This is the accessible text file for CG Presentation number GAO-11- 
644CG entitled 'Opportunities to Strengthen Government Performance and 
Enhance Auditor Communication' which was released on May 17, 2011. 

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Opportunities to Strengthen Government Performance and Enhance Auditor 

CIGIE 2011 Annual Conference: 
Washington, D.C.: 
May 4, 2011: 

Gene L. Dodaro: 
Comptroller General of the United States: 
U.S. Government Accountability Office: 



* GPRA Modernization Act Goals: 
* Financial Management Challenges: 
* GAO's Social Media Initiatives: 
* International Auditor Cooperation Efforts: 

GPRA Modernization Act Goals: 

* Adopting a more coordinated and crosscutting approach to achieving 
common goals. 

* Addressing weaknesses in major management functions. 

* Ensuring performance information is both useful and used in decision 

* Instilling sustained leadership commitment and accountability for 
achieving results. 

* Engaging Congress in identifying management and performance issues 
to address. 

Adopting a Coordinated and Crosscutting Approach: 

GAO's report on duplication, overlap, and fragmentation highlights 
areas where such an approach is needed, including programs related to: 
* Teacher Quality; 
* Surface Transportation; 
* Employment & Training; 
* Domestic Food Assistance; 
* Economic Development; 
* Financial Literacy. 

Addressing Weaknesses in Major Management Functions: 

Agencies need more effective management capabilities 6 to better 
implement programs and policies. 

GPRA Modernization Act requires OMB to develop goals to improve 
management functions across the government, including in the following 
* Financial management; 
* Human capital; 
* Information technology; 
* Procurement and acquisition; 
* Real property. 

Ensuring Performance Information is Useful and Used 

To ensure performance information will be both useful 7 and used, it 
must meet various users needs for completeness, accuracy, validity, 
timeliness, and ease of use. 

Act has several requirements that could help meet these needs: 

* Agencies to disclose more information on the accuracy and validity 
of their performance data, such as data sources; 
* Quarterly, rather than annual, reporting for priority goals; 
* Information to be posted on a governmentwide website. 

To ensure that federal officials have the knowledge and 8 skills 
necessary to use the information they are gathering, the Act requires 
OPM to: 
* Identify key skills and competencies needed to carry out performance 
management activities; 
* Incorporate those skills and competencies into relevant position 
classifications and agency training. 

Sustained Leadership Commitment and Accountability for Results: 

The Act creates several new leadership structures and responsibilities 
aimed at sustaining attention on improvement efforts: 

* At the agency level, a Chief Operating Officer and Performance 
Improvement Officer at each agency. 

* A governmentwide Performance Improvement Council to assist in 
carrying out the governmentwide performance and reporting requirements 
of the act. 

* Quarterly reviews for the governmentwide and agency priority goals 
that involve top leadership. 

Engaging Congress: 

The Act significantly enhances requirements for agencies to consult 
with Congress when establishing or adjusting governmentwide and agency 

* OMB and agencies are to consult with relevant committees, obtaining 
majority and minority views, about proposed goals at least once every 
2 years. 

* In addition, OMB and agencies are to describe how they incorporated 
congressional input into their goals. 

* OMB is required to report on unmet agency goals each year, and where 
a goal has been unmet for 3 years, OMB can propose the program for 
termination or restructuring, among other actions. 

GAO's Role in Evaluating Implementation of the GPRA modernization Act: 

The act includes provisions requiring GAO to evaluate implementation 
over time: 

* By June 2013, GAO is to report on implementation of the act's 
planning and reporting requirements at both the governmentwide and 
agency levels. 

* By September 2015 and 2017, GAO is to evaluate whether performance 
management is being used by federal agencies to improve results. 

* Also by September 2015 2017--and every 4 years thereafter--GAO is to 
evaluate implementation of the federal government priority goals and 
performance plans, and related reporting requirements. 

GPRA Modernization Act Implementation Timelines: 

* June 30, 2011: Quarterly agency priority progress reviews, 
consistent with the Act, begin for the goals listed in the FY11 Budget. 

* February 6, 2012: 
- OMB publishes interim federal government priority goals and prepares 
federal government performance plans, consistent with the Act; 
- Agencies adjust their current strategic plans, prepare performance 
plans, and identify new or update existing agency priority goals to 
make them consistent with the Act. 

* No later than February 27, 2012: Agencies make performance reporting 
updates on FY 2011 performance consistent with the Act. 

* June 30, 2012: Quarterly federal government priority progress 
reviews begin. 

