GAO discussed the U.S. agricultural research system, focusing on what could be done to help the system respond to the challenges faced by the agricultural sector.

GAO noted that: (1) while many agricultural research needs have changed, the structure created to meet these needs has remained essentially intact; (2) in fiscal year (FY) 1996, the Agricultural Research Service (ARS) allocated over $67 million (or 9.5 percent of its appropriated research funds) to overhead costs, and the Cooperative State Research, Education, and Extension Service allocated $14.7 million (or 3.6 percent of its total research budget) to overhead; (3) in addition to the associated overhead costs, the Department of Agriculture's (USDA) existing infrastructure has hindered its ability to move into new research areas that require different equipment and scientific expertise; (4) USDA recognizes the need to consolidate ARS laboratories; (5) in its FY 1996 budget request, it proposed closing 12 laboratories, however, directives from congressional committees have limited USDA's ability to act; (6) USDA's Strategic Planning Task Force, established by the 1996 farm bill, has the potential to address the issue of laboratory closings in an objective manner; (7) another way to increase efficiency is through more collaboration among federal, state, and industry research scientists; (8) finally, Cooperative Research and Development Agreements represent an important mechanism through which federal laboratories and private industry can collaborate; (9) along with increased efficiency, there is a need for improved accountability for federal research expenditures; (10) USDA has several efforts under way to improve its research information systems; (11) since FY 1996, USDA has allocated about $200,000 to fund a task force established to enhance USDA's Current Research Information System capabilities; (12) in addition, USDA is in the early stages of planning for the design and development of a Research, Education, and Economics Information System to integrate some of the systems currently used by USDA's research agencies; (13) accountability has also been hindered by several of the mechanisms USDA uses to allocate its research funds; (14) the impact of these funding mechanisms is that a large proportion of USDA-funded research, in particular, earmarked grants, formula funds, and to some degree, in-house research, is less subject to accountability than competitively funded research; and (15) nearly all the respondents to a 1995 agricultural research survey conducted by the House Committee on Agriculture agreed that all of USDA's special research grants should be awarded competitively, not through earmarking.