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entitled 'U.S. Government Accountability Office: Performance & 
Accountability Report: Fiscal Year 2011' which was released on 
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GAO-12-4SP: 

Serving The Congress And The Nation: 

U.S. Government Accountability Office: 

Performance And Accountability Report: 

Fiscal Year 2011: 

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. 

[End of section] 

GAO Performance and Accountability Report 2011: 

Contents: 

Abbreviations: 

How to Use This Report: 

Introduction: 
From the Comptroller General: 
Financial Reporting Assurance Statements: About GAO: 
Mission: 
Strategic Planning and Management Process: Organizational Structure: 
Strategies for Achieving Our Goals: How We Measure Our Performance: 

Part I: Management’s Discussion and Analysis: 

Assisting the Congress and the Nation during Changing and Challenging 
Times: 
Focusing on Our Client: 
Focusing on Our People: 
Focusing on Our Internal Operations: GAO’s High-Risk Program: 
Duplication Mandate: 
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010: The 
Troubled Asset Relief Program: The American Recovery and Reinvestment 
Act: General Counsel Decisions and Other Legal Work: Managing Our Resources: 
Strategic and Annual Work Planning: Internal Management Challenges and 
External Factors That Could Affect Our Performance: 

Part II: Performance Information: 

Performance Information by Strategic Goal: 

Goal 1 Overview: Address Current and Emerging Challenges to the Well- 
being and Financial Security of the American People: Financial Benefits: 
Nonfinancial Benefits: 
Testimonies: 

Goal 2 Overview: Respond to Changing Security Threats and the 
Challenges of Global Interdependence: Financial Benefits: 
Nonfinancial Benefits: 
Testimonies: 

Goal 3 Overview: Help Transform the Federal Government to Address 
National Challenges: 
Financial Benefits: 
Nonfinancial Benefits: 
Testimonies: 

Goal 4 Overview: Maximize the Value of GAO by Enabling Quality, Timely 
Service to the Congress and by Being a Leading Practices Federal Agency: 
Data Quality and Program Evaluation: Verifying and Validating 
Performance Data: Program Evaluation: 

Part III: Financial Information: 

From the Chief Financial Officer: Audit Advisory Committee’s Report: 
Independent Auditor’s Report: 
Purpose of Each Financial Statement: Financial Statements: 
Notes to Financial Statement: 

Part IV: Inspector General’s View of GAO’s Management Challenges: 

Inspector General’s View of GAO’s Management Challenges: 

Part V: Appendix: 

Data Quality: 

Image Sources: 

Providing Comments on This Report: 

Obtaining Copies of GAO Documents: 

Connect with GAO: 

Abbreviations: 

AD/CV: antidumping and countervailing: 

AEITC: Advance Earned Income Tax Credit: 

APSS: Administrative Professional and Support Staff: 

ASP: Advanced Spectroscopic Portal: 

CAO: Chief Administrative Office: 

CBP: U.S. Customs and Border Protection: 

CGAB: Comptroller General’s Advisory Board: 

CMS: Centers for Medicare & Medicaid Services: 

CRA: Congressional Review Act: 

CSI: Container Security Initiative: 

CSRS: Civil Service Retirement System: 

DHS: Department of Homeland Security: 

DNI: Director of National Intelligence: 

DOD: Department of Defense: 

DOE: Department of Energy: 

DOJ: Department of Justice: 

DOL: Department of Labor: 

DOT: Department of Transportation: 

DWG: Domestic Working Group: 

EAP: Educator’s Advisory Panel: 

EESA: 2008 Emergency Economic Stabilization Act: 

EN: employment network: 

EPA: Environmental Protection Agency: 

ERS: Engagement Reporting System: 

ESC: Enterprise Services Center: 

EVM: earned value management: 

FAIS: Forensic Audits and Investigative Service: 

FCS: Future Combat System: 

FECA: Federal Employees’ Compensation Act: 

FEGLI: Federal Employees Group Life Insurance: 

FEHBP: Federal Employees Health Benefits Program: 

FEMA: Federal Emergency Management Agency: 

FERS: Federal Employees Retirement System: 

FFMIA: Federal Financial Management Improvement Act of 1996: 

FICA: Federal Insurance Contributions Act: 

FMFIA: Federal Managers’ Financial Integrity Act of 1982: 

GAGAS: generally accepted government auditing standards: 

GPRA: Government Performance and Results Act of 1993: 

GPRA: 2010: GPRA Modernization Act of 2010: 

GSA: General Services Administration: 

HAI: health-care-associated infection: 

HHS: Department of Health and Human Services: 

HSPD-12: Homeland Security Presidential Directive 12: 

HUBZone: Historically Underutilized Business Zone: 

HUD: Department of Housing and Urban Development: 

IC: U.S. Intelligence Community: 

IDES: Integrated Disability Evaluation System: 

IFPTE: International Federation of Professional and Technical 
Engineers: 

IG: inspector general: 

INTOSAI: International Organization of Supreme Audit Institutions: 

IRS: Internal Revenue Service: 

IT: information technology: 

JSF: Joint Strike Fighter: 

LOGCAP: Logistics Civil Augmentation Program: 

MA: Medicare Advantage: 

MKV: Multiple Kill Vehicle: 

NASA: National Aeronautics and Space Administration: 

NFC: National Finance Center: 

NFIP National Flood Insurance Program: 

OMB: Office of Management and Budget: 

OPM: Office of Personnel Management: 

OSDBU: Office of Small and Disadvantaged Business Utilization: 

PAR: performance and accountability report: 

PIV: Personal Identity Verification: 

QCI: Quality and Continuous Improvement: 

SAI: supreme audit institution: 

SBA: Small Business Administration: 

SBInet: Secure Border Initiative Network: 

SEC: Securities and Exchange Commission: 

SSA: Social Security Administration: 

TARP: Troubled Asset Relief Program: 

TSAT: Transformational Satellite: 

USACE: U.S. Army Corps of Engineers: 

USAID:  U.S. Agency for International Development: 

USCP: U.S. Capitol Police: 

USDA: Department of Agriculture: 

VA: Department of Veterans Affairs: 

[End of section] 

How to Use This Report: 

This report describes the U.S. Government Accountability Office’s 
performance measures, results, and accountability processes for fiscal 
year 2011. 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 website at [hyperlink, 
http://www.gao.gov/sp.html]. 

This report has an introduction, four parts, and a supplementary 
appendix as follows: 

Introduction: 

This section includes the letter from the Comptroller General and a 
statement attesting to the completeness and reliability of the 
performance and financial data in this report and the effectiveness of 
our internal controls over our financial reporting. This section also 
includes a summary discussion of our mission, strategic planning 
process, organizational structure, strategies we use to achieve our 
goals, 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 2011. It also includes information on our 
internal controls 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 2011 and the targets we are aiming for in fiscal 
year 2012. It also includes a summary of our program evaluation for 
the fiscal year. 

Financial Information: 

This section includes details on our finances in fiscal year 2011, 
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 an explanation of 
the 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. 

Appendix on Data Quality: 

This section describes how we ensure the completeness and reliability 
of the data for each of our performance measures. 

[End of How to Use This Report] 

Introduction: 

From the Comptroller General: 

November 15, 2011: 

I am pleased to present GAO’s performance and accountability report 
for fiscal year 2011. This year our products covered a wide spectrum 
of issues—-from banking to health care and retirement to defense, 
homeland, and information security. We issued our biennial high-risk 
report calling attention to opportunities for cost savings and 
improvements in federal agency and program management. We issued our 
first annual report under a new mandate in which we identified 
duplication, overlap, cost-saving opportunities, and revenue 
enhancements in government programs. We issued several products under 
the Dodd-Frank Wall Street Reform Act on mortgages, securities 
markets, financial institutions, the Federal Reserve, and consumer 
protection and many other products related to health insurance reform. 
We also reported and testified on the Department of Homeland 
Security’ s progress and challenges ten years after 9/11. We continued 
to regularly report the results of our work related to the Troubled 
Asset Relief Program and the American Recovery and Reinvestment Act. 
Additionally, we updated our Yellow Book on government auditing 
standards to reflect recent developments in the accountability 
profession. 

We again received from independent auditors an unqualified or “clean” 
opinion on our financial statements for fiscal year 2011. We began to 
implement the requirements of the Government Performance and Results 
Modernization Act of 2010 and identified financial and nonfinancial 
benefits as our priority measures. This year, we documented $45.7 
billion in financial benefits for the federal government—-a return of 
$81 for every dollar invested in GAO. We also recorded 1,318 other 
benefits in broad program and operational areas cutting across the 
government. I am confident that the performance and financial 
information in this report is complete and reliable and meets our high 
standards for accuracy and transparency. 

The 112th Congress relied on us to inform its work on national and 
international issues, with our senior officials testifying at 174 
hearings. Getting our message out is crucial; to better serve our 
clients and the public we continued to pilot our e-report-—formatted 
for faster and easier Internet access to key aspects of our reports—- 
and we launched Facebook and Flickr pages to reach a wider audience. 

We undertook and received a clean opinion on our triennial external 
peer review conducted by an international team of our counterparts at 
national audit institutions. This was our third international peer 
review and the first to examine both financial and performance audits. 
The peer review team identified a number of good practices that should 
interest other audit offices as well as future changes for us to 
consider to further strengthen our products. 

We could not have achieved this level of performance without the 
outstanding efforts of our professional, diverse, and 
multidisciplinary staff. Through their hard work and dedication in 
uncertain times, we met our clients’ needs with 95 percent on-time 
delivery. Our people and internal operations measures indicate that 
our employees feel they have the developmental opportunities, work 
experiences and environment, and operational support they need to 
produce high-quality products. We met or exceeded six of the targets 
for our seven people measures—retention rate (with and without 
retirements), staff development, staff utilization, effective 
leadership by supervisors, and organizational climate. We did not meet 
our target for new hires as we curtailed hiring to filling only 
critical needs because of budget constraints. 

We have updated our internal management challenges—-removing physical 
security and information security based on progress in those areas. We 
continue to focus on human capital by completing work on a new 
performance management system and enhancing efforts on succession 
planning, training, critical hiring, and alternative staff rewards and 
recognition. This year, we are adding a new engagement efficiency 
challenge focused on making improvements in three areas given 
constrained resources: managing and conducting engagements, utilizing 
resources, and communicating our message. 

We maintained our productive working relationship with the employees’ 
union, GAO Employees Organization, International Federation of 
Professional and Technical Engineers, Local 1921, and began 
implementing our first master collective bargaining agreement. We are 
also working with the Employee Advisory Council and the Diversity 
Advisory Council on a range of issues. 

Fiscal year 2011 continued a very active and challenging time for GAO, 
yet we succeeded at performing our mission, responding to mandates, 
and accomplishing many of our goals while managing budget constraints. 
Fiscal year 2012 brings more challenges with responsibilities to 
further assess and report on duplicative government programs and 
financial regulatory reform efforts among many other pressing issues. 
At the same time, in anticipation of a lower budget, we are reducing 
spending through limiting hiring, attrition, and scaling back or 
rescoping mission support contracts. Our strategic plan for serving 
the Congress through fiscal year 2015 provides the framework for 
reporting on progress toward our institutional goals. We look forward 
to continuing to serve the Congress and the public in the coming year. 

Signed by: 

Gene L. Dodaro: 
Comptroller General of the United States: 

[End of From the Comptroller General] 

Financial Reporting Assurance Statements: 

November 15, 2011: 

We, as GAO’s executive committee, along with the Controller, 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, 2011, 
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 and complete. Transactions are 
(1) 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, and (2) 
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 and complete. 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, as amended, (GPRA) and related 
OMB guidance. 

We also believe that (1) these 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 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: 

Gene L. Dodaro: 
Comptroller General of the United States: 

Signed by: 

David M. Fisher: 
Chief Administrative Officer/Chief Financial Officer: 

Signed by: 

Patricia A. Dalton: 
Chief Operating Officer: 

Signed by: 
Cheryl B. Whitaker: 
Acting Controller: 

Signed by: 

Lynn H. Gibson: 
General Counsel: 

[End of Financial Reporting Assurance Statements] 

About GAO: 

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 FMFIA, GPRA, and the 
Federal Financial Management Improvement Act of 1996 (FFMIA).[Footnote 
1] Accordingly, this performance and accountability report for fiscal 
year 2011 provides what we consider to be information comparable to 
that reported by executive branch agencies in their annual performance 
and accountability reports. This report also fulfills our requirement 
to report annually on the work of the Comptroller General under 31 
U.S.C. 719. 

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 objective and 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. 

[Text box: 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. End of text box] 

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 figure 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 to Address 
National Challenges. 

* Strategic Goal 4: Maximize the Value of GAO by Enabling Quality, 
Timely Service to the Congress and Being a Leading Practices Federal 
Agency. 

Figure 1: GAO’s Strategic Planning Hierarchy: 

[Refer to PDF for image: A four level stair-step pyramid that shows 
GAO's strategic planning hierarchy] 

Level 1: Strategic Goals (4); 
Level 2: Strategic Objectives (20); 
Level 3: Performance goals (96); 
Level 4: Key Efforts (300+). 

Source: GAO. 

[End of Figure 1: GAO’s Strategic Planning Hierarchy] 

Each strategic goal is composed of strategic objectives, for which 
there are specific strategies taking the form of performance goals, 
each of which has a set of key efforts. Figure 1 illustrates this 
hierarchy and the text box on the left provides an example of 
structure of one of our strategic goals. Our audit, evaluation, and 
investigative work is primarily aligned under the first three 
strategic goals, which span domestic and international issues 
affecting the lives of all Americans and influencing the extent to 
which the federal government serves the nation’s current and future 
interests. 

[Text box: 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: Financing and Programs to Serve the Health Needs 
of an Aging and Diverse Population Performance Goal: Assess trends and 
issues in public and private health insurance coverage and reforms. 

Key Efforts: 

* Analyze implementation of mandated and potential reforms, such as 
modifications to federal tax policies and new insurance-purchasing 
arrangements, for their estimated impact on the numbers of uninsured, 
costs of health care services, the health insurance industry, and 
implementation challenges for federal and state agencies. 

* Evaluate trends and the distribution of health insurance coverage, 
including long-term care insurance and employer sponsorship of private 
health insurance for employees and retirees. 

* Analyze the coverage and affordability of products available to 
consumers in the individual and small-group insurance markets. 

* Assess the impact of public and private agencies’ efforts to achieve 
compliance with federal and state health insurance standards. 
End of text box] 

Figure 2 provides examples of the results of this work described in 
Part II of this report. 

Figure 2: How GAO Assisted the Nation: Fiscal Year 2011: 

Goal 1: Address Current and Emerging Challenges to the Well-Being and 
Financial Security of the American People: 

* Identified savings of $3.7 billion by reducing unneeded payments to 
Medicare Advantage plans. 

* Improved consistency and compatibility of health care-associated 
infection data. 

* Led the Social Security Administration to improve oversight of its 
Ticket-to-Work program. 

* Identified opportunities to enhance investigation of online child 
pornography. 

* Recommended ways to strengthen the Federal Reserve’s management of 
emergency assistance to stabilize financial markets. 

* Developed a series of assessments of emerging technologies with 
important implications for the nation. 

* Found regulatory weaknesses in EPA’s water-based lead testing and 
treatment program. 

* Informed improvements in air passenger rights to compensation for 
mishandled baggage. 

Goal 2: Respond to Changing Security Threats and the Challenges of 
Global Interdependence: 

* Encouraged enhanced desktop computer security to protect sensitive 
information, which 22 federal agencies implemented. 

* Identified progress and remaining work to implement homeland 
security missions at DHS ten years after 9/11. 

* Led DHS to scale back the flawed advanced radiation detector 
program—-avoiding costs of $1.2 billion. 

* Identified challenges and recommended improvements in DOD’s 
expanding cybersecurity mission. 

* Surfaced potential costs and risks of contract transition during 
drawdown from Iraq, resulting in benefits of $77.5 million. 

* Led DOD to restructure the Joint Strike Fighter program-—DOD’s most 
costly and ambitious acquisition. 

* Increased USAID focus on planning, coordination, and monitoring of 
Afghan water projects. 

* Improved monitoring and evaluation of State, Labor, and USAID 
projects to combat human trafficking. 

Goal 3: Help Transform the Federal Government to Address National 
Challenges: 

* Provided timely information on the debt limit and budget controls to 
help address the long-term fiscal challenge. 

* Helped eliminate the Advanced Earned Income Tax Credit, avoiding 
$569 million in costs. 

* Identified 227,700 tax delinquents receiving federal benefits to 
explore ways to increase collection of unpaid taxes. 

* Found ways to incorporate required data into Centers for Medicare 
and Medicaid systems to better detect improper payments. 

* Issued updated government auditing standards to reflect recent 
developments in the accountability profession. 

* Identified opportunities to reduce risk and achieve cost savings in 
several types of government contracting. 

* Recommended improvements to planning and implementation of federal 
data center consolidation at 24 federal agencies. 

Goal 4: Maximize the Value of GAO by Enabling Quality, Timely Service 
to the Congress and Being a Leading Practices Federal Agency: 

* Tested use of quick response, or "QR" codes, on our products to 
quickly link users to our website. 

* Completed training for all staff on diversity and inclusion 
awareness issues. 

* Began implementing our first Master Collective Bargaining Agreement 
with IFPTE, Local 1921. 

* Received a clean opinion on our third international triennial peer 
review. 

* Began implementing GPRA Modernization Act of 2010 by identifying 
priority performance measures and incorporating performance data on 
our website. 

Source: GAO. 

Note: Additional information on accomplishments by goal is highlighted 
in Part II of this report. 

[End of Figure 2: How GAO Assisted the Nation: Fiscal Year 2011] 

The fourth goal is focused internally on improving efficiency and 
effectiveness in performing our work, maintaining and enhancing a 
diverse workforce, expanding collaboration to promote professional 
standards, and being a responsible steward of our resources. 

In July 2010, we issued and began the transition to our strategic plan 
for fiscal years 2010 through 2015. The plan describes our goals and 
strategies for supporting the Congress and the nation and identifies 
eight trends that provide context for the plan. These are highlighted 
in our strategic planning framework for serving the Congress (see 
figure 3). We identified these trends based on a review of external 
literature, discussions with outside advisors and selected experts, 
and input from our mission teams based on their discussions with 
congressional clients and their institutional knowledge. 

The four strategic goals and the strategic objectives that support 
them reflect these broad trends. Several multiyear performance goals 
define a specific level of achievement for each strategic objective. 
At the base of our strategic planning hierarchy, key efforts describe 
a body of work that operationalizes each performance goal. 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. In keeping with the GPRA Modernization Act of 
2010, we plan to shift to a 4-year planning cycle with an interim 
update in 2012 and the next full update in 2014. A description of the 
steps in our strategic planning process is included in our strategic 
plan (see our complete strategic plan on [hyperlink, 
http://www.gao.gov/products/GAO-10-559SP]). This site also provides 
access to our prior annual performance plans and performance and 
accountability reports. 

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 increasing pace with which crucial 
issues emerge and evolve, we incorporate 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 publicly available—-like our 
strategic plan-—on our website [hyperlink, http://www.gao.gov/sp.html]. 

[Text box: 
Each year, we hold ourselves accountable to the Congress and to the 
American people for our performance, primarily through our annual 
performance and accountability report. End of text box] 

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 tenth consecutive year its Certificate of Excellence in 
Accountability Reporting for outstanding accountability reporting for 
our fiscal year 2010 performance and accountability report. We also 
received a “Best-in-Class” award for a concise, well-written, and 
highly readable Summary of GAO’s Performance and Financial Information 
for Fiscal year 2010 (see figure. 4). 

Figure 3: GAO's Strategic Plan Framework: 

[Refer to PDF for Image: illustration] 

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. 

Trends: 

* National Security Threats; 

* Fiscal Sustainability Challenges; 

* Economic Recover and Growth; 

* Global Interdependency; 

* Science & Technology; 

* Networks and Virtualization; 

* Shifting Roles of Government; 

* Demographic and Societal Change. 

Goals & Objectives: 

Provide Timely, Quality Service to the Congress and the Federal 
Government to: 

1) Address Current and Emerging Challenges to the Well-being and 
Financial Security of the American People related to: 

* Health care needs; 

* Lifelong learning; 

* Benefits and protections for workers, families, and children; 

* Financial security; 

* Effective system of justice; 

* Viable communities; 

* Stable financial system and consumer protection; 

* Stewardship of natural resources and the environment; 

* Infrastructure; 

2) Respond to Changing Security Threats and the Challenges of Global 
Interdependence involving: 

* Homeland security; 

* Military capabilities and readiness; 

* U.S. foreign policy interests; 

* Global market forces. 

Help Transform the Federal Government to Address National Challenges 
by assessing: 

* Government’s fiscal position and options for closing gap; 

* Fraud, waste, and abuse; 

* Major management challenges and program risks. 

Maximize the Value of GAO by Enabling Quality, Timely Service to the 
Congress and Being a Leading Practices Federal Agency in the areas of: 

* Efficiency, effectiveness, and quality; 

* Diverse and inclusive work environment; 

* Professional networks and collaboration; 

* Institutional stewardship and resource management. 

Core Values: 

* Accountability; 

* Integrity; 

* Reliability. 

Source: GAO. 

[End of Figure 3: GAO's Strategic Plan Framework] 

Figure 4: GAO’s Performance and Accountability Report Awards: 

[Refer to PDF for Image: 4 illustrations] 

Scanned copies of: 

1. Cover of the Government Accountability Office's Summary of GAO's 
Performance and Financial Results, Fiscal Year 2010. 

2. Cover of the Government Accountability Office's Performance and 
Accountability Report for Fiscal Year 2010. 

3. AGA Certificate of Excellence in Accountability Reporting, Best-In- 
Class Award, presented to the U.S. Government Accountability Office: 
"In recognition of Providing the Best Summary of Performance and 
Financial Information in your FY10 Agency Financial Report." 

Signed by: 

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

Signed by: 

Relmond P. Van Daniker, DBA, CPA: Executive Director, AGA: 

4. AGA Certificate of Excellence in Accountability Reporting, 
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, 2010. 

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, CGFM: 
Chair, Certificate of Excellence in Accountability Reporting Director: 

Signed by: 

Relmond P. Van Daniker, DBA, CPA: Executive Director, AGA: 

Source: GAO. 

[End of Figure 4: GAO’s Performance and Accountability Report Awards] 

Organizational Structure: 

As the Comptroller General of the United States, Gene L. Dodaro is the 
head of GAO. On December 22, 2010, he was confirmed as Comptroller 
General after serving as the Acting Comptroller General since March 
2008. Prior to that, Mr. Dodaro served as GAO’s Chief Operating 
Officer for 9 years. Three other executives join Comptroller General 
Dodaro to form our Executive Committee: Chief Operating Officer 
Patricia A. Dalton, Chief Administrative Officer/Chief Financial 
Officer David M. Fisher, and General Counsel Lynn Gibson. 

To achieve our strategic goals, our staff is organized as shown in 
figure 5. For the most part, our 14 evaluation, audit, research, and 
investigative 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. In addition to 
this work, Forensic Audits and Investigative Service (FAIS) follows up 
on engagements and referrals from our other teams when its special 
services are required for specific fraud allegations or for assistance 
in evaluating security matters. FAIS also manages Fraudnet, which is 
our online system created for the public to report to GAO allegations 
of fraud, waste, abuse, or mismanagement of federal funds. FAIS is an 
integrated unit composed of investigators, analysts, and auditors who 
have experience with forensic auditing and data mining assisted by 
staff in our Office of General Counsel. 

Senior executives in the teams manage a portfolio of engagements to 
ensure that we meet the Congress’s need for information on quickly 
emerging issues as we also continue longer-term work that flows 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, our General Counsel’s office 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 matrixed structure 
increases our effectiveness, flexibility, and efficiency in using our 
expertise and resources to meet congressional needs on complex issues. 

Figure 5: Organizational Structure: 

[Refer to PDF for image: organizational chart] 

Level one: Comptroller General of the United States: 
* Public Affairs; 
* Strategic Planning and External Liaison; 
* Congressional Relations; 
* Opportunity and Inclusiveness. 

Level one (set apart from all GAO units to denote independence and 
statutory role): Inspector General. 

Level two: 
* General Counsel; 
* Chief Operating Officer; 
* Chief Administrative Officer/Chief Financial Officer. 

Level three: 

Under General Counsel: 
Goals 1, 2, 3, and 4: 
* Provide audit and other legal support services for all goals and 
staff offices; 
* Manage GAO’s bid protest and appropriations law work. 

Under Chief Operating Officer: 
* Quality and Continuous Improviement: 
* Teams: 

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 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 to address national challenges: 
* Applied Research and Methods; 
* Financial Management and Assurance; 
* Forensic Audits and Investigative Service; 
* Information Technology; 
* Strategic Issues. 

Under Chief Administrative Officer/Chief Financial Officer: 

Goal 4: 
Maximize the Value of GAO by Enabling Quality, Timely Service to the 
Congress and Being a Leading Practices Federal Agency: 
* Controller; 
* Field Operations; 
* Human Capital Office; 
– Chief Human Capital Officer; 
* Information Systems and Technology Services; 
– Chief Information Officer; 
* Knowledge Services; 
* Professional Development Program. 

Source: GAO. 

Note: The structure of the Office of the General Counsel 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 5: Organizational Structure] 

The Office of the 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 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. The 
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 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 
the General Counsel’s office, primarily in the Legal Services group, 
provide legal support for goal 4 efforts. 

We maintain a workforce with training in many 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 (see figure 6). Staff in these field offices are aligned with 
our research, audit, investigative, and evaluation teams and perform 
work in tandem with our headquarters staff in support of our external 
strategic goals. 

In September 2008, the Government Accountability Office Act of 2008 
was enacted establishing the Office of the Inspector General (IG) of 
GAO as a statutory office within the agency. The IG is appointed by 
and reports to the Comptroller General. The IG is responsible for 
conducting audits and investigations relating to the administration of 
the programs and operations of GAO and for making recommendations to 
promote its economy, efficiency, and effectiveness. The IG also keeps 
the Comptroller General and the Congress fully informed through its 
semiannual reports that describe its findings. In addition, the IG 
investigates allegations from GAO employees and other interested 
parties concerning activities within GAO that may constitute the 
violation of any law, rule, or regulation; mismanagement; or a gross 
waste of funds or other wrongdoing. 

Figure 6: GAO’s Office Locations: 

[Refer to PDF for image: U.S. map] 

This figure is a map of the United States depicting the following GAO 
Office Locations: 

Atlanta, Georgia: 
Boston, Massachusetts: 
Chicago, Illinois: 
Dallas, Texas: 
Dayton, Ohio: 
Denver, Colorado: 
Huntsville, Alabama: 
Los Angeles, California: 
Norfolk, Virginia: 
San Francisco, California: 
Seattle, Washington: 
Washington, D.C. 

Source: See Image Sources. 

[End of Figure 6: GAO’s Office Locations] 

Strategies for Achieving Our Goals: 

GPRA directs agencies to articulate not just goals but also strategies 
for achieving those goals. As detailed in Part I of this report, we 
emphasize two overarching strategies for achieving our goals: (1) 
providing information from our work to the Congress and the public in 
a variety of forms and (2) continuing to strengthen our human capital 
and internal operations. Specifically, our strategies emphasize the 
importance of working with other organizations on crosscutting issues 
and effectively addressing the challenges to achieving our agency’s 
goals and recognizing the internal and external factors that could 
impair our performance. Through these strategies, which have proven 
successful for us for a number of years, we plan to achieve the level 
of performance that is needed to meet our performance measures and 
goals. This level of performance will allow us to achieve our four 
broad strategic goals. 

Attaining our three external strategic goals (1, 2, and 3) and their 
related objectives rests, for the most part, on providing 
professional, objective, fact-based, nonpartisan, nonideological, 
fair, and balanced information to support the Congress in carrying out 
its constitutional responsibilities. To implement the performance 
goals and key efforts related to these three goals, we develop and 
present information in a number of ways, including: 

* evaluations of federal policies, programs, and the performance of 
agencies; 

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

* investigations to assess whether illegal or improper activities are 
occurring; 

* analyses of the financing for government activities; 

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

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

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

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

We conduct specific engagements as a result of requests from 
congressional committees and mandates written into legislation, 
resolutions, and committee reports. In fiscal year 2011, we devoted 94 
percent of our engagement resources to work requested or mandated by 
the Congress. We devoted the remaining 6 percent of the engagement 
resources to work initiated under the Comptroller General’s authority. 
Much of this work addressed various challenges that are of broad-based 
interest to the Congress, such as the cost and status of both security 
stabilization and reconstruction efforts in Iraq and Afghanistan, our 
high-risk list, and the federal debt.[Footnote 2] Also covered by this 
work were reviews of government programs and operations that we have 
identified as at high risk for fraud, waste, abuse, and mismanagement 
as well as reviews of agencies’ budget requests to help support 
congressional decision making. By making recommendations to improve 
the accountability, operations, and services of government agencies, 
we contribute to increasing the effectiveness of federal spending and 
enhancing the taxpayers’ trust and confidence in their government. 

Our staff are responsible for following high standards for gathering, 
documenting, and supporting the information we collect and analyze. 
This information is usually presented in a product that is made 
available to the public. In some cases, we develop products that 
contain classified or sensitive information that cannot be made 
available publicly. In recent years, we have issued around 900 
products each year, primarily in an electronic format. In addition, we 
publish about 300 to 400 legal decisions and opinions each year. Our 
products include the following: 

* reports and written correspondence; 

* testimonies and statements for the record, where the former are 
delivered orally by one or more of our senior executives at a 
congressional hearing and the latter are provided for inclusion in the 
congressional record; 

* briefings, which are usually given directly to congressional staff 
members; and; 

* legal decisions and opinions resolving bid protests and addressing 
issues of appropriations law, as well as opinions on the scope and 
exercise of authority of federal officers. 

We also produce special publications on specific issues of general 
interest to many Americans, such as our reports on the fiscal future 
of the United States and our decisions on federal bid protests. 
[Footnote 3] Our publication, Principles of Federal Appropriations 
Law, is viewed both within and outside of the government as the 
primary resource on federal case law related to the availability, use, 
and control of federal funds. In addition, we maintain the government’ 
s repository of reports on Antideficiency Act violations and make 
available on our website information extracted from those reports. 
Collectively, our products contain information and often conclusions 
and recommendations that allow us to achieve our external strategic 
goals. 

Another means of ensuring that we are achieving our goals is by 
examining the impact of our past work and using that information to 
shape our future work. Consequently, we evaluate actions taken by 
federal agencies and the Congress in response to our past 
recommendations. The results are reported in terms of the financial 
benefits and nonfinancial benefits. We actively monitor the status of 
our open recommendations—those that remain valid but have not yet been 
implemented—and report our findings annually to the Congress and the 
public [hyperlink, http://www.gao.gov/openrecs.html]. 

Similarly, our biennial high-risk report, most recently issued in 
February 2011, provides a status report on major government operations 
that we consider high risk because they are vulnerable to fraud, 
waste, abuse, and mismanagement or are in need of broad-based 
transformation (see p. 38). Such special publications are valuable 
planning tools because they help us to identify areas to focus on 
important policy and management issues facing the nation. 

To attain our fourth strategic goal—-an internal goal-—and its four 
related objectives, we implement projects to address the key efforts 
in our strategic plan. We conduct surveys of our congressional clients 
and internal customers to obtain feedback on our products, processes, 
and services and identify ways to improve them. We also perform 
internal management studies and evaluations. 

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

* use advisory panels and other bodies to inform our strategic and 
annual work planning and; 

* maintain strategic working relationships with other national and 
international government accountability and professional 
organizations, including the federal inspectors general, state and 
local audit organizations, and other national audit offices. 

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

How We Measure Our Performance: 

To help us determine how well we are meeting the needs of the Congress 
and maximizing our value as a leading practices organization, we 
assess our performance annually using a balanced set of quantitative 
performance measures that focus on four key areas—results, client, 
people, and internal operations. 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 (1, 2, and 3) to reach 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 to encourage 
consistent performance across goals. Internally, 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 for 
improvement. 

* Client. To measure how well we are serving our client, we capture 
the number of congressional hearings where we are asked to present 
expert testimony and our timeliness in delivering products to the 
Congress. We use an electronic client feedback form to collect data on 
the services we are providing to our congressional clients. 

We set a target at the agencywide level for the number of hearings and 
then assign a portion of these hearings as a target for each of the 
external goals (1, 2, and 3) based on each goal’s expected 
contribution to the agencywide total. We base this target on our 
assessment of the congressional calendar and hearing trend data. 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 an agencywide target for timeliness 
because we want our performance on this measure 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 impact employees’ quality of work 
life. Examples of surveyed services include secure Internet access and 
voice communication systems, performance management, and benefits 
information and assistance. We set targets for these measures at the 
agencywide level. 