* No later than October 1, 2012: Governmentwide performance website 

* February 3, 2014: Full Implementation with a new strategic planning 

[End of section] 

Financial Management Challenges: 

CFO Act: Key Accomplishments and Progress Made: 

* Cultural change — accountability; 
* Governmentwide leadership structure and agency CFOs; 
* New accounting and reporting standards; 
* Preparing timely, auditable financial statements; 
* Strengthening internal control; 
* Improving financial management systems; 
* Improving performance information; 
* Establishing fiscal sustainability reporting; 
* Issuing summarized financial reports, including the governmentwide 
Citizen's Guide. 

Results of the FY 2010 Financial Audits: 

* 20 of 24 CFO Act Agencies received unqualified audit opinions on 
their accrual-based financial statements. (Only 6 did in 1996.) 

* Three major impediments continue to prevent GAO from rendering an 
opinion on the U.S. government's accrual-based consolidated financial 
- Financial management problems at the Department of Defense (DOD); 
- Inability to adequately account for and reconcile intragovernmental 
activity and balances between federal entities; 
- Ineffective process for preparing the consolidated financial 

U.S. Government's Consolidated Financial Statements - Getting to a 
Clean Opinion: 

Department of Defense (DOD): 

* Several entities have received a clean opinion: 

- U.S. Army Corp of Engineers, Defense Finance and Accounting Service, 
Defense Commissary Agency, Defense Contract Audit Agency, Military 
Retirement Fund. 

* U.S. Marine Corps working toward an auditable Statement of Budgetary 
Resources as a first step. Lessons learned may pave the way for other 
military services. 

* DOD focus on improving business systems, ensuring reliability of 
budget information, and existence and completeness of all mission-
critical assets. 

* Financial Improvement and Audit Readiness plan (FIAR) defines path 
for DOD's plans to achieve auditability by 2017. 

Intragovernmental activity & balances between federal entities: 

Key actions taken/planned by Treasury: 

* Developed and issued Intragovernmental Business Rules. 

* Established various focus groups, consisting of Treasury and federal 
entity personnel. 

* Developed and implemented intragovernmental confirmation and 
reporting and analysis systems. 

* Developing financial statements for the General Fund of the U.S. 
Government to help address unreconciled differences existing between 
the General Fund and federal entity trading partners related to 
appropriation and other intragovernmental transactions. 

Consolidated financial statements (CFS) preparation process: 

Key actions taken/planned by Treasury: 

* Developed, documented, and implemented numerous standard operating 

* Hired contractors to assist in addressing certain control 

* Continuing to execute and implement corrective action plans to 
address previously identified control deficiencies. 

* Considering obtaining personnel from certain other entities, with 
additional financial reporting expertise, to assist Treasury during 
the year-end CFS preparation process. 

Increases in Improper Payment Estimates: 

* Improper payment estimated amounts have been steadily rising over 
the years, primarily due to expansion in the number of programs being 

* However, the fiscal year 2010 increase in the estimates was 
primarily related to an increase in reported outlays and, for the 
Unemployment Insurance and Earned Income Tax Credit programs, 
increases in reported error rates. 

* The fiscal year 2010 $125.4 billion improper payment estimate rose 
$16.2 billion from the prior year estimate of $109.2 billion. 

Figure: Fiscal Year 2010 Improper Payment Estimates by Program: 

[Refer to PDF for image: vertical bar graph] 

10 programs account for 94 percent of the fiscal year 2010 $125.4 
billion estimate. 

Program: Medicare Fee-for-Service; 
Improper payment estimate: $34.3 billion. 

Program: Medicaid (S); 
Improper payment estimate: $22.5 billion. 

Program: Unemployment Insurance (S); 
Improper payment estimate: $17.5 billion. 

Program: Earned Income Tax Credit; 
Improper payment estimate: $16.9 billion. 

Program: Medicare Advantage; 
Improper payment estimate: $13.6 billion. 

Program: Supplemental Security Income Program; 
Improper payment estimate: $4.8 billion. 

Program: Old Age and Survivor's Insurance; 
Improper payment estimate: $3.2 billion. 

Program: Supplement Nutrition Assistance Program (S); 
Improper payment estimate: $2.2 billion. 

Program: National School Lunch Program (S); 
Improper payment estimate: $1.5 billion. 

Program: Federal Student Aid--Pell Grants; 
Improper payment estimate: $1.0 billion. 

Program: Other; 
Improper payment estimate: $7.9 billion. 

(S)—State Administered Program. 

Source: GAO analysis. 

[End of figure] 

Improper Payments Elimination and Recovery Act of 2010: 

* In July 2010, the President set goals under the Accountable 
Government Initiative which include (1) reducing overall improper 
payments by $50 billion by fiscal year 2012 and (2) recapturing at 
least $2 billion in actual improper payments by fiscal year 2012. 

* On July 22, 2010, the Improper Payments Elimination and Recovery Act 
(IPERA) was enacted. 

* IPERA establishes additional requirements related to (1) manager 
accountability, (2) recovery auditing, (3) compliance and 
noncompliance determinations and reporting, and (4) an opinion on 
internal controls over improper payments. 

* IPERA requirements related to agencies' improper payment estimating 
and reporting, manager accountability, recovery auditing, and 
compliance determinations and reporting, became effective for fiscal 
year 2011 under OMB's April 14, 2011, implementing guidance. 

* OMB expects to issue guidance related to providing an opinion on 
internal controls over improper payments in the future. 

Challenges to a More Comprehensive Picture of Improper Payments: 

* Full extent of improper payments is still unknown 22 because some 
agencies have not yet reported estimates for all risk-susceptible 

* Categories of improper payments and the root causes are not 
consistently identified in programs' improper payment estimates or 
included in aggregate estimates. 

* Corrective actions are unique to specific entities and programs 
across the federal government. 

* Preventing, reducing, and recovering improper payments needs to be a 
high priority. 

[End of section] 

GAO's Social Media Initiatives: 

How Citizens Consume Information is Changing: 

Figure: Americans' news sources: 

[Refer to PDF for image: horizontal bar graph] 

Local television: 78%; 
National network or cable TV: 73%; 
The internet: 61%; 
Radio broadcasts: 54%; 
Local print newspapers: 50%; 
National print newspapers: 17%. 

Source: "Understanding the Participatory News Consumer," Pew Internet 
& American Life Project, March 2010. 

[End of figure] 

Figure: "Most essential" medium: 

[Refer to PDF for image: pie-chart] 

Internet: 42%; 
Television: 37%; 
Radio: 14%; 
Newspapers: 5%. 

Source: Arbitron/Edison Research, "The Infinite Dial 2010." 

[End of figure] 

GAO Now Provides Information Through More Formats and Channels: 

* Using video to provide content for GAO channel on YouTube. 

* Automated Twitter feeds of our work now have more than 8,000 

* A mobile version of GAO website allows users of smart phones to 
access GAO's reports and testimonies. 

* Podcasts available on iTunes make summaries of our work more 

* Images — photos and graphics — from our reports are on Flickr to 
drive more people to our products. 

* Sharing widgets encourage users to share and e-mail our work with 
others they know may be interested. 

* E-report format gives easier web-based access to our work. 

Other New Media Opportunities for GAO: 

On the horizon: 
* GAO Facebook page (coming soon); 
* Online chats and blogs; 
* Video podcasts; 
* iPhone and other smartphone apps; 
* External GAO reports widget; 
* E-reader capability for Kindle, Nook, etc. 

[End of section] 

International Auditor Cooperation Efforts: 

* INTOSAI's triennial congress held last November. 

* Updated INTOSAI Strategic Plan approved with focus on priority areas 
for the next 5 years: 

1. Helping to ensure the independence of supreme audit institutions 

2. Implementing the International Standards for Supreme Audit 
Institutions (ISSAIs). 

3. Strengthening SAI capacity building. 

4. Demonstrating the value and benefits of SAIs. 

5. Fighting corruption. 

6. Strengthening INTOSAI communication. 

* Johannesburg Accords were endorsed and include discussions & 
recommendations on 2 themes: 

1. Value and benefits of SAIs: 
* Emphasizes that accountability and transparency are an indispensable 
part of democracy; 
* Communicating with citizens & stakeholders. 

2. Environmental auditing: 
* Raises awareness of audit issues related to the environment, the 
economy, and society. 

International Standards for Supreme Audit Institutions (ISSAIs): 

* Adoption of more than 40 new standards. 

* Finalizes a complete framework of international audit standards, 
which individual SAIs can use as a reference point. 

* Focus now on implementation support for countries wishing to apply 
the standards. 

INTOSAI-Donor Cooperation: 

* INTOSAI and about 15 donor organizations and countries, including 
the United States, are continuing to make progress on a key 
international effort to strengthen the capacity of SAIs in developing 

* Stocktaking report completed (90% response rate). 

* INTOSAI working with international donors and aid organizations to 
support SAIs most in need of assistance. 

* Next Steering Committee meeting to be held in Washington, D.C. this 

[End of section] 

On the Web: 
Web site: [hyperlink,] 

Chuck Young, Managing Director, Public Affairs: (202) 512-4800: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7149: 
Washington, D.C. 20548: 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. The published product may be 
reproduced and distributed in its entirety without further permission 
from GAO. However, because this work may contain copyrighted images or 
other material, permission from the copyright holder may be necessary 
if you wish to reproduce this material separately. 

[End of presentation]