendations, HUD made many operational changes that since 2002 have 
enabled the agency to routinely incorporate information on unexpended 
balances into the management and operation of its programs and to take 
unexpended balances into account in setting forth budget needs. HUD has 
routinely recaptured unutilized funds to offset its budget requests. 
(Goal 1); 
Amount: $2.19. 

Description: Helped to increase collections of civil debt. In July 
2001, we reported that the Department of Justice’s (Justice) financial 
litigation units, which are responsible for both criminal and civil 
debt collection, did not have adequate procedures for enforcing 
collections. We made a number of recommendations to the Attorney
General to help the units improve criminal debt collections and stem 
the growth in reported uncollected criminal debt. One such 
recommendation was to reinforce policies and procedures for entering 
cases into debt-tracking systems; filing liens; issuing demand letters, 
delinquent notices, and default notices; performing asset discovery 
work; and using other enforcement techniques. These policies and 
procedures are applicable to the units’ civil as well as criminal debt 
collection efforts. In January 2002, Justice completed actions to 
address this recommendation, including providing training materials to 
unit staff involved in debt collection. These actions helped it to 
increase collections of civil debt in fiscal years 2004 and 2005—the 
third and fourth years for which we are claiming financial benefits 
over a 5-year period—by a total of about $1.70 billion on a net present 
value basis. (Goal 3); 
Amount: $1.70. 

Description: Recommended that the Congress reduce the Department of 
Defense’s (DOD) fiscal year 2007 operations and maintenance budget. The 
congressional appropriations committee conferees reduced DOD’s fiscal 
year 2007 operations and maintenance appropriations by $1.459 billion 
based in part on the analysis we provided identifying fiscal year 2004 
and 2005 underexecution of some budget subactivity groups. Staff 
members used the analysis of underexecution (designations exceeded 
obligations) for fiscal years 2004 and 2005 in part to reduce DOD’s 
fiscal year 2007 budget request by $598.8 million for subactivity 
groups that have been historically underexecuted. In addition, the 
conferees reduced DOD’s fiscal year 2007 budget request by $860.6 
million for peacetime training and flying hour offsets also based in 
part on our analysis of underexecution in multiple subactivity groups 
used to fund these activities. The combined impact—as indicated 
above—is about $1.459 billion. (Goal 2); 
Amount: $1.46. 

Description: Identified an opportunity for DOD to reallocate funds to 
cover new initiatives. In a November 2002 report, we suggested that the 
Congress consider extending the deadline for the submission of DOD’s 
Quadrennial Defense Review in order to provide additional time for DOD 
to align its upcoming budget request with its newest strategic thinking 
as reflected in the Quadrennial Defense Review. In our view, this extra 
time would allow DOD to take full advantage of the review’s results and 
shift resources where they would be needed most, that is, provide for a 
better allocation of resources, and avoid unnecessary costs of lower 
priority programs. The Congress adopted our approach and the 2006 
Quadrennial Defense Review is the first to benefit from the extended 
deadline and reallocate defense resources in accordance with DOD’s new 
strategic plan. As a result, DOD’s fiscal year 2007 budget shifts 
resources into new programs advocated by the Quadrennial Defense 
Review, including over $1 billion for a special operations initiative
to help fight the war on terror. To pay for these initiatives, DOD 
shaved billions of dollars from other programs. The 2006 Quadrennial 
Defense Review stated that by shifting the completion date of the 
review to coincide with the submission of the President’s fiscal year 
2007 budget request, DOD had included a limited number of new 
initiatives in the budget submission for fiscal year 2007, rather than 
waiting until the fiscal year 2008 budget cycle. The final 
congressional action on DOD’s proposal provided a $1.2 billion increase 
in funding for Special Operations Forces in fiscal year 2007. (OMB 
documents state that DOD made offsetting reductions before the 
President’s budget was sent to the Congress.) The financial benefit is 
the $1.2 billion made available from the reallocation of resources. 
(Goal 2); 
Amount: $1.2. 
 
Source: GAO. 

[End of Table] 

Nonfinancial Benefits: 

Many of the benefits that result from our work cannot be measured in 
dollar terms. During fiscal year 2007, we recorded a total of 1,354 
nonfinancial benefits (see fig. 9). We significantly exceeded our 
target because of actions taken by agencies governmentwide on several 
of our reports dealing with governmentwide IT and accounting issues. We 
believe that we will achieve our fiscal year 2008 target of 1,150 
nonfinancial benefits (shown on p. 21) though we do not expect there 
will be as many situations similar to fiscal year 2007 where agencies 
will take governmentwide actions on our recommendations. 

Figure 9: Nonfinancial Benefits GAO Recorded in Fiscal Year 2007: 

[See PDF for Image]- graphic text: 

Bar graph with six items. 

2003 Actual: 1,043; 
2004 Actual: 1,197; 
2005 Actual: 1,409; 
2006 Actual: 1,342. 
2007 Target: 1,100; 
2007 Actual: 1,354. 

Source: GAO. 

[End of Figure] 

In fiscal year 2007 we documented 646 instances where federal agencies 
used our information to improve services to the public, 74 instances 
where the information we provided to the Congress resulted in statutory 
or regulatory changes, and 634 instances where agencies improved core 
business processes or governmentwide reforms as a result of our work. 
(See fig. 10.) These actions covered a variety of issues such as 
improving the Department of Veteran's Affairs' (VA) ability to process 
veteran's claims for disability benefits, identifying weaknesses in 
telecommunications data, providing information on the rising cost of 
military pay and compensation, and improving the strategic planning of 
U.S. diplomacy efforts. In figure 11, we provide examples of some of 
the nonfinancial benefits we claimed as accomplishments in fiscal year 
2007. The laws that we cite in the first section of this figure were 
enacted in fiscal year 2007. 

Figure 10: Types of Nonfinancial Benefits Documented in Fiscal Year 
2007 from Our Work: 

[See PDF for Image]- graphic text: 

Pie chart with three slices, representing a total of 1,354 nonfinancial 
benefits. 

Core business processes improved at agencies and governmentwide 
management reforms advances by GAO's work: 634 (46.8%); 

Agencies acted on GAO information to improve services to the public: 
646 (47.7%); 

Information GAO provided to the Congress resulted in statutory or 
regulatory changes: 74 (5.5%). 

Source: GAO. 

[End of Figure] 

Figure 11: GAO's Selected Nonfinancial Benefits Reported in Fiscal Year 
2007: 

Nonfinancial benefits that helped to change laws: 

Department of Homeland Security Appropriations Act of 2007, Pub. L. No. 
109-295: 

Our work is reflected in this law in different ways: 

Developing a center to locate children after disasters. After 
hurricanes Katrina and Rita, GAO found that the National Center for 
Missing and Exploited Children (NCMEC) faced problems getting access to 
American Red Cross and Federal Emergency Management Agency (FEMA) data 
because of these organizations' concerns about privacy. GAO found that 
a lesson learned from these disasters is that agreements for data 
sharing between NCMEC and the American Red Cross and FEMA can help 
locate missing persons more quickly. We spoke about these concerns 
several times with congressional staff. Subsequently, Pub. L. No. 109- 
295 provided for a National Emergency Child Locator Center to be 
established within NCMEC and requires the FEMA Administrator to 
establish procedures to make all relevant information available to the 
center in a timely manner to facilitate the expeditious identification 
and reunification of children with their families. The law also 
requires the center to enter into a cooperative agreement with federal 
and state agencies and with other organizations, such as the American 
Red Cross, as necessary to implement their missions. 

Improving FEMA information on the status of hurricane relief and 
recovery funds. In September 2006, we recommended four actions to 
improve reporting by FEMA to the appropriations committees on the 
status of governmentwide hurricane relief and recovery. These actions 
included (1) explicitly recognizing that FEMA's weekly reporting on 
mission assignment obligations and expenditures does not reflect the 
status from a governmentwide perspective, (2) requesting and including 
actual obligation and expenditure data from agencies performing mission 
assignments in FEMA reporting at specified intervals, (3) including in 
the weekly report amounts reimbursed to other agencies that are in 
suspense because FEMA has not yet reviewed and approved the 
documentation supporting the expenditures, and (4) reiterating to 
agencies performing mission assignments FEMA's policies on (a) the 
detailed information required in supporting documentation for 
reimbursements and (b) the timeliness of agency billings. As requested, 
we provided language that was included in Pub. L. No. 109-295 which 
implemented these recommendations. 

The John Warner National Defense Authorization Act for Fiscal Year 
2007, Pub. L. No. 109-364: 

U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq 
Accountability Appropriations Act, 2007, Pub. L. No. 110-28: 

In December 2005 and January 2007, we reported that DOD and NASA 
structured monetary incentives in ways that led to significant 
disconnects between the fees paid to contractors and program outcomes. 
We made recommendations aimed at strengthening the link between 
incentives and outcomes. The Comptroller General testified on this 
issue in April 2006 and we briefed multiple congressional committees. 
The result has been changes to award and incentive fee policies across 
several agencies including DOD, NASA, and the Department of Homeland 
Security (DHS). Pub. L. No. 109-364 incorporated our recommendations by 
requiring DOD to issue guidance to ensure that award fees are linked to 
acquisition outcomes. In addition, Pub. L. No. 110-28 required all DHS 
award fees to be linked to successful acquisition outcomes. 

Postal Accountability and Enhancement Act, Pub. L. No. 109-435: 

In April 2001, we designated USPS's transformation and long-term 
outlook as a high-risk area because its financial outlook had 
deteriorated significantly and it had no comprehensive plan to address 
its financial, operational, or human capital challenges. We concluded 
that the need for a comprehensive transformation of USPS was more 
urgent than ever and called for the Congress to act on comprehensive 
postal reform legislation. Since then, USPS developed a transformation 
plan to guide its ongoing efforts related to implementing initiatives 
included in its plan and improved its financial outlook. Further, in 
December 2006, the Congress enacted comprehensive postal reform 
legislation to provide a framework for modernizing USPS's rate-setting 
processes and strengthening regulatory oversight and financial 
transparency. Thus, in January 2007, we removed USPS transformation and 
long-term outlook from our high-risk list. 

Foreign Investment and National Security Act of 2007, Pub. L. No. 110- 
49: 

The Exon-Florio amendment to the Defense Production Act authorizes the 
President to conduct investigations and to suspend or prohibit foreign 
acquisitions, mergers, or takeovers of U.S. companies that threaten to 
impair national security. The President delegated the authority to 
investigate transactions to an interagency committee, the Committee on 
Foreign Investment in the United States. In our September 2005 report, 
we found that some members of the committee have narrowly defined what 
constitutes a threat to national security, despite the broad coverage 
of the factors listed in Exon-Florio that may be considered in 
determining a threat to national security. In one case, this narrow 
view resulted in the weakening of enforcement provisions in an 
agreement to mitigate national security concerns. In our report, we 
suggested that the Congress consider amending Exon-Florio to more 
clearly emphasize factors that should be considered in determining the 
potential harm to national security. In response to our report and 
subsequent events, in 2007 the Congress amended Exon-Florio adding 
additional factors to be considered in determining the effect of a 
transaction on national security. 

Implementing Recommendations of the 9/11 Commission Act of 2007, Pub. 
L. No. 110-53: 

Our work is reflected in this law in different ways: 

Reexamining inspection exemptions for inbound cargo. During our review 
of the Transportation Security Administration's (TSA) inbound air cargo 
(i.e., cargo bound for the United States from a foreign country) 
security procedures, we briefed congressional staff on several 
occasions regarding the status of inbound air cargo security and the 
challenges that TSA faces to reducing the vulnerability of the air 
cargo system to terrorist attack. Based on a subsequent report, we 
recommended that TSA establish a time frame for completing an 
assessment of whether existing random inspection exemptions for inbound 
air cargo pose an unacceptable vulnerability to the security of air 
cargo, and take steps, if necessary, to address identified 
vulnerabilities. The Congress included a provision in the 9/11 
Commission Act consistent with our recommendation which requires DHS to 
conduct an assessment of inspection exemptions for cargo transported on 
passenger aircraft and an analysis to assess the risk of maintaining 
such exemptions no later than 120 days from the enactment of the act. 

Reexamining inspection exemptions for domestic air cargo. During our 
review of TSA's domestic air cargo (i.e., cargo that is transported 
within the United States) security procedures, we briefed congressional 
staff regarding the status of domestic air cargo security and the 
challenges that TSA faces to reduce the vulnerability of the air cargo 
system to terrorist attack. Based on a subsequent report, we 
recommended that TSA reexamine the rationale for existing air cargo 
inspection exemptions, determine whether such exemptions leave the air 
cargo system unacceptably vulnerable to terrorist attack, and make any 
needed adjustments to the exemptions. The Congress included a provision 
in the 9/11 Commission Act consistent with this recommendation, by 
requiring DHS to conduct an assessment of inspection exemptions for 
cargo transported on passenger aircraft and an analysis to assess the 
risk of maintaining such exemptions no later than 120 days from the 
enactment of the act. 

Nonfinancial benefits that helped to improve services to the public: 

Strengthened screening procedures for all VA health care practitioners: 

We identified key screening requirements that VA uses to verify the 
professional credentials and personal backgrounds of its health care 
practitioners. We found adequate screening requirements for certain 
practitioners, such as physicians, for whom all licenses are verified 
by contacting state licensing boards. However, screening requirements 
for others, such as currently employed nurses and respiratory 
therapists, are less stringent because they do not require verification 
of all licenses and national certificates. Moreover, they require only 
physical inspection of the credential rather than contacting state 
licensing boards and national certifying organizations. Physical 
inspection alone can be misleading; not all credentials indicate 
whether they are restricted, and credentials can be forged. We 
recommended that VA expand the verification requirement that facility 
officials contact state licensing boards and national certifying 
organizations to include all state licenses and national certificates 
held by applicants and employed practitioners. In response to our 
recommendation, VA directed its medical facilities to document the 
verification of all state licenses and national certificates (held by 
all practitioners applying for VA positions) with the issuing state 
licensing board or national certifying organization. In December 2006, 
VA required facility officials to credential all health care 
practitioners who claim licensure, registration, or certification 
through its electronic credentialing system. In addition, VA required 
its facility officials to establish a mechanism to ensure that multiple 
licenses, registrations, and/or certifications were held in good 
standing by contacting the state boards or issuing organization. VA's 
actions will better ensure the safety of veterans receiving health care 
at VA medical facilities. 

Tightened monitoring criteria in the Environmental Protection Agency's 
(EPA) rule on lead in drinking water: 

In a January 2006 report, we recommended that EPA should reassess 
existing regulations and guidance to ensure the circumstances in which 
states approve water systems for reduced monitoring are appropriate and 
that systems resume standard monitoring following a major treatment 
change. We reported that lead rule implementation experiences to date 
have revealed weaknesses in the regulatory framework. In some cases, 
corrosion control can be impaired by changes to other water treatment 
processes, and controls that would help avoid such impacts may not be 
adequate. In July 2006, EPA proposed to change the federal regulations 
and disallow water systems that exceed the lead action level from 
initiating or remaining on a reduced lead and copper monitoring 
schedule based solely on the results of their water quality parameter 
monitoring (see Federal Register, 71, FR 40828 (July 18, 2006)). EPA 
noted that this change would ensure that reduced monitoring would only 
be permitted in instances in which it has been demonstrated that 
corrosion control treatment is both effective and reliable. Compliance 
with water quality parameters alone may not always indicate that 
corrosion control is effective. 

Encouraged reporting of nursing home fire safety deficiencies: 

As part of our review of nursing home fire safety, we found that 
federal oversight of state fire safety activities is inadequate to 
ensure that existing standards are being enforced. Specifically, we 
found that despite the availability of information on oversight of 
nursing home quality through the Center for Medicare and Medicaid 
Services' (CMS) Nursing Home Compare Web site, no comparable 
information on fire safety was available. Therefore, consumers lack a 
complete picture of a nursing home's compliance with federal health and 
safety requirements when selecting a facility. To provide the public 
with important information about the fire safety status of nursing 
homes, we recommended that the Administrator of CMS make fire safety 
deficiency data available via the Nursing Home Compare Web site, 
including information on whether the facility has automatic sprinklers. 
CMS concurred with our recommendation and began posting this 
information on the Web site in October 2006. 

Improved information security at the Securities and Exchange Commission 
(SEC): 

In our past work we reported that a publicly accessible workstation 
connected to the internal SEC network was not securely configured. We 
recommended that SEC develop and implement procedures to ensure that 
all publicly-accessible workstations were adequately secured and 
configured with the minimum amount of services necessary to accomplish 
their purpose. In response to our recommendation, SEC removed the 
unsecured workstation and developed procedures to ensure that publicly 
located workstations are secure. As a result, SEC has reduced the risk 
that network services can be compromised, disrupted, or disabled via 
publicly accessible workstations. 

Improved coordination to enhance security of nuclear warhead sites in 
Russia: 

We reported in past work that DOD and the Department of Energy (DOE) 
pursued different approaches to securing nuclear warhead sites in 
Russia. We found that DOD and DOE did not know how many additional 
sites they planned to help secure, had not determined which department 
would improve security at sites they both had in their plans, and had 
not worked together to standardize the types of security equipment 
provided to Russia. As a result, we recommended that DOD and DOE work 
more closely together and develop an integrated plan to help secure 
Russia's warhead sites. In response, DOD and DOE improved their 
coordination mechanisms for sharing information and avoiding 
duplication of effort. Under the aegis of National Security Council 
(NSC) guidance, the departments agreed on what sites to upgrade and 
which department would install the upgrade. They have also developed 
common design standards to ensure consistency in the assistance 
provided to Russia warhead storage sites. DOD and DOE have also adopted 
similar approaches in how they manage the contracts for installing the 
security upgrades. 

Nonfinancial benefits that helped to promote sound agency and 
governmentwide management: 

FEMA establishes control to help limit disaster assistance payments to 
individuals with invalid Social Security numbers: 

As part of our audit of FEMA's Individuals and Households Program (IHP) 
to assist the victims of hurricanes Katrina and Rita, we found that 
FEMA did not adequately validate the identity of registrants applying 
for disaster assistance. We identified payments to thousands of IHP 
registrants who provided Social Security numbers that were never issued 
or which belonged to deceased individuals. We recommended that FEMA 
improve internal controls over identity confirmation to provide 
reasonable assurance that disaster assistance payments are made only to 
qualified IHP applicants. FEMA subsequently implemented new edit 
controls intended to ensure that Social Security numbers and names 
submitted by IHP disaster assistance registrants are both appropriately 
matched and valid. FEMA's improved control procedures in this area 
should improve up-front controls over the registration process to 
better ensure that only valid applicants receive IHP payments, thereby 
helping to reduce fraudulent IHP payments based on invalid registration 
data. 

NASA establishes policies for reimbursement by nonofficial travelers on 
passenger aircraft: 

In previous work we found that while NASA used its passenger aircraft 
to transport numerous nonofficial travelers to various events, it did 
not have effective procedures in place for collecting reimbursements 
from these travelers as required by OMB Circular No. A-126. We 
recommended that NASA establish procedures for identifying and 
recovering applicable costs associated with transporting these 
nonofficial travelers. In response to our recommendations, in fiscal 
year 2006, NASA revised its aircraft use policy to include specific 
instructions for identifying and obtaining reimbursements from 
nonofficial travelers. This policy change establishes necessary 
procedures for recovering the applicable costs of providing air 
transportation services to nonofficial travelers, and may result in 
savings to NASA and the federal government for the cost of transporting 
these passengers. 

Army requires credit card vendors to conduct credit checks before 
issuing individually billed travel cards: 

During our audits of the Army's controls over individually billed 
travel cards, we found substantial problems with controls over travel 
card accounts, including issuing cards to individuals without 
conducting credit checks. Credit checks could have revealed travel card 
applicants with poor prior credit histories and helped prevent the 
substantial delinquencies and amounts charged-off identified in our 
audits. GAO recommended that the Army establish policies and procedures 
governing the issuance of individual travel cards to military and 
civilian employees, including evaluating the feasibility of extended 
use of credit checks for all travel card applicants. In response to our 
recommendation, pursuant to a revision to DOD's Financial Management 
Regulation, the Army now requires its travel card contractor to perform 
a credit check on each new card applicant. Under this policy, (1) 
applicants who refuse to permit a credit checks may be asked to self-
certify to their creditworthiness in order to obtain restricted travel 
cards, and (2) applicants who are denied government travel cards due to 
poor credit scores, or inability to meet self-certification 
requirements, will be exempt from mandatory use of the individually 
billed account travel cards. By implementing these requirements, Army 
strengthened management oversight and internal controls over the 
individually billed travel card program and reduced the chance that 
travel cards will be issued to individuals at high risk of not making 
payments or not making payments timely, thus reducing fees and 
eliminating substantial resources spent pursuing and collecting past 
due accounts. 

Source: GAO. 

[End of Table] 

Past Recommendations Implemented: 

One way we measure our effect on improving the government's 
accountability, operations, and services is by tracking the percentage 
of recommendations that we made 4 years ago that have since been 
implemented. At the end of fiscal year 2007, 82 percent of the 
recommendations we made in fiscal year 2003 had been implemented (see 
fig. 12), primarily by executive branch agencies. Putting these 
recommendations into practice generates tangible benefits for the 
nation. 

Figure 12: Percentage of Past Recommendations Implemented in Fiscal 
Year 2007: 

[See PDF for Image]- graphic text: 

Bar graph with six items. 

Four-year implementation rate: 

2003 Actual: 82%; 
2004 Actual: 83%; 
2005 Actual: 85%; 
2006 Actual: 82%; 
2007: Target: 80%; 
2007: Actual: 82%. 

Source: GAO. 

[End of Figure] 

The 82 percent implementation rate for fiscal year 2007 exceeded our 
target for the year by 2 percentage points, matching our performance in 
fiscal years 2003 and 2006, respectively. Our performance on this 
measure declined from 85 percent in fiscal year 2005 to 82 percent in 
fiscal years 2006 and 2007 because, in some cases, we were unable to 
obtain the agency data that would allow us to fully document that our 
recommendations had been implemented. As figure 13 indicates, agencies 
need time to act on recommendations. Therefore, we assess 
recommendations implemented after 4 years, the point at which 
experience has shown that if a recommendation has not been implemented, 
it is not likely to be. 

Figure 13: Cumulative Implementation Rate for Recommendations Made in 
Fiscal Year 2003: 

[See PDF for Image]- graphic text: 

Bar graph with four items. 

After 1 year: 18%; 
After 2 years: 32%; 
After 3 years: 43%; 
After 4 years: 82%. 

Source: GAO. 

[End of Figure] 

New Products Containing Recommendations: 

In fiscal year 2007, about 66 percent of the 647 written products we 
issued (excluding testimonies) contained recommendations. (See fig. 
14.) We track the percentage of new products with recommendations 
because we want to encourage staff to develop recommendations that when 
implemented by the Congress and agencies, produce financial and 
nonfinancial benefits for the nation. We exceeded our target of 60 
percent by 6 percentage points because our audit teams are emphasizing 
the need to identify possible recommendations as they plan and carry 
out their work. However, we set our target again in fiscal year 2008 at 
60 percent because we recognize that our products do not always include 
recommendations and that the Congress and agencies often find such 
informational reports just as useful as those that contain 
recommendations. Our informational reports have the same analytical 
rigor and meet the same quality standards as those with recommendations 
and, similarly, can help to bring about significant financial and 
nonfinancial benefits. Hence, this measure allows us ample leeway to 
respond to requests that result in reports without recommendations. 

Figure 14: Percentage of New Products with Recommendations in Fiscal 
Year 2007: 

[See PDF for Image]- graphic text: 

Bar graph with six items. 

2003 Actual: 55%; 
2004 Actual: 63%; 
2005 Actual: 63%; 
2006 Actual: 65%; 
2007 Target: 60%; 
2007 Actual: 66%. 

Source: GAO. 

[End of Figure] 

Focusing on Our Client: 

To fulfill the Congress's information needs, we strive to deliver the 
results of our work orally as well as in writing at a time agreed upon 
with our client. Our performance this year indicates that we assisted 
our client--the Congress--well, by significantly exceeding our target 
on the number of hearings we participated in and delivering many of our 
products on time based on the feedback from our client. 

Testimonies: 

Our clients often invite us to testify on our current and past work 
when it addresses issues that congressional committees are examining 
through the hearing process. During fiscal year 2007, experts from our 
staff testified at 276 congressional hearings covering a wide range of 
complex issues (see fig. 15). (See fig. 16 for a summary of issues we 
testified on by strategic goal in fiscal year 2007.) Over 90 of our 
testimonies were related to high-risk areas and programs, which are 
discussed on page 40. 

In fiscal year 2007, we significantly exceeded our target for 
testimonies at 185 hearings and surpassed our performance on this 
measure over the last 4 years. In fact, only three times in the last 25 
fiscal years have we delivered testimonies at more hearings. The new 
Congress that took office in January 2007 was extremely interested in 
our past and current work on a variety of issues and asked us to 
testify at 91 more hearings than we anticipated even though this was 
during a year following an election when historically our testimonies 
are lower. The Congress asked our executives to testify more than 10 
times this fiscal year on Hurricane Katrina issues and about 20 times 
on issues related to both terrorism and the Iraq conflict. Though lower 
than our actual performance on this measure in 2007, we believe that 
our fiscal year 2008 target of testimonies at 220 hearings is 
challenging and reflects a more typical estimate of the number of 
hearings we are likely to attend after a very busy first year for this 
Congress. 

Figure 15: Testimonies: 

[See PDF for Image]- graphic text: 

Bar graph with six items. 

Hearings at which GAO testified: 

2003 Actual: 189; 
2004 Actual: 217; 
2005 Actual: 179; 
2006 Actual: 240; 
2007 Target: 185; 
2007 Actual: 276. 

Source: GAO. 

[End of Figure] 

Figure 16: GAO's Selected Testimony Issues in Fiscal Year 2007: 

Selected Testimony Issues: 

Fiscal Year 2007: 

Goal 1: 

Address Challenges to the Well-Being and Financial Security of the 
American People: 

* Federal oversight of food safety; 

* Capacity and service gaps among homeless veterans programs; 

* Reauthorizing the State Children's Health Insurance Program; 

* Claims processing challenges for veterans' disability benefits; 

* FEMA payments on hurricane-damaged properties; 

* Nursing home oversight; 

* Private pension fees; 

* Small Business Administration's disaster preparedness efforts; 

* Improved safety for coal miners; 

* Federal actions to improve child welfare services; 

* Oil and gas royalties; 

* Medicare physician payments; 

* Effects of seller-funded down payments on home loans; 

* Status of the future air traffic control system; 

* USPS reform efforts; 

* Federal real property issues; 

* Emergency management plans for schools. 

Goal 2: 

Respond to Changing Security Threats and the Challenges of 
Globalization: 

* Status of benchmarks for Iraqi government; 

* DOD's management of systems and assets; 

* Improving the military's supply chain; 

* Linking defense strategy with military personnel requirements; 

* Navy shipbuilding; 

* Using best practices for space acquisitions; 

* Vulnerabilities in U.S. export control systems; 

* Combating nuclear smuggling; 

* Securing radiological sources in foreign countries; 

* Improving the efficiency of U.S. food aid procedures; 

* National strategy to enforce intellectual property rights; 

* DHS's major mission and management functions; 

* Risk- management principles and homeland security; 

* Secure border initiative; 

* Bankruptcy reform and credit counseling; 

* National strategy to improve financial literacy; 

* VA's information security management. 

Goal 3: 

Help Transform the Federal Government's Role and How It Does Business: 

* Contracting and security challenges in Iraq; 

* Federal acquisitions and contracting challenges; 

* Acquisition challenges at DHS; 

* Security vulnerabilities at unmonitored border locations; 

* Incomplete reporting of federal improper payments; 

* Fiscal stewardship challenges facing the United States; 

* Tax abuses by Medicare Part B providers; 

* Transforming DHS's financial management systems; 

* Challenges facing the polar satellite program; 

* Electronic voting; 

* Balancing individual privacy with homeland security needs; 

* Health information technology and privacy; 

* Long-term fiscal challenges; 

* Tax compliance; 

* Human capital challenges facing the federal government; 

* Rebuilding the Gulf Coast; 

* Preparations for the 2010 Census. 

Source: See Image Sources. 

[End of Table] 

Timeliness: 

To be useful to the Congress, our products must be available when our 
client needs them. We used the results of our client feedback survey as 
a barometer for how well we are getting our products to our 
congressional clients when they need the information. We used this 
survey as the primary data source for our external timeliness measure 
because the responses come directly from our clients. We tally 
responses from the surveys we send to key congressional staff working 
for the requesters of our testimony statements and more significant 
written products (e.g., engagements assigned an interest level of 
"high" by our senior management[Footnote 4] and those requiring an 
investment of 500 staff days or more), which represented 95 percent of 
the written products we issued in fiscal year 2007. Because our 
products usually have multiple requesters, we often survey more than 
one congressional staff person per testimony or product. Each survey 
asks the client whether the product was provided or delivered on time. 
In fiscal year 2007, we had a 28 percent response rate from the 
congressional staff surveyed, which provided us with feedback on 54 
percent of the products for which we sent surveys. 

As shown in figure 17, in fiscal year 2007 we missed our timeliness 
target by 1 percentage point. We have always set our target for 
timeliness high because it is important for us to meet congressional 
needs when they occur, but we have yet to achieve this target. We will 
continue to emphasize to our audit teams the importance of 
communicating with our clients about when they will need testimony 
statements and products and delivering these statements and products 
when agreed to allow them enough time to prepare for hearings and other 
congressional activities. We anticipate these actions will enable us to 
meet our fiscal year 2008 target of 95 percent. 

Figure 17: Timeliness: 

[See PDF for Image]- graphic text: 

Bar graph with six items. 

Percentage of products on time. 

2003 Actual: N/A; 
2004 Actual: 89%; 
2005 Actual: 90%; 
2006 Actual: 92%; 
2007 Target: 95%; 
2007 Actual: 94. 

Source: GAO. 

Note: We pilot tested our client feedback survey beginning in March 
2002 and collected actual data on our client's satisfaction with the 
timeliness of our products in fiscal year 2004. 

[End of Figure] 

Focusing on Our People: 

Our highly professional, multidisciplinary staff were critical to the 
level of performance we demonstrated in fiscal year 2007. Our ability 
to hire, develop, retain, and lead staff is a key factor to fulfilling 
our mission of serving the Congress and the American people. 

Over the last 5 fiscal years, we have refined our processes for 
measuring how well we manage our human capital. In fiscal year 2007, we 
met or exceeded our targets for five of our eight people measure. All 
eight measures are directly linked to our goal 4 strategic objective of 
becoming a professional services employer of choice. For more 
information about our people measures, see Verifying and Validating 
Performance Data on page 78 of this report. 

New Hire Rate and Acceptance Rate: 

Our new hire rate is the ratio of the number of people hired to the 
number we planned to hire. Annually, we develop a workforce plan that 
takes into account strategic goals, projected workload changes, and 
other changes such as retirements, attrition, promotions, and skill 
gaps. The workforce plan for the upcoming year specifies the number of 
planned hires and, for each new hire, specifies the pay plan, skill 
type, and level. The plan is conveyed to each of our units to guide 
hiring throughout the year. Progress toward achieving the workforce 
plan is monitored monthly by the Chief Operating Officer and the Chief 
Administrative Officer. Adjustments to the workforce plan are made 
throughout the year, if necessary, to reflect changing needs and 
conditions. In fiscal year 2007, our adjusted plan was to hire 198 
staff. However, we were only able to bring on board 187 staff by year- 
end. Of the 198 staff positions, 3 positions were carried over to 
fiscal year 2008 because the applicants could not start until the new 
fiscal year. Our acceptance rate measure is a proxy for our 
attractiveness as an employer and an indicator of our competitiveness 
in bringing in new talent. It is the ratio of the number of applicants 
accepting offers to the number of offers made. Table 3 shows that we 
exceeded by 1 percentage point the targets we set for our new hire rate 
and met our acceptance rate target of 72 percent. Our calculations for 
each of these measures do not include offers extended to applicants for 
fiscal year 2007 vacancies who accepted but will not report on duty 
until the first quarter of fiscal year 2008. (For more about our 
recruitment strategy and performance in fiscal year 2007, see app. 1, 
p. 182.): 

Table 3: Actual Performance and Targets Related to Our New Hire Rate 
and Acceptance Rate Measures: 

Performance measures: People: New hire rate; 

2003 Actual: 98%; 
2004 Actual: 98%; 
2005 Actual: 94%; 
2006 Actual: 94%; 
2007 Target: 95%; 
2007 Actual: 96%. 

Performance measures: People: Acceptance rate; 

2003 Actual: 72%; 
2004 Actual: 72%; 
2005 Actual: 71%; 
2006 Actual: 70%; 
2007 Target: 72%; 
2007 Actual: 72%. 

Source: GAO. 

[End of Table] 

Retention Rate: 

We continuously strive to make GAO a place where people want to work. 
Once we have made an investment in hiring and training people, we would 
like them to stay with us. This measure is one indicator of whether we 
are attaining this objective. We calculate this measure by taking 100 
percent minus the attrition rate, where attrition rate is defined as 
the number of separations divided by the average on-board strength. We 
calculate this measure with and without retirements. Table 4 shows that 
both of our retention rate targets have declined 2 percentage points 
since fiscal year 2003, but have remained relatively flat during the 
intervening years. 

Table 4: Actual Performance and Targets Related to Our Retention Rate 
Including and Excluding Retirements: 

Performance measures: People: Retention rate: With retirements; 
2003 Actual: 92%; 
2004 Actual: 90%; 
2005 Actual: 90%; 
2006 Actual: 90%; 
2007 Target: 90%; 
2007 Actual: 90%. 

Performance measures: People: Retention rate: Without retirements; 
2003 Actual: 96%; 
2004 Actual: 95%; 
2005 Actual: 94%; 
2006 Actual: 94%; 
2007 Target: 94%; 
2007 Actual: 94%. 

Source: GAO. 

[End of Table] 

Source: GAO. 

Staff Development and Utilization, Leadership, and Organizational 
Climate: 

One way that we measure how well we are supporting our staff and 
providing an environment for professional growth and improvement is 
through our annual employee feedback survey. This Web-based survey, 
which is conducted by an outside contractor to ensure the 
confidentiality of every respondent, is administered to all of our 
employees once a year. Through the survey, we encourage our staff to 
indicate what they think about our overall operations, work 
environment, and organizational culture and how they rate our managers-
-from their immediate supervisors to the Executive Committee--on key 
aspects of their leadership styles. The survey consists of over 100 
questions. 

In fiscal year 2007, about 72 percent of our employees completed the 
survey, and we met our target for staff development but missed the 
remaining three targets (see table 5). Though we did not meet our 
targets for leadership or organizational climate in fiscal year 2007, 
the favorable responses were equal to or slightly better than those in 
fiscal year 2006. We revised our fiscal year 2008 targets slightly for 
leadership and organizational climate and set them at 80 percent and 75 
percent, respectively, to be more realistic, but still challenging. We 
anticipate continued improvement on these measures. Since fiscal year 
2003, favorable responses to our staff utilization measure (see p. 90 
for more information on this measure) have generally increased, but 
declined in fiscal year 2007. We also adjusted this target slightly and 
set it at 75 percent for fiscal year 2008 to ensure that it is 
realistic and challenging, and we plan to perform a comprehensive 
analysis of the factors associated with staff utilization during the 
fiscal year. 

Data from our employee feedback survey are also used by by the 
Partnership for Public Service to determine our standing in the annual 
Best Places to Work in the Federal Government rankings. We were cited 
as second on the list of large federal agencies according to rankings 
released in April 2007 by this organization. We were also selected by 
Washingtonian magazine in September 2007 as a "Great Place to Work" 
from more than 225 candidates because of our interesting work, good pay 
and benefits, collegial staff, employee development, and flexibility. 

Table 5: Actual Performance and Targets Related to Our Measures of 
Employee Satisfaction with Staff Development, Staff Utilization, 
Leadership, and Organizational Climate: 

Performance Measures: People: Staff development; 
2003 Actual: 67%; 
2004 Actual: 70%; 
2005 Actual: 72%; 
2006 Actual: 76%; 
2007 Target: 75%; 
2007 Actual: 76%. 

Performance Measures: People: Staff utilization;  
2003 Actual: 71%; 
2004 Actual: 72%; 
2005 Actual: 75%; 
2006 Actual: 75%; 
2007 Target: 78%; 
2007 Actual: 73%. 

Performance Measures: People: Leadership; 
2003 Actual: 78%; 
2004 Actual: 79%; 
2005 Actual: 80%; 
2006 Actual: 79%; 
2007 Target: 80%; 
2007 Actual: 79%. 

Performance Measures: People: Organizational Climate; 
2003 Actual: 71%; 
2004 Actual: 74%; 
2005 Actual: 76%; 
2006 Actual: 73%; 
2007 Target: 76%; 
2007 Actual: 74%. 

Source: GAO. 

[End of table] 

Focusing on Our Internal Operations: 

Our mission and people are supported by our internal administrative 
services, including information management, facility management, 
knowledge services, human capital, financial management, and other 
services. To assess our performance related to how well our internal 
administrative services help employees get their jobs done or improve 
employees' quality of work life, we use information from our annual 
customer satisfaction survey to set targets and assess our performance 
for both of these measures, which are shown in table 6 along with 
baseline data that we recorded for them in fiscal year 2003 and fiscal 
year 2004. We asked staff to rank 31 internal services available to 
them and to indicate on a scale from 1 to 5 their satisfaction with 
each service. Our internal operations measures are directly related to 
our goal 4 strategic objectives of continuously enhancing our business 
and management processes and becoming a professional services employer 
of choice. The first measure encompasses 21 services that help 
employees get their jobs done, such as Internet access, desktop 
computer equipment, voice and video communication systems, shared 
service centers for copying and courier assistance, travel services, 
and report production. The second measure encompasses another 10 
services that affect quality of work life, such as assistance related 
to pay and benefits, building security and maintenance, and workplace 
safety and health. Using survey responses, we calculate a composite 
score for each service category that reflects employee ratings for (1) 
satisfaction with the service and (2) importance of the service. 

Table 6: Actual Performance and Targets Related to Our Internal 
Operations Measures: 

Performance measures: Internal operations: Help get job done; 
2003 Actual: 3.98; 
2004 Actual: 4.01; 
2005 Actual: 4.1; 
2006 Actual: 4.1; 
2007 Target: 4.0; 
2007 Actual: N/A. 

Performance measures: Internal operations: Quality of work life; 
2003 Actual: 3.86; 
2004 Actual: 3.96; 
2005 Actual: 3.98; 
2006 Actual: 4.0; 
2007 Target: 4.0; 
2007 Actual: N/A. 

Source: GAO. 

Note: We will report actual data for fiscal year 2007 once the data 
from our November 2007 internal operations survey have been analyzed. 
N/A indicates that the data are not available yet. 

[End of Table] 

Building and Sustaining Partnerships: 

The various societal, economic, and other challenges facing our nation 
are becoming increasingly difficult for public agencies to address, in 
part because these issues tend to cut across different organizations 
and sectors. At the same time, public agencies are being called upon to 
address these complex problems in an era of tighter resources, smaller 
workforce levels, and other constraints. As a result of these trends, 
it will be difficult, if not impossible, for any one agency to address 
these challenges on its own. Moreover, evidence suggests that the most 
effective solutions arise when organizations join forces to apply their 
experience, knowledge, and resources to address common challenges. 

We have long recognized the importance of working collaboratively, and 
teams and units supporting all four of our strategic goals have 
continued their partnerships with a number of organizations, such as 
the National Academies of Sciences, the Council for Excellence in 
Government, and the International Organization of Supreme Audit 
Institutions (INTOSAI). Indeed, our collaborative relationship