Setting Performance Targets: 

To establish targets for all of our measures, we consider our past 
performance, including recent patterns and 4-year rolling averages, as 
well as upcoming events we are aware of for most of our results 
measures (see p. 24) and the external factors that influence our work 
(see p. 56). Based on this information, the teams and offices that are 
directly engaged in the work discuss with our top executives their 
views of what we have planned to accomplish in the strategic plan and 
what they believe they can accomplish in the upcoming fiscal year. 
Members of our Executive Committee 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 4] 
We may adjust these targets after they are initially published when 
our expected future work or level of funding provided warrants doing 
so. If we make changes, we include the changed targets in later 
documents, such as this performance and accountability report, and 
indicate 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. 

On the pages that follow, we assess our performance for fiscal year 
2011 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] 

Part 1: Management's Discussion and Analysis: 

Assisting the Congress and the Nation during Changing and Challenging 
Times: 

In fiscal year 2011, the most pressing and demanding issues faced by 
the Congress and the public helped to define our priorities. Our 
reporting helped inform the Congress and the administration in 
developing policies and executing programs in areas such as 
duplication and overlap in government programs, the Dodd-Frank Wall 
Street Reform Act, our high-risk update, and nationwide funding 
provided through the American Recovery and Reinvestment Act of 2009 
(Recovery Act) and the Troubled Asset Relief Program (TARP), as well 
as our continued oversight of areas across the government. 

This work also allowed us to achieve many of our performance goals, 
and we monitored how well we performed and supported our staff using 
15 annual performance measures. The results of our efforts are 
reflected in our solid performance in fiscal year 2011—we met or 
exceeded all but two of the performance targets we set for our client 
and people measures—those for which data are available (see table 1). 
We exceeded our targets for our two priority measures—financial and 
nonfinancial benefits. We achieved $45.7 billion in financial 
benefits, exceeding our target of $42 billion by $3.7 billion. 
[Footnote 5] This represents an $81 return on every dollar the 
Congress invested in us. We recorded 1,318 nonfinancial benefits, 
exceeding our target of 1,200 by 118 benefits. We met our target for 
past recommendations implemented and we exceeded our target for new 
products with recommendations by 8 percentage points. We did not meet 
our target of 200 hearings at which we were asked to testify, due to 
fewer-than-anticipated hearings in a range of subject areas. We did 
meet the target for delivering our products and testimonies to our 
clients in a timely manner. We also met or exceeded our annual targets 
for six of seven of our people measures. 

Concerning our two internal operations measures, we assess our 
performance related to how well our internal administrative services 
(e.g., computer support, mail service, and physical security) help 
employees get their jobs done or impact employees’ quality of work 
life based on responses to an annual internal survey. These measures 
are directly related to our efforts under goal 4 of our strategic plan 
to enable quality, timely service to the Congress and being a leading 
practices federal agency. The survey asks staff to rank the importance 
of each service to them and indicate their satisfaction with it. There 
always is a lag in reporting on this measure because our customer 
feedback survey is conducted after we issue the performance and 
accountability report. In fiscal year 2010, our scores were 3.94 for 
each of our measures to help get the job done and for our quality of 
work life. We did not meet our targets of 4.0 for both scores. 
However, on a scale of 1 to 5, with 5 being the highest, these scores 
indicate that our employees were largely satisfied with the internal 
administrative services we provide. 

Table 1: Agencywide Summary of Annual Measures and Targets: 

Performance Measure: Results: Financial benefits (dollars in 
billions); 
2006 Actual: $51.0 billion; 
2007 Actual: $45.9 billion; 
2008 Actual: $58.1 billion; 
2009 Actual: $43.0 billion; 
2010 Actual: $49.9 billion; 
2011 Target: $42.0 billion; 
2011 Actual: $45.7 billion; 
Met/Not Met: Met; 
2012 Target: $40.0 billion. 

Performance Measure: Results: Nonfinancial benefits; 
2006 Actual: 1,342; 
2007 Actual: 1,354; 
2008 Actual: 1,398; 
2009 Actual: 1,315; 
2010 Actual: 1,361; 
2011 Target: 1,200; 
2011 Actual: 1,318; 
Met/Not Met: Met; 
2012 Target: 1,200. 

Performance Measure: Results: Past recommendations implemented; 
2006 Actual: 82%; 
2007 Actual: 82%; 
2008 Actual: 83%; 
2009 Actual: 80%; 
2010 Actual: 82%; 
2011 Target: 80%; 
2011 Actual: 80%; 
Met/Not Met: Met; 
2012 Target: 80%. 

Performance Measure: Results: New products with recommendations; 
2006 Actual: 65%; 
2007 Actual: 66%; 
2008 Actual: 66%; 
2009 Actual: 68%; 
2010 Actual: 61%; 
2011 Target: 60%; 
2011 Actual: 68%; 
Met/Not Met: Met; 
2012 Target: 60%. 

Performance Measure: Client: Testimonies; 
2006 Actual: 240; 
2007 Actual: 276; 
2008 Actual: 298; 
2009 Actual: 203; 
2010 Actual: 192; 
2011 Target: 200; 
2011 Actual: 174; 
Met/Not Met: Not Met; 
2012 Target: 180. 

Performance Measure: Client: Timeliness[A]; 
2006 Actual: 93%; 
2007 Actual: 95%; 
2008 Actual: 95%; 
2009 Actual: 95%; 
2010 Actual: 95%; 
2011 Target: 95%; 
2011 Actual: 95%; 
Met/Not Met: Met; 
2012 Target: 90%. 

Performance Measure: People: New hire rate; 
2006 Actual: 94%; 
2007 Actual: 96%; 
2008 Actual: 96%; 
2009 Actual: 99%; 
2010 Actual: 95%; 
2011 Target: 95%; 
2011 Actual: 84%;
Met/Not Met: Not Met; 
2012 Target: 95%. 

Performance Measure: People: Retention rate: With retirements; 
2006 Actual: 90%; 
2007 Actual: 90%; 
2008 Actual: 90%; 
2009 Actual: 94%; 
2010 Actual: 94%; 
2011 Target: 90%; 
2011 Actual: 92%; 
Met/Not Met: Met; 
2012 Target: 90%. 

Performance Measure: People: Retention rate: Without retirements; 
2006 Actual: 94%; 
2007 Actual: 94%; 
2008 Actual: 93%; 
2009 Actual: 96%; 
2010 Actual: 96%; 
2011 Target: 94%; 
2011 Actual: 96%; 
Met/Not Met: Met; 
2012 Target: 94%. 

Performance Measure: People: Staff development[B]; 
2006 Actual: 76%; 
2007 Actual: 76%; 
2008 Actual: 77%; 
2009 Actual: 79%
2010 Actual: 79%; 
2011 Target: 76%; 
2011 Actual: 79%; 
Met/Not Met: Met; 
2012 Target: 76%. 

Performance Measure: People: Staff utilization[B,C]; 
2006 Actual: 75%; 
2007 Actual: 73%; 
2008 Actual: 75%; 
2009 Actual: 78%; 
2010 Actual: 77%; 
2011 Target: 75%; 
2011 Actual: 78%; 
Met/Not Met: Met; 
2012 Target: 75%. 

Performance Measure: People: Effective leadership by supervisors 
[B,D]; 
2006 Actual: 79%; 
2007 Actual: 79%; 
2008 Actual: 81%; 
2009 Actual: 83%; 
2010 Actual: 83%; 
2011 Target: 80%; 
2011 Actual: 83%; 
Met/Not Met: Met; 
2012 Target: 80%. 

Performance Measure: People: Organizational climate[B]; 
2006 Actual: 73%; 
2007 Actual: 74%; 
2008 Actual: 77%; 
2009 Actual: 79%; 
2010 Actual: 79%; 
2011 Target: 75%; 
2011 Actual: 80%; 
Met/Not Met: Met; 
2012 Target: 75%. 

Performance Measure: Internal operations[E]: Help get job done; 
2006 Actual: 4.1; 
2007 Actual: 4.05; 
2008 Actual: 4.0; 
2009 Actual: 4.03; 
2010 Actual: 3.94; 
2011 Target: 4.0; 
2011 Actual: N/A; 
Met/Not Met: N/A; 
2012 Target: 4.0. 

Performance Measure: Internal operations[E]: Quality of work life; 
2006 Actual: 4.0; 
2007 Actual: 3.98; 
2008 Actual: 4.01; 
2009 Actual: 4.01; 
2010 Actual: 3.94;  
2011 Target: 4.0; 
2011 Actual: N/A; 
Met/Not Met: N/A; 
2012 Target: 4.0. 

Source: GAO. 

Note: Information explaining all of the measures included in this 
table appears in the Appendix on Data Quality of this report. 

[A] The timeliness measure is based on one question on a form sent out 
to selected clients. The response rate for the form in fiscal year 
2011 was 25 percent, and 98 percent of the clients who responded 
answered this question. The percentage shown in the table represents 
the percentage of respondents who answered favorably to this question 
on the form. 

[B] This measure is derived from our annual agencywide employee 
feedback survey. From the staff who expressed an opinion, we 
calculated the percentage of those who selected favorable responses to 
the related survey questions. Responses of “no basis to judge/not 
applicable” or “no answer” were excluded from the calculation. While 
including these responses in the calculation would result in a 
different percentage, our method of calculation is an acceptable 
survey practice, and we believe it produces a better and more valid 
measure because it represents only those employees who have an opinion 
on the questions. 

[C] 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 (3) 
in general, I was utilized effectively. 

[D] In fiscal year 2009, we changed the name of this measure from “ 
Leadership” to its current nomenclature to clarify that the measure 
reflects employees’ satisfaction with their immediate supervisors’ 
leadership. In fiscal year 2010, we changed one of the questions for 
this measure. 

[E] For our internal operations measures, we ask staff to rank 32 
internal services available to them and to indicate on a scale from 1 
to 5, with 5 being the highest, their satisfaction with each service. 
These measures are described in more detail on page 37 of this report. 
We will report actual data for fiscal year 2011 once data from our 
November 2011 internal customer satisfaction survey have been 
analyzed. N/A indicates that the data are not yet available. 

[End of Table 1: Agencywide Summary of Annual Measures and Targets] 

Our fiscal year 2012 targets for 12 of 15 of our performance measures 
are the same as those targets we reported in our fiscal year 2012 
performance plan in February 2011. We believe that these targets are 
challenging yet realistic for our staff given current fiscal 
constraints. For example, we lowered our financial benefits target for 
2012 from $42 billion to $40 billion. We expect to have fewer 
resources to monitor agency actions to implement our recommendations. 

To help us examine trends over time, we look at 4-year rolling 
averages for the following performance measures: financial benefits, 
nonfinancial benefits, new products with recommendations, and 
testimonies. We calculate 4-year rolling averages because historically 
our performance on these measures has fluctuated from year to year, 
and this calculation 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 our averages 
for financial benefits and new products with recommendations increased 
each year from 2006 to 2009 and then remained fairly stable from 2009 
to 2011. The average number of nonfinancial benefits we recorded 
increased from 2006 to 2008 and has remained fairly stable for the 
period from 2009 to 2011. 

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

Performance measure: Results: Financial benefits; 
2006: $43.0 billion; 
2007: $45.1 billion; 
2008: $48.7 billion; 
2009: $49.5 billion; 
2010: $49.2 billion; 
2011: $49.2 billion. 

Performance measure: Results: Nonfinancial benefits; 
2006: 1,248; 
2007: 1,325; 
2008: 1,376; 
2009: 1,352; 
2010: 1,357; 
2011: 1,348. 

Performance measure: Results: New products with recommendations; 
2006: 61%; 
2007: 64%; 
2008: 65%; 
2009: 66%; 
2010: 65%; 
2011: 66%. 

Performance measure: Client: Testimonies; 
2006: 206; 
2007: 228; 
2008: 248; 
2009: 254; 
2010: 242; 
2011: 217. 

Source: GAO. 

[End of Table 2: Four-Year Rolling Averages for Selected GAO Measures] 

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, in addition to our 4- 
year rolling averages and our past performance. Our experience has 
shown that during the fiscal year in which an election occurs, the 
Congress generally holds fewer hearings. In the months after an 
election, the members usually only meet for a short session, and then 
they reorganize in the following months, providing fewer opportunities 
for us to testify. In both 2010 and 2011, our experience was less than 
anticipated because of a congressional focus on a few key policy areas 
that did not encompass as many hearings on our broad scope of work as 
in recent years. We therefore have set a lower target for 
congressional testimonies in 2012. 

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. In many cases, the benefits we 
claimed in fiscal year 2011 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. Our methodology for 
determining financial benefits can be found in table 19 in the 
Appendix on Data Quality of this report. 

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 financial benefit 
can be the result of changes in business operations and activities; 
the restructuring of federal programs; or modifications to 
entitlements, taxes, or user fees. 

In fiscal year 2011, our work generated about $45.7 billion in 
financial benefits (see figure 7). We exceeded our target by almost 9 
percent because of several large unanticipated accomplishments. Part 
II of this report provides more information on these accomplishments 
by goal. (See figure 8.) In light of resource constraints that may 
affect our ability to follow up on actions taken, we have reduced our 
target for financial benefits to $40 billion in 2012. 

Figure 7: Financial Benefits GAO Recorded: 

[Refer to PDF for image: vertical bar graph] 

2006 Actual: $51.0 billion; 
2007 Actual: $45.9 billion; 
2008 Actual: $58.1 billion; 
2009 Actual: $43.0 billion; 
2010 Actual: $49.9 billion; 
2011 Target: $42.0 billion; 
2011 Actual: $45.7 billion. 

Source: GAO. 

[End of Figure 7: Financial Benefits GAO Recorded] 

Financial benefits included in our performance measures are net 
benefits—that is, estimates of financial benefits that have been 
reduced by the estimated 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. We limit the period over which benefits from an 
accomplishment can accrue to no more than 5 years. 

Estimates used to calculate our financial benefits 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. Additional examples of financial benefits can be found in Part 
II of this report. 

Figure 8: GAO’s Selected Major Financial Benefits Reported in Fiscal 
Year 2010: 

[Refer to PDF for image: table] 

Description: Termination of Future Combat System (FCS) Manned Ground 
Vehicle. Section 211 of the fiscal 2006 National Defense Authorization 
Act required us to provide annual reports on the Army’s FCS. We 
reported that knowledge deficiencies remained in key areas—critical 
technologies, FCS system designs, actual demonstrations, and network 
performance. In April 2009, the Secretary of Defense effectively made 
a no-go decision on the program when he recommended canceling the 
manned ground vehicle portion of the FCS development effort—8 of 14 
core systems—and directed the Army to pursue an alternative ground 
combat vehicle program, as well as to demonstrate and field the FCS 
spinout equipment. The President’s budget request reflected this 
decision, and the Office of Management and Budget cited our work in 
its rationale. 
[hyperlink, http://www.gao.gov/products/GAO-09-288]; 
Amount: $11.2 billion. 

Description: Department of Defense (DOD) Transformational Satellite 
(TSAT) Communications System Termination. TSAT is one of the most 
ambitious, expensive, and complex space systems ever built. In 2003, 
we recommended that the start of the TSAT acquisition program be 
delayed until the program showed that the technologies were mature and 
the design was feasible and producible. In 2006, we reported that DOD 
was not meeting the original cost, schedule, and performance goals and 
the satellite’s initial capability would be less than what DOD 
planned. Citing our 2009 assessment of the program, the President’s 
Fiscal Year 2010 Budget proposed to terminate the TSAT program because 
of significant cost increases and schedule delays. 
[hyperlink, http://www.gao.gov/products/GAO-06-537], 
[hyperlink, http://www.gao.gov/products/GAO-04-71R]; 
Amount: $5.3 billion. 

Description: Reductions in Payments to Medicare Advantage (MA) Plans. 
Medicare spending on private health plans increased rapidly after the 
enactment of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003, rising 64 percent from 2004 to 2006, while 
enrollment increased by more than 50 percent. For 2007, some 
beneficiaries enrolled in the MA program could have experienced higher 
cost sharing than if they were enrolled in Medicare fee-for-service. 
For 2005, MA plans spent less on medical expenses than they had 
projected, leading to profits that were about $1.14 billion greater 
than projected. Congressional staff said our body of work was 
instrumental in the passage of the 2008 Medicare Improvements for 
Patients and Providers Act, which reduced payments to the MA program. 
[hyperlink, http://www.gao.gov/products/GAO-08-359], 
[hyperlink, http://www.gao.gov/products/GAO-08-827R], 
[hyperlink, http://www.gao.gov/products/GAO-08-522T]; 
Amount: $3.6 billion. 

Description: DOD Terminates Multiple Kill Vehicle (MKV) Program. In 
March 2008, we reported that the MKV program encountered technical 
anomalies during testing that led to multiple investigations and cost 
increases. In July 2008, we reported that DOD had not yet established 
an effective process to identify, prioritize, and address the 
combatant command’s ballistic missile defense needs. In March 2009, we 
highlighted software development issues that affected planned tests 
and further development of the MKV program. Citing our information, 
the administration terminated the MKV program and the Congress did not 
appropriate funds for the program in the Fiscal Year 2010 DOD 
Appropriations Act. The associated reduction for fiscal years 2010 
through 2013 is about $2.7 billion. 
[hyperlink, http://www.gao.gov/products/GAO-09-338], 
[hyperlink, http://www.gao.gov/products/GAO-08-448], 
[hyperlink, http://www.gao.gov/products/GAO-08-740]; 
Amount: $2.7 billion. 

Description: Congress Transfers Funds into “Cash for Clunkers” 
Program. In 2008, as part of a mandated review of the Department of 
Energy’s (DOE) implementation of the Loan Guarantee Program for 
Innovative Energy Technologies, we reported that DOE was not well 
positioned to manage the program effectively or maintain 
accountability because it had not completed a number of key management 
and internal control activities. In 2009, we updated the 
appropriations staff on DOE’s efforts to address our previous 
recommendations regarding program management and accountability. We 
also noted that DOE had received loan guarantee applications for at 
least 68 projects but had committed to only one loan guarantee, even 
though a number of the applications had been submitted in response to 
a solicitation issued in 2006. Subsequently, in August 2009, the 
Congress authorized the transfer of about $2.05 billion from the Loan 
Guarantee program to the “Cash for Clunkers” program. 
[hyperlink, http://www.gao.gov/products/GAO-10-627], 
[hyperlink, http://www.gao.gov/products/GAO-08-750]; 
Amount: $2.05 billion. 

Description: Pakistani Reimbursement Claims. In June 2008, we reported 
that DOD did not consistently apply its Coalition Support Funds 
oversight guidance and that deficiencies existed in its oversight 
procedures. The DOD Comptroller’s 2003 guidance calls for Coalition 
Support Fund reimbursement claims to contain quantifiable information 
to substantiate claims, but DOD did not obtain detailed documentation 
to verify that claimed costs were valid, actually incurred, or 
correctly calculated. In response to our recommendations, DOD issued 
revised guidance for requesting and processing Coalition Support Fund 
claims. Additionally, in fiscal 2011, DOD provided data on Coalition 
Support Fund payments to Pakistan for 2008 through 2009. The cost 
reduction associated with the improved reimbursement process is about 
$1.1 billion. 
[hyperlink, http://www.gao.gov/products/GAO-08-806; 
Amount: $1.1 billion. 

Source: GAO. 

Note: Additional examples of fiscal year 2011 financial benefits can 
be found in Part II of this report. 

[End of Figure 8: GAO’s Selected Major Financial Benefits Reported in 
Fiscal Year 2010] 

Nonfinancial Benefits: 

Many of the benefits that result from our work cannot be measured in 
dollar terms. During fiscal year 2011, we recorded a total of 1,318 
nonfinancial benefits (see figure 9). We exceeded our target by nearly 
10 percent largely because of a number of accomplishments we 
documented that related to national security, defense acquisitions, 
and international affairs. We have set our 2012 target for 
nonfinancial benefits at 1,200 again, notwithstanding resource 
constraints. 

Figure 9: Nonfinancial Benefits: 

[Refer to PDF for image: vertical bar graph] 

2006 Actual: 1,342; 
2007 Actual: 1,354; 
2008 Actual: 1,398; 
2009 Actual: 1,315; 
2010 Actual: 1,361; 
2011 Target: 1,200; 
2011: Actual: 1,318. 

Source: GAO. 

[End of Figure 9: Nonfinancial Benefits] 

In fiscal year 2011 we documented actions taken across federal 
programs—-about 32 percent of the total nonfinancial benefits were in 
the area of public safety and security, including programs such as 
homeland security and justice programs and critical technologies. 
About 40 percent resulted from improvements in business process and 
management, such as improved oversight of federal oil and gas 
resources and detection of fraud, waste, and abuse. (See figure 10.) 
In figure 11, we provide examples of nonfinancial benefits we claimed 
as accomplishments in fiscal year 2011. Additional examples of 
nonfinancial benefits can be found in Part II of this report. 

Figure 10: Types of Fiscal Year 2011 Nonfinancial Benefits: 

[Refer to PDF for image: vertical bar graph] 

Public Insurance and Benefits: 3%; Public Safety and Security: 32%; 
Acquisition and Contract Management: 9%; Tax Law Administration: 3%; 
Program Efficiency and Effectiveness: 13%; Business Process and 
Management: 40%. 

Source: GAO. 

Note: These categories closely align with those in our high-risk list 
(see table 7). 

[End of Figure 10: Types of Fiscal Year 2011 Nonfinancial Benefits] 

Examples of programs included in categories: 

* Public Insurance and Benefits: Medicare, Medicaid, Department of 
Veterans Affairs and DOD health care, disability programs, national 
flood insurance, federal deposit insurance, and other insurance 
programs. 

* Public Safety and Security: Homeland security and justice programs, 
critical infrastructure, critical technologies, food safety, 
transportation safety, telecommunications safety, international food 
assistance, public health, consumer protection, environmental issues, 
and national defense and foreign policy. 

* Acquisition and Contract Management: DOD weapon system acquisition, 
National Aeronautics and Space Administration acquisition management, 
and all federal agency and interagency contract management. 

* Tax Law Administration: Internal Revenue Service (IRS) business 
systems modernization, tax policy, and enforcement of tax laws. 

* Program Efficiency and Effectiveness: Fraud, waste, and abuse; U.S. 
financial regulatory system; federal oil and gas resources; U.S. 
Postal Service; transportation funding; and telecommunications funding. 

* Business Process and Management: Federal agency financial audits, 
federal information systems, federal real property, human capital 
management, DOD business transformation, business systems 
modernization, financial management, support infrastructure 
management, and supply chain management. 

Figure 11: GAO’s Selected Nonfinancial Benefits Reported in Fiscal 
Year 2011: 

[Refer to PDF for image: table] 

Program: Public Insurance and Benefits; Description: Enforcement 
Actions Posted on Nursing Home Compare. In March 2007, we reported 
that while Nursing Home Compare had been modified a number of times to 
add important quality information, such as the results of surveys and 
complaint investigations, it did not contain information about the 
sanctions implemented against nursing homes. To improve public 
information available to consumers that helps them assess the quality 
of nursing home care, we recommended that the Centers for Medicare & 
Medicaid Services (CMS) expand Nursing Home Compare to include 
implemented sanctions, such as the amount of civil monetary penalties 
and the duration of denial of payment for new admissions. In July 
2011, CMS began posting such information on Nursing Home Compare. 
[hyperlink, http://www.gao.gov/products/GAO-10-844T], 
[hyperlink, http://www.gao.gov/products/GAO-05-656]. 

Program: Public Safety and Security; Description: HHS Finalized 
Antiviral Guidance for Pharmaceutical Interventions during Influenza 
Pandemic. Antivirals are a type of pharmaceutical intervention 
available during an influenza pandemic. They are one of the primary 
methods used to prevent the spread of disease as well as to reduce 
morbidity and mortality caused by the influenza virus. Given the wider 
recognition of factors, such as protecting health care and law 
enforcement personnel, needed to keep society functioning, and a 
greater production capacity, we noted the need for the Department of 
Health and Human Services (HHS) to finalize guidance on how antivirals 
would be used during a pandemic. In December 2008, HHS released 
guidance incorporating the recognition of these and other factors. 
[hyperlink, http://www.gao.gov/products/GAO-08-671]. 

Program: Acquisition and Contract Management; Description: Reducing 
Risk in Government Contracting. The federal government spends more 
than $500 billion annually on goods and services, using a variety of 
contracting mechanisms. We identified opportunities for cost savings 
and reduced risk to the government in a series of reports on 
undefinitized contracts, use of blanket purchase agreements where 
discounts were not sought, and cost-reimbursement contracts. As a 
result of our work, federal acquisition regulations were amended and 
the Office of Federal Procurement Policy and DOD issued new policies 
to focus on opportunities to reduce risk in government contracting. 
[hyperlink, http://www.gao.gov/products/GAO-10-299], 
[hyperlink, http://www.gao.gov/products/GAO-09-792], 
[hyperlink, http://www.gao.gov/products/GAO-09-921]. 

Program: Tax Law Administration; Description: Congress Increased the 
Statute of Limitations for IRS Audits of Offshore Financial Activity. 
In 2007, we found that the time it took the IRS to complete 
examinations involving U.S. taxpayers with offshore financial activity 
was significantly longer than for other examinations and that 
additional time was required for these examinations because of their 
technical complexity and challenges associated with obtaining 
information from foreign sources. As a result, IRS examiners may 
prematurely close, or not even open, offshore-related examinations 
because of the 3-year statute of limitations. We suggested that the 
Congress extend the statute of limitations for examinations involving 
offshore financial activity. The Hiring Incentives to Restore 
Employment Act, enacted in March 2010, included provisions from the 
Foreign Account Tax Compliance Act that increase the statute of 
limitations to 6 years for offshore examinations. 
[hyperlink, http://www.gao.gov/products/GAO-07-237]. 

Program: Program Efficiency and Effectiveness; Description: Small 
Business Administration (SBA) Decertifies Companies from Historically 
Underutilized Business Zone (HUBZone) Program. In July 2008, we 
reported on control weaknesses and vulnerabilities in SBA’
 s application and monitoring process for its HUBZone Program that 
exposed the government to fraud and abuse. In March 2009, we also 
found that fraud and abuse in the HUBZone Program extends beyond the 
Washington, D.C., area. Based on our investigations of HUBZone 
companies in Texas, Alabama, and California, we determined that 
several companies did not meet the program eligibility requirements 
and referred these companies to the SBA Inspector General for further 
investigation. As a result, SBA took action and decertified the 
companies from the HUBZone Program. 
[hyperlink, http://www.gao.gov/products/GAO-09-440]. 

Program: Business Process and Management; Description: OMB Sets 
Milestones for Implementation of the Infrastructure Needed for Use of 
Personal Identity Verification (PIV) Cards. In February 2008, we 
reported that much work had been accomplished to lay the foundations 
for implementation of Homeland Security Presidential Directive 12 
(HSPD-12), but that agencies had made limited progress in implementing 
and using PIV cards. We recommended that OMB revise its approach to 
overseeing implementation of HSPD-12 by establishing realistic 
milestones for full implementation of the infrastructure needed to 
best use the electronic authentication capabilities of PIV cards in 
agencies. In response, OMB issued memorandum M-11-11 setting such 
milestones. 
[hyperlink, http://www.gao.gov/products/GAO-08-292]. 

Source: GAO. 

Note: Additional examples of fiscal year 2011 nonfinancial benefits 
can be found in Part II of this report. 

[End of Figure 11: GAO’s Selected Nonfinancial Benefits Reported in 
Fiscal Year 2011] 

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 2011, 80 percent of the 
recommendations we made in fiscal year 2007 had been implemented (see 
figure 12), primarily by executive branch agencies. Putting these 
recommendations into practice generates tangible benefits for the 
nation. 

Figure 12: Percentage of Past Recommendations Implemented 

[Refer to PDF for image: vertical bar graph] 

Four-year implementation rate: 
2006 Actual: 82%; 
2007 Actual: 82%; 
2008 Actual: 83%; 
2009 Actual: 80%; 
2010 Actual: 82%; 
2011 Target: 80%; 
2011 Actual: 80%. 

Source: GAO. 

[End of Figure 12: Percentage of Past Recommendations Implemented] 

The 80 percent implementation rate for fiscal year 2011 met our target 
for the year. As figure 13 indicates, agencies need time to act on 
recommendations. We assess recommendations implemented after 4 years 
based on our experience that recommendations remaining open after that 
period of time are generally not implemented in subsequent years. 

Figure 13: Cumulative Implementation Rate for Recommendations Made in 
Fiscal Year 2007: 

[Refer to PDF for image: vertical bar graph] 

After 1 year: 9%; 
After 2 years: 32%; 
After 3 years: 41%; 
After 4 years: 80%. 

Source: GAO. 

[End of Figure 13: Cumulative Implementation Rate for Recommendations 
Made in Fiscal Year 2007] 

New Products Containing Recommendations: 

In fiscal year 2011, about 68 percent of the 592 written products we 
issued (excluding testimonies) contained recommendations (see figure 
14). We track the percentage of new products with recommendations 
because we want to focus on developing 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 8 percentage points. However, we have set our target again 
in fiscal year 2012 at 60 percent because we recognize that our 
products do not always include recommendations, and the Congress and 
agencies often find informational reports 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 substantial 
financial and key nonfinancial benefits. Hence, this measure allows us 
some flexibility in responding to requests that result in reports 
without recommendations. 

Figure 14: Percentage of New Products with Recommendations: 

[Refer to PDF for image: vertical bar graph] 

2006 Actual: 65%; 
2007 Actual: 66%. 
2008 Actual: 66%; 
2009 Actual: 68%; 
2010 Actual: 61%; 
2011 Target: 60%; 
2011 Actual: 68%. 

Source: GAO. 

[End of Figure 14: Percentage of New Products with Recommendations] 

Focusing on Our Client: 

To fulfill the Congress’s information needs, we plan 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 
the Congress well, by striving to respond to all congressional 
requests for testimony and delivering almost all of our products on 
time based on the feedback from our clients. 

Testimonies: 

Our clients often invite us to testify on our current and past work as 
it relates to issues that committees are examining through the 
congressional hearing process. During fiscal year 2011, experts from 
our staff testified at 174 congressional hearings covering a wide 
range of complex issues. We did not meet our target of 200 hearings at 
which we testify (see figure 15) by 26 hearings. This measure is 
client driven based on invitations to testify, and we cannot always 
anticipate clients’ specific subject area interests. The 174 hearings 
at which the Congress asked our executives to testify in fiscal year 
2011 covered the scope of our mission areas. (See figure 17 for 
selected topics we testified on by strategic goal in fiscal year 
2011.) Fifty-seven of the hearings at which our senior executives 
testified were related to high-risk areas and programs, which are 
listed on page 39. 

Figure 15: Testimonies: 

[Refer to PDF for image: vertical bar graph] 

Hearings at which GAO testified: 

2006 Actual: 240; 
2007 Actual: 276. 
2008 Actual: 298; 
2009 Actual: 203; 
2010 Actual: 192; 
2011 Target: 200; 
2011 Actual: 174. 

Source: GAO. 

[End of Figure 15: Testimonies] 

We have reduced our fiscal year 2012 target of testimonies to 180 
hearings and believe this should be a reasonable estimate given recent 
trends and the Congress’s continuing interest in financial regulatory 
reform, natural resources, and the conflicts in Iraq and Afghanistan. 

Timeliness: 

To be useful to the Congress, our products must be available when our 
clients need them. In fiscal year 2011, we met our timeliness target 
of 95 percent. (See figure 16.) We outreach directly to our clients 
through several means, including an electronic feedback form. We use 
the results of our client feedback form as a primary source and 
barometer for whether we are getting our products to our congressional 
clients when they need the information. To calculate this result, we 
tally responses from the form 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 6] and those 
expected to reach 500 staff days or more), which represented about 56 
percent of the congressionally requested written products we issued in 
fiscal year 2011. Because our products usually have multiple 
requesters, we often send forms to more than one congressional staff 
person per testimony or product. One of the questions on each form 
asks the client whether the product was provided or delivered on time. 
In fiscal year 2011, of the forms returned to us, 98 percent of the 
congressional staff responding answered the question on timeliness. 
Overall, the response rate to our entire form was 25 percent, though 
we received feedback on 50 percent of the products for which we sent 
forms. 

We have consistently set a high target for timeliness because it is 
important for us to meet congressional needs when they occur. We have 
reduced our fiscal year 2012 target to 90 percent because of resource 
constraints that may affect our on-time delivery. 

Figure 16: Timeliness: 

[Refer to PDF for image: vertical bar graph] 

Percentage of products on time: 

2006 Actual: 93%; 
2007 Actual: 95%; 
2008 Actual: 95%; 
2009 Actual: 95%; 
2010 Actual: 95%; 
2011 Target: 95%; 
2011 Actual: 95%. 

Source: GAO. 

[End of Figure 16: Timeliness] 

Focusing on Our People: 

Our highly professional, multidisciplinary, and diverse staff were 
critical to the level of performance we demonstrated in fiscal year 
2011. 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 2011, 
we met or exceeded six of seven of our people measures. These measures 
are directly linked to our goal 4 strategic objective of being a 
leading practices federal agency. For more information about our 
people measures, see Table 19 on page 126 of this report. 

New Hire Rate: 

Our new hire rate is the ratio of the number of people hired to the 
number we planned to hire. We develop an annual workforce plan that 
takes into account strategic goals; projected workload requirements; 
and other changes, such as retirements, other attrition, promotions, 
and skill gaps. The workforce plan specifies the number of planned 
hires for the upcoming year. The plan is conveyed to each of our units 
to guide hiring throughout the year. Adjustments to the plan are made 
throughout the year, if necessary, to reflect changing needs and 
conditions. In fiscal year 2011, our original plan was to hire 90 new 
staff. Because of the delay in receiving our final appropriations, 
compounded by a significantly reduced budget, we adjusted our plan to 
56 new staff, but we were only able to bring on board 47 staff by 
year- end. Table 3 shows that we did not meet our target of 95 percent 
of our goal for new hires, achieving an 84 percent new hire rate. 

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

Performance measures: People: New hire rate; 
2006 Actual: 94%; 
2007 Actual: 96%; 
2008 Actual: 96%; 
2009 Actual: 99%; 
2010 Actual: 95%; 
2011 Target: 95%; 
2011 Actual: 84%. 

Source: GAO. 

[End of Table 3: Actual Performance and Targets Related to Our New 
Hire Rate Measure] 

Figure 17: Selected Testimony Topics: Fiscal Year 2011: 

[Refer to PDF for image: table] 

Goal 1: Address Current and Emerging Challenges to the Well-Being and 
Financial Security of the American People: 

* Safety of Medical Devices; 
* DOD and VA Care Coordination Program; 
* VA Prevention of Sexual Assaults; 
* State Oversight of Private Health Insurance Rates; 
* Potential Overlap and Duplication in Government Programs; 
* Incapacitated Adults; 
* Federal Workers’ Compensation; 
* Military and Veterans Disability System; 
* Oversight of DOD Tuition Assistance Program; 
* Securities Lending in 401(k) Plans; 
* Pension Benefit Guaranty Corporation Management; 
* Financial Literacy; 
* Mortgage Foreclosures Regulatory Oversight; 
* Oversight of Residential Appraisals; 
* TARP; 
* Interior’s Major Management Challenges; 
* Federal Oil and Gas Restructuring; 
* Improvements Needed for Safe Drinking Water; 
* Food and Agriculture Emergency Preparedness; 
* Airport and Airway Trust Funds; 
* Traffic and Vehicle Safety; 
* Use of Recovery Act Transportation Funds; 
* Unneeded Owned and Leased Federal Facilities; 
* VA Real Property Realignment; 
* Needed U.S. Postal Service Legislation. 

Goal 2: Respond to Changing Security Threats and the Challenges of 
Global Interdependence: 

* DHS 10 Years After 9/11; 
* Electronic Employment Eligibility Verification; 
* Aviation Security Behavior Detection Program; 
* Maritime Security U.S. Counterpiracy Action Plan; 
* Cross-Border Currency Smuggling; 
* Assessing National Preparedness Capabilities; 
* Visa Overstay Enforcement; 
* Combatting Nuclear Smuggling; 
* Flood Insurance Reform; 
* Efforts to Address Terrorist Safe Havens; 
* Antidumping and Countervailing Duties; 
* Diplomatic Security Training Challenges; 
* DOD Space Acquisitions; 
* Missile Defense Transparency and Accountability; 
* DOD Cost Overruns; 
* Joint Strike Fighter Program Restructuring; 
* Coast Guard Deepwater Program; 
* Army’s Ground Force Modernization; 
* Littoral Combat Ship Acquisition Strategies; 
* Contract Oversight of non-U.S. Vendors in Afghanistan; 
* Addressing Urgent Warfighter Needs; 
* Personnel Security Clearance Process. 

Goal 3: Help Transform the Federal Government to Address National 
Challenges: 

* Oversight and Accountability of Federal Grants; 
* Reducing Improper Payments; 
* Fiscal Year 2010 U.S. Government Financial Statements; 
* DOD Financial Management Challenges; 
* Medicare and Medicaid Fraud, Waste, and Abuse; 
* Fraud Prevention in Service-Disabled Veteran-Owned Small Business 
Program; 
* Fraud Prevention in SBA’s 8(a) Program; 
* Tax Delinquent Recovery Act Contractors; 
* Protecting Federal Information Systems; 
* Information Technology Investment Oversight; 
* VA Information Technology; 
* Federal Information Technology Spending; 
* Unfunded Mandates Reform Act Requirements; 
* Budget Enforcement Mechanisms; 
* 2010 Census Lessons Learned; 
* Value Added Taxes; 
* Tax System Complexity and Taxpayer Compliance; 
* GPRA Modernization Act Implementation. 

Source: GAO. 

Note: Additional information on selected testimonies can be found in 
Part II of this report. 

[End of Figure 17: Selected Testimony Topics: Fiscal Year 2011] 

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 onboard 
strength. We calculate this measure with and without retirements. Our 
exit surveys have shown that staff who retire do so for family, life, 
or health considerations; whereas nonretirees leave for new 
opportunities to work elsewhere, for family reasons, or to make better 
use of their skills. Table 4 shows that prior to fiscal years 2009 and 
2010, we consistently met the 90 percent target rate for overall 
retention (with retirements), and in fiscal years 2009 and 2010 we 
exceeded that rate by 4 percentage points. In fiscal year 2011, we 
exceeded this target rate by 2 percentage points at 92 percent. We 
also exceeded our target for our retention rate without retirements by 
2 percentage points at 96 percent. As with fiscal years 2009 and 2010, 
we attribute exceeding the target retention rates to a slow economy, 
which has caused some staff to delay retirement and reduced other 
attrition, such as resignations or transfers to other agencies. 

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

Performance measures: People: Retention rate: With retirements; 
2006 Actual: 90%; 
2007 Actual: 90%; 
2008 Actual: 90%; 
2009 Actual: 94%; 
2010 Actual: 94%; 
2011 Target: 90%; 
2011 Actual: 92%. 

Performance measures: People: Retention rate: Without retirements; 
2006 Actual: 94%; 
2007 Actual: 94%. 
2008 Actual: 93%; 
2009 Actual: 96%; 
2010 Actual: 96%; 
2011 Target: 94%; 
2011 Actual: 96%. 

Source: GAO. 

[End of Table 4: Actual Performance and Targets Related to Our 
Retention Rate Including and Excluding Retirements] 

Staff Development and Utilization, Effective Leadership by 
Supervisors, and Organizational Climate: 

One way that we measure how well we are supporting our staff and 
providing an environment for professional growth is through our annual 
employee feedback survey. This web-based survey is administered to all 
of our employees once a year. To ensure the confidentiality of every 
respondent, we use an outside contractor to administer the survey and 
to analyze the responses. 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 their 
immediate supervisors on key aspects of their leadership styles. The 
survey consists of over 100 questions. From the staff who expressed an 
opinion, we calculated the percentage of those who selected favorable 
responses to the related survey questions. Responses of “no basis to 
judge/not applicable” or “no answer” were excluded from the 
calculation. While including these responses in the calculation would 
result in a different percentage, our method of calculation is an 
acceptable survey practice, and we believe it produces a better and 
more valid measure because it represents only those employees who have 
an opinion on the questions. (See Part V of this report on pp. 132-134 
for additional information about these measures). This fiscal year, 
about 70 percent of our employees completed the survey and we exceeded 
all four targets (see table 5). Our fiscal year 2011 performance on 
all of these measures was very consistent with our fiscal year 2010 
results. Our performance on the staff development and leadership 
measures was the same as last year, and staff utilization and 
organizational climate were higher by 1 percentage point. Given our 
performance on these measures over the last 5 years, we have decided 
to retain our fiscal year 2011 targets for fiscal year 2012 (see table 
1). 

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

Performance Measures[A]: People: Staff development; 
2006 Actual: 76%; 
2007 Actual: 76%; 
2008 Actual: 77%; 
2009 Actual: 79%; 
2010 Actual: 79%; 
2011 Target: 76%; 
2011 Actual: 79%. 

Performance Measures[A]: People: Staff utilization; 
2006 Actual: 75%; 
2007 Actual: 73%; 
2008 Actual: 75%; 
2009 Actual: 78%; 
2010 Actual: 77%; 
2011 Target: 75%; 
2011 Actual: 78%. 

Performance Measures[A]: People: Effective leadership by supervisors[B]; 
2006 Actual: 79%; 
2007 Actual: 79%; 
2008 Actual: 81%; 
2009 Actual: 83%; 
2010 Actual: 83%; 
2011 Target: 80%; 
2011 Actual: 83%. 

Performance Measures[A]: People: Organizational Climate; 
2006 Actual: 73%; 
2007 Actual: 74%; 
2008 Actual: 77%; 
2009 Actual: 79%; 
2010 Actual: 79%; 
2011 Target: 75%; 
2011 Actual: 80%. 

Source: GAO. 

[A] Certain portions of our Web-based survey are used to develop these 
four measures. 

[B] In fiscal year 2009, we changed the name of this measure from 
"Leadership" to its current nomenclature to clarify that the measure 
reflects employees’ satisfaction with their immediate supervisors’ 
leadership. In fiscal year 2010, we changed one of the questions for 
this measure. 

[End of Table 5: Actual Performance and Targets Related to Our 
Measures of Employee Satisfaction with Staff Development, Staff 
Utilization, Effective Leadership by Supervisors, and Organizational 
Climate] 

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, and to set targets, we use 
information from our annual customer satisfaction survey, the results 
of which are shown in table 6. We asked staff to rank 32 internal 
services available to them and to indicate on a scale from 1 to 5, 
with 5 being the highest, their satisfaction with each service. Our 
internal operations measures are directly related to our efforts under 
goal 4 of our strategic plan to enable quality, timely service to the 
Congress and be a leading practices federal agency. The first measure 
encompasses 17 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 15 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. While we did not meet our target of 4.0 for 
each of the two categories, our score of 3.94 for each shows that 
staff are largely satisfied with the services they receive. 

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

Performance measures: Internal operations: Help get job done; 
2006 Actual: 4.10; 
2007 Actual: 4.05; 
2008 Actual: 4.00; 
2009 Actual: 4.03; 
2010 Actual: 3.94; 
2011 Target: 4.0; 
2011: Actual: N/A. 

Performance measures: Internal operations: Quality of work life; 
2006 Actual: 4.00; 
2007 Actual: 3.98; 
2008 Actual: 4.01; 
2009 Actual: 4.01; 
2010 Actual: 3.94; 
2011 Target: 4.0; 
2011: Actual: N/A. 

Source: GAO. 

Note: We will report actual data for fiscal year 2011 once the data 
from our November 2011 internal operations survey have been analyzed. 
N/A indicates that the data are not available yet. 

[End of Table 6: Actual Performance and Targets Related to Our 
Internal Operations Measures] 

GAO’s High-Risk Program: 

In 1990, we began our high-risk program to highlight long-standing 
challenges facing the federal government. Historically, we designated 
high-risk areas based on their increased susceptibility to fraud, 
waste, abuse, and mismanagement. As the program has evolved, we have 
also used the high-risk designation to draw attention to the need for 
broad-based transformation to achieve greater efficiency, 
effectiveness, accountability, and sustainability of key government 
programs and operations. 

[Text box: Our 2011 high-risk area work: 
* 186 reports; 
* 57 testimonies; 
* $29.2 billion in financial benefits; 
* 544 nonfinancial benefits. 
End of text box] 

Issued to coincide with the start of each new Congress, our high-risk 
updates have helped sustain attention from members of the Congress who 
are responsible for oversight and from executive branch officials who 
are accountable for performance. Overall, our high-risk program has 
served to identify and help resolve serious weaknesses in areas that 
involve substantial resources and provide critical services to the 
public. Since 1990, GAO has designated over 50 areas as high risk and 
subsequently removed over one-third of the areas based on progress 
made. As of the end of fiscal year 2011, our high-risk list 
highlighted 30 areas across government. Table 7 lists each current 
high-risk area and the year it was added to the list. 

In our February 2011 high-risk update (GAO-11-278), we reported that 
sufficient progress had been made to remove the high-risk designation 
from two areas: the DOD Personnel Security Clearance Program and the 
2010 Census. High-level attention by DOD, OMB, and the Office of the 
Director of National Intelligence, along with consistent congressional 
oversight, led to significant improvements in processing security 
clearances. For example, DOD processed 90 percent of all initial 
clearances in an average of 49 days in fiscal year 2010 and thus met 
the 60-day statutory timeliness objective. The U.S. Census Bureau, 
with active congressional oversight, took steps to address problems we 
pointed out since designating the 2010 Census a high-risk area in 
March 2008. Those steps included efforts to control costs, better 
manage operations, strengthen its risk management activities, and 
enhance the testing of automated systems. 

Table 7: GAO’s High-Risk List as of September 30, 2011: 

High-risk area: Strengthening the Foundation for Efficiency and 
Effectiveness: 

* Management of Federal Oil and Gas Resources (new); 
Year designated: 2011. 

* Modernizing the Outdated U.S. Financial Regulatory System; 
Year designated: 2009. 

* Restructuring the U.S. Postal Service to Achieve Sustainable 
Financial Viability; 
Year designated: 2007. 

* Funding the Nation’s Surface Transportation System; 
Year designated: 2008. 

* Strategic Human Capital Management; 
Year designated: 2001. 

* Managing Federal Real Property; 
Year designated: 2003. 

High-risk area: Transforming DOD Program Management; 

* DOD Approach to Business Transformation; 
Year designated: 2005. 

* DOD Business Systems Modernization; 
Year designated: 1995. 

* DOD Support Infrastructure Management; 
Year designated: 1997. 

* DOD Financial Management; 
Year designated: 1995. 

* DOD Supply Chain Management; 
Year designated: 1990. 

* DOD Weapon Systems Acquisition; 
Year designated: 1990. 

High-risk area: Ensuring Public Safety and Security; 

* Implementing and Transforming the Department of Homeland Security; 
Year designated: 2003. 

* Establishing Effective Mechanisms for Sharing and Managing Terrorism-
Related Information to Protect the Homeland; 
Year designated: 2005. 

* Protecting the Federal Government’s Information Systems and the 
Nation ’s Cyber Critical Infrastructures; 
Year designated: 1997. 

* Ensuring the Effective Protection of Technologies Critical to U.S. 
National Security Interests; 
Year designated: 2007. 

* Revamping Federal Oversight of Food Safety; 
Year designated: 2007. 

* Protecting Public Health through Enhanced Oversight of Medical 
Products; 
Year designated: 2009. 

* Transforming EPA’s Process for Assessing and Controlling Toxic 
Chemicals; 
Year designated: 2009. 

High-risk area: Managing Federal Contracting More Effectively; 

* DOD Contract Management; 
Year designated: 1992. 

* DOE’s Contract Management for the National Nuclear Security 
Administration and Office of Environmental Management; 
Year designated: 1990. 

* NASA Acquisition Management; 
Year designated: 1990. 

* Management of Interagency Contracting; 
Year designated: 2005. 

High-risk area: Assessing the Efficiency and Effectiveness of Tax Law 
Administration; 

* Enforcement of Tax Laws; 
Year designated: 1990. 

* IRS Business Systems Modernization; 
Year designated: 1995. 

High-risk area: Modernizing and Safeguarding Insurance and Benefit; 
Programs: 

* Improving and Modernizing Federal Disability Programs; 
Year designated: 2003. 

* Pension Benefit Guaranty Corporation Insurance Programs; 
Year designated: 2003. 

* Medicare Program; 
Year designated: 1990. 

* Medicaid Program; 
Year designated: 2003. 

* National Flood Insurance Program; Year designated: 2006. 

Source: GAO. 

[End of Table 7: GAO’s High-Risk List as of September 30, 2011] 

Also in our February 2011 high-risk update, we designated one new 
high- risk area—Management of Federal Oil and Gas Resources. The 
Department of the Interior (Interior) does not have reasonable 
assurance that it is collecting its share of billions of dollars of 
revenue from oil and gas produced on federal lands and it continues to 
experience problems in hiring, training, and retaining sufficient 
staff to provide oversight and management of oil and gas operations on 
federal lands and waters. Further, Interior recently began 
restructuring its oil and gas program, which is inherently 
challenging, and there are many open questions about whether Interior 
has the capacity to undertake this reorganization while carrying out 
its range of responsibilities, especially in a constrained resource 
environment. 

Several high-risk areas likely require legislative action in addition 
to executive branch action to effectively address the area. For 
example, for the high-risk area "Transforming EPA’s Process for 
Assessing and Controlling Toxic Chemicals," we have recommended 
statutory changes to provide the Environmental Protection Agency (EPA) 
with additional authorities to obtain health and safety information 
from the chemical industry and to shift more of the burden to chemical 
companies for demonstrating the safety of their chemicals. More 
information on statutory changes recommended can be found in the “What 
Remains to be Done” section for the relevant high-risk area in the 
report [hyperlink, http://www.gao.gov/highrisk]. 

In fiscal year 2011, we issued 186 reports and delivered 57 
testimonies to the Congress related to our high-risk work. We 
documented $29.2 billion in financial benefits and 544 nonfinancial 
benefits related to high-risk areas. These results are based on 
reviews spanning the high-risk areas. The area with the largest amount 
of financial benefits was DOD Weapon Systems Acquisition, and the 
largest number of nonfinancial benefits was in Protecting the Federal 
Government’s Information Systems and the Nation’s Cyber Critical 
Infrastructures. Our next biennial high-risk update is planned for 
January 2013. More information on the high-risk series is available on 
our website at [hyperlink, http://www.gao.gov/highrisk]. 

Duplication Mandate: 

In 2010, a new statutory requirement—-the Duplication Mandate-—called 
for GAO to identify federal programs, agencies, offices, and 
initiatives-—either within departments or governmentwide—-that have 
duplicative goals or activities and report annually to the Congress on 
our findings, as well as actions to reduce such duplication.[Footnote 
7] 

In March 2011 we issued our first annual report [hyperlink, 
http://www.gao.gov/products/GAO-11-318SP], which identified 34 areas 
either where agencies, offices, or initiatives have similar or 
overlapping objectives or provide similar services to the same 
populations, or where government missions are fragmented across 
multiple agencies or programs. For example, 82 programs designed to 
help improve teacher quality are administered across 10 federal 
agencies. At least 31 entities within the DOD provide items urgently 
needed to U.S. warfighters at a cost of over $76 billion since 2005. 
Overlap and fragmentation can be indicators of unnecessary 
duplication, which can waste scarce federal resources, negatively 
impact key federal technology and other efforts, and result in less 
effective and efficient services for the American public. However, we 
also noted that some degree of duplication may be necessary given the 
nature or magnitude of the federal effort, as in the case of national 
security and defense. In light of the nation’s fiscal pressures, we 
also identified 47 other areas where the federal government may be 
able to achieve cost savings or revenue enhancement. Many of these 
exist within single departments or agencies, such as multiple 
opportunities within the Internal Revenue Service to improve tax 
compliance. We further identified several potentially significant 
governmentwide cost-saving opportunities, such as promoting 
competition for the more than $500 billion in federal contracts and 
applying strategic sourcing best practices throughout the federal 
procurement system. 

In many areas, we suggested actions-—outlining some new options, as 
well as underscoring numerous existing GAO recommendations-—that 
policymakers could take to reduce or eliminate unnecessary 
duplication, overlap, and fragmentation or achieve other potential 
financial benefits. A number of these actions can be addressed by 
agency officials, such as closing collaboration and information 
sharing gaps and pursuing more comprehensive and strategic approaches 
to managing and overseeing broad-based efforts. Others may require 
executive branch or enhanced congressional oversight or legislative 
action, particularly where fragmentation or overlap may be partially 
due to the legislative creation of separate programs under the 
jurisdiction of several different agencies, as in the case of some 
federal homeless programs; where fragmentation and overlap challenges 
have been long-standing, as they have been in the federal approach to 
surface transportation. We identified areas where additional 
information, including the implementation costs associated with 
potential options, such as program consolidations or terminations, 
could help identify the optimal course of action. 

Streamlining federal efforts, reducing government costs, and enhancing 
revenue collections can offer near-term financial and other benefits, 
as well as help set the government on a more sustainable, long-term 
fiscal path. Depending on the nature and extent of actions taken, 
these actions could collectively result in tens of billions of dollars 
in annual savings. Actions in some areas alone could produce 
significant savings. For example, we estimated that addressing 
potentially duplicative policies designed to boost domestic ethanol 
production could reduce federal revenue losses by up to $5.7 billion 
annually. Estimating financial benefits was not always possible. In 
some cases necessary information was not readily available, and in 
other cases, the benefits that may result from reducing or eliminating 
duplication, such as better law enforcement or coordination, can be 
difficult to monetize. Nevertheless, given the amount of program 
dollars involved in the issues we identified, even limited adjustments 
to the federal approach could result in significant savings. 

The 81 areas identified in our report were drawn from our prior and 
ongoing audit work and cover a wide range of government missions, 
federal agencies, and federal programs. Combined with areas that will 
be covered in our reports for fiscal years 2012 and 2013, our work, 
which leverages the diverse skills of interdisciplinary teams 
throughout the agency, will provide policymakers with a systematic and 
practical examination of potentially significant instances of 
duplication governmentwide. 

In addition to testifying over 30 times before the Congress on our 
first annual report findings and on specific issues highlighted in the 
report, we addressed issues of duplication, overlap, and fragmentation 
in our routine audit work during fiscal year 2011. For example, we 
testified on opportunities to reduce duplication both in federal 
teacher quality programs [hyperlink, http://www.gao.gov/products/GAO- 
11-510T] and in small business programs [hyperlink, 
http://www.gao.gov/products/GAO-11-558T] and on examining the extent 
of overlap and fragmentation in the federal government’s economic 
development efforts [hyperlink, http://www.gao.gov/products/GAO-11-872T]. 
We continue to monitor executive, legislative, and agency developments 
in the areas identified in our March 2011 report and will provide 
periodic updates on those developments to the Congress. 

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010: 

The Congress passed the Dodd-Frank Wall Street Reform and Consumer 
Protection Act on July 21, 2010, to address regulatory gaps and 
oversight failures in the U.S. mortgage, securities, and financial 
markets. The act requires significant rule making by regulatory 
agencies and requires us to conduct over 40 studies on a broad array 
of issues and, for a third of these studies, to report our findings 
within a year of the act’s passage. As a result, in fiscal year 2011, 
we issued 17 products on issues such as mortgages, securities markets, 
financial institutions, and consumer protection, making 15 
recommendations to various financial regulators. 

We studied several issues related to mortgages, including appraisals 
and the effect of the act’s requirements on the mortgage market. We 
recommended that federal banking regulators, the Federal Housing 
Finance Agency, and the Bureau of Consumer Financial Protection 
consider addressing several key areas related to appraisers, including 
selection criteria, as part of joint rulemaking under the act to 
establish minimum standards for states to apply in registering 
appraisal management companies [hyperlink, 
http://www.gao.gov/products/GAO-11-653]. We also studied the potential 
impact on the mortgage market of the act’s criteria for lower-risk 
mortgages, credit risk retention requirement, and provisions 
concerning homeownership counseling and regulation of high-cost loans 
[hyperlink, http://www.gao.gov/products/GAO-11-656]. 

With regard to securities markets, we studied the risks and regulation 
of proprietary trading by banking entities and recommended that 
regulators collect and review more comprehensive information on the 
nature and volume of activities potentially covered by the act 
[hyperlink, http://www.gao.gov/products/GAO-11-529]. In our work on 
the movement of former Securities and Exchange (SEC) employees to 
regulated firms, we recommended that SEC establish standards for 
documentation of ethics advice issues associated with the movement of 
employees between SEC and other employers [hyperlink, 
http://www.gao.gov/products/GAO-11-654]. We explored other issues as 
well, including the role of the Governmental Accounting Standards 
Board in the municipal securities market [hyperlink, 
http://www.gao.gov/products/GAO-11-267R]; the liability of parties who 
assisted, aided, and abetted fraud in securities transactions 
[hyperlink, http://www.gao.gov/products/GAO-11-664]; and the 
feasibility of a self-regulatory organization to oversee private fund 
advisers [hyperlink, http://www.gao.gov/products/GAO-11-623]. 

Regarding issues related specifically to financial institutions, we 
evaluated the implementation of the prompt corrective action framework 
for troubled institutions and recommended that bank regulators 
consider additional triggers and other actions to improve prompt 
corrective action [hyperlink, http://www.gao.gov/products/GAO-11-612]. 
In our audit of the Federal Reserve System’s emergency program 
activities, we made seven recommendations to strengthen the Federal 
Reserve System’s policies and processes for managing future emergency 
programs [hyperlink, http://www.gao.gov/products/GAO-11-696]. We also 
studied bankruptcy and orderly liquidation processes for financial 
companies and international coordination related to the bankruptcy of 
these companies [hyperlink, http://www.gao.gov/products/GAO-11-707]. 

Our studies on consumer protection issues first looked at oversight 
issues related to financial planners. We made recommendations to SEC 
and the National Association of Insurance Commissioners related to 
consumers’ understanding of the titles and designations financial 
planners use and the standard of care that applies to them [hyperlink, 
http://www.gao.gov/products/GAO-11-235]. We studied the regulatory 
requirements for mutual fund advertisements and the advertisements’ 
impact on investors and recommended that regulators communicate better 
to the industry any changes in rule interpretations affecting fund 
advertising [hyperlink, http://www.gao.gov/products/GAO-11-697]. In 
addition, we assessed regulatory approaches for person-to-person 
lending [hyperlink, http://www.gao.gov/products/GAO-11-613] and 
reviewed evaluations of methods and strategies for improving financial 
literacy [hyperlink, http://www.gao.gov/products/GAO-11-614]. 

The Troubled Asset Relief Program: 

The 2008 Emergency Economic Stabilization Act (EESA) that created the 
Troubled Asset Relief Program (TARP) originally authorized the 
Department of the Treasury (Treasury) to purchase or guarantee up to 
$700 billion in troubled assets and to mitigate foreclosures. The $700 
billion ceiling was never reached, and in July 2010 the Dodd-Frank 
Wall Street Reform and Consumer Protection Act reduced the amount to 
$475 billion. EESA provided us with an oversight role with broad 
monitoring and reporting responsibilities, including a requirement to 
submit a report on our work at least every 60 days. While TARP 
programs that provide mortgage assistance remain ongoing, other TARP 
programs continue to wind down as Treasury manages and sells assets 
purchased to address the financial crisis that began in 2007. 

In fiscal year 2011, we issued 13 products with 16 recommendations. We 
reported on the status of TARP programs and related ongoing 
challenges; the management infrastructure for TARP programs; and the 
status of our recommendations to Treasury. For example, we analyzed 
the process Treasury used under the Capital Purchase Program to 
provide capital to banks during the financial crisis [hyperlink, 
http://www.gao.gov/products/GAO-11-47] and monitored the financial 
condition of American International Group, Inc. and the status of 
Treasury’s investment [hyperlink, http://www.gao.gov/products/GAO-11-46] 
and [hyperlink, http://www.gao.gov/products/GAO-11-716]. We also 
reviewed the continuing implementation of Making Home Affordable 
foreclosure mitigation programs [hyperlink, 
http://www.gao.gov/products/GAO-11- 288] and [hyperlink, 
http://www.gao.gov/products/GAO-11-367R]. In addition, we completed 
our annual financial statement audit for Treasury ’s Office of 
Financial Stability—the entity established to implement TARP 
[hyperlink, http://www.gao.gov/products/GAO-11-174] and [hyperlink, 
http://www.gao.gov/products/GAO-11-434R]. 

Our recommendations generally followed two themes: (1) helping to 
ensure that Treasury is managing TARP programs effectively and (2) 
monitoring the use of funds to meet the EESA’s objectives. 
Specifically, we recommended that Treasury finalize a staffing plan to 
help ensure that its programs are well managed as TARP winds down, 
given that term appointments continue to expire for staff hired when 
TARP was first established. We also recommended a number of 
improvements to the foreclosure mitigation programs, such as capturing 
better information on program outcomes. In addition, our financial 
audit recommended improvements to internal controls over financial and 
accounting reporting processes. 

The American Recovery and Reinvestment Act: 

The American Recovery and Reinvestment Act of 2009 (Recovery Act) 
mandated several studies for GAO, including conducting bimonthly 
reviews on the uses of and accountability for Recovery Act funds in 
selected states and localities and commenting on the estimates of jobs 
created or retained as reported by recipients of Recovery Act funds. 
In fiscal year 2011, the focus of our bimonthly reviews shifted from 
our prior work reporting on the uses of funds across a wide range of 
programs by the selected states and the District of Columbia to 
providing enhanced analysis of selected programs in states and 
localities, with each bimonthly review highlighting a single Recovery 
Act program. With this approach, we have provided the Congress and 
other decision makers with more in-depth analyses of programs and 
their results. 

To respond to the mandate to comment on jobs created or retained, we 
have commented each quarter on the required Recovery Act reports of 
nonfederal recipients of Recovery Act funds, including grants, 
contracts, and loans. These recipient reports included a list of each 
project or activity for which Recovery Act funds were expended or 
obligated and information concerning the amount and use of funds and 
jobs created or retained by these projects and activities. In fiscal 
year 2011, this work focused on recipient reporting related to the 
specific programs reviewed, and included work addressing steps that 
states and localities took to ensure the quality of the data they 
submitted. We also reviewed steps that federal agencies took after 
recipients reported to ensure that their recipients’ data were of high 
quality and that those required to report did so. 

In fiscal year 2011, we issued five reports fulfilling these two 
ongoing mandates—on Recovery Act funding for Head Start [hyperlink, 
http://www.gao.gov/products/GAO-11-166], Energy Efficiency and 
Conservation Block Grants [hyperlink, http://www.gao.gov/products/GAO- 
11-379], transportation and water infrastructure projects [hyperlink, 
http://www.gao.gov/products/GAO-11-600] and [hyperlink, 
http://www.gao.gov/products/GAO-11-608], and education programs 
[hyperlink, http://www.gao.gov/products/GAO-11-804]. In addition to 
fulfilling our bimonthly and recipient reporting mandates, our fiscal 
year 2011 Recovery Act-related reports have covered a wide spectrum of 
program and policy areas, including: 

* efforts to award Recovery Act broadband funds and risks in providing 
oversight of funded projects [hyperlink, 
http://www.gao.gov/products/GAO-11-371T], 

* steps that the Federal Emergency Management Agency could take to 
protect sensitive Recovery Act port security grant details [hyperlink, 
http://www.gao.gov/products/GAO-11-88], 

* ways to improve the responsiveness of federal Medicaid assistance to 
states during economic downturns [hyperlink, 
http://www.gao.gov/products/GAO-11-395], 

* ways that the Department of Justice could improve the assessment of 
Justice Assistance Grants’ impact [hyperlink, 
http://www.gao.gov/products/GAO-11-87], 

* knowledge of past recessions and how it can inform future federal 
fiscal assistance to state and local governments [hyperlink, 
http://www.gao.gov/products/GAO-11-401], 

* an assessment of grant award procedures for the Recovery Act’s 
Transportation Investment Generating Economic Recovery grants 
[hyperlink, http://www.gao.gov/products/GAO-11-234], 

* states’ access to and use of the increased Federal Medicaid 
Assistance Percentage funds and states’ plans to sustain their 
Medicaid programs once these funds are no longer available [hyperlink, 
http://www.gao.gov/products/GAO-11-58], and, 

* known federal tax debt owed by Recovery Act contract and grant 
recipients [hyperlink, http://www.gao.gov/products/GAO-11-485] and 
[hyperlink, http://www.gao.gov/products/GAO-11-686T]. 

Agencies have implemented more than half of the 68 recommendations we 
have made since our first report was issued in April 2009, including 
providing additional guidance for fulfilling reporting requirements, 
improving the monitoring of recipients and subrecipients of Recovery 
Act funds, clarifying approaches states can take to recover 
administrative costs associated with the wide range of activities to 
comply with the Recovery Act, and developing procedures to measure 
impact. 

We also have made a number of suggestions to states and localities for 
improvements in their use of Recovery Act funds. Our presence in the 
selected states and localities heightened the level of vigilance, 
including influencing officials to make real-time improvements to head 
off problems before they could occur. For example, Massachusetts 
officials commented that the regular meetings with the GAO team 
members helped them clarify their policies for managing recipient 
reporting, and the regular reports helped state officials reinforce 
the message of appropriate oversight and control. In Ohio, in response 
to our findings on institutions of higher education’s use of the State 
Fiscal Stabilization Fund, the Board of Regents improved its 
monitoring plan; it now requires institutions to identify cumulative 
program revenues and expenditures and attest that funds were used only 
for allowable expenditures. Moving forward, our capacity to continue 
this work has been enhanced by the strong and productive working 
relationships established with state and local government leaders. 

We continue to maintain a separate page on our external website 
devoted to our Recovery Act work. In one place [hyperlink, 
http://www.gao.gov/recovery], the public can find information on the 
Recovery Act, see biweekly updates on Recovery Act outlays, access our 
bimonthly reviews on the use of funds, view related podcasts, use an 
interactive map to access reports on each of the selected states and 
the District of Columbia, learn about other mandates and related work, 
and find out how to report allegations of abuse of Recovery Act funds. 

General Counsel Decisions and Other Legal Work: 

In addition to benefiting from our audit and evaluation work, which 
reflects considerable legal input, the Congress and the public also 
benefited from the legal products and activities undertaken by our 
Office of General Counsel in fiscal year 2011. The following exemplify 
some of our key contributions. 

We redesigned GAO’s Legal Decisions & Bid Protest web pages in 
response to comments and questions received from the public and to 
conform with our reconfigured Internet site. These newly streamlined 
pages are accessible at [hyperlink, 
http://www.gao.gov/legal/index.html]. The user-friendly format, 
additional content, and enhanced search capabilities help to ensure 
that our legal products are easily accessible to the public and the 
Congress. 

The Procurement Law Division within the Office of General Counsel 
handled more than 2,300 bid protests during the course of fiscal year 
2011.[Footnote 8] Bid protests have been increasing in part because of 
our expanded jurisdiction over task orders, A-76 protests, and 
Transportation Security Administration protests. A protest challenges 
a federal agency’s handling of an individual federal procurement. Many 
of these protests were resolved without a written decision because the 
federal agency involved voluntarily took corrective action to address 
the protest. The remaining protests were either dismissed for 
procedural deficiencies, resolved using Alternative Dispute Resolution 
procedures, or decided on the merits. In fiscal year 2011, we issued 
more than 400 decisions on the merits, which addressed a wide range of 
issues involving compliance with, and the interpretation of, 
procurement statutes and regulations. Certain of these protests 
involved significant government programs and received extensive media 
coverage. For example, we: 

* denied U.S. Aerospace’s protest of an Air Force decision to reject 
as late the protester’s proposal for the closely watched KC-X tanker 
modernization program, valued at approximately $40 billion; 

* denied a protest challenging the award of a contract valued in 
excess of $3 billion by DOD’s TRICARE Management Activity to provide 
dental health care insurance for family members of military personnel; 

* sustained challenges from three offerors to the General Services 
Administration’s (GSA)decision to award a 15-year lease for office 
space for the Department of Health and Human Services—GSA’s lease 
prospectus estimated the value of this lease at approximately $30 
million per year; and; 

* sustained a challenge to the award by the U.S. Army Corps of 
Engineers (USACE) of a $675 million design-build contract for 
permanent canal closures and pumps being built as part of the 
hurricane protection program in New Orleans. In addition to a conflict 
of interest issue, the decision concluded that the USACE had failed to 
determine whether the awardee’s construction approach would meet the 
solicitation’s requirements for withstanding lateral loads. 

Within the Procurement Law Division, six attorneys appointed by the 
General Counsel also serve on our Contract Appeals Board, established 
by the Congress in 2007 to hear appeals from contracting officer 
decisions with respect to any contract entered into by a legislative 
branch agency. In addition to using alternative dispute resolution 
procedures to resolve contract disputes, the Board conducted two 
hearings and published three decisions in fiscal year 2011, which 
appear on our website. As of the end of the fiscal year, 21 appeals 
were pending on the board’s docket. 

In addition to our bid protest decisions, we also issued a 
congressionally mandated analysis of “aiding and abetting” liability 
for securities fraud violations[Footnote 9] and a comprehensive 
identification of statutory exemptions from federal safety rules for 
motor carriers.[Footnote 10] In fiscal year 2011, we published 21 
appropriations decisions, opinions, and letters on such issues as the 
U.S. government’s sovereign immunity, the Antideficiency Act, and 
violations of the Miscellaneous Receipts statute. We issued two 
letters and an opinion affirming the U.S. government’s constitutional 
sovereign immunity from local and state taxation absent an express 
waiver in statute. The letters addressed a Washington, D.C. tax on 
stormwater, and the opinion addressed a California tax on e-waste. 
[Footnote 11] We subsequently assisted the Congress in drafting 
legislation to provide an express waiver of sovereign immunity on 
stormwater taxes, which was enacted into law on January 4, 2011. 

We issued a number of opinions to congressional committees, including 
two opinions determining that agencies had violated the Miscellaneous 
Receipts statute. One opinion found that the Bureau of Land Management 
violated the statute when it sold land and used the proceeds without 
authority to augment its appropriation for the purchase of land. 
[Footnote 12] The other opinion found that the U.S. Army violated the 
statute when it directed cash rent payments into an escrow account 
instead of a special account in the U.S. Treasury as provided by 
law.[Footnote 13] We noted that both agencies should adjust their 
accounts in accordance with the opinions and report Antideficiency Act 
violations if unable to do so. 

The third edition of Principles of Federal Appropriations Law, 
commonly known as the Red Book, continued to be the primary resource 
for appropriations law guidance in the federal financial community. In 
fiscal year 2011, the Red Book averaged thousands of downloads per 
week as attorneys, budget analysts, financial managers, project 
managers, contracting officers, and accountable officers from all 
three branches of the government accessed it to research questions 
about budget and appropriations law. We also issued our annual update 
of the third edition of the Red Book. 

Attorneys from General Counsel continued to teach a 2-1/2-day course 
on appropriations law that explains the framework for analyzing 
appropriations law issues to ensure that funds are available for 
obligation with regard to purpose, amount, and time. We held 22 
classes and had participation from staff at nine agencies as well as a 
number of congressional staff. In addition, appropriations lawyers 
taught several 1-day seminars on specialized appropriations law topics 
for eight agencies, including the Executive Office of the President, 
and spoke on our appropriations law work at conferences and training 
hosted by three agencies. To enhance communication within the 
appropriations law community across all agencies and within the three 
branches of government, we hosted our seventh annual appropriations 
law forum in March 2011. Attorneys from more than 86 agency counsel 
offices as well as offices of inspectors general participated in an 
analysis of significant decisions and opinions from 2010 and 
interactive sessions on budget scoring, the appropriations legislative 
process and the obligational consequences of incremental funding. 

In March and April during the pendency of a possible government 
shutdown, attorneys from our General Counsel’s Office assisted 
congressional committees (including the House and Senate 
Appropriations Committees), the Chief Administrative Officer of the 
House, the Secretary of the Senate, and numerous federal agencies by 
fielding hundreds of inquiries on funding gaps and interpretations of 
the Antideficiency Act based on appropriations case law. Questions 
were wide-ranging on implications for various government operations in 
the event that the Congress and the President failed to enact 
appropriations. 

For fiscal year 2011, we received 22 Antideficiency Act reports for 
our repository and made selected information from these reports 
publicly available on our website. Since the Congress amended the 
Antideficiency Act in December 2004 requiring agencies to send us a 
copy of reports of Antideficiency Act violations, we have received 141 
reports and maintain an official repository of Antideficiency Act 
reports. 

We continued to report under the Congressional Review Act (CRA) on 
major rules proposed by federal agencies to the standing committees of 
jurisdiction of both Houses of the Congress. For fiscal year 2011, we 
issued 79 reports. To improve compliance with CRA, we tracked 
executive branch rules that were published in the Federal Register and 
cross-checked to ensure that they were submitted to us. We also 
outreached to OMB and the relevant agencies to assist them in meeting 
the CRA requirement that rules be submitted to us. Following this 
outreach, the number of rules not received by us has declined 
significantly over the last 2 fiscal years. 

The General Counsel’s Legal Services group worked closely with GAO 
management and union representatives in preparation for an upcoming 
election to determine if the GAO Employees Organization, International 
Federation of Professional and Technical Engineers (IFPTE) should be 
the exclusive bargaining representative for particular Administrative 
Professional and Support Staff (APSS) employees. Legal Services worked 
closely with GAO management and IFPTE representatives to determine 
which employees should be included in the APSS proposed bargaining 
unit and eligible to vote on the issue of representation. Legal 
Services also reviewed for legal sufficiency our first master 
collective bargaining agreement for those analyst employees who are 
represented by IFPTE, Local 1921. The group was also involved in the 
analysis of a range of labor relations issues during the course of the 
year. 

Managing Our Resources: 

Resources Used to Achieve Our Fiscal Year 2011 Performance Goals Our 
financial statements for the fiscal year ending September 30, 2011, 
were audited by an independent auditor, Clifton Gunderson, LLP, and 
received an unqualified opinion. The auditor found our internal 
controls to be effective—which means that no material weaknesses were 
identified—and reported that we substantially complied with the 
applicable requirements for financial systems in FFMIA. In addition, 
the auditor found no instances of noncompliance with the laws or 
regulations in the areas tested. In the opinion of the independent 
auditor, our financial statements are presented fairly in all material 
respects and are in conformity with generally accepted accounting 
principles. The auditor’s report, along with the statements and their 
accompanying notes, begin on page 101 in this report.[Footnote 14] 
Table 8 summarizes key data. 

Table 8: GAO’s Financial Highlights: Resource Information: 

Total budgetary resources[A]; 
Fiscal year 2011: $591.5 million; 
Fiscal year 2010: $613.0 million. 

Total outlays[A]; 
Fiscal year 2011: $569.7 million; 
Fiscal year 2010: $593.8 million. 

Net cost of operations: Goal 1: Well-being/financial security of the 
American people; 
Fiscal year 2011: $245.0 million; 
Fiscal year 2010: $213.1 million. 

Net cost of operations: Goal 2: Changing security threats/challenges 
of globalization; 
Fiscal year 2011: $147.3 million; 
Fiscal year 2010: $171.6 million. 

Net cost of operations: Goal 3: Transforming the federal government to 
address national challenges; 
Fiscal year 2011: $164.2 million; 
Fiscal year 2010: $195.4 million. 

Net cost of operations: Goal 4: Maximizing the value of GAO; 
Fiscal year 2011: $20.1 million; 
Fiscal year 2010: $29.4 million. 

Net cost of operations: Less reimbursable services not attributable to 
goals; 
Fiscal year 2011: ($7.1 million); 
Fiscal year 2010: ($6.6 million). 

Total net cost of operations[A]; 
Fiscal year 2011: $569.5 million; 
Fiscal year 2010: $602.9 million. 

Actual FTEs: 
Fiscal year 2011: 3,212; 
Fiscal year 2010: 3,347. 

Source: GAO. 

[A] The net cost of operations figures include nonbudgetary items, 
such as imputed pension and depreciation costs, which are not included 
in the figures for total budgetary resources or total outlays. 

[End of Table 8: GAO’s Financial Highlights: Resource Information] 

Compared with the statements of large and complex agencies in the 
executive branch, our statements present a relatively simple picture 
of a small yet very important agency in the legislative branch. We 
focus most of our financial activity on the execution of our 
congressionally approved budget with most of our resources devoted to 
the people needed for our mission. 

In fiscal year 2011, our budgetary resources included new direct 
appropriations of $546.3 million (net of an approximate $1 million 
rescission)—a reduction of $10.5 million from the fiscal year 2010 
level. We also received reimbursements from the lease of space in our 
Washington, D.C. headquarters building, audits of agency financial 
statements, and support activities related to monitoring the 
implementation of TARP, including bimonthly reporting and conducting 
an annual audit of the Office of Financial Stability’s financial 
statements on TARP. In fiscal year 2010, in addition to our 
appropriation and earned reimbursements, our resources included $20.8 
million to cover program reviews required by the Recovery Act. 

Our total assets were $125 million, consisting mostly of property and 
equipment (including the headquarters building, land and improvements, 
and computer equipment and software) and funds with the U.S. Treasury. 
The net property and equipment balance increased $3.9 million in 
fiscal year 2011 to $36.7 million. Capital asset acquisitions include 
replacement of the headquarters building steam heating system with a 
more energy efficient natural gas system as well as necessary 
information systems data storage capacity hardware. Total liabilities 
of $108 million were composed largely of employees’ accrued annual 
leave, employees’ salaries and benefits, amounts owed to other 
government agencies, and nongovernmental accounts payable. 

Overall, our net cost of operations in fiscal year 2011 is 
approximately $33 million below the fiscal year 2010 level largely 
because of expiration of fiscal year 2010 funding for our work under 
the Recovery Act and a reduced current year appropriation. In fiscal 
year 2011, the Executive Committee made resource decisions in 
accordance with our strategic plan and budgetary constraints and 
reallocated resources between some areas of work and reduced work in 
other areas. Goal 1 (Well-being and Financial Security of the American 
People) increased to reflect the reallocation of resources from goal 3 
(Transform the Federal Government to Address National Challenges) 
because of the expiration of fiscal year 2010 Recovery Act funds and a 
reduction in the level of TARP work from goal 2 (Changing Security 
Threats). Goal 1 also increased to reflect the realignment of 
resources from goal 2 to goal 1, consistent with our strategic plan 
issued in late fiscal year 2010. Goal 4 (Maximizing the Value of GAO) 
resources for both contracts and staff time declined because of budget 
constraints. 

Figure 18 shows how our fiscal year 2011 costs break down by category. 

Figure 18: Use of Fiscal Year 2011 Funds by Category: 

[Refer to PDF for image: pie chart] 

Percentage of Total Net Costs: 

Salaries and benefits: 82.0%; 
Building and hardware maintenance services: 10.6%; 
Rent (space and hardware): 2.2%; 
Depreciation: 1.8%; 
Other: 3.4%. 

Source: GAO. 

[End of Figure 18: Use of Fiscal Year 2010 Funds by Category] 

Figure 19 shows our net costs by goal for fiscal year 2007 through 
fiscal year 2011. 

Figure 19: Net Cost by Goal: 

[Refer to PDF for image: vertical bar chart] 

Goal 1; 
2007: $177.4 million; 
2008: $201.2 million; 
2009: $191.3 million; 
2010: $213.1 million; 
2011: $245.0 million. 

Goal 2; 
2007: $157.5 million; 
2008: $161.1 million; 
2009: $168.4 million; 
2010: $171.6 million; 
2011: $147.3 million. 

Goal 3; 
2007: $146.6 million; 
2008: $150.6 million; 
2009: $177.1 million; 
2010: $195.4 million; 
2011: $164.2 million. 

Goal 4; 
2007: $23.9 million; 
2008: $22.6 million; 
2009: $27.7 million; 
2010: $29.4 million; 
2011: $20.1 million. 

Source: GAO. 

Note: Totals are not adjusted for inflation. 

[End of Figure 19: Net Cost by Goal] 

Summary of Financial Systems Strategies and Financial Management 
System Framework: 

Our financial management system processing is performed by an OMB- 
designated shared service provider, the Department of Transportation, 
Enterprise Services Center (ESC). The major financial system in use at 
ESC is Delphi/Oracle Federal Financials (Delphi), supplemented by a 
number of supporting systems. 

Delphi is an off-the-shelf system that meets OMB’s Office of Federal 
Financial Management’s Federal Financial Management System 
Requirements. We use a number of other off-the-shelf systems for 
specialized support of Delphi. These include Compusearch’s PRISM, a 
contract and procurement system; U.S. Bank’s purchase card system for 
small purchases; Northrop Grumman’s GovTrip system for travel; and 
Kofax’s Markview, a document work flow system to process vendor invoices. 

These off-the-shelf systems are continuously updated by the respective 
system developers and by periodically upgrading to new versions; 
therefore, our systems remain current. Additionally, these systems 
ensure that we can produce timely, useful, and reliable financial 
information and strengthen internal controls. 

Going forward, we are planning to complete implementation of a new 
workforce planning system during fiscal year 2012. A Pentaho database 
forms the basis of this project. In fiscal year 2011, we “stood up” 
the project’s phase 1, which has the repository for workforce planning 
data. 

Financial Systems and Internal Controls: 

We recognize the importance of strong financial systems and internal 
controls to ensure our accountability, integrity, and reliability. To 
achieve a high level of quality, management maintains a quality 
control program and seeks advice and evaluation from both internal and 
external sources. 

We complied with the spirit of OMB Circular No. A-123, Management’s 
Responsibility for Internal Control, which provides guidance for 
agencies’ assessments of internal control over financial reporting. We 
performed a risk-based assessment by identifying, analyzing, and 
testing internal controls for key business processes. Based on the 
results of the assessment, we have reasonable assurance that internal 
control over financial reporting, as of September 30, 2011, was 
operating effectively and that no material control weaknesses exist in 
the design or operation of the internal controls over financial 
reporting. Additionally, our independent auditor found that we 
maintained effective internal controls over financial reporting and 
compliance with laws and regulations. Consistent with our assessment, 
the auditor found no material internal control weaknesses. 

We are also committed to fulfilling the internal control objectives of 
FMFIA. Although we are not subject to the act, we comply voluntarily 
with its requirements. Our internal controls are designed to provide 
reasonable assurance that transactions are properly recorded, 
processed, and summarized to permit the preparation of financial 
statements, and that assets are safeguarded against loss from 
unauthorized acquisition, use, or disposition. Further, they are 
designed to ensure that transactions are executed in accordance with 
the laws governing the use of budget authority and other laws and 
regulations that could have a direct and material effect on the 
financial statements. 

In addition, we are committed to fulfilling the objectives of FFMIA. 
We believe that 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 as of 
September 30, 2011. We made this assessment based on criteria 
established under FFMIA and guidance issued by OMB. 

The Improper Payments Elimination and Recovery Act of 2010 requires 
that agencies periodically (1) review activities susceptible to 
significant improper payments; (2) estimate the amount of improper 
payments; (3) implement a plan to reduce improper payments; and (4) 
report the estimated amount of improper payments and the progress to 
reduce them. We have implemented and maintained internal control 
procedures that help monitor disbursement of federal funds for valid 
obligations. These controls are tested annually. Based on the results 
of our tests, we made no improper payments in fiscal year 2011. 

Our Inspector General (IG) also conducts audits and investigations 
that are internally focused. During fiscal year 2011, the IG evaluated 
the effectiveness of our policy and procedures for preventing and 
detecting travel charge card misuse and reviewed our information 
security program. In addition, the IG operates an internal hotline for 
use by our employees and contractors to report potential fraud, waste, 
and abuse of our government property, assets, and resources and other 
potentially serious problems in our operations, including the possible 
violation of any law or regulation. The results of the IG’s work and 
actions taken by us to address IG recommendations are highlighted in 
the IG’s semiannual reports to the Congress. (See for example OIG-11- 
4.) 

In addition, our Audit Advisory Committee assists the Comptroller 
General in overseeing the effectiveness of our financial reporting and 
audit processes, internal controls over financial operations, and 
processes that ensure compliance with laws and regulations relevant to 
our financial operations. The committee is composed of individuals who 
are independent of GAO and have outstanding reputations in public 
service or business with financial or legal expertise. The current 
members of the committee are as follows: 

* Judith H. O’Dell (Chair), CPA CVA, President of O’Dell Valuation 
Consulting LLC, Chair of the Financial Accounting Standards Board’s 
Private Company Financial Reporting Committee; former trustee of the 
Financial Accounting Foundation, which is responsible for overseeing, 
funding, and appointing members of the Financial Accounting Standards 
Board and the Governmental Accounting Standards Board; and former 
member of the board of directors of the American Institute of 
Certified Public Accountants. 

* Lawrence B. Gibbs, a practicing attorney and member of Miller & 
Chevalier, Chartered, and a former Commissioner of IRS. 

* Michael A. Nemeroff, a partner in Sidley Austin LLP, and head of its 
Government Contracting Practice, and a former member of the GAO Legal 
Advisory Committee. 

The committee’s report appears in Part III of this report on page 100. 

Limitation on Financial Statements: 

Responsibility for the integrity and objectivity of the financial 
information presented in the financial statements in this report rests 
with our managers. The statements were prepared to report our 
financial position and results of operations, consistent with the 
requirements of the Chief Financial Officers Act, as amended (31 
U.S.C. 3515). The statements were prepared from our financial records 
in accordance with the formats prescribed in OMB Circular No. A-136, 
Financial Reporting Requirements. These financial statements differ 
from the financial reports used to monitor and control our budgetary 
resources. However, both were prepared from the same financial records. 

Our financial statements should be read with the understanding that as 
an agency of a sovereign entity, the U.S. government, we cannot 
liquidate our liabilities (i.e., pay our bills) without legislation 
that provides resources to do so. Although future appropriations to 
fund these liabilities are likely and anticipated, they are not 
certain. 

Planned Resources to Achieve Our Fiscal Year 2012 Performance Goals: 

As with the rest of the federal government, we are operating under a 
continuing resolution appropriation at funding levels slightly below 
the fiscal year 2011 level, pending enactment of the final fiscal year 
2012 appropriations. Although final congressional action on our fiscal 
year 2012 request of $556.8 million is still pending, indications are 
that we will be operating below our fiscal year 2011 appropriation 
level, which was 1.9 percent below our fiscal year 2010 budget. On 
July 22, 2011, the House Committee on Appropriations approved direct 
appropriations of $511.3 million, a reduction of 6.4 percent from our 
fiscal year 2011 appropriation level. On September 15, 2011, the 
Senate Committee on Appropriations approved $504.5 million, a 
reduction of 7.6 percent from our fiscal year 2011 appropriation 
level. Both the House and Senate Committees on Appropriations 
emphasized that the legislative branch will lead by example by 
tightening its belt wherever possible, employing best practices, 
finding efficiencies, and improving business practices. 

Given the likelihood of reduced funding in fiscal year 2012, we built 
on our previous cost cutting efforts, which have included 
significantly reduced hiring and audit-related travel since fiscal 
year 2010, and reexamined our budget, line by line, pinpointing 
potential savings across the agency and opportunities to further 
minimize administrative costs. As part of this effort, we completed a 
comprehensive assessment of our field office structure and reassessed 
spending at our headquarters office. Using this information, we are 
targeting reductions of about $45 million from our fiscal year 2012 
budget request. These planned cuts will touch on operations across the 
agency. Our staff head count will fall below 3,000 for the first time 
in the agency’s modern history (a reduction of 375 people since fiscal 
year 2010), and critical information technology and infrastructure 
improvements will be deferred or canceled. While these reductions will 
be significant and wide ranging, and diminish our current heavy 
reporting volume, they have been crafted to ensure that our reputation 
for producing high-quality reports will not suffer. Importantly, we 
are coupling our spending reductions with ongoing and planned 
efficiency improvements in areas such as streamlining our engagement 
processes and identifying further reductions to our long-term 
operations costs. Together, our spending reductions and efficiency 
improvements will help ensure that we maintain the capacity to assist 
the Congress in priority areas during a difficult budget time, and 
position the agency to meet the performance goals as outlined in our 
strategic plan through fiscal year 2015. 

Strategic and Annual Work Planning: 

As noted in our current strategic plan, in the current dynamic, 
fiscally constrained environment, the challenges we face cross 
national borders; the public, private, and nonprofit sectors; and 
levels of government. Achieving our strategic goals and objectives 
requires us to coordinate and collaborate with international and 
intergovernmental organizations with similar or complementary 
missions. In particular, we: 

* use advisory panels and other bodies to inform our strategic and 
annual work planning and; 

* maintain strategic working relationships with other domestic and 
international government accountability and professional 
organizations, including the federal inspectors general, state and 
local audit organizations, and other countries’ national audit offices. 

Advisory boards and panels help us to identify key trends, 
opportunities and challenges, and lessons learned that we should 
factor into our work and operations. During fiscal year 2011, 
following the swearing in of a permanent Comptroller General, we began 
a comprehensive reexamination of the membership and charters of the 
Comptroller General’s Advisory Board (CGAB), the Domestic Working 
Group (DWG), the Educator’s Advisory Panel (EAP), and the 
Accountability Advisory Council. We also organized meetings of the 
CGAB, the DWG, and the EAP. At its September 2011 meeting, the CGAB 
comprising of distinguished individuals with experience in the public, 
private, and nonprofit sectors, shared their views on our nation’s 
fiscal sustainability, our technology assessments, and our key 
initiatives, including our high-risk, financial reform, and 
duplication and overlap work. The November 2010 meeting of the DWG, 
comprising 19 inspectors general, state auditors, and local auditors, 
provided us a better understanding of their fiscal sustainability 
challenges and other issues at the federal, state and local levels. 
The July 2011 meeting of the EAP, comprising deans of leading academic 
institutions, identified emerging public policy and human capital 
issues and provided ideas on diversity inclusion and recruiting, 
emerging talent and learning needs, and partnership opportunities. 

To improve planning and performance, we shared information and 
expertise as host of an annual meeting with senior representatives 
from our sister legislative branch agencies—the Congressional Research 
Service and the Congressional Budget Office. Held in June 2011, the 
agenda included discussions on concrete ways to streamline and improve 
operations, modernize information delivery to the Congress, expand use 
of social media, explore collaboration on database subscriptions and 
training, and ensure proper handling of sensitive information. After 
the highly productive meeting, the sister agencies have agreed to meet 
more frequently. 

Networks, Collaborations, and Partnerships: 

Unlike the national audit offices of some countries, we have no direct 
audit responsibility over states and localities. As a result, we face 
unique challenges in "following the federal dollar" and ensuring 
accountability for grants and other federal funds flowing out to 
subfederal recipients. We also have an important role of coordinating 
professional audit standards, setting audit standards for federally 
funded programs, and representing U.S. views and interests in the 
international community. The State Department and the U.S. Agency for 
International Development look to us to represent the broader 
interests of the U.S. Government in promoting good governance 
internationally and often seek our support of educational visits by 
leaders from foreign countries. Domestic audit and accountability 
offices look to us for guidance, expertise, and technical assistance 
in implementing professional standards. 

We have leveraged our resources by collaborating with our domestic and 
global networks. Through these networks, such as the federal 
inspectors general and state and local auditors groups, notably the 
National Association of State Auditors, Controllers, and Treasurers 
and Association of Local Government Auditors, we have continued to 
build capacity within our agency and among our partners to do quality 
work auditing programs involving U.S. funds. 

Intergovernmental Audit Forums: 

On the domestic front, we organized the National Intergovernmental 
Audit Forum meeting of federal, state, and local auditors in the fall 
of 2010. State and local officials briefed their federal counterparts 
on their responses to fiscal challenges as well as their efforts to 
assure adequate oversight of federal funds expended under the Recovery 
Act. We also convened our annual coordination meeting with the Council 
of Inspectors General for Integrity and Efficiency (CIGIE), the 
umbrella organization for the almost 80 inspectors general in the 
federal departments and agencies. At the meeting, we shared our high- 
risk report and work relating to improper payments and the Recovery 
Act. We have also begun discussions with the Council to explore 
potential partnership opportunities in delivering training to auditors 
and analysts. 

We organized 12 meetings of the various regional Intergovernmental 
Audit Forums to discuss such topics as the 2011 update of the Yellow 
Book, which sets standards for auditing federally funded programs, as 
well as promote dialogue regarding common issues, opportunities, and 
challenges. 

INTOSAI: 

For over three decades, we have been a member of the International 
Organization of Supreme Audit Institutions (INTOSAI), an association 
of 190 national audit offices that are our counterparts. This network 
has positioned us well to address a more interdependent world where 
domestic challenges (e.g., regulation of financial markets, drugs, 
consumer products, homeland security, and rebuilding our 
infrastructure) have global dimensions. In November 2010, we 
participated in the triennial INTOSAI congress in Johannesburg, South 
Africa, along with more than 550 attendees from 152 national audit 
offices. Chief among the congress’s accomplishments were the adoption 
of voluntary international auditing standards for supreme audit 
institutions, an important accountability resource, especially in 
developing and emerging countries. Through our active participation in 
the Professional Standards Committee and subcommittees, we stayed 
abreast of changes in international accounting, auditing, and 
reporting standards and shared the U.S. perspective in shaping the 
standards, given the consensus building that the world is rapidly 
moving toward adopting international accounting and auditing 
standards. Delegates also approved an update to the INTOSAI strategic 
plan, the development of which was led by the Comptroller General. 

In participating in INTOSAI knowledge-sharing working groups (e.g., 
Public Debt, Information Technology, Environmental Auditing, Program 
Evaluation, Fight Against International Money Laundering and 
Corruption, Value of SAIs, and Key National Indicators) and task 
forces, we acquire knowledge and network with experts in other 
countries. For example, our participation in the Public Debt Working 
Group and our leadership of the Task Force on the Global Financial 
Crisis: Challenges to Supreme Audit Institutions involves some 25 
countries and has provided us current information on global events and 
multiple facets of the financial crisis. We presented a status report 
of the task force’s preliminary findings at the 20th INTOSAI Congress 
in November 2010. The task force has also issued its first two 
preliminary reports—on causes of the crisis and implications for SAIs, 
and on the effects of government actions taken in response to the 
crisis. We also participated in a joint United Nations-INTOSAI 
symposium where we explained how citizens and the public can help 
enhance the audit process and strengthen accountability. The symposium 
was attended by 140 representatives of SAIs and international 
organizations. 

Capacity Building: 

In support of the Federal government’s interest in promoting good 
governance and ensuring that federally funded programs abroad are 
effectively and efficiently used, we continued to advance INTOSAI- 
Donor Cooperation and Capacity Building. 

We played a significant role in continuing to move the 2009 
international memorandum of understanding with INTOSAI forward in 
2011, participating in two steering committee meetings and helping to 
focus the agenda and the dialogue on the most critical issues. INTOSAI 
and the donors approved a first-ever global SAI stocktaking report in 
November 2010. It found that many SAIs in developing countries fall 
short of being able to perform the full range of their 
responsibilities. The report has led to matching donors to relevant 
SAI capacity building projects, which represent some of the first 
funding streams under this initiative. At the July 2011 steering 
committee meeting, work was launched to develop a databank on SAI 
Support and create a pooled funding mechanism. Both represent 
significant steps towards strengthening developing country SAIs. 

In fiscal year 2011, 20 participants from 17 countries completed our 
4- month International Auditor Fellowship Program for mid- to senior- 
level staff from other countries. Demand for the program has continued 
to increase, with participation levels up by 18 percent compared with 
the average of the previous 10 years. We also improved the program by 
updating the case study on performance audits. Through this program, 
our instructors, mentors, and sponsors become part of a growing 
community of good government professionals and experts across nations. 
The goodwill engendered supports our country’s image abroad and 
facilitates our staff’s access to foreign officials relevant to our 
audit work. 

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

The Comptroller General, the Executive Committee, and other senior 
executives identify management challenges through the agency’s 
strategic planning, management, internal controls, and budgeting 
processes. We monitor our progress in addressing the challenges 
through our annual performance and accountability process. Under 
strategic goal 4, several performance goals and underlying key efforts 
focus attention on each of our management challenges. We use a 
balanced scorecard approach for quarterly monitoring of these and 
other critical initiatives, and we report each year on our progress 
toward our performance goals. Each year, we ask our IG to examine 
management’s assessment of the challenges and the agency’s progress in 
addressing them. 

For many years, we have focused high level management attention on 
three challenges—physical security, information security, and human 
capital. For fiscal year 2012, we are removing the first two 
challenges, as we have advanced our security programs’ maturity levels 
to a point where we have programs in place to adequately protect our 
people, property, and other assets; continuously monitor for threats; 
and respond as needed when new threats arise. We will continue 
focusing high-level management attention on human capital issues and 
have identified several high-priority areas for fiscal year 2012. In 
addition, we have identified a new challenge related to improving the 
efficiency and effectiveness of our engagements and delivery of timely 
and quality information to the Congress. 

Physical Security Challenge: 

We identified physical security as a management challenge in our 2001 
performance and accountability report as a result of the September 11, 
2001, terrorist attacks and the anthrax incidents at the U.S. Postal 
Service. We continued reporting physical security as a challenge over 
the last 10 years because of the substantial effort necessary to put 
effective programs in place. We created offices focused on safety, 
security, and emergency preparedness, which collectively have taken a 
multitude of actions we have reported in prior performance and 
accountability reports. For example, to improve physical security at 
our headquarters building in Washington, D.C., we: 

* maintain an armed contract guard force, ballistic-rated guard 
booths, and a vehicle/resistant perimeter wall, 

* implemented an integrated electronic security system to 
significantly improve monitoring and controls, which also supports 
implementation of relevant Homeland Security Presidential Directive 12 
measures, 

* installed measures to address mailroom safety, including downdraft 
tables to protect staff when screening incoming mail, exterior wall 
blast protection, and X-ray machines; and, 

* enhanced building air filtration and system controls that enable 
closure of outside air intakes. 

We are also implementing electronic security systems in our field 
offices to provide the capability for 24/7 monitoring and visual 
verification of incidents at any of our offices from headquarters. 

In addition, we implemented a modern alarm system with public address 
and text message board capabilities and created two operations 
centers—-a security operations center to provide a centralized 24/7 
command center to ensure protection of the headquarters building and 
its occupants and an emergency operations center to serve as the 
central staging location for essential personnel and management during 
major emergencies. We also developed a Continuity of Operations Plan 
that outlines our response to a variety of events that could affect 
the operations of the agency. During the last 4 years, we have 
exercised building evacuations, shelter-in-place, and alternate 
computing facility operations as part of our disaster preparedness 
program to ensure that these program components function as intended, 
and we provide continuity awareness training for all employees and 
contractors. 

We participate as a member of the federal Interagency Security 
Committee to remain aware and apprised of the latest practices and 
threats that agency programs should address. For example, we are 
working to formalize a Facility Security Plan that would address a 
number of proactive security and protective initiatives being adopted 
by the committee. This includes the creation of a Facility Security 
Committee and a vulnerability assessment program and schedule, and 
formalizing the security response and actions necessary during 
escalated security conditions. 

While we still have several projects under way or planned to enhance 
our safety, security, and emergency preparedness functions, we believe 
that reporting physical security as a management challenge is no 
longer warranted. In our review of these programs for this year’s 
report, we have determined that our programs are mature; meet federal 
requirements; and provide appropriate protections for our people, 
property, and other assets. Embedded in our programs are procedures 
for continuous monitoring of threats and changing requirements and 
practices, and processes for evolving our programs, as needed. We are 
confident that we have the ability to respond to and address new 
threats and emergencies as they arise. 

Information Security: 

Since our fiscal year 2002 performance and accountability report, we 
have reported information security as a management challenge because 
of the magnitude of risk associated with weaknesses identified during 
internal reviews and independent evaluations of our information 
security program. For example, we did not have a comprehensive 
disaster recovery program dealing with the continuity of information 
technology (IT) services and had not implemented a comprehensive 
intrusion detection strategy to provide effective compensating 
security controls against malware and external threats. In addition, 
we needed to ensure that our policies and procedures were consistent 
with federal information security governance. 

Through sustained commitment and top leadership support, we have 
developed and implemented an information systems security program that 
comprehensively addresses risks and provides for continuous evolution 
of our processes and controls. In past performance and accountability 
reports, we have discussed the many program elements and controls we 
have implemented to protect our information and systems. For example, 
we have implemented robust, two-factor authentication using tokens for 
internal and external access to our network, and protect our data at 
rest through full disk encryption on our mobile computers. We ensure 
that staff and contractors complete IT security awareness training 
annually, as required by law. While implementing our “defense-in-depth”
 strategy, we have deployed multiple layers of security controls to 
actively monitor our network traffic between internal systems and out 
across the Internet. In addition, we have implemented an integrated 
security solution on our laptops and desktops that provides managed 
antivirus, antimalware, and personal firewalls as part of our standard 
business practice. We also have a disaster recovery program that 
includes use of an alternate computing facility, which is capable of 
maintaining many of our operations during a major crisis or threat. 

Of note, our program has been assessed by our IG every year since 2003 
and, for the past 3 years, has been found to be consistent with the 
requirements of the Federal Information Security Management Act of 
2002. This sustained performance demonstrates that our program (1) 
provides a sufficient process for planning, implementing, evaluating, 
and documenting remedial action to address any deficiencies in our 
information systems security policies, procedures, and practices; (2) 
includes processes and procedures to continue to build our capability 
to minimize IT security threats and incidents and enhance our disaster 
recovery efforts; and (3) adheres to federal information security 
governance, such as OMB and National Institute of Standards and 
Technology guidance. As such, we have determined that reporting 
information security as a management challenge is no longer warranted. 
However, given the constantly evolving nature of information security 
threats, we will maintain management focus on continuing to support a 
robust security program. 

Human Capital: 

We depend on a talented and diverse, high-performing, knowledge-based 
workforce to carry out our mission in support of the Congress. Like 
other federal agencies, human capital management poses many challenges 
with an ever-changing workforce, emerging civil service reforms, and 
continuous pressure to do more with less. We were able to make 
progress in several key areas as planned for fiscal year 2011. 
Specifically, we: 

* completed the first master collective bargaining agreement with GAO 
Employees Union, IFPTE, Local 1921; 

* continued to focus on attracting and hiring staff to address our 
staffing needs in support of our strategic plan and Workforce 
Diversity Plan, while filling critical needs identified in our annual 
Workforce Plan; 

* completed implementation of all the short-term recommendations from 
the Performance Appraisal Study; and; 

* made significant progress on design of a new performance management 
system by conducting job analyses and developing draft rating criteria 
and a new rating scale. 

Additional details on these and related actions taken in fiscal year 
2011 are discussed in Part II of this report. 

This past year also saw a number of economic and political changes 
that have greatly affected federal agencies. Like the rest of the 
federal government, we are facing an era of austere budgets and the 
associated impacts on our ability to hire, retain, and motivate a top- 
performing workforce. At the same time, demand for our work remains 
high. While we have achieved many successes in recruiting and hiring 
top-notch diverse candidates, providing outstanding entry-level 
development training, and offering employees a wide range of highly 
desired benefits programs, it may be difficult to continue and build 
on these successes. As a result, the overarching human capital 
challenge that we face now, and for the foreseeable future, is 
ensuring that we continue to support the mission of the agency with 
the right resources, where and when they are needed, in the face of 
declining budgets, and provide meaningful rewards and recognition 
needed to retain our highly skilled workforce. In order to ensure 
continued high-quality and timely service to the Congress, in fiscal 
year 2012, we will focus our efforts on a few top priorities to 
sustain an agile, well-trained, balanced, diverse workforce. 

* Succession planning. As staff reductions seem inevitable, we will 
strengthen our succession planning so that staff who are eligible to 
advance to key positions are provided with the training and other 
necessary development to ensure that they have the requisite skills 
and experience for those positions. Succession planning is 
particularly critical for our senior executive corps, of which 40 
percent are eligible to retire. Thus, we will have our senior 
executives work with management staff at the next level down to convey 
important historical information about agency programs and operations; 
key working relationships, partnerships, and experts in relevant 
fields; and perspectives on emerging issues and areas for continued 
agency involvement, to ensure that critical knowledge and expertise 
are not lost. 

* Training. We will begin to shift the emphasis of our training 
program from primarily entry-level training providing more targeted, 
needed "just-in-time" training, which may be subject matter or audit 
skill related in nature. 

* Hiring. Even though we will need to greatly curtail hiring, we 
cannot forget the lessons learned from the workforce reductions in the 
1990s, which resulted in a lengthy hiring freeze and corresponding 
concentration of staff at higher band levels. Thus, we will need to 
reduce our heavy focus on entry-level recruiting to enable swift 
hiring that addresses critical needs regardless of the level or 
position. However, we must also preserve some level of partnerships 
with colleges and professional associations so we do not lose access 
and appeal to quality, diverse entry-level candidates. 

* Rewards and recognition. Lastly, since we cannot achieve our mission 
without our people, we will begin exploring alternative methods for 
rewarding and recognizing our high-performing workforce to incentivize 
and retain them given likely limitations in our ability to provide 
financial rewards and salary increases. 

We will also continue management attention on several long-term 
priority issues in fiscal year 2012—namely, development of a new 
performance management system and implementation of the long-term 
recommendations from the Performance Appraisal Study, as well as 
leveraging technology to ensure accuracy and efficiency in human 
capital processes and management. 

Engagement Efficiency Challenge: 

With the many complex challenges facing the Congress and the nation, 
we need to look for ways to produce our reports and analysis more 
quickly and efficiently without sacrificing quality. We have taken 
steps to improve management and prioritization of the "pipeline" of 
Congressional requests and mandates we receive, as outlined in our 
Congressional Protocols and through the extensive outreach that our 
Office of Congressional Relations and our senior executives conduct in 
our day-to-day operations. In addition, while we have been able to 
sustain high levels of productivity and continue to be an important 
resource for our congressional clients, we are not immune from the 
concerns about federal spending, already receiving a lower budget in 
fiscal year 2011. With more than 80 percent of our budget devoted to 
personnel costs, modest reductions or even static funding will require 
that we reduce staffing levels and curtail hiring. As a result, our 
ability to continue to provide timely information and analysis to the 
Congress as it debates critical issues of national and international 
concern poses a significant management challenge in this time of 
limited resources as compared to previous years. 

Accordingly, in an environment where quality and effectiveness are 
paramount and must be maintained while resources are declining, we 
must improve our efficiency in responding to congressional requests 
and mandates to meet the Congress’s needs and remain a trusted 
resource in a fast-moving, ever-changing world. To address this 
challenge, we have identified three areas of opportunity for improved 
efficiency and will be taking the following steps in these areas in 
fiscal year 2012. 

* Managing and conducting engagements. While we have relieved some 
administrative burdens in managing and conducting engagements by 
streamlining certain business processes and improving technology 
support, more work remains to significantly improve our efficiency. 
The way in which we plan and conduct our engagements has changed 
little over the years and the business process for most types of GAO 
engagements is fundamentally the same. Accordingly, we will begin an 
end-to-end analysis of our engagement process to identify areas for 
improvements in efficiency while maintaining adherence to essential 
quality standards. 

* Utilizing resources. Our highly professional workforce, which 
represents a broad array of disciplines, is our most important asset. 
Our work covers the breadth of government and requires that our 
employees frequently master intricate details of federal programs and 
agency operations to which they have sometimes had little previous 
exposure. Their ability to do so is a hallmark of a “GAO analyst” and 
is critical to our ability to respond to changing congressional needs. 
However, we could do more to capitalize on our employees’ flexibility 
and agility when assigning work. We need to improve our ability to 
multitask staff across multiple engagements, tapping needed skills and 
expertise where and when they are needed. As a result, we will 
evaluate our current model for utilizing staff on engagements and 
identify changes to enhance our agility and responsiveness. 

* Communicating our message. In recent years, the way in which the 
world communicates has changed dramatically as a result of electronic 
media. While our findings and conclusions are a standard of excellence 
and accepted authoritative statements on the functioning of federal 
agencies and programs, producing a typical GAO report can be made more 
efficient and the reports do not port easily to the electronic world. 
We have made significant progress in the past year tailoring the 
presentation of the results of our work to be more web friendly; 
however, this process adds another step to an already multilayered 
report writing and production process. In addition, we have tremendous 
amounts of valuable content in existing reports that could be quickly 
repurposed and in-house expertise that should be leveraged to inform 
Congressional decision making on key issues of national importance. 
Thus, we will continue to assess our clients’ and audited agencies’ 
key information needs and communication-style preferences, and explore 
alternative ways of meeting those needs that will enable us to “bring 
our product to market” in a more efficient and effective manner, 
without sacrificing quality or context. 

Mitigating External Factors: 

In addition to the resource constraints and uncertainty of the budget 
for fiscal year 2012, which directly affect our internal management 
challenges, other external factors that could affect our performance 
and progress toward our goals include shifts in congressional 
interests, the ability of other agencies to make improvements needed 
to implement our recommendations in a constrained budget environment, 
and access to agency information. We mitigate these factors in several 
ways. 

While demand for our work is very high, with 929 congressional 
requests and new mandates in fiscal year 2011, unanticipated shifts in 
congressional priorities change the mix of work we are asked to 
perform. To be prepared to address timely and relevant issues, we use 
the eight broad trends identified in our strategic plan to guide our 
work plans. We also communicate frequently with our congressional 
clients to stay abreast of their interests. In addition, each year we 
conduct about 80 evaluations annually under the Comptroller General’s 
authority to address priority issues we identify. We also strive to 
maintain flexibility in deploying our resources in response to 
shifting priorities and have successfully redirected our resources 
when appropriate and maintained broad-based staff expertise. For 
example, to address the recent Duplication Mandate in fiscal year 
2011, we employed multidisciplinary teams composed of staff from 
across the agency. We devoted 34 percent of our audit resources to 
mandates in fiscal year 2011. The level of demand for our work remains 
high as we fulfill ongoing requirements under mandates and other 
responsibilities. For example, we have just completed the first year 
of multiyear mandates to report on health care and financial 
regulatory reform issues. Moreover, all Senate committees are required 
to review programs within their jurisdiction to identify potential 
fraud, waste, and abuse in program spending—giving particular scrutiny 
to issues raised in our reports—and to develop recommendations for 
improved government performance. Similarly, House rules require each 
standing committee or subcommittee to hold at least one hearing on 
issues raised by us indicating that federal programs or operations 
authorized by the committee are at high risk for fraud, waste, abuse, 
or mismanagement (see p. 39 for more information about our high-risk 
list areas and programs.) 

Another external factor that affects our ability to serve the Congress 
is the extent to which we can obtain access to agency information. 
This access to information plays an essential role in our ability to 
report on issues of importance to the Congress and the American 
people. Executive departments and agencies are generally very 
cooperative in providing us access to the information we need. It is 
fairly rare for an agency to deny us access to information, and rarer 
still for an agency to refuse to work toward an accommodation that 
will allow us to do our work. 

While we generally receive very good cooperation, over time we have 
experienced access issues at certain departments and agencies. We 
actively pursue access issues as they arise, and we are engaged in 
discussions and efforts across the executive branch to enhance our 
access to information. In 2011, there were several developments on the 
access front relating to these discussions and efforts. As we reported 
in the performance and accountability report for fiscal year 2010, the 
Department of Justice (DOJ) in recent years has employed a centralized 
process for screening our access requests, resulting in delays and 
occasional denials of access to information. Given this, in 2011 DOJ 
initiated a trial program designed to improve its responsiveness to 
our requests. The program included target time frames for DOJ 
production of documents and for the scheduling of interviews with 
agency officials, as well as the designation by DOJ of senior 
component officials for our reviews. We and DOJ are in agreement that 
the trial program has led to efficiencies in conducting work at the 
department, including receiving information in a timelier manner and 
enhanced communication. DOJ is currently in the process of making the 
trial program changes a permanent part of its procedures for working 
with us. 

Another development in fiscal year 2011 relating to our access to 
information was in the context of intelligence. The Intelligence 
Authorization Act for Fiscal Year 2010, Pub. L. No. 111-259, § 348 
required the Director of National Intelligence (DNI), in consultation 
with the Comptroller General, to issue a written directive by May 1, 
2011, governing the access of the Comptroller General to information 
in the possession of an element of the U.S. Intelligence Community 
(IC). The statutory requirement to develop a directive on this subject 
was designed to address the historic challenges that we have 
experienced in gaining access to information in the IC. The DNI and 
his staff did consult with us during the development of the directive, 
and we believe that the resulting directive (Intelligence Community 
Directive 114) provides a starting point for addressing these 
challenges. The directive contains a number of provisions designed to 
promote constructive interaction between us and elements of the IC, 
such as establishing a presumption of cooperation with us. However, we 
have concerns with how several terms in the directive could be 
interpreted, since they are framed as areas where information would 
generally not be available to us for certain audits or reviews. It is 
crucial that these terms and the overall directive be carefully 
implemented and monitored to ensure that we are able to obtain the 
information we need to assist the Congress in its oversight 
responsibilities, including responding to requests from the committees 
on armed services, justice, homeland security, foreign affairs, and 
appropriations, as well as the congressional intelligence committees. 

We have experienced other access issues at certain agencies because of 
long-standing and erroneous interpretations of our access authority, 
even where the agencies involved are otherwise generally cooperative. 
In some cases, agencies have interpreted language in program statutes 
limiting their disclosure or use of data as restricting our access, 
notwithstanding our statutory access rights. Examples include an 
interpretation by the Food and Drug Administration with respect to a 
provision of the Federal Food, Drug, and Cosmetic Act, as well as an 
interpretation by the Federal Trade Commission of a provision in the 
Hart-Scott-Rodino Act, as amended. Legislation currently pending in 
the House (H.R. 2646) and the Senate (S. 237) would confirm our access 
rights, refuting agency interpretations that restrict GAO’s access in 
these and other circumstances. 

We devote a high level of attention to monitoring and aggressively 
pursuing access issues as they arise. We appreciate the interest of 
the Congress in helping to ensure that we obtain access to information 
and the efforts by agencies to cooperate with our requests. 

[End of Part I: Management's Discussion and Analysis] 

Part II: Performance Information: 

Performance Information by Strategic Goal: 

In the following sections, we discuss how each of our four strategic 
goals contributed to our fiscal year 2011 performance results. For 
goals 1, 2, and 3-—our external goals—-we present performance results 
for the three annual measures that we assess at the goal level as well 
as accomplishments under the strategic objectives for these goals. 
Most teams and units also contributed toward meeting the targets for 
the agencywide measures that were discussed in part I of this report. 
For goal 4—our internal goal—we present selected work for that goal’s 
strategic objectives as well as program evaluations conducted under 
this goal. We also present additional accomplishments and 
contributions for each of the four goals. 

Strategic Goal 1: Address Current and Emerging Challenges to the Well- 
being and Financial Security of the American People: 

Our first strategic goal upholds our mission to support the Congress 
in carrying out its constitutional responsibilities by focusing on 
work that helps address the current and emerging challenges affecting 
the well-being and financial security of the American people and 
American communities. Our multiyear (fiscal years 2010-2015) strategic 
objectives under this goal are to provide information that will help 
address: 

* financing and programs to serve the health needs of an aging and 
diverse population; 

* lifelong learning to enhance U.S. competitiveness; 

* benefits and protections for workers, families, and children; 

* financial security for an aging population; 

* a responsive, fair, and effective system of justice; 

* viable communities; 

* a stable financial system and consumer protection; 

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

* a viable, efficient, safe, and accessible national physical 
infrastructure. 

These objectives, along with the performance goals and key efforts 
that support them, are discussed fully in our strategic plan, which is 
available on our website at [hyperlink, http://www.gao.gov/sp.html]. 
The work supporting these objectives was performed primarily by 
headquarters and field office staff in the following teams: Education, 
Workforce, and Income Security; Financial Markets and Community 
Investment; Health Care; Homeland Security and Justice; Natural 
Resources and Environment; and Physical Infrastructure. In line with 
our performance goals and key efforts, goal 1 staff reviewed a variety 
of programs affecting the nation’s health providers and patients, 
students and educators, employees and workplaces, and social service 
providers and recipients. In addition, goal 1 staff performed work for 
our congressional clients related to improving the nation’s law 
enforcement systems and federal agencies’ ability to prevent and 
respond to terrorism and other major crimes. 

[Text box: Selected Work under Goal 1: Since 2008, we have been 
providing technical assistance to the U.S. Capitol Police (USCP) and 
the Congress on USCP’s acquisition of a new radio system, which has 
been funded with over $100 million in appropriations. We have improved 
the system’s technical design by reviewing and providing feedback on 
the radio system design, including an examination of issues related to 
system coverage and interference. We have improved the management of 
the project by reviewing the integrated project schedule and working 
with USCP and its partner agencies to improve its completeness and 
accuracy, including identifying and prioritizing program risks in the 
schedule. End of text box] 

To accomplish our work under these strategic objectives in fiscal year 
2011, we conducted engagements, audits, analyses, and evaluations of 
programs at major federal agencies, such as the Departments of Health 
and Human Services, Education, Energy, Homeland Security, Justice, 
Transportation, Housing and Urban Development, and the Interior, and 
developed reports and testimonies on the efficacy and soundness of 
programs they administer. 

As shown in table 9, we did not meet the target set for financial 
benefits for goal 1, but we exceeded the targets for nonfinancial 
benefits and testimonies. 

Table 9: Strategic Goal 1’s Annual Performance Results and Targets: 

Performance measure: Financial benefits; 
2006 Actual: $22.0 billion; 
2007 Actual: $12.9 billion; 
2008 Actual: $19.3 billion; 
2009 Actual: $12.1 billion; 
2010 Actual: $17.8 billion; 
2011 Target: $13.4 billion; 
2011 Actual: $12.6 billion; 
Met/Not Met: Not met; 
2012 Target[A]: $11.0 

Performance measure: Nonfinancial benefits; 
2006 Actual: 268; 
2007 Actual; 238; 
2008 Actual: 226; 
2009 Actual: 224; 
2010 Actual: 233; 
2011 Target: 225; 
2011 Actual: 243; 
Met/Not met: Met;
2012 Target[A]: 225. 

Performance measure: Testimonies; 
2006 Actual: 97; 
2007 Actual: 125; 
2008 Actual: 123; 
2009 Actual: 85; 
2010 Actual: 86; 
2011 Target: 78; 
2011 Actual: 84; 
Met/Not Met: Met; 
2012 Target[A]: 85. 

Source: GAO. 

Note: Financial benefits for goals 1 through 3 do not sum to the total 
agencywide target as we have left a portion of the financial benefits 
target unassigned in 2012. Experience leads us to believe that we can 
meet the agencywide target but we cannot predict under which goals 
because of governmentwide resource constraints. 

[A] Our fiscal year 2012 targets for financial benefits and 
testimonies have been revised from those we reported in our fiscal 
year 2012 performance budget in February 2011. Specifically, we have 
reduced the financial benefits target from $17.0 billion to $11.0 
billion and the testimony target from 90 to 85. The nonfinancial 
benefits target remains the same. 

[End of Table 9: Strategic Goal 1’s Annual Performance Results and 
Targets] 

To help us examine trends for these measures over time, we look at 
their 4-year averages, which minimize the effect of an unusual level 
of performance in any single year. These averages are shown in table 
10. This table indicates that the 4-year average for goal 1 financial 
benefits has gradually declined since fiscal year 2006. This decline 
is mostly due to some large financial benefits from earlier years that 
are reflected in the averages. Goal 1’s nonfinancial benefits peaked 
in fiscal year 2007 and declined until 2010 and then increased 
slightly in 2011. The average number of hearings at which we testify 
increased from 2006 through 2008 and remained fairly stable from 2008 
through 2010, declining somewhat in 2011. 

Table 10: Four-Year Rolling Averages for Strategic Goal 1: 

Performance measure: Financial benefits; 
2006: $22.0 billion; 
2007: $19.3 billion; 
2008: $17.5 billion; 
2009: $16.6 billion; 
2010: $15.5 billion; 
2011: $15.5 billion. 

Performance measure: Nonfinancial benefits; 
2006: 254; 
2007: 259; 
2008: 252; 
2009: 239; 
2010: 230; 
2011: 232. 

Performance measure: Testimonies; 
2006: 88; 
2007: 99; 
2008: 108; 
2009: 108; 
2010: 105; 
2011: 95. 

Source: GAO. 

[End of Table 10: Four-Year Rolling Averages for Strategic Goal 1] 

The following sections describe our performance under goal 1 for each 
of these three quantitative performance measures and describe the 
targets for fiscal year 2011. 

Financial Benefits: 

The financial benefits reported for this goal in fiscal year 2011 
totaled $12.6 billion, missing the target we set by $.8 billion, or 6 
percent. Among these accomplishments are large financial savings from 
our work on the level of funding for the Medicare Advantage program 
and DOE’s Loan Guarantee Program for Innovative Energy Technologies. 

Because we expect to have fewer resources with which to follow up on 
actions to implement our recommendations, we have set the target for 
fiscal year 2012 at $11 billion based on discussion with the goal 1 
teams about the level of benefits they believe they can achieve. 

[Text box: Example of Goal 1’s Financial Benefits: We identified 
overlap and duplication in 47 federal employment and training programs 
funded at a total of $18 billion in 2009, and found that their 
effectiveness was not always proven. Members of the Congress cited our 
findings and questioned continued funding at the same levels given the 
lack of information about their effectiveness. The Congress 
subsequently enacted the Department of Defense and Full- Year 
Continuing Appropriations Act, 2011 (P.L. 112-10), which reduced 
funding for several employment and training programs we identified by 
a total of more than $1.1 billion. [hyperlink, 
http://www.gao.gov/products/GAO-11-92]. End of text box] 

Nonfinancial Benefits: 

Nonfinancial benefits reported for goal 1 in fiscal year 2011 totaled 
243, exceeding our target of 225 by 18 benefits, or 8 percent. The 
majority of goal 1’s nonfinancial benefits were in the areas of public 
safety and security, including programs in the areas of public health, 
food safety, transportation safety, consumer protection, environmental 
safety, and telecommunications safety, and in the area of business 
process and management, including federal real property, human capital 
management, and facilities management. For fiscal year 2012, we 
maintained the 2011 target of 225 for nonfinancial benefits. We 
believe that we are more likely to achieve a greater number of 
nonfinancial benefits under goals 2 and 3 over the next few years 
based on our experience. This target is the same as that we set in our 
fiscal year 2012 performance plan. 

[Text box: Example of Goal 1’s Nonfinancial Benefits: We found that 
without a coordinated federal strategy, the nation is at risk of 
investing in biofuel production, distribution infrastructure-— such as 
fueling stations—-and biofuel-compatible vehicles that could not be 
effectively used. As a result, the Biomass Research and Development 
Board, which includes members from 10 federal agencies and is co-
chaired by the Departments of Energy and Agriculture, developed a 
National Biofuels Action Plan. The plan documents the government’s 
strategies—in collaboration with the private sector—for coordinating 
biofuel production, fuel distribution, and end use to help ensure 
effective investment. 
[hyperlink, http://www.gao.gov/products/GAO-07-713] End of text box] 

Testimonies: 

Our witnesses testified at 84 congressional hearings related to this 
strategic goal, which exceeded the fiscal year 2011 target by 6 
testimonies, or 8 percent. Among the topics on which we testified were 
medical devices, Social Security disability, financial literacy, oil 
and gas, and the U.S. Postal Service. (See figure 17 for selected 
testimony topics by goal.) We set our fiscal year 2012 target at 85 
testimonies on goal 1 issues based on our experience over the past few 
years. 

[Text box: Example of Goal 1’s Testimonies: Financial Literacy plays 
an important role in helping ensure the financial health and stability 
of individuals, families, and our broader national economy. Economic 
changes in recent years have highlighted the need to empower Americans 
to make informed financial decisions, yet evidence indicates that many 
U.S. consumers could benefit from a better understanding of financial 
matters. For example, recent surveys indicate that many consumers have 
difficulty with basic financial concepts and do not budget. We 
testified on (1) the state of the federal government’s approach to 
financial literacy, (2) observations on overall strategies for 
addressing financial literacy, and (3) the role we can play in 
addressing and raising awareness on this issue. [hyperlink, 
http://www.gao.gov/products/GAO-11-504T] End of text box] 

Table 11 provides examples of goal 1 accomplishments and contributions. 

Table 11: Goal 1 Accomplishments and Contributions: 

Health Care Needs and Financing: 

1.01: Contributing to Congressional Oversight of Health Care Reform: 
We contributed to congressional oversight of early implementation of 
health insurance reforms included in the Patient Protection and 
Affordable Care Act through 20 reports and 5 testimonies on health 
insurance and aspects of the Medicaid program significant to its 
expansion. For example, we testified on how states are using federal 
grants to bolster their health insurance premium rate reviews and 
reported on insurers’ anticipated responses to new requirements. Our 
work on the Medicaid program included reviews of managed care, access 
to services, and efforts to reduce improper payments and adjust the 
program during the economic downturn. 
[hyperlink, http://www.gao.gov/products/GAO-11-878T], 
[hyperlink, http://www.gao.gov/products/GAO-11-711], 
[hyperlink, http://www.gao.gov/products/GAO-11-701], 
[hyperlink, http://www.gao.gov/products/GAO-11-662]. 

1.02: Adding a Public Input Process before Approval of Medicaid 
Demonstrations: 
States can depart from Medicaid requirements through demonstrations 
designed to test new approaches for delivering services. The 
Department of Health and Human Services (HHS) established a policy in 
1994 to allow public input during the demonstration approval process 
but was not implementing it. We recommended that HHS do so and when 
the department disagreed, we asked the Congress to consider requiring 
a public input process. In March 2010, the Patient Protection and 
Affordable Care Act required HHS to ensure that its approval process 
for pending demonstrations provides for a meaningful level of public 
input at both state and federal levels. 
[hyperlink, http://www.gao.gov/products/GAO-02-817]. 

1.03: Adding Scrutiny of Medicare Home Health and Durable Medical 
Equipment Providers: 
Because our reviews of the Medicare home health and durable medical 
equipment (DME) benefits indicated that they were targets of fraud and 
abuse, we recommended that the Centers for Medicare & Medicaid 
Services (CMS) assess the feasibility of verifying the criminal 
history of all key officials named on a home health agency enrollment 
application and strengthen enrollment processes for DME providers. 
Citing the findings of GAO in its final rule, CMS began new screening 
procedures effective on March 25, 2011, that will involve criminal 
background checks and other additional scrutiny for new home health 
and DME providers. 
[hyperlink, http://www.gao.gov/products/GAO-09-185], 
[hyperlink, http://www.gao.gov/products/GAO-10-844T], 
[hyperlink, http://www.gao.gov/products/GAO-05-656], 
[hyperlink, http://www.gao.gov/products/GAO-05-43]. 

1.04: Improving Consistency and Compatibility of Hospital Infection 
Data: 
Our 2008 report on federal efforts to reduce or prevent health-care- 
associated infections (HAI) in hospitals recommended that HHS 
establish greater consistency and compatibility of HAI data collected. 
Consistent with this recommendation, in 2011, HHS began requiring 
hospitals to report central-line-associated bloodstream infection data 
to qualify for full Medicare payments and, in 2012, will begin 
requiring hospitals to report other infection data. HHS is also taking 
steps to ensure the compatibility of HAI data and to improve the 
reliability of national estimates of HAIs—-for example, by conducting 
a national prevalence survey. 
[hyperlink, http://www.gao.gov/products/GAO-08-283]. 

1.05: Increasing Review of Medicare Suppliers’ Compliance with 
Standards: 
In a 2005 report, we concluded that CMS must strengthen oversight of 
suppliers of durable medical equipment. We recommended that inspectors 
review a minimum number of patient files to determine supplier 
adherence to standards for maintaining documentation of services and 
information provided to beneficiaries. Consistent with this 
recommendation, in 2011, CMS began requiring inspectors to review 5 to 
10 beneficiary files to validate that suppliers are in compliance with 
a new requirement to maintain certain ordering and referring 
documentation of services and information provided for 7 years. 
[hyperlink, http://www.gao.gov/products/GAO-05-656]. 

Lifelong Learning: 

1.06: Improving Implementation of the Post-9/11 GI Bill: We found that 
the VA’s Post-9/11 GI Bill program to provide education benefits to 
veterans and servicemembers faced inadequate information systems and 
program guidance and an increase in improper benefit payments. We 
recommended that VA provide better information to schools and leverage 
the experience of officials who administer aid. VA issued guidance to 
schools, made key data available, and worked with Department of 
Education officials. In addition, the Senate requested that VA conduct 
a full accounting of steps that have been taken in response to our 
report and assess ways to reduce improper payments. [hyperlink, 
http://www.gao.gov/products/GAO-11-356R]. 

Benefits and Protection for Workers, Families and Children: 

1.07: Integrating Federal Disability Evaluation Systems: We made 
recommendations to improve the implementation and monitoring of the 
Integrated Disability Evaluation System (IDES), the DOD and VA pilot 
program for integrating their disability systems. The agencies 
implemented our recommendations: DOD contracted for a study of 
differences in diagnoses between VA and military physicians to assess 
their prevalence and causes, and VA took steps to improve its ability 
to track and resolve problems with the sufficiency of medical 
examinations. We testified twice on IDES’s challenges, alerting the 
Congress to a decline in the timeliness of case completion. 
[hyperlink, http://www.gao.gov/products/GAO-11-69]. 

1.08: Preventing Sex Offenders’ Access to Children: Using the National 
Sex Offender Registry, we identified three registered sex offenders 
who were employed at schools or child care facilities in violation of 
state laws. We referred these individuals to their respective state 
oversight bodies; these referrals resulted in all three offenders 
being removed from their positions, preventing their access to 
vulnerable children. This work further helped identify the systemic 
vulnerabilities that allowed registered sex offenders access to 
schools, and better informed the Congress of opportunities to enhance 
protections to separate sex offenders from vulnerable school 
populations. 
[hyperlink, http://www.gao.gov/products/GAO-11-200], 
[hyperlink, http://www.gao.gov/products/GAO-11-757]. 

1.09: Ensuring Elder Justice and Well-Being: Our work on elder justice 
informed reauthorization of the Older Americans Act and drew attention 
to the challenges of addressing elder abuse. We recommended ways for 
the HHS to improve data collection on adult protective services and 
establish a national resource center to make these data accessible and 
comprehensible. The agency is establishing a national resource center 
for state adult protective services programs. The Congress also 
invited us to testify on these issues, which we did. 
[hyperlink, http://www.gao.gov/products/GAO-11-384T], 
[hyperlink, http://www.gao.gov/products/GAO-11-208], 
[hyperlink, http://www.gao.gov/products/GAO-11-129SP]. 

1.10: Strengthening Oversight of Social Security Administration’s 
Ticket to Work Program: 
We found that almost one-third of payments the Social Security 
Administration (SSA) made to Ticket to Work program service providers, 
known as employment networks (EN), went to those providing limited or 
no direct services beyond passing back a portion of the payments to 
beneficiaries. We also found weaknesses in its process to approve ENs 
and no performance measures to evaluate them. We recommended ways for 
SSA to address this. SSA now requires prospective ENs to submit 
comprehensive business plans, is identifying more specific criteria to 
assess their qualifications, and has developed performance measures. 

Financial Security for An Aging Population: 

1.11: Ensuring Key Information Is Available to Defined Contribution 
Plan Sponsors: 
Our work found that participants in defined contribution plans, such 
as 401(k) and 403(b) plans, have limited information to compare 
investment options and invest wisely. We recommended that the 
Department of Labor (DOL) ensure that information, such as fees and 
expenses, is made available. DOL issued a rule requiring plan 
administrators and their service providers to disclose certain 
information regarding investments to plan sponsors. The regulation is 
intended to ensure that beneficiaries have the information they need 
to manage their retirement savings. 
[hyperlink, http://www.gao.gov/products/GAO-08-222T], 
[hyperlink, http://www.gao.gov/products/GAO-07-21]. 

Responsive, Fair, and Effective System of Justice: 

1.12: Managing Overlap Among Federal Law Enforcement Agencies’ Crime- 
Fighting Efforts: 
Four Department of Justice (DOJ) law enforcement components share 
authority for addressing certain crimes, including those that involve 
explosives. Over a third of the DOJ agents we surveyed reported 
differences with agents from other components when determining roles 
and responsibilities during investigations, which negatively affected 
the investigations to some degree. In response to our 2011 
recommendation, DOJ has promoted greater use of an existing 
deconfliction system and committed to holding periodic meetings among 
the four components to identify differences, discuss conflict 
resolution mechanisms, and improve information sharing. 
[hyperlink, http://www.gao.gov/products/GAO-11-314]. 

1.13: Identifying Opportunities to Enhance Investigations of Online 
Child Pornography: 
Our March 2011 report on federal efforts to address online child 
pornography highlighted for the Congress challenges to law enforcement 
in investigating these crimes. We also discussed efforts to address 
challenges through assisting electronic service providers in 
identifying and reporting pornography, making tips to law enforcement 
more useful, better coordinating investigations, and ensuring that 
steps taken to analyze digital evidence are cost-effective. As of June 
2011, DOJ senior management said the agency is addressing our 
recommendation to assess costs and benefits of the forensic process 
and plans to update the Congress on progress in late 2011. 
[hyperlink, http://www.gao.gov/products/GAO-11-334]. 

Viable Communities: 

1.14: Collecting Information on Tribes’ Plans for Improving Housing- 
related Infrastructure: 
In 2010, we recommended that the Department of Housing and Urban 
Development (HUD) collect information on tribes’ plans to address 
housing-related infrastructure needs in revising the reporting form 
for Native American Housing Assistance and Self-Determination Act of 
1996 grant recipients. Developing infrastructure is an eligible grant 
activity and a pressing need for many tribes. Our review of the draft 
form showed that HUD would not be tracking grantees’ plans 
specifically for infrastructure. In 2011, OMB approved HUD’s new form, 
which will allow tribes to identify and detail their housing plans, 
including improving the quality of existing infrastructure or of 
substandard housing units. 
[hyperlink, http://www.gao.gov/products/GAO-10-326]. 

1.15: Improving Contracting Opportunities for Small Businesses: In 
2011, we examined federal small business contracting efforts and 
recommended that agencies comply with reporting requirements for 
Office of Small and Disadvantaged Business Utilization (OSDBU) 
directors, consider collecting data on small businesses in federal 
mentor-protégé programs after program completion, and improve the 
reliability of data on actions that help small businesses access 
federal contracts. In response, certain agencies have begun to take 
actions, including revising the reporting structure for the OSDBU 
director, collecting data on protégé achievements, and updating 
guidance for reporting and verifying data. 
[hyperlink, http://www.gao.gov/products/GAO-11-418], 
[hyperlink, http://www.gao.gov/products/GAO-11-548R], 
[hyperlink, http://www.gao.gov/products/GAO-11-549R]. 

Stable Financial System and Consumer Protection: 

1.16: Increasing Securities Regulators’ Use of DOD’s Information on 
Banned Sales Agents: 
In 2005, we recommended that securities regulators make use of 
information that the DOD maintains on individuals or firms that have 
been sanctioned by the military for improper solicitation practices. 
The SEC recently reported using such information to conduct 
investigations and targeted examination sweeps of securities firms 
that market products to members of the military. These efforts, based 
on our recommendation, enhance financial regulators’ ability to 
identify instances of problematic financial product sales to military 
members. 
[hyperlink, http://www.gao.gov/products/GAO-06-23]. 

1.17: Improving the Federal Response to the Foreclosure Crisis: In 
2011, we issued several reports on the housing foreclosure crisis. Two 
reports provided previously unavailable information on foreclosure 
actions that were abandoned or processed without proper legal 
documentation. The Congress and federal regulators are considering 
recommendations we made to help reduce the negative effects of these 
actions on families and communities. In response to recommendations in 
another report, the Department of the Treasury now penalizes mortgage 
servicers for not suitably processing loan modifications for 
distressed borrowers and has increased monitoring of servicers’ 
complaint-handling practices. 
[hyperlink, http://www.gao.gov/products/GAO-11-338T], 
[hyperlink, http://www.gao.gov/products/GAO-11-367R], 
[hyperlink, http://www.gao.gov/products/GAO-11-93], 
[hyperlink, http://www.gao.gov/products/GAO-11-433]. 

1.18: Strengthening the Federal Reserve’s Management of Emergency 
Assistance: 
On numerous occasions in 2008 and 2009, the Federal Reserve Board 
invoked emergency authority under the Federal Reserve Act of 1913 to 
authorize new, broad-based programs and financial assistance to 
individual institutions to stabilize financial markets. In a 2011 
report, we helped increase transparency of the Federal Reserve by 
providing information on its actions in response to the financial 
crisis. This report represents the first time the Federal Reserve’s 
emergency lending activities have been audited by us. We identified 
opportunities to improve the management of vendors, risks, conflicts 
of interest, and documentation related to the emergency programs. The 
Federal Reserve Board agreed that our recommendations would benefit 
its response in the event of a future crisis and agreed to strongly 
consider them. 
[hyperlink, http://www.gao.gov/products/GAO-11-696]. 

Stewardship of Natural Resources and the Environment: 

1.19: Informing the Congress about Emerging Technologies: To better 
inform the Congress about emerging technologies with important 
implications for the nation, we have issued a series of technology 
reports—most recently, a congressionally requested assessment of 
emerging climate engineering technologies. For this report we 
developed a multidisciplinary approach with an assessment of the 
technologies’ maturity and potential consequences; foresight efforts 
(e.g., scenarios to elicit views on future directions); and 
consideration of issues such as public engagement. The first report in 
the series informed the Intelligence Reform and Terrorism Prevention 
Act of 2004. 
[hyperlink, http://www.gao.gov/products/GAO-11-71], 
[hyperlink, http://www.gao.gov/products/GAO-03-174]. 

1.20: Strengthening Efforts to Protect Consumers from Lead 
Contamination: 
Elevated lead levels in the District of Columbia’s water raised 
questions about how well consumers are protected nationwide. Our 
report on the Environmental Protection Agency’s (EPA) lead testing and 
treatment requirements revealed regulatory weaknesses, a lack of 
public information, and other problems. In response to our 
recommendations on these issues, EPA proposed regulatory changes to 
strengthen testing, treatment, and consumer notification requirements. 
In addition, EPA conducted an outreach campaign and provided tools to 
help schools and child care facilities assess and take steps to 
address lead contamination in their drinking water. 
[hyperlink, http://www.gao.gov/products/GAO-06-148]. 

1.21: Developing a Strategy for Using Long-term Stewardship Contracts: 
Federal land management agencies are increasingly using a tool known 
as stewardship contracting to conduct land management projects, such 
as thinning forests to reduce the risk of wildland fire. This tool was 
designed to help the agencies work more efficiently by using any of 
several innovative contracting approaches. To ensure the tool’s 
appropriate use and funding, we recommended that the agencies develop 
a strategy for its use that recognizes certain risks of these 
contracts and addresses the circumstances in which they should be 
used. In response, the Bureau of Land Management developed a strategy 
to address these risks and enhance the tool’s use. 
[hyperlink, http://www.gao.gov/products/GAO-09-23]. 

1.22: Strengthening Controls Over Federal Farm Program Payments: 
Farmers receive federal farm program payments for crop subsidies, 
conservation practices, and disasters. We found that the Department of 
Agriculture (USDA) made $1.1 billion in farm program payments in the 
names of about 173,000 deceased individuals from 1999 through 2005. As 
a result, the Congress directed USDA to strengthen its controls over 
such payments through the Food, Conservation, and Energy Act of 2008. 
In response, USDA implemented computer matching with data from SSA to 
verify that individuals receiving payments are not deceased and 
improved payment guidance to its 2,200 local offices. 
[hyperlink, http://www.gao.gov/products/GAO-07-818], 
[hyperlink, http://www.gao.gov/products/GAO-07-1137T]. 

Viable National Infrastructure: 

1.23: Improving Oversight of Broadband Programs: In reports and 
testimonies following passage of the Recovery Act, we identified 
weaknesses in the Rural Utilities Service’s oversight plans for the 
Broadband Initiatives Program, which funded broadband infrastructure 
in rural areas. We reported that the agency may be unable to ensure 
that all recipients of program funds complete their projects as 
required, since the Recovery Act did not provide funding beyond 
September 30, 2010. We recommended that the agency develop contingency 
plans and incorporate variability of funding into its oversight plans, 
and our work helped the agency develop an oversight plan that will 
guard against waste, fraud, and abuse. 
[hyperlink, http://www.gao.gov/products/GAO-11-371T], 
[hyperlink, http://www.gao.gov/products/GAO-10-823], 
[hyperlink, http://www.gao.gov/products/GAO-10-80], 
[hyperlink, http://www.gao.gov/products/GAO-10-192T]. 

1.24: Monitoring the U.S. Investment in Chrysler and General Motors: 
In exchange for providing $62 billion in restructuring assistance to 
Chrysler and General Motors through the Troubled Asset Relief Program, 
Treasury received an equity stake in the companies. Following our 
November 2009 report on the importance of having sufficient expertise 
to monitor its investment, Treasury hired two additional employees and 
a financial advisor, better positioning it to maximize its return. 
Treasury sold a portion of its General Motors equity in the company’s 
initial public offering in November 2010, and fully divested its 
Chrysler equity in July 2011, recouping a substantial amount of its 
investment. 
[hyperlink, http://www.gao.gov/products/GAO-10-151], 
[hyperlink, http://www.gao.gov/products/GAO-11-471]. 

1.25: Improving Governance at the Smithsonian Institution: After a 
number of highly publicized governance and accountability breakdowns, 
the Smithsonian’s Board of Regents initiated a governance reform 
effort in 2007. In a subsequent series of reports and testimonies, we 
monitored and evaluated the board’s efforts, and made recommendations 
related to improving communication, transparency, and accountability. 
In response, the board has put in place governance structures and 
policies that will allow it to exercise its oversight functions and 
help to ensure that it can be an effective steward for the institution. 
[hyperlink, http://www.gao.gov/products/GAO-08-632], 
[hyperlink, http://www.gao.gov/products/GAO-08-250T], 
[hyperlink, http://www.gao.gov/products/GAO-10-190R], 
[hyperlink, http://www.gao.gov/products/GAO-10-297T]. 

1.26: Improving Security at National Icons and Parks: In 2009, we 
reported that the National Park Service faced several challenges in 
protecting national icons and parks from the threat of terrorism. 
These challenges related to managing risk, using technology, sharing 
information, measuring performance, and managing human capital. Our 
work led to improvements in all of these areas and influenced other 
organizational changes, including a reorganization of the U.S. Park 
Police and the creation of an Icon Protection Council within the 
National Park Service. As a result of these efforts, the service is 
better equipped to protect national icons and parks, as well as the 
millions of people who visit them. 
[hyperlink, http://www.gao.gov/products/GAO-09-983]. 

1.26: Improving Air Passenger Rights: In 2010, we reported that the 
Department of Transportation (DOT) did not have a policy on airlines’ 
compensation of passengers for mishandled bags. Also, federal agencies 
that assess airline ticket fees were not clearly disclosing which fees 
were reimbursable for unused nonrefundable tickets. We recommended 
that the agencies improve disclosure. In 2011, following our report, 
DOT issued rules for baggage compensation, and two agencies that 
assess fees—the Departments of Homeland Security and Agriculture—
issued guidance that their fees are refundable. Passengers will now 
benefit from more compensation for mishandled bags and reimbursement 
of fees. 
[hyperlink, http://www.gao.gov/products/GAO-10-785], 
[hyperlink, http://www.gao.gov/products/GAO-10-885T]. 

1.27: Reducing Unneeded Federal Real Property: For years, we have 
reported that the federal government spent billions of dollars on 
unneeded real property. Real property holding-agencies have retained 
unneeded real property because of underlying obstacles—-such as 
competing stakeholder interests and various legal and budgetary 
limitations—-that have hampered real property reform efforts. We 
recommended that OMB develop an action plan to address the underlying 
obstacles. In 2011, the administration proposed the Civilian Property 
Realignment Act to address the underlying obstacles and help agencies 
reduce their unneeded real property, which could save taxpayers 
billions of dollars. 
[hyperlink, http://www.gao.gov/products/GAO-07-349] 

Source: GAO. 

[End of Table 11: Goal 1 Accomplishments and Contributions] 

[End of Strategic Goal 1] 

Strategic Goal 2: Respond to Changing Security Threats and the 
Challenges of Global Interdependence: 

The federal government is working to promote foreign policy goals, 
sound trade policies, and other strategies to advance the interests of 
the United States and its allies. The federal government is also 
working to balance national security demands overseas and at home with 
demands related to an evolving national security environment. Given 
the importance of these efforts, our second strategic goal focuses on 
helping the Congress and the federal government in their responses to 
changing security threats and the challenges of global 
interdependence. Our multiyear (fiscal years 2010-2015) strategic 
objectives under this goal are to support congressional and agency 
efforts to: 

* protect and secure the homeland from threats and disasters, 

* ensure military capabilities and readiness, 

* advance and protect U.S. foreign policy interests, and, 

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

These objectives, along with the performance goals and key efforts 
that support them, are discussed fully in our strategic plan, which is 
available on our website at [hyperlink, http://www.gao.gov/sp.html]. 
The work supporting these objectives is performed primarily by 
headquarters and field staff in the following teams: Acquisition and 
Sourcing Management, Defense Capabilities and Management, Homeland 
Security and Justice, and International Affairs and Trade. In 
addition, the work supporting some performance goals and key efforts 
is performed by headquarters and field staff from the Financial 
Markets and Community Investment, Information Technology, and Natural 
Resources and Environment teams. 

[Text box: Selected Work under Goal 2: The Joint Strike Fighter (JSF) 
is DOD’s most costly and ambitious acquisition; life-cycle costs are 
projected to exceed $1 trillion. Since 2001, we have chronicled the 
program’s poor performance, substantial cost increases, persistent 
schedule delays, and the cost and benefits of a competitive engine 
strategy. We’ve recommended numerous ways to improve management, 
control costs, and reduce risks. DOD is now restructuring the JSF 
program consistent with our recommendations. Our several assessments 
of the competitive engine strategy have provided the Congress with 
timely and objective assessments on a contentious and long-standing 
issue. [hyperlink, http://www.gao.gov/products/GAO-11-325], 
[hyperlink, http://www.gao.gov/products/GAO-11-903R]. End of text box] 

To accomplish our work in fiscal year 2011 under these strategic 
objectives, we conducted engagements and audits that involved 
fieldwork related to international and domestic programs that took us 
across multiple continents. As in the past, we developed reports, 
testimonies, and briefings on our work. 

As shown in table 12, we exceeded our fiscal year 2011 performance 
targets for financial and nonfinancial benefits, but we did not meet 
the target for testimonies. 

Table 12: Strategic Goal 2’s Annual Performance Results and Targets: 

Performance measure: Financial benefits; 
2006 Actual: $12.0 billion; 
2007 Actual: $10.3 billion; 
2008 Actual: $15.4 billion; 
2009 Actual: $12.4 billion; 
2010 Actual: $20.5 billion; 
2011 Target: $13.9 billion; 
2011 Actual: $25.9 billion; 
Met/Not Met: Met; 
2012 Target[A]: $11.4 billion. 

Performance measure: Nonfinancial benefits; 
2006 Actual: 449; 
2007 Actual: 468; 
2008 Actual: 468; 
2009 Actual: 457; 
2010 Actual: 444; 
2011 Target: 345; 
2011 Actual: 447; 
Met/Not Met: Met; 
2012 Target[A]: 450. 

Performance measure: Testimonies; 
2006 Actual: 68; 
2007 Actual: 73; 
2008 Actual: 93; 
2009 Actual: 67; 
2010 Actual: 58; 
2011 Target: 65; 
2011 Actual: 48; 
Met/Not Met: Not met; 
2012 Target[A]: 50. 

Source: GAO. 

Note: Financial benefits for goals 1 through 3 do not sum to the total 
agencywide target as we have left a portion of the financial benefits 
target unassigned. Experience leads us to believe that we can meet the 
agencywide target but we cannot predict under which goals because of 
governmentwide resource constraints. 

[A] Our fiscal year 2012 target for all three performance measures 
differs from those we reported in our fiscal year 2012 performance 
budget in February 2011. Specifically, we decreased financial benefits 
from $14.0 billion to $11.4 billion, and testimonies from 70 to 50 and 
increased nonfinancial benefits from 345 to 450. 

[End of Table 12: Strategic Goal 2’s Annual Performance Results and 
Targets] 

To help us examine trends for these measures over time, we look at 
their 4-year averages, which minimize the effect of an unusual level 
of performance in any single year and are shown in table 13. This 
table indicates that over the past 5 years goal 2 financial benefits 
reached the highest level in 2011, and average nonfinancial benefits 
and testimonies increased steadily from 2006 to 2009 and declined in 
2010 and 2011. 

Table 13: Four-Year Rolling Averages for Strategic Goal 2: 

Performance measure: Financial benefits; 
2006: $10.4 billion; 
2007: $11.2 billion; 
2008: $12.7 billion; 
2009: $12.5 billion; 
2010: $14.7 billion; 
2011: $18.6 billion. 

Performance measure: Nonfinancial benefits; 
2006: 364; 
2007: 413; 
2008: 438; 
2009: 461; 
2010: 459; 
2011: 454. 

Performance measure: Testimonies; 
2006: 57; 
2007: 63; 
2008: 67; 
2009: 75; 
2010: 73; 
2011: 67. 

Source: GAO. 

[End of Table 13: Four-Year Rolling Averages for Strategic Goal 2] 

The following sections describe our performance under goal 2 for each 
of our quantitative performance measures and describe the targets for 
fiscal year 2011. 

Financial Benefits: 

The financial benefits reported for this goal in fiscal year 2011 
totaled $25.9 billion, which exceeded our target by $12 billion, or 86 
percent. Among these accomplishments are large financial benefits, 
including DOD’s termination of the Army’s Future Combat System manned 
ground vehicle program and the Transformational Satellite 
Communications System. 

[Text box: Example of Goal 2’s Financial Benefits: We identified the 
potential costs and risks of transitioning the Logistics Civil 
Augmentation Program from LOGCAP III to the LOGCAP IV contract during 
the final stages of the drawdown of U.S. forces from Iraq and 
recommended that the Army conduct an analysis of the costs and 
benefits of this transition. The Army analysis recommended the 
continued use of LOGCAP III. In May 2010 the Army announced that it 
would continue to use the LOGCAP III contract to support U.S. Forces 
in Iraq until December 2011. According to the Army this decision will 
result in cost avoidance of about $77.5 million. [hyperlink, 
http://www.gao.gov/products/GAO-10-376. End of text box] 

We expect our work on defense and acquisition issues to continue to 
produce economies and efficiencies, but we do not expect the same 
level of benefits as in the past 2 years because of large savings from 
termination of a portion of DOD’s Future Combat System and its 
Transformational Satellite Communications System that will not 
continue in future years. Therefore, we set our fiscal year 2012 
target at $11.4 billion, which is more consistent with the trend in 
prior years. 

Nonfinancial Benefits: 

The nonfinancial benefits reported for goal 2 in fiscal year 2011 
totaling 447 nonfinancial benefits, exceeded our target by 102 
benefits, or 30 percent. The majority of goal 2’s nonfinancial 
accomplishments were in the areas of public safety and security for 
programs, including homeland security and justice, international aid, 
national defense and foreign policy, and acquisition and contract 
management at DOD, NASA, and DOE. Based on our recent experience, and 
our 4-year rolling average, we set our fiscal year 2012 target at 450. 
This target is close to our recent experience and our 4-year average. 

[Text box: Example of Goal 2’s Nonfinancial Benefits: We continued to 
review development efforts in Afghanistan with our 2010 report on U.S. 
support of water projects. In response to five of our recommendations 
on planning, coordination, and project monitoring, the U.S. Agency for 
International Development established a mechanism to enhance 
interagency and international project coordination, improved 
interagency planning among U.S. agencies and the Afghan government, 
began a routine review of water project performance data, improved its 
efforts to establish annual targets for all performance indicators, 
and distributed guidance for project monitoring in high- threat 
environments. [hyperlink, http://www.gao.gov/products/GAO-11-138]. End 
of text box] 

Testimonies: 

Our witnesses testified at 48 congressional hearings related to this 
strategic goal in fiscal year 2011, missing our target of 65 by 17 
hearings, or 26 percent. Goal 2 testimony topics included DHS 10 years 
after 9/11, flood insurance, space acquisitions, DOD personnel 
security clearances, defense space acquisitions, and diplomatic 
security. (See figure 17 for selected testimony topics by goal.) We 
have set our target at 50 for presenting testimony based on our 
experience over the past 2 years. 

[Text box: Example of Goal 2’s Testimonies: 
Corresponding with the 10-year anniversary of 9/11, we testified on 
our comprehensive report assessing progress made by DHS in 
implementing its missions, and operational weaknesses that contributed 
to delays and problems. We noted areas that have affected DHS’s 
implementation efforts, such as the need for DHS to better lead and 
coordinate the efforts of its homeland security partners, strengthen 
its management functions, and strategically manage risks and adjust, 
as needed, its efforts to address current and evolving threats. 
[hyperlink, http://www.gao.gov/products/GAO-11-919T]. End of text box] 

Table 14 provides examples of goal 2 accomplishments and contributions. 

Table 14: Goal 2 Accomplishments and Contributions: 

Protect and Secure the Homeland: 

2.01: Encouraging Changes to Container Staffing Model Resulted in 
Financial Benefits: 
Our reviews of U.S. Customs and Border Protection’s (CBP) Container 
Security Initiative (CSI) revealed that CBP did not consider whether 
some functions performed by staff at overseas ports could be performed 
remotely in the United States nor did it consider the optimal number 
of staff that should be placed overseas as opposed to in the United 
States. We recommended that CBP revise its staffing model. As a 
result, CBP began transferring CSI positions from overseas ports to 
the United States in January 2009. Foreign staffing levels for CSI 
decreased from 170 in January 2009 to 86 in April 2011, resulting in 
net financial benefits of $35.4 million. 
[hyperlink, http://www.gao.gov/products/GAO-05-557], 
[hyperlink, http://www.gao.gov/products/GAO-08-187]. 

2.02: Leading DHS to Scale Back Flawed Advanced Radiation Detector 
Program: 
The United States deploys radiation detectors to prevent the smuggling 
of nuclear and radiological materials. The Department of Homeland 
Security’s (DHS) Advanced Spectroscopic Portals (ASP) are second- 
generation radiation detectors designed to replace detectors already 
deployed. In a series of products since 2006 about problems with the 
cost, testing, and performance of ASPs, we found that ASPs would be 
significantly more expensive than current-generation detectors but had 
not been shown to be more effective. Our work led DHS to significantly 
scale back the scope of the ASP program, resulting in estimated 
financial benefits of $1.2 billion. 
[hyperlink, http://www.gao.gov/products/GAO-10-252T], 
[hyperlink, http://www.gao.gov/products/GAO-09-804T], 
[hyperlink, http://www.gao.gov/products/GAO-09-655], 
[hyperlink, http://www.gao.gov/products/GAO-08-979]. 

2.03: Framing the National Flood Insurance Program Debate: In 2011, we 
testified before House and Senate committees and reviewed the Federal 
Emergency Management Agency’s (FEMA) management of the National Flood 
Insurance Program (NFIP). We reported that in order for NFIP to become 
financially sound, premium rates must fully reflect the risk of loss, 
and that FEMA needs to address management weaknesses in multiple 
areas. We evaluated proposed changes to the program against a 
framework we developed for federal involvement in natural catastrophe 
insurance, pointing out the benefits and challenges of different 
approaches. Our work in this area has helped frame the ongoing NFIP 
reform debate. 
[hyperlink, http://www.gao.gov/products/GAO-11-297], 
[hyperlink, http://www.gao.gov/products/GAO-11-670T], 
[hyperlink, http://www.gao.gov/products/GAO-11-429T]. 

2.04: Identifying Internal Control Weaknesses in Transportation Worker 
Credentialing: 
In May 2011 we reported on internal control weaknesses in the DHS 
program to provide credentials to transportation workers who require 
access to secure areas of maritime facilities and vessels. We reported 
that control weaknesses in the program hindered the achievement of the 
program’s security objectives. We recommended that DHS perform an 
assessment of control-related weaknesses and risks and determine 
actions needed to correct or compensate for them. This work informed 
both the congressional and public discussion about the program. 
[hyperlink, http://www.gao.gov/products/GAO-11-657]. 

2.05: Ensuring Accountability for FEMA to Develop Metrics to Aid in 
Assessing Preparedness: 
In 2010, we reported that FEMA had not yet developed national 
preparedness capability requirements based on established metrics as 
required by the Post-Katrina Emergency Management Reform Act. Citing 
our work, the Senate report accompanying the Redundancy Elimination 
and Enhanced Performance for Preparedness Grants Act of 2010 requires 
FEMA to report the results of its plans, including a specific 
timetable, for developing a set of quantifiable performance metrics to 
assess the effectiveness of preparedness grant programs, thus 
establishing accountability for FEMA’s actions. 
[hyperlink, http://www.gao.gov/products/GAO-11-51R]. 

2.06: Ensuring An Authorized U.S. Workforce: In response to ongoing 
congressional interest, we reported and testified several times since 
2005 on DHS’s progress and challenges in implementing E-Verify, an 
electronic employment verification tool. We reported that DHS had 
improved E-Verify’s accuracy, but the system remained vulnerable 
tofraud and work site enforcement resources were limited. We made 
recommendations to help DHS further reduce E-Verify errors, better 
ensure compliance with E-Verify rules, and plan for expansion of E-
Verify. Our work was widely cited by the Congress and in the media, 
and has helped frame the debate on whether the E-Verify system is 
ready for mandatory use. 
[hyperlink, http://www.gao.gov/products/GAO-11-146]. 

2.07: Enhancing Federal Desktop Computer Security: In FY 2010, we 
recommended that 22 major federal agencies fully implement the federal 
desktop core configuration--a set of strong security settings for 
Windows-based workstations. In fiscal year 2011, a number of agencies 
have acted to implement the stronger security settings, ensure 
contractual language is in place so that new acquisitions include the 
settings, and document and approve any deviations. As a result, these 
agencies have significantly improved their ability to protect the 
confidentiality, integrity, and availability of sensitive information 
maintained on agency workstations. 
[hyperlink, http://www.gao.gov/products/GAO-10-202]. 

Military Capabilities and Readiness: 

2.08: Identifying Potential Defense Budget Savings: In our annual 
review of DOD’s procurement and research, development, evaluation and 
test budgets for selected weapon systems, we examined the President’s 
fiscal year 2011 budget requests for 146 defense acquisition programs. 
In performing this work, we identified approximately $6 billion in 
potential fiscal year 2011 budget reductions and restrictions as well 
as excess prior year appropriations. The Congress used this 
information to make budgetary decisions resulting in about $3 billion 
in budget reductions and rescissions. 

2.09: Highlighting Risks in DOD Weapon System Acquisitions: We 
continue to be one of the primary sources of information for the 
Congress and the public on the risks associated with individual weapon 
system programs and the performance of the defense acquisition system. 
Our annual assessment of DOD weapon programs is a comprehensive 
independent examination and a key oversight tool for the Congress. In 
2010, we found that weapon system acquisition costs have grown by over 
$135 billion over the past 2 years and that most of the 71 programs we 
reviewed were still not fully adhering to a knowledge-based 
acquisition approach, putting them at higher risk of cost growth and 
schedule delays. 
[hyperlink, http://www.gao.gov/products/GAO-11-233SP]. 

2.10: Assessing DOD’s Ability to Provide Trained and Ready Forces for 
Military Operations: 
In numerous reports on training and military operations, we identified 
issues with DOD’s ability to improve training management skills, 
readiness reporting, and coordination of language and culture 
training; enhance Army brigade support to advise missions; manage and 
oversee its processes for responding to urgent needs in Iraq and 
Afghanistan; and distribute supplies and equipment to the forces in 
Afghanistan. Our work helped frame significant issues for 
congressional and public debate, and prompted DOD and the Congress to 
take action. For example, the Army and the Marine Corps have improved 
the consistency of their readiness reporting. 
[hyperlink, http://www.gao.gov/products/GAO-11-760], 
[hyperlink, http://www.gao.gov/products/GAO-11-456], 
[hyperlink, http://www.gao.gov/products/GAO-11-273], 
[hyperlink, http://www.gao.gov/products/GAO-11-526], 
[hyperlink, http://www.gao.gov/products/GAO-11-673]. 

2.11: Assessing DOD’s Expanding Cyber Mission: Our work identified key 
challenges in DOD’s cybersecurity efforts. Our recommendations were 
designed to strengthen DOD’s cyber-related joint doctrine, develop 
common definitions, improve guidance on command and control 
relationships, gain a complete picture of cyberspace capabilities and 
gaps, clarify policy on which personnel can perform cyber operations, 
define mission requirements, and develop full- spectrum cyberspace 
budget estimates. DOD has generally agreed with our recommendations 
and in some cases outlined steps it plans to take in response. Our 
work has also assisted the Congress in its oversight of this evolving 
threat. 
[hyperlink, http://www.gao.gov/products/GAO-11-75], 
[hyperlink, http://www.gao.gov/products/GAO-11-421], 
[hyperlink, http://www.gao.gov/products/GAO-11-695R]. 

2.12: Improving Global Defense Posture Management: Since 2006, we have 
reported on issues related to DOD’s overall global posture strategy 
and management practices, and the transformation of military posture 
in Europe and Asia. Those reports make numerous recommendations to 
improve DOD’s management of these efforts and the information about 
them that DOD makes available to the executive branch and 
congressional committees. Our reports have highlighted the need for 
comprehensive cost information that can be used to fully evaluate 
investment requirements and affordability of posture initiatives. In 
many cases, DOD has agreed with our recommendations and has begun to 
implement them. 
[hyperlink, http://www.gao.gov/products/GAO-11-316], 
[hyperlink, http://www.gao.gov/products/GAO-09-706R], 
[hyperlink, http://www.gao.gov/products/GAO-06-852], 
[hyperlink, http://www.gao.gov/products/GAO-11-131]. 

2.13: Removing DOD’s Personnel Security Clearance Program from Our 
High-Risk List: 
Our oversight—-through continuous monitoring, reporting, and 
participation in 14 congressional hearings--contributed to our ability 
to remove DOD’s personnel security clearance program from our high- 
risk list. We designated DOD’s program as high-risk in 2005 because of 
significant processing delays, and kept the program on the list in 
2007 and 2009 for continued delays and quality issues. As a result, 
DOD improved timeliness, worked with executive agencies to develop a 
strategic framework, implemented quality assessment tools, issued 
guidance, and committed to reform. Our work brought attention and 
correction to issues that have a governmentwide impact. 

Advance U.S. Foreign Policy Interests: 

2.14: Improving Monitoring and Evaluation of Projects to Combat Human 
Trafficking: 
In response to our 2007 recommendations, the Department of State 
(State), DOL, and USAID strengthened monitoring and evaluation of 
projects to combat human trafficking. State improved project design 
and baseline data collection and developed indicators for program 
outputs and outcomes. USAID published an evaluation framework for 
antitrafficking and victim protection programs and is developing 
guidance for more effective evaluations. DOL updated its evaluation 
procedures and training plans, and revised its terms of reference for 
contracting evaluations. It also pilot tested a tool that may 
strengthen performance data reliability and validity. 
[hyperlink, http://www.gao.gov/products/GAO-07-1034]. 

2.15: Combating Arms Trafficking to Mexico: In 2009, we reported that 
U.S. agencies were not coordinating efforts to combat the arms 
trafficking to Mexico. To address our recommendations, the Bureau of 
Alcohol, Tobacco, Firearms and Explosives and U.S. Immigration and 
Customs Enforcement signed an agreement that resulted in collaboration 
and information sharing on investigations of firearms trafficking and 
possession of firearms by illegal aliens. The U.S. Attorney General 
and State also acted in response to our recommendations by supporting 
the Mexican government in disseminating an electronic firearms tracing 
system to Mexican law enforcement agencies. 
[hyperlink, http://www.gao.gov/products/GAO-09-709]. 

2.16: Improving DOD and State’s Management of Security Assistance 
Programs: 
DOD and State have used Section 1206 and 1207 funding authorities to 
help other countries respond to threats of terrorism and instability 
through military and nonmilitary assistance projects. In response to 
our findings and recommendations, DOD significantly improved its 
guidance for developing Section 1206-funded military projects and is 
establishing a system for evaluating them. Furthermore, in fiscal year 
2011, the Congress did not reauthorize funding for Section 1207 
nonmilitary projects, which we reported as being virtually 
indistinguishable from those of other foreign assistance programs but 
more costly and slower to implement. 
[hyperlink, http://www.gao.gov/products/GAO-10-431]. 

Respond to Global Market Forces: 

2.17: Improving Duty Collections: In 2008, we reported on problems in 
collecting antidumping and countervailing (AD/CV) duties. Over $600 
million was uncollected from fiscal years 2001 through 2007. We 
identified weaknesses in communication between the Department of 
Commerce (Commerce) and CBP; as a result, agencies took steps to 
improve timeliness and clarity. Commerce also developed a human 
capital plan to address challenges affecting AD/CV duty operations. We 
suggested that the Congress require Commerce and other agencies to 
evaluate the relative merits of prospective versus retrospective duty 
collection systems. Commerce did so in 2010 in response to 
congressional direction. 
[hyperlink, http://www.gao.gov/products/GAO-08-391]. 

Source: GAO. 

[End of Table 14: Goal 2 Accomplishments and Contributions] 

[End of Strategic Goal 2] 

Strategic Goal 3: Help Transform the Federal Government to Address 
National Challenges: 

Our third strategic goal focuses on the collaborative and integrated 
elements needed for the federal government to achieve results. The 
work under this goal highlights the intergovernmental relationships 
that are necessary to achieve national goals. Our multiyear (fiscal 
years 2010-2015) strategic objectives under this goal are to: 

* analyze the government’s fiscal position and opportunities to 
strengthen approaches to address the current and projected fiscal gap; 

* identify fraud, waste, and abuse; and; 

* support congressional oversight of major management challenges and 
program risks. 

These objectives, along with the performance goals and key efforts 
that support them, are discussed fully in our strategic plan, which is 
available on our website at [hyperlink, http://www.gao.gov/sp.html]. 
The work supporting these objectives is performed primarily by 
headquarters and field staff from the Applied Research and Methods, 
Financial Management and Assurance, Forensic Audits and Investigative 
Service, Information Technology, and Strategic Issues teams. In 
addition, the work supporting some performance goals and key efforts 
is performed by headquarters and field staff from the Acquisition and 
Sourcing Management and Natural Resources and Environment teams. This 
goal also includes our bid protest and appropriations law work, which 
is performed by staff in the Office of the General Counsel. 

To accomplish our work under these objectives, we performed our 
foresight work, for example, examining the nation’s long-term fiscal 
and management challenges, and our insight work focusing on federal 
programs at high risk for fraud, waste, abuse, and mismanagement. 

[Text box: Selected Work under Goal 3: Our work helped inform the 
public debate on the debt limit and budget controls to address the 
long-term fiscal challenge. We reported on the debt limit and 
explained that failure to raise it in a timely manner could have 
serious negative consequences for the federal government and the 
Treasury market. We testified on ways the budget process can help 
enforce budget decisions and we expanded our web page to include 
answers to key questions about federal debt. This page and the debt 
limit report were frequently used by Congress, the press, and the 
public during the year. 
[hyperlink, http://www.gao.gov/products/GAO-11-203], 
[hyperlink, http://www.gao.gov/products/GAO-11-451SP], 
[hyperlink, http://www.gao.gov/products/GAO-11-626T],
 Debt Frequently Asked Questions 
 [hyperlink, http://www.gao.gov/special.pubs/longterm/debt]. End of text] 

As shown in table 15, we did not meet our fiscal year 2011 performance 
targets for this goal’s financial benefits, we missed our target for 
nonfinancial benefits by two, and we did not meet our target for 
testimonies for this goal. 

Table 15: Strategic Goal 3’s Annual Performance Results and Targets: 

Performance measure: Financial benefits; 
2006 Actual: $17.0 billion; 
2007 Actual: $22.8 billion; 
2008 Actual: $23.4 billion; 
2009 Actual: $18.5 billion; 
2010 Actual: $11.6 billion; 
2011 Target: $14.7 billion; 
2011 Actual: $7.2 billion; 
Met/Not Met: Not met; 
2012 Target[A]: $7.3 billion. 

Performance measure: Nonfinancial benefits; 
2006 Actual: 625; 
2007 Actual: 648; 
2008 Actual: 704; 
2009 Actual: 634; 
2010 Actual: 684; 
2011 Target: 630; 
2011 Actual: 628; 
Met/Not Met: Not met; 
2012 Target[A]: 525. 

Performance measure: Testimonies; 
2006 Actual: 73; 
2007 Actual: 74; 
2008 Actual: 76; 
2009 Actual: 49; 
2010 Actual: 45; 
2011 Target: 54; 
2011 Actual: 39; 
Met/Not Met: Not met; 
2012 Target[A]: 40. 

Source: GAO. 

Note: Financial benefits for goals 1 through 3 do not sum to the total 
agencywide target as we have left a portion of the financial benefits 
target unassigned. Experience leads us to believe that we can meet the 
agencywide target but we cannot predict under which goals because of 
governmentwide resource constraints. 

[A] Our fiscal year 2012 target for all three performance measures 
differs from those we reported in our fiscal year 2012 performance 
budget in February 2011. Specifically, we decreased financial benefits 
from $11.0 billion to $7.3 billion, nonfinancial benefits from 630 to 
525, and testimonies from 57 to 40. 

[End of Table 15: Strategic Goal 3’s Annual Performance Results and 
Targets] 

To help us examine trends for these measures over time, we look at 
their 4-year averages—shown in table 16—which minimize the effect of 
an unusual level of performance in any single year. Table 16 indicates 
that over the 6-year period from 2006 through 2011, financial benefits 
increased steadily from 2006 through 2009, decreased somewhat in 2010, 
and decreased substantially in 2011. Nonfinancial benefits rose from 
2006 through 2008, decreased in 2009, increased in 2010, and decreased 
in 2011. The trend in the average number of hearings during which our 
senior executives testified on goal 3 issues also rose from 2006 
through 2008, remained stable in 2009, and declined substantially in 
2010 and 2011. 

Table 16: Four-Year Rolling Averages for Strategic Goal 3: 

Performance measure: Financial benefits; 
2006: $10.1 billion; 
2007: $14.6 billion; 
2008: $18.6 billion; 
2009: $20.4 billion; 
2010: $19.1 billion; 
2011: $15.2 billion. 

Performance measure: Nonfinancial benefits;
 2006: 630; 
2007: 654; 
2008: 686; 
2009: 653; 
2010: 668; 
2011: 663. 

Performance measure: Testimonies; 
2006: 59; 
2007: 64; 
2008: 68; 
2009: 68; 
2010: 52; 
2011: 52. 

Source: GAO. 

The following sections describe our performance under goal 3 for each 
of our quantitative performance measures and describe the targets for 
fiscal year 2011. 

[End of Table 16: Four-Year Rolling Averages for Strategic Goal 3] 

Financial Benefits: 

The financial benefits reported for this goal in fiscal 2010 totaled 
$7.2 billion, missing our target of $14.7 billion by $7.5 billion. 
Among these accomplishments are benefits from eliminating the advanced 
earned income tax credit, reducing governmentwide improper payments, 
and improving oversight of a critical border surveillance system 
acquisition. 

Because we have missed our target for this goal for the past 2 years, 
we are modifying our approach for 2012. We have set our 2012 target at 
$7.3 billion based on the steady decline in financial benefits for 
this goal over the past 4 years. We have also left a portion of our 
agencywide target unallocated rather than increasing the target for 
each goal. Our experience leads us to believe that we can meet the 
target, but we are uncertain under which goals. 

[Text box: Example of Goal 3’s Financial Benefits: We found that the 
VA had significant weaknesses in its information systems and 
technology architecture. We recommended that the department implement 
the earned value management (EVM) practices that addressed the 
detailed weaknesses we had identified, as well as take action to 
reverse negative performance trends to mitigate a potential cost 
overrun. In response, the department began to formulate policies as 
part of the Program Management and Accountability System that 
incorporate critical practices of EVM. Based on these new policies, 
the department found the Vista-FM program to be poorly planned and 
managed; we also reported that this program had weaknesses. Following 
this evaluation and our recommendations, the department eliminated the 
program, resulting in a net financial benefit totaling $385.3 million 
from fiscal years 2010 to 2014. 
[hyperlink, http://www.gao.gov/products/GAO-10-2]. End of text box] 

Nonfinancial Benefits: 

Nonfinancial benefits reported for goal 3 in fiscal year 2010 totaled 
628, missing our target by 2 benefits, or less than 1 percent. The 
majority of goal 3’s benefits were in the area of business process and 
improvement, including federal agency financial audits; federal 
information systems; business systems modernization; and in public 
safety and security, including critical infrastructure. We set our 
2012 target at 525 benefits. While we recognize that this target is 
lower than our fiscal year 2011 actual performance and 4-year average 
for this measure, we believe it is a realistic estimate based on our 
projected goal 3 work. 

[Text box: Example of Goal 3’s Nonfinancial Benefits: As part of our 
ongoing series of investigations into tax delinquents who receive 
federal benefits, we identified 224,000 tax delinquent individuals who 
received passports and 3,700 tax delinquent contractors and grantees 
that received Recovery Act funds. These investigations are used as a 
tool by the Congress to help explore new ways to increase collection 
of unpaid taxes and to prevent the award of federal funds to tax 
delinquents [hyperlink, http://www.gao.gov/products/GAO-11-272] 
[hyperlink, http://www.gao.gov/products/GAO-11-485]. End of text box] 

Testimonies: 

Our witnesses testified at 39 congressional hearings related to this 
strategic goal in fiscal year 2011, missing the target of 54 by 15 
hearings, or 28 percent. Among the testimony topics covered were tax 
system complexity and taxpayer compliance, tax delinquent Recovery Act 
contractors, DOD financial management, and information technology 
investment oversight. (See figure 17 for selected testimony topics by 
goal.) For fiscal year 2012, we have set a target of testifying at 40 
hearings based on the decline in hearings in this goal over the past 2 
years. 

[Text box: Example of Goal 3’s Testimonies: As the Congress considers 
the role and design of appropriate budget enforcement mechanisms in 
changing the government’s fiscal path, we testified on some elements 
that could facilitate debate and contribute to efforts to place the 
government on a more sustainable long-term fiscal path. We discussed 
broad principles for a more transparent and effective budget process, 
the history of budget enforcement mechanisms, and options to consider 
going forward. We noted that carefully designed mechanisms can enforce 
agreements that have already been made and ensure compliance. 
[hyperlink, http://www.gao.gov/products/GAO-11-626T] End of text box] 

Table 17 provides examples of goal 3 accomplishments and contributions. 

Table 17: Goal 3 Accomplishments and Contributions: 

Analyze the Government’s Fiscal Position: 

3.01: Eliminating the Advance Earned Income Tax Credit: Our work found 
that few taxpayers claimed the Advance Earned Income Tax Credit 
(AEITC) and noncompliance with requirements was high. Both the President
’s fiscal year 2010 and 2011 budgets proposed elimination of this 
credit and our work was cited as justification. In August 2010, the 
AEITC was eliminated, and our analysis of Joint Committee on Taxation 
data showed that the federal government will save about $569 million 
from fiscal years 2011 through 2015. 
[hyperlink, http://www.gao.gov/products/GAO-07-1110]. 

3.02: Adjusting Internal Revenue Service (IRS) Penalties for Inflation: 
In August 2007, we reported that civil tax penalties are not indexed 
for inflation and recommended that the Congress consider requiring IRS 
to periodically adjust penalties for inflation to account for the 
decrease in real value over time. In two separate acts, the Congress 
took action consistent with our recommendation and increased the fixed 
value of three penalties. Together, according to estimates by the 
Joint Committee on Taxation, these increases in the value of the 
penalties will result in additional federal revenues of about $233 
million over the first 5 years after their enactment. 
[hyperlink, http://www.gao.gov/products/GAO-07-1062] 

3.03: Improving User Fee Compliance: Our User Fee Design Guide 
identifies key principles to consider when designing and implementing 
cost-based fees. In applying these principles, we identified numerous 
ways to improve the efficiency and effectiveness of various fees and 
the operations they support. For example, we recommended that DHS and 
the U.S. Army Corps of Engineers ensure timely payment of harbor 
maintenance fees by charging interest for late payments and sharing 
information to monitor fee compliance. The agencies implemented our 
recommendations, and fee collections increased by over $26 million as 
of April 2011. 
[hyperlink, http://www.gao.gov/products/GAO-08-321], 
[hyperlink, http://www.gao.gov/products/GAO-08-386SP], 
[hyperlink, http://www.gao.gov/products/GAO-09-180], 
[hyperlink, http://www.gao.gov/products/GAO-07-1131], 
[hyperlink, http://www.gao.gov/products/GAO-09-70]. 

3.04: Improving Federal Financial Reporting and Related Internal 
Controls: 
Our financial audit work helped promote improved transparency and more 
complete and accurate financial reporting concerning unsustainable 
federal fiscal policy, uncertainties surrounding the costs of federal 
actions taken to stabilize the nation’s financial markets, and 
uncertainties surrounding social insurance costs. In addition, our 
work furthered a number of significant improvements in financial 
reporting, including improved reporting on the reconciliation of 
overall federal net operating costs with reported unified budget 
deficit amounts, and agency-level improvements in financial reporting 
internal controls (including controls at IRS and the Federal Deposit 
Insurance Corporation). 
[hyperlink, http://www.gao.gov/products/GAO-11-363T], 
[hyperlink, http://www.gao.gov/products/GAO-11-536], 
[hyperlink, http://www.gao.gov/products/GAO-11-687R]. 

Identify Fraud, Waste, and Abuse: 

3.05: Avoiding Unnecessary Redundancies and Improving Efficiencies in 
Defense Programs: 
We identified five defense areas for congressional consideration 
related to duplication, overlap, or fragmentation, such as 
opportunities to avoid unnecessary redundancies and improve 
efficiencies in the military medical command and warfighter urgent- 
needs acquisitions. The Congress has directed several actions in 
fiscal year 2011 related to this work. For example, DOD began an 
evaluation of its urgent-needs processes as mandated by the Congress. 
This evaluation will examine areas of duplication we identified and 
report on needed improvements. 
[hyperlink, http://www.gao.gov/products/GAO-11-441T], 
[hyperlink, http://www.gao.gov/products/GAO-11-714T]. 

3.06: Preventing Fraud in SBA’s HUBZone Program: In 2008, we 
identified substantial vulnerabilities in SBA’s HUBZone program 
application and monitoring process, clearly demonstrating that the 
program is vulnerable to fraud and abuse. We also identified 29 cases 
of eligibility fraud by program participants, which we referred to 
SBA. In response to our referrals, 20 participants were removed from 
the program, preventing them from receiving contracts meant for truly 
disadvantaged businesses. Based on this work and other related 
engagements, the Congress has taken steps to strengthen punishments 
for businesses that misrepresent their eligibility for such small 
business set-aside programs. 

3.07: Identifying Improper Payments Through the Use of Information 
Technology: 
We reported that CMS faced challenges in developing and implementing a 
centralized data warehouse, the Integrated Data Repository. We made 
recommendations to help ensure that required data are incorporated 
into the system. Accordingly, the Congress included language that 
requires CMS to incorporate prepayment data by the end of 2012 and 
Medicaid data by the end of 2014 in the Medicare and Medicaid Fighting 
Fraud and Abuse to Save Taxpayers’ Dollars Act, which was introduced 
in June 2011. If enacted, this action should help ensure that CMS’s 
systems provide capabilities needed to predict and detect improper 
payments in Medicare and Medicaid, thus preventing the loss of 
billions of taxpayer dollars. 
[hyperlink, http://www.gao.gov/products/GAO-11-475], 
[hyperlink, http://www.gao.gov/products/GAO-11-822T]. 

Address Major Management Challenges and Program Risks: 

3.08: Improving Oversight of a Critical Border Surveillance System 
Acquisition: 
We have reported on a range of management challenges facing the Secure 
Border Initiative Network (SBInet). In a series of reports, we 
highlighted numerous cost, schedule, and performance risks, and 
concluded that DHS had not economically justified its investment in 
SBInet. After initiating a departmentwide assessment of the SBInet 
program, the DHS Secretary froze SBInet funding and, at the completion 
of the assessment in January 2011, the Secretary decided to end SBInet 
as originally conceived. The Secretary’s actions resulted in a total 
financial benefit of $1.61 billion. 
[hyperlink, http://www.gao.gov/products/GAO-10-340], 
[hyperlink, http://www.gao.gov/products/GAO-10-158], 
[hyperlink, http://www.gao.gov/products/GAO-10-588SP], 
[hyperlink, http://www.gao.gov/products/GAO-09-896], 
[hyperlink, http://www.gao.gov/products/GAO-09-1013T]. 

3.09: Improving Census Cost Estimates and Productivity: Our 
recommendations helped the U.S. Census Bureau reduce costs and improve 
operations for the 2010 Census. For example, the bureau updated its 
cost estimate for the nonresponse follow-up operation using better 
assumptions and identified savings of approximately $602 million. The 
bureau also increased productivity during the address canvassing 
operation by enhancing the reliability of handheld computers used to 
collect data. As a result, the bureau saved an estimated $98 million. 
[hyperlink, http://www.gao.gov/products/GAO-11-193], 
[hyperlink, http://www.gao.gov/products/GAO-11-154], 
[hyperlink, http://www.gao.gov/products/GAO-11-45], 
[hyperlink, http://www.gao.gov/products/GAO-11-496T], 
[hyperlink, http://www.gao.gov/products/GAO-08-554]. 

3.10: Issuing Major Update to Government Auditing Standards: The 2011 
revision to the Government Auditing Standards—applicable to audits of 
government programs and entities—is the first major update since 2007. 
The revision modernized and updated the standards to reflect recent 
developments in the accountability and auditing profession applicable 
in the government environment, and represents a major step in 
achieving greater consistency with international and U.S. auditing 
standards. Further, the revision includes a principles- based 
framework for analyzing threats to auditor independence and applying 
safeguards to help ensure a strong, ethical, and independent 
foundation for all government audits. 

3.11: Establishing a Foundation for Effective DOD Financial Management 
and Accountability: 
In 2011, our DOD work helped focus the department’s efforts to 
establish a sound foundation and the top-level support critical to 
effectively improving its financial management operations and 
achieving financial statement auditability. Our work helped focus 
attention on actions needed to address long-standing financial 
management challenges, such as those in the areas of leadership, 
oversight, and systems development. In particular, our work helped 
focus congressional oversight on DOD financial management issues, 
including establishing a panel dedicated to addressing these issues 
and holding five oversight hearings on the topic this past year. 
[hyperlink, http://www.gao.gov/products/GAO-11-851], 
[hyperlink, http://www.gao.gov/products/GAO-11-830], 
[hyperlink, http://www.gao.gov/products/GAO-11-930T], 
[hyperlink, http://www.gao.gov/products/GAO-11-932T], 
[hyperlink, http://www.gao.gov/products/GAO-11-933T]. 

3.12: Improving Methods for Obtaining Sensitive Policy Information: We 
earlier proposed an innovative method for obtaining sensitive policy- 
relevant information in self-report surveys while protecting 
respondent privacy—and explored this in response to a congressional 
request. This approach is now being used to study illegal immigration, 
in a methodology grant awarded to the University of Chicago by the 
National Science Foundation. With this method, each respondent’s 
answer applies to a group of survey items (including a sensitive item) 
shown on two cards. No answer identifies an individual respondent with 
the sensitive item, but that item can be estimated indirectly for the 
population as a whole. 
[hyperlink, http://www.gao.gov/products/GAO-06-775]. 

3.13: Improving Oversight of NASA through Transparent Budget 
Documentation: 
Based on our work on NASA’s major projects, we have found that NASA 
does not provide the Congress with enough information for it to 
conduct oversight of NASA’s $69 billion portfolio and hold NASA 
accountable for results. For example, the lack of specific project 
information on plans to use funding leaves the Congress with little 
information with which to hold NASA accountable for achieving what it 
says it will in any given year. As a result of our work, we were asked 
by the Congress to provide a blueprint of information to increase the 
transparency of NASA budget documentation. This information was 
included in the fiscal year 2012 House appropriations report language 
for NASA. 
[hyperlink, http://www.gao.gov/products/GAO-11-239SP], 
[hyperlink, http://www.gao.gov/products/GAO-11-364R], 
[hyperlink, http://www.gao.gov/products/GAO-11-216T], 
[hyperlink, http://www.gao.gov/products/GAO-10-227SP]. 

3.14: Improving the Government’s Process for Reimbursing Basic 
Research Cost: 
In 2010, we found that the government’s policies for setting indirect 
cost rates—the basis of federal government payments—for universities 
performing basic research needed to be updated. In response, OMB 
established an interagency task force to review and update the federal 
government’s process to establish the universities’ indirect cost 
rates. We also identified the need for DOD, whose basic research 
funding mostly goes to universities, to increase its oversight of 
indirect cost reimbursements based on those rates. As a result, DOD 
issued new requirements in November 2010 to help ensure accurate 
reimbursement of research costs. 
[hyperlink, http://www.gao.gov/products/GAO-10-937]. 

3.15: Improving Planning and Implementation of Federal Data Center 
Consolidation: 
In 2010, OMB announced plans for 24 federal agencies to consolidate 
800 data centers by 2015, an initiative intended to address a dramatic 
rise in the number of centers and a corresponding increase in 
operational costs. Our report reviewed the agencies’ asset inventories 
and consolidation plans, identified weaknesses, and made 
recommendations to address the weaknesses. This work helped focus 
congressional, administration, and agency attention on the key 
elements of consolidation planning and resulted in increased oversight 
of the plans enacted by each agency. 
[hyperlink, http://www.gao.gov/products/GAO-11-565]. 

3.16: Improving HUD IT Modernization Management: Since 2008, we have 
assisted the Congress with oversight of HUD’s IT modernization 
efforts. We identified the status and risks of these efforts, 
including weaknesses related to key IT management controls, and made 
recommendations to address them. This work helped focus congressional 
and administration attention on this important initiative, and 
resulted in HUD reducing the number of its modernization projects from 
29 to 7. This allowed the department to more effectively manage its 
modernization projects relative to the progress made in establishing 
critical IT management controls 
[hyperlink, http://www.gao.gov/products/GAO-11-72], 
[hyperlink, http://www.gao.gov/products/GAO-11-762]. 

3.17: Improving the Regulatory Process: To improve the effectiveness 
and transparency of agencies’ reviews of existing regulations, we 
recommended that the OMB develop guidance, policies, and procedures 
incorporating multiple elements. All of our recommendations were 
prominent features of an executive order and related OMB guidance 
issued in 2011. For example, the order and guidance directed agencies 
to prioritize plans for retrospective reviews of existing regulations, 
include public input when planning and conducting the reviews, and 
write future regulations in ways that will facilitate evaluation of 
their consequences. 
[hyperlink, http://www.gao.gov/products/GAO-07-
791]. 

Source: GAO. 

[End of Table 17: Goal 3 Accomplishments and Contributions] 

[End of Strategic Goal 3] 

Strategic Goal 4: Maximize the Value of GAO by Enabling Quality, 
Timely Service to the Congress and by Being a Leading Practices 
Federal Agency: 

Our fourth strategic goal embraces the spirit of continuous and 
focused improvement in order to sustain high-quality, timely service 
to the Congress, while also implementing leading practices in our 
internal operations. Activities carried out under this goal also 
address our three internal management challenges and our management 
improvement initiatives. The multiyear (fiscal years 2010-2015) 
strategic objectives under this goal are to: 

* improve efficiency and effectiveness in performing our mission and 
delivering quality products and services to the Congress and the 
American people; 

* maintain and enhance a diverse workforce and inclusive work 
environment through strengthened recruiting, retention, development, 
and reward programs; 

* expand networks, collaborations, and partnerships that promote 
professional standards and enhance our knowledge, agility, and 
response time; and; 

* be a responsible steward of our human, information, fiscal, 
technological, and physical resources. 

These objectives, along with the performance goals and key efforts 
that support them, are discussed fully in our strategic plan, which is 
available on our website at [hyperlink, http://www.gao.gov/sp.html]. 
The work supporting these objectives is performed under the direction 
of the Chief Administrative Officer through the following offices: the 
Controller and Administrative Services, Field Operations, Human 
Capital, Information Systems and Technology Services, Knowledge 
Services, and the Professional Development Program. Assistance on 
specific key efforts is provided by the Special Assistant for 
Diversity Issues; the Applied Research and Methods team; and other 
offices, including Strategic Planning and External Liaison, 
Congressional Relations, Opportunity and Inclusiveness, Quality and 
Continuous Improvement, Public Affairs, and General Counsel. To 
accomplish our work under these four objectives, we performed internal 
studies and completed projects that further the strategic goal. As 
shown in table 6 on page 38, while our internal operations did not 
meet our targets for services and functions that help employees get 
their jobs done and improve the quality of their work life, the scores 
of 3.94 against our target of 4.0 indicate that our staff are largely 
satisfied with the services they receive. Table 18 provides examples 
of goal 4 accomplishments and contributions and additional examples 
are included throughout this report. 

[Text box: Selected Work under Goal 4: We broadened the use of social 
media technologies to help reach new external audiences by launching 
Facebook and Flickr pages. We also tested use of quick response, or "QR"
 codes, on our products to quickly link users to our website. 

We implemented a mandatory e-learning course for managers of staff who 
telework to ensure that managers understand federal requirements, 
policy, and relevant terms of the collective bargaining agreement with 
our Employees Organization, IFPTE, Local 1921. 

For the first time in 10 years, we conducted a study of our field 
office structure to evaluate the degree to which it is configured in a 
manner that realizes changing conditions and is producing long-term 
efficiencies in how we do our work today. 

The energy-efficient lighting that was installed in the Headquarters 
building last year resulted in a 20 percent energy usage reduction for 
a savings of over $210,000, and reducing air conditioning used in the 
building on weekends resulted in more than $100,000 in savings. End of 
text box] 

Table 18: Goal 4 Accomplishments and Contributions: 

Improve Efficiency and Effectiveness: 

4.01: Enhancing Support for Conducting, Managing, and Reporting on Our 
Work; 
To expand functionality and address user requests, we eliminated 
unnecessary system constraints in a key engagement-management system. 
We also implemented 14 standard graphic templates that will decrease 
turnaround time, ensure consistency, and reduce rework. As part of a 
longer-term effort, we completed requirements definition for the first 
phase of a multiphase effort to consolidate and streamline essential 
engagement management functions that currently rely on three outdated, 
stand-alone systems. In addition, we implemented a new search engine 
to provide enhanced search functionality for internal and external 
users. 

4.02: Monitoring Factors Affecting the Federal Government and Demands 
for Our Work: 
To stay abreast of changing issues that could affect our work, we 
participated in a series of Anticipatory Governance workshops 
organized by the National Defense University with the intention of 
increasing the government’s capacity to anticipate and plan for 
crosscutting national challenges. We also established an internal “Wiki” 
page to share foresight resources (e.g. critical thinking concerning 
long-term developments) throughout the agency, such as publications 
and presentations that provide insight into emerging issues and 
potentially changing demands for our work. In addition, we hosted 
several experts who spoke with our staff through the Comptroller 
General’s Speaker Series to explore and understand current trends and 
strategic challenges. 

Enhance Recruitment, Development, Retention, and Rewards: 

4.03: Strengthening Recruiting Initiatives to Attract a Diverse 
Workforce: 
To ensure that our recruitment efforts are aligned with workforce and 
diversity needs and changing agency priorities and resources, we 
developed a recruiting plan that creates a strong linkage between the 
recruitment program and organizational needs, increases the diversity 
of staff serving as recruiters, provides enhanced support to 
recruiting staff, and institutes stronger program management and 
accountability processes, particularly over recruitment-related 
expenditures. Even though we curtailed hiring due to our constrained 
fiscal year 2011 budget, we maintained critical relationships with our 
educator advisory partners and addressed needs identified in our 
annual Workforce Plan by increasing the percentage of staff with 
disabilities. 

4.04: Improving Our Performance Management Systems: To ensure fairness 
and equity in our performance management process, we completed 
implementation of all the short-term recommendations from our recent 
Performance Appraisal Study. For example, we standardized midpoint 
feedback by providing updated guidance, and we developed a new 
training course to ensure that all staff receive required feedback and 
that the feedback addresses required elements. In addition, we made 
significant progress on the design of a new performance management 
system by conducting job analyses and developing draft rating 
criteria, a new rating scale, and performance expectation tools. 

4.05: Enhancing Efforts to Develop the Workforce: To continue to 
develop and support staff outside of their primary assignments, we 
revised our mentoring program and launched a new cohort of 
participants. Major changes included adding a midpoint evaluation for 
mentors and mentees, improving the process for matching mentors and 
mentees, and facilitating a panel discussion of current and former 
mentors and mentees on how to mentor effectively. We also piloted a “
speed mentoring” program to provide another method for staff to get 
advice without going through the formal, 6-month-long program. To 
continue to enhance employees’ report-writing skills, we added a new 
advanced writing workshop for our analysts that received very high 
reviews from participants, and we updated content for two other 
writing courses. 

4.06: Supporting an Unbiased Environment That Values Opportunity and 
Inclusiveness: 
To continue our commitment to ensuring an inclusive and inviting 
workplace, we completed delivery of Part I and began delivery of Part 
II of our diversity training, which is focused on discussing team- 
specific areas of concern regarding diversity and inclusion, and 
developing solutions. We also created a new Diversity and Inclusion 
statement for the agency that was publicized broadly upon its 
issuance. In addition, we provided communications to staff to ensure 
that they are aware of the many counseling services and other programs 
to support work-life balance that we offer. 

Expand Networks, Collaborations, and Partnerships: 

4.07: Enhancing Professional Accounting and Auditing Standards: We met 
with the new Chairman of the Public Company Accounting Oversight Board 
to promote collaboration with this professional audit standards-
setting body. We worked with INTOSAI on using the INTOSAI Journal to 
ensure broad understanding of the new INTOSAI standards. We also 
helped strengthen public sector accounting and auditing standards by 
providing comments on INTOSAI’s guide for peer review. We leveraged 
technology to enable our experts to provide “virtual presentations” at 
several intergovernmental audit forums, saving travel time and dollars. 

4.08: Enhancing Information Sharing and Collaboration with Others to 
Expand Audit Knowledge: 
We refreshed membership on the Comptroller General’s Advisory Board, 
and the Domestic Working Group on current and emerging issues, such as 
financial market regulation and health care reform. We also leveraged 
relationships with leading organizations and experts to convene 
Comptroller General’s Forums to gather perspectives in two areas of 
our work—municipal ratings and financial literacy. In addition to 
annual coordination meetings, we sponsored separate meetings with 
CIGIE to share information about areas of ongoing work. We also worked 
with NASACT and ALGA to facilitate our research on engagements 
requiring information and access to state and local government 
officials. 

Human, Information, Fiscal, Technological, and Physical Resources: 

4.09: Proactively Protecting Physical and Information Security: To 
continue our efforts to align our physical security procedures with 
Homeland Security Presidential Directive 12 guidelines, and in 
anticipation of a lower fiscal year 2012 budget, we accelerated our 
minimum background investigation work and completed investigations for 
more than half of our employees who required them in fiscal year 2012. 
To ensure timely notification and dissemination of critical 
information to emergency response team members, we implemented an 
application that allows designated Blackberry users to contact all key 
emergency response members even when the Blackberry server is down. 

4.10: Leveraging Technology to Achieve Business Process Improvement 
and Efficiency Gains: 
We implemented a new web-based system in our Workforce Relations 
Office that provides automated case-management tracking. We developed 
a workforce planning system that will help eliminate redundant systems 
and enhance our decision-making processes through enhanced analytical 
capabilities provided by a modern, integrated business intelligence 
solution. We invested significant effort in optimizing use of our 
recently purchased human resources system to enable it to become the 
single authoritative source for accurate and reliable human capital 
data and support all essential human capital functions. Program 
implementation for this system is under way with go-live scheduled by 
mid-fiscal year 2012. In addition, we indexed our entire legislative 
histories collection, which dramatically improves search results. We 
began implementing an enterprise storage and backup solution for our 
network, which is a critical step toward necessary upgrades. We 
expanded use of our software to support web-based data collection for 
a number of internal programs, such as mentoring, student loan 
repayment, and the Senate financial disclosure process. Lastly, we 
enabled staff to use personally owned, non-Blackberry smart phones to 
access their e-mail. 

4.11: Improving Management of Key Administrative Processes: To 
strengthen internal controls over our time-and-attendance reporting 
process, we added a statement to our electronic reporting system for 
employees to attest to the accuracy of their time-and-attendance 
submissions. We also strengthened controls over the use of travel 
charge cards by implementing procedures to more closely manage the 
number of staff with cards and the spending limit on individual cards. 
In addition, we significantly strengthened procedures for addressing 
staff with delinquent travel card accounts and established a target 
for the agency’s delinquency rate. This enabled us to achieve a very 
low delinquency rate that is well under our target. To strengthen our 
strategic planning process, we conducted a “lessons learned” exercise 
on the development of our fiscal year 2010 to 2015 strategic plan to 
evaluate strengths and areas for improvement. Lastly, to address 
fiscal year 2011 funding reductions, we implemented a number of 
actions to streamline our operations, reduce discretionary costs, and 
leverage technology to help us achieve our mission more efficiently 
and effectively. For example, we reduced our travel costs by over 25 
percent by focusing on immediate travel needs to support congressional 
commitments, making strategic staffing decisions, reducing the number 
of travelers on necessary trips, and using technology in lieu of 
traveling. We also reduced administrative support services in areas 
such as office cleaning, facilities management, security, IT, and 
human capital support. We curtailed recruiting activities, recognition 
and retention incentives, and training. In addition, we reduced 
investments not resulting in a short-term payback, deferred them, or 
both. 

4.12: Enhancing Information-sharing and Collaboration with Internal 
Employee Organizations: 
We finalized the first comprehensive collective bargaining agreement 
with IFPTE, Local 1921, that sets the agreed-upon working conditions, 
processes, and rights of the parties. Through the year, we negotiated 
with IFPTE in good faith and worked constructively with our Employee 
Advisory and Diversity Advisory Committees to reach agreement on 
several specific agency actions that affect employee working 
conditions, such as annual performance-based compensation for fiscal 
year 2011 and upgrades to a key engagement database and to our 
operating system. We also implemented training for our managers on the 
collective bargaining agreement to ensure consistent understanding and 
application of the requirements of managers under the agreement. 

Source: GAO. 

[End of Table 18: Goal 4 Accomplishments and Contributions] 

[End of Strategic Goal 4] 

Data Quality and Program Evaluation: 

Verifying and Validating Performance Data: 

Each year, we measure our performance with indicators of the results 
of our work, client service, people management, and internal 
operations. To assess our performance, we use actual, rather than 
projected, data for almost all of our performance measures. We believe 
the data are complete and reliable based on our verification and 
validation procedures to ensure quality. The specific sources of the 
data for our annual performance measures, procedures for independently 
verifying and validating these data, and the limitations of these data 
are described in table 19 of the Appendix on Data Quality. 

Program Evaluation: 

To assess our progress toward our mission-based strategic goals 1 
through 3 and related objectives and to update them for our strategic 
plan, we evaluate actions taken by federal agencies and the Congress 
in response to our recommendations. The results of these evaluations 
are conveyed in this performance and accountability report as 
financial benefits and nonfinancial benefits from our work. In 
addition, we actively monitor the status of our open recommendations—- 
those that remain valid but have not yet been implemented—-and report 
our findings annually to the Congress and the public (see [hyperlink, 
http://www.gao.gov/openrecs.html]). We use this analysis to determine 
the need for further work in specific issue areas. For example, if an 
agency has not implemented a recommendation based on our audit work, 
we may decide to pursue further action with agency officials or 
congressional committees, or we may decide to undertake additional 
work in that area. We also use our biennial high-risk report to update 
the status of areas we consider vulnerable to fraud, waste, abuse, and 
mismanagement or in need of broad-based transformation. The report 
serves as an evaluation and planning tool to help us to identify areas 
where our continued efforts are needed to maintain focus on important 
policy and management issues facing the nation. (See [hyperlink, 
http://www.gao.gov/docsearch/featured/highrisk.html].) 

Under strategic goal 4, we also conduct management studies and 
projects to examine internal issues, operations, and processes 
affecting all four of our strategic goals. Our management improvement 
initiatives, first identified in 2008, have addressed a range of human 
capital and engagement management areas and have continued to evolve 
as projects within specific offices, such as development of our 
product line and the evaluation of our performance management system. 
These projects are now covered under the performance information by 
strategic objective for goal 4. In fiscal year 2011, we: 

* deployed to analysts wide-screen or dual computer monitors that can 
display two documents side by side, which has speeded up our process 
for checking our draft reports against the evidence supporting our 
message. We also began pilot testing desktop video technology to 
reduce travel costs and facilitate work between headquarters and field 
office staff. In addition, we fielded several procedural changes to 
streamline our engagement management process. This ongoing engagement 
streamlining initiative focuses on streamlining our engagement 
processes—especially those activities performed by mission team 
analysts—and increasing efficiency through the use of IT, while still 
adhering to our high standards for product quality and timeliness. The 
engagement streamlining team comprises mission team analysts, 
technical staff, and representatives from our Offices of Quality and 
Continuous Improvement, Information Systems and Technology Services, 
and Knowledge Services and our employee organizations. 

* enhanced our quality assurance processes in response to the findings 
of internal inspections. We simplified and clarified some of our key 
processes to help ensure compliance with our professional standards. 
These changes included enhancements to our policies on (1) conducting 
and documenting supervisory review of engagement documentation, (2) 
conducting limited investment engagements, and (3) preparing 
engagement management and product files. We updated our online Words @ 
Work resource, which provides analysts with authoritative guidance on 
our product types and their elements. We also developed and released a 
revised web-based data reliability course which covers and elaborates 
on Assessing the Reliability of Computer-Processed Data GAO-09-680G. 
We provided an additional 28 mandatory quality assurance training 
classes for our audit staff. The quality assurance improvements and 
the web-based training provided our staff with clear guidance on a 
variety of key policies to help ensure compliance with our 
professional standards. 

* engaged an international team of senior representatives from five 
national audit institutions to conduct a peer review of our 
performance and financial audit practices for the year ended December 
31, 2010. This review was our third international peer review and the 
first to examine both financial and performance audits. In previous 
years, private sector auditing firms conducted the financial audit 
reviews. The external peer review offers feedback on the quality of 
reports and work processes. Generally Accepted Government Auditing 
Standards (GAGAS) requires that an external peer review be done every 
3 years; the main purpose is to ensure that we and other audit 
organizations comply with GAGAS (GAGAS 3.56). The peer review 
identified good practices that may interest other audit institutions 
and identified some areas that may need attention from management. 

* assessed the requirements of the GPRA Modernization Act of 2010 
(GPRA 2010)--although we are not subject to these requirements, we 
intend to implement the spirit of the law as a matter of policy. We 
identified financial and nonfinancial benefits as our priority 
measures and developed a new presentation of nonfinancial benefits to 
provide readers with more information on the program and operational 
areas in which these benefits are achieved. In keeping with the GPRA 
2010 requirement to improve transparency of priority-area performance 
results, concurrent with the issuance of this report, we updated our 
website on strategic planning, performance, and accountability to 
include data on our priority performance measures [hyperlink, 
http://www.gao.gov/about/strategic.html]. The Comptroller General 
designated the Chief Operating Officer as the Performance Improvement 
Officer for mission areas and the Chief Administrative Officer as the 
Performance Improvement Officer for internal operations. In addition, 
beginning with this report, we will no longer print hard copies of the 
full performance and accountability report. It will be available 
electronically at [hyperlink, http://www.gao.gov/products/GAO-12-4SP]. 

* completed our annual evaluation of financial management practices 
and processes. Each year, we monitor internal financial management 
controls through the use of reviews that include identification of key 
controls over financial reporting and assessment of the operating 
effectiveness of those controls. We review control objectives across 
all cycles[Footnote 15] and, where applicable, implement consolidated 
end-to-end testing of some processes (e.g., budget, procurement, 
property, and disbursement cycles). We also develop corrective action 
plans for any identified control issues and monitor the plans until 
the issue is resolved. Our program meets the objectives of the Federal 
Managers’ Financial Integrity Act of 1982, even though, as a 
legislative branch agency, we are not legally required to do so. We 
report the results of our analyses to the appropriate internal control 
working groups and the Senior Assessment Team, composed of senior 
agency managers and chaired by our Chief Financial Officer, that 
actively oversee the process. Additionally, our review of financial 
management systems is consistent with OMB Circular A-127 and includes 
an analysis of the Standards for Attestation Engagements No. 16 (SSAE 
16) Audits for our shared service providers. The review also includes 
our auditor’s opinions on our financial statements and on internal 
controls over financial reporting and the auditor’s report on 
compliance with laws and regulations. 

[End of Part II: Performance Information] 

Part III: Financial Information: 

From the Chief Financial Officer: 

November 15, 2011: 

I am pleased to report that during fiscal year 2011, the U.S. 
Government Accountability Office continued to honor its commitment to 
lead by example in federal financial management. For the 25th 
consecutive year, independent auditors gave us an unqualified opinion 
on our financial statements, citing no material weaknesses or major 
compliance problems. The financial statements that follow were 
prepared, audited, and made publicly available as an integral part of 
this performance and accountability report (PAR) 45 days after the end 
of the fiscal year. Our fiscal year 2010 PAR received a certificate of 
excellence in accountability reporting from the Association of 
Government Accountants, an honor we have received each year since we 
first applied in fiscal year 2001. 

Our financial management system continues to be centered on Oracle 
Federal Financials, hosted and supported by the Enterprise Services 
Center (ESC) at the Department of Transportation. ESC maintains the 
accounting system and related subsidiary systems and performs the bulk 
of our daily transaction processing. The implementation of a workforce 
planning system is underway; this system will help eliminate redundant 
systems and enhance our decision-making processes through enhanced 
analytical capabilities provided by a modern, integrated business 
intelligence solution. The optimization of our human resources system, 
HR Connect, is also under way. HR Connect will serve as the single 
integrated system that supports virtually all of the human capital 
functions and processes performed by us. When fully implemented, HR 
Connect will serve as the primary source for timely and accurate human 
capital data and our personnel system of record. It will also 
establish a human capital data architecture that enables the right 
information to be available to the right people at the right time, 
thereby enhancing the timeliness and accuracy of personnel actions, 
and support more timely and informed decision making. Given that our 
staff account for more than 80 percent of our budget, efficient and 
effective human capital management is critical. 

In the area of internal controls, we continue to perform rigorous 
testing in accordance with Office of Management and Budget Circular A- 
123, Management’s Responsibility for Internal Control, Appendix A, 
including end-to-end transaction testing (following a transaction 
through the budget, procurement, disbursement, and property business 
cycles). These tests validate compliance, effectiveness and 
efficiency, and proper financial reporting, as well as act as a 
compensating control for accounting activities performed at the 
various shared service providers. These efforts contributed to our 
independent auditor providing a positive opinion on the effectiveness 
of our internal controls as well as management providing the 
assurances regarding our financial reporting and internal controls as 
provided in detail on page 4 of this report. 

In anticipation of funding constraints in fiscal years 2011 and 2012, 
we began implementing actions in fiscal year 2010, fiscal year 2011, 
and continuing in fiscal year 2012 to reduce our staffing, streamline 
our operations, reduce administrative expenses, and leverage 
technology to improve our efficiency and effectiveness. To achieve 
these goals, we constrained hiring; offered voluntary separation 
incentives and early retirement opportunities; reduced and deferred 
investments; and reduced discretionary spending in human capital, 
engagement support (including travel), and infrastructure support 
operations, including facilities management, information technology, 
and other administrative services. We also continued to identify and 
implement additional energy efficiency measures. 

To improve the efficiency of our mission work, we took several 
significant steps to more effectively use staff time and leverage 
technology. For example, we eliminated unnecessary system constraints 
in a key engagement management system and created graphics templates 
to standardize and expedite development of report graphics. We also 
clarified responsibilities and procedures for coordinating with 
external entities, such as state and local audit offices, which 
provide an important resource for engagement teams to expand their 
reach into key areas. In addition, we leveraged technology and use of 
social media tools to help reach new audiences and provide external 
users with additional ways to access our products. We are currently 
studying our end-to-end engagement management process to identify 
additional opportunities for process efficiency and are establishing a 
new management challenge that addresses this area. 

While our constrained fiscal environment continues to be challenging, 
GAO will continue to meet the highest-priority needs of the Congress 
and implement our strategic goal 4 objectives to provide quality, 
timely service to the Congress and be a leading practices agency. 

Signed by: 

David M. Fisher: 
Chief Financial Officer: 

[End of From the Chief Financial Officer] 

Audit Advisory Committee’s Report: 

The Audit Advisory Committee (the Committee) assists the Comptroller 
General in overseeing the U.S. Government Accountability Office’s 
financial operations. As part of that responsibility, the Committee 
meets with agency management and its internal and external auditors to 
review and discuss GAO’s external financial audit coverage, the 
effectiveness of GAO’s internal controls over its financial 
operations, and its compliance with certain laws and regulations that 
could materially impact GAO’s financial statements. GAO’s external 
auditors are responsible for expressing an opinion on the conformity 
of GAO’s audited financial statements with the U.S. generally accepted 
accounting principles. The Committee reviews the findings of the 
internal and external auditors, and GAO’s responses to those findings, 
to ensure that GAO’s plan for corrective action includes appropriate 
and timely follow-up measures. In addition, the Committee reviews the 
draft performance and accountability report, including its financial 
statements, and provides comments to management who have primary 
responsibility for the performance and accountability report. The 
Committee met twice with respect to its responsibilities as described 
above. During these sessions, the Committee met with the internal and 
external auditors without GAO management being present and discussed 
with the external auditors the matters that are required to be 
discussed by generally accepted auditing standards. Based on 
procedures performed as outlined above, we recommend that GAO’s 
audited statements and footnotes be included in the 2011 performance 
and accountability report. 

Signed by: 

Judith H. O’Dell CPA CVA: 
Chair: 
Audit Advisory Committee: 

[End of Audit Advisory Committee’s Report] 

Independent Auditor’s Report: 

Clifton Gunderson LLP: 
Certified Public Accountants & Consultants: 11710 Beltsville Drive, 
Suite 300: Calverton, Maryland 20705-3106: 
Offices in 17 states and Washington, DC: tel: 301-931-2050: 
fax: 301-931-1710: 
[hyperlink, http://www.cliftoncpa.com]: 

Comptroller General of the United States: 

In our audits of the Government Accountability Office (GAO) for fiscal 
years 2011 and 2010, we found: 

* The financial statements are presented fairly, in all material 
respects, in conformity with accounting principles generally accepted 
in the United States of America. 

* GAO maintained, in all material respects, effective internal control 
over financial reporting. 

* GAO's financial management systems substantially complied with the 
applicable requirements of the Federal Financial Management 
Improvement Act of 1996 (FFMIA). 

* No reportable noncompliance with laws and regulations we tested. 

The following sections discuss in more detail (1) these conclusions, 
(2) our conclusions on Management's Discussion and Analysis (MD&A) and 
other supplementary information, and (3) our objectives, scope, and 
methodology. 

Opinion on Financial Statements: 

In our opinion, the financial statements including the accompanying 
notes present fairly, in all material respects, in conformity with 
accounting principles generally accepted in the United States of 
America, GAO's assets, liabilities, and net position as of September 
30, 2011 and 2010, and net costs; changes in net position; and 
budgetary resources for the years then ended. 

Opinion on Internal Control: 

In our opinion, GAO maintained, in all material respects, effective 
internal control over financial reporting as of September 30, 2011, 
that provided reasonable assurance that misstatements, losses, or 
noncompliance material in relation to the financial statements would 
be prevented or detected and corrected on a timely basis. Our opinion 
is based on criteria established under 31 U.S.C. 3512 (c), (d), the 
Federal Managers' Financial Integrity Act (FMFIA), the Office of 
Management and Budget (OMB) Circular No. A-123, Management's 
Responsibility for Internal Control, and GAO's Standards for Internal 
Control in the Federal Government, as required by OMB audit guidance. 

We noted other nonreportable matters involving internal control and 
its operation that we will communicate in a separate management letter. 

Opinion on FFMIA Compliance: 

In our opinion, GAO's financial management systems, as of September 
30, 2011, substantially complied with the following requirements of 
FFMIA: (1) federal financial management systems requirements, (2) 
federal accounting standards, and (3) the United States Government 
Standard General Ledger (SGL) at the transaction level. Our opinion is 
based on criteria established under FFMIA for federal financial 
management systems, accounting principles generally accepted in the 
United States of America, and the SGL. 

Compliance with Laws and Regulations: 

Our tests for compliance with selected provisions of laws and 
regulations disclosed no instances of noncompliance that would be 
reportable under Government Auditing Standards. The objective of our 
audit was not to provide an opinion on overall compliance with laws 
and regulations. Accordingly, we do not express such an opinion. 

This conclusion on laws and regulations is intended solely for the use 
of the management of GAO, OMB, and Congress and is not intended to be, 
and should not be, used by anyone other than these specified parties. 

Consistency of Other Information: 

The MD&A included as Part I is not a required part of the financial 
statements, but is supplementary information required by accounting 
principles generally accepted in the United States of America. We have 
applied certain limited procedures, which consisted principally of 
inquiries of management regarding the methods of measurement and 
presentation of the required supplementary information. However, we 
did not audit the information and express no opinion on it. 

The introductory information, performance information, and appendixes 
listed in the table of contents are presented for additional analysis 
and are not a required part of the financial statements. Such 
information has not been subjected to the auditing procedures applied 
in the audit of the financial statements and, accordingly, we express 
no opinion on them. 

Objectives, Scope, and Methodology: 

Management is responsible for (1) preparing the financial statements 
in conformity with accounting principles generally accepted in the 
United States of America, (2) establishing and maintaining effective 
internal control over financial reporting, and evaluating its 
effectiveness, (3) ensuring that GAO's financial management systems 
substantially comply with FFMIA requirements, and (4) complying with 
applicable laws and regulations. GAO management evaluated the 
effectiveness of GAO's internal control over financial reporting as of 
September 30, 2011, based on criteria established under FMFIA. GAO 
management's assertion is included in the Financial Reporting 
Assurance Statements section of the Performance and Accountability 
Report. 

We are responsible for planning and performing our audits to obtain 
reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining, on a test 
basis, evidence supporting the amounts and disclosures in the 
financial statements. An audit also includes assessing the accounting 
principles used and significant estimates made by management, as well 
as evaluating the overall financial statement presentation. 

We are responsible for planning and performing our examination to 
obtain reasonable assurance about whether management maintained, in 
all material respects, effective internal control over financial 
reporting as of September 30, 2011. Our examination included obtaining 
an understanding of the entity and its operations, including its 
internal control over financial reporting; considering GAO's process 
for evaluating and reporting on internal control over financial 
reporting the GAO is required to perform by FMFIA; assessing the risk 
that a material misstatement exists in the financial statements and 
the risk that a material weakness exists in internal control over 
financial reporting; evaluating the design and operating effectiveness 
of internal control and assessing risk; testing relevant internal 
controls over financial reporting; and performing such other 
procedures as we considered necessary in the circumstances. We did not 
test all internal controls relevant to operating objectives as broadly 
defined by the FMFIA. 

An entity's internal control over financial reporting is a process 
effected by those charged with governance, management, and other 
personnel, the objectives of which are to provide reasonable assurance 
that (1) transactions are properly recorded, processed, and summarized 
to permit the preparation of financial statements in accordance with 
accounting principles generally accepted in the United States, and 
assets are safeguarded against loss from unauthorized acquisition, 
use, or disposition; and (2) transactions are executed in accordance 
with the laws governing the use of budget authority and other laws and 
regulations that could have a direct and material effect on the 
financial statements. 

Because of inherent limitations in any internal control, misstatements 
due to error or fraud may occur and not be detected. Also, projections 
of any evaluation of the internal control to future periods are 
subject to the risk that the internal control may become inadequate 
because of changes in conditions, or that the degree of compliance 
with the policies or procedures may deteriorate. 

We are responsible for planning and performing our examination to 
obtain reasonable assurance about whether GAO's financial management 
systems substantially complied with the three FFMIA requirements. We 
examined, on a test basis, evidence about GAO's substantial compliance 
with those requirements, and performed such other procedures as we 
considered necessary in the circumstances. 

We are also responsible for testing compliance with selected 
provisions of laws and regulations that have a direct and material 
effect on the financial statements. We did not test compliance with 
all laws and regulations applicable to GAO. We limited our tests of 
compliance to selected provisions of those laws and regulations that 
have a direct and material effect on the financial statements and 
those required by OMB audit guidance that we deemed applicable to the 
financial statements for the fiscal year ended September 30, 2011. We 
caution that noncompliance may occur and not be detected by these 
tests and that such testing may not be sufficient for other purposes. 

We conducted our audits and examinations in accordance with auditing 
standards generally accepted in the United States of America; 
Government Auditing Standards, issued by the Comptroller General of 
the United States; attestation standards established by the American 
Institute of Certified Public Accountants; and OMB audit guidance. We 
believe that our audits and examinations provide a reasonable basis 
for our opinions. 

Signed by: 

Clifton Gunderson, LLP: 
Calverton, Maryland: 
November 10, 2011: 

[End of Independent Auditor's Report] 

Purpose of Each Financial Statement: 

The financial statements on the next four pages present the following 
information: 

* The balance sheet presents the combined amounts we had available to 
use (assets) versus the amounts we owed (liabilities) and the residual 
amounts after liabilities were subtracted from assets (net position). 

* The statement of net cost presents the annual cost of our 
operations. The gross cost less any offsetting revenue earned from our 
activities is used to arrive at the net cost of work performed under 
our four strategic goals. 

* The statement of changes in net position presents the accounting 
items that caused the net position section of the balance sheet to 
change from the beginning to the end of the fiscal year. 

* The statement of budgetary resources presents how budgetary 
resources were made available to us during the fiscal year and the 
status of those resources at the end of the fiscal year. 

[End of Purpose of Each Financial Statement] 

Financial Statements: 
U.S. Government Accountability Office: Balance Sheets: As of September 
30, 2011 and 2010 (Dollars in thousands): 

Assets: 

Intragovernmental: Funds with the U.S. Treasury and cash (Note 3); 
2011: $84,253; 
2010: $88,244. 

Intragovernmental: Accounts receivable; 
2011: $3,820; 
2010: $871. 

Total Intragovernmental; 
2011: $88,073; 
2010: $89,115. 

Property and equipment, net (Note 4); 
2011: $36,745; 
2010: $32,824. 

Other; 
2011: $504; 
2010: $328. 

Total Assets; 
2011: $125,322; 
2010: $122,267. 

Liabilities: 

Intragovernmental: Accounts payable; 
2011: $8,288; 
2010: $11,573. 

Intragovernmental: Employee benefits (Note 6); 
2011: $4,632; 
2010: $4,404. 

Intragovernmental: Workers' compensation (Note 7); 
2011: $2,554; 
2010: $2,620. 

Total Intragovernmental; 
2011: $15,474; 
2010: $18,597. 

Accounts payable and other; 
2011: $17,249; 
2010: $16,286. 

Salaries and benefits (Note 6); 
2011: $24,375; 
2010: $23,365. 

Accrued annual leave and other (Note 5); 
2011: $32,241; 
2010: $35,178. 

Workers' compensation (Note 7); 
2011: $16,181; 
2010: $15,217. 

Capital leases (Note 9); 
2011: $23; 
2010: $2,637. 

Note payable (Note 5); 
2011: $2,931; 
2010: [Empty]. 

Total Liabilities; 
2011: $108,474; 
2010: $111,280. 

Net Position: Unexpended appropriations; 
2011: $29,701; 
2010: $28,531. 

Net Position: Cumulative results of operations; 
2011: ($12,853)
2010: ($17,544). 

Total Net Position (Note 13); 
2011: $16,848; 
2010: $10,987. 

Total Liabilities and Net Position; 
2011: $125,322; 
2010: $122,267. 

[End of Balance Sheets] 

Financial Statements: 
U.S. Government Accountability Office: Statements of Net Cost: For 
Fiscal Years Ended September 30, 2011 and 2010 (Dollars in thousands): 

Net Costs by Goal (Note 2): 

Goal 1: Well-Being/Financial Security of American People; 
2011: $247,123; 
2010: $218,277. 

Less: reimbursable services; 
2011: ($2,089); 
2010: ($5,153). 

Net goal costs; 
2011: $245,034; 
2010: $213,124. 

Goal 2: Changing Security Threats/Challenges of Global Interdependence; 
2011: $147,330; 
2010: $171,597. 

Less: reimbursable services; 
2011: [Empty]; 
2010: [Empty]. 

Net goal costs; 
2011: $147,330; 
2010: $171,597. 

Goal 3: Transform the Federal Government to Address National 
Challenges; 
2011: $177,402; 
2010: $207,215. 

Less: reimbursable services; 
2011: ($13,211); 
2010: ($11,802). 

Net goal costs; 
2011: $164,191; 
2010: $195,413. 

Goal 4: Maximize the Value of GAO; 2011: $20,094; 
2010: $29,441. 

Less: reimbursable services; 
2011: [Empty]; 
2010: [Empty]. 

Net goal costs; 
2011: $20,094; 
2010: $29,441. 

Less: reimbursable services not attributable to goals; 
2011: ($7,152); 
2010: ($6,619). 

Net Cost of Operations (Note 10); 
2011: $569,497; 
2010: $602,956. 

[End of Statements of Net Cost] 

Financial Statements: 
U.S. Government Accountability Office: Statements of Changes in Net 
Position: For Fiscal Years Ended September 30, 2011 and 2010 (Dollars 
in thousands): 

Cumulative Results of Operations, Beginning of fiscal year; 
2011: ($17,544); 
2010: ($23,995). 

Budgetary Financing Sources - Appropriations used; 
2011: $543,327; 
2010: $576,126. 

Other Financing Sources: Intragovernmental transfer of property and 
equipment; 
2011: [Empty]; 
2010: ($14). 

Other Financing Sources: Federal employee retirement benefit costs 
paid by OPM and imputed to GAO (Note 6); 
2011: $30,861; 
2010: $33,295. 

Total Financing Sources; 
2011: $574,188; 
2010: $609,407. 

Net Cost of Operations; 
2011: ($569,497); 
2010: ($602,956). 

Net Change; 
2011: $4,691; 
2010: $6,451. 

Cumulative Results of Operations, End of fiscal year; 
2011: ($12,853); 
2010: ($17,544). 

Unexpended Appropriations, Beginning of fiscal year; 
2011: $28,531; 
2010: $48,330. 

Budgetary Financing Sources and Uses: Current year appropriations; 
2011: $547,349; 
2010: $557,849. 

Budgetary Financing Sources and Uses: Permanently not available; 
2011: ($2,852); 
2010: ($1,522). 

Budgetary Financing Sources and Uses: Appropriations used; 2011: 
($543,327); 
2010: ($576,126). 

Total unexpended appropriations, End of fiscal year; 2011: $29,701; 
2010: $28,531. 

Net Position; 
2011: $16,848; 
2010: $10,987. 

[End of Statements of Changes in Net Position] 

Financial Statements: 
U.S. Government Accountability Office: Statements of Budgetary 
Resources: For Fiscal Years Ended September 30, 2011 and 2010 (Dollars 
in thousands): 

Budgetary Resources (Note 11): Unobligated balance, brought forward 
October 1; 
2011: $10,838; 
2010: $30,373. 

Budgetary Resources (Note 11): Recoveries of prior year unpaid 
obligations; 
2011: $7,361; 
2010: $2,344. 

Budgetary Resources (Note 11): Budget authority: Appropriations; 
2011: $547,349; 
2010: $557,849. 

Budgetary Resources (Note 11): Budget authority: Spending authority 
from offsetting collections: Earned and collected; 
2011: $21,048; 
2010: $24,139. 

Budgetary Resources (Note 11): Budget authority: Spending authority 
from offsetting collections: Change in receivable from Federal 
sources: 
2011: $2,978; 
2010: ($133). 

Budgetary Resources (Note 11): Budget authority: Spending authority 
from offsetting collections: Change in unfilled customer orders-- 
advance received; 
2011: $206; 
2010: ($86). 

Budgetary Resources (Note 11): Budget authority: Spending authority 
from offsetting collections: Change in unfilled customer orders-- 
without advance; 
2011: $4,589; 
2010: $1. 

Budgetary Resources (Note 11): Budget authority: Spending authority 
from offsetting collections: Subtotal; 
2011: $576,517; 
2010: $581,770. 

Budgetary Resources (Note 11): Permanently not available; 
2011: ($2,852); 
2010: ($1,522). 

Total Budgetary Resources; 
2011: $591,517; 
2010: $612,965. 

Status of Budgetary Resources: Obligations incurred: Direct; 
2011: $550,308; 
2010: $581,262. 

Status of Budgetary Resources: Obligations incurred: Reimbursable; 
2011: $22,315; 
2010: $20,865. 

Status of Budgetary Resources: Obligations incurred: Subtotal; 
2011: $572,623; 
2010: $602,127. 

Status of Budgetary Resources: Unobligated balance-Apportioned; 
2011: $8,479; 
2010: $6,515. 

Status of Budgetary Resources: Unobligated balance not available; 
2011: $10,415; 
2010: $4,323. 

Total Status of Budgetary Resources; 
2011: $591,517; 
2010: $612,965. 

Change in Obligated Balance: Obligated balance, net: Unpaid Obligated 
balance, brought forward October 1; 
2011: $78,264; 
2010: $72,317. 

Change in Obligated Balance: Uncollected customer payments from 
Federal sources, brought forward October 1; 
2011: ($846); 
2010: ($978). 

Change in Obligated Balance: Total, unpaid obligation, net, brought 
forward October 1; 
2011: $77,418; 
2010: $71,339. 

Change in Obligated Balance: Obligations incurred; 
2011: $572,623; 
2010: $602,127. 

Change in Obligated Balance: Less: Gross Outlays; 
2011: ($569,743); 
2010: ($593,836). 

Change in Obligated Balance: Recoveries of prior-year unpaid 
obligations, actual; 
2011: ($7,361); 
2010: ($2,344). 

Change in Obligated Balance: Change in uncollected customer payments 
from Federal sources; 
2011: ($7,567); 
2010: $132. 

Change in Obligated Balance: Obligated balance, net, end of period: 
Unpaid Obligations; 
2011: $73,783; 
2010: $78,264. 

Change in Obligated Balance: Obligated balance, net, end of period: 
Uncollected customer payments from Federal sources; 
2011: ($8,413); 
2010: ($846). 

Change in Obligated Balance: Total, Unpaid obligations, net, end of 
period; 
2011: $65,370; 
2010: $77,418. 

Net Outlays: Gross outlays; 
2011: $569,743; 
2010: $593,836. 

Net Outlays: Less: Offsetting collections; 
2011: ($21,254); 
2010: ($24,053). 

Net outlays; 
2011: $548,489; 
2010: $569,783. 

The accompanying notes are an integral part of these statements. 

[End of Statements of Budgetary Resources] 

[End of Financial Statements] 

Notes to Financial Statements: 

Note 1. Summary of Significant Accounting Policies: 

Reporting Entity: 

The accompanying financial statements present the financial position, 
net cost of operations, changes in net position, and budgetary 
resources of the United States Government Accountability Office. GAO, 
an agency in the legislative branch of the federal government, 
supports the Congress in carrying out its constitutional 
responsibilities. GAO carries out its mission primarily by conducting 
audits, evaluations, analyses, research, and investigations and 
providing the information from that work to the Congress and the 
public in a variety of forms. The financial activity presented relates 
primarily to the execution of GAO’s congressionally approved budget. 
GAO ’s budget consists of an annual appropriation covering salaries 
and expenses as well as revenue from reimbursable audit services and 
rental income. The revenue from audit services and rental income is 
presented on the statements of net cost as "reimbursable services" and 
included as part of "spending authority from offsetting collections 
earned and collected" on the statements of budgetary resources. The 
financial statements, except for federal employee benefit costs paid 
by the Office of Personnel Management (OPM) and imputed to GAO, do not 
include the effects of centrally administered assets and liabilities 
related to the federal government as a whole, such as interest on the 
federal debt, which may in part be attributable to GAO. The Davis- 
Bacon Act trust’s assets, related liabilities, revenues, and costs 
related to beneficiary payments are not those of GAO and therefore are 
not included in the accompanying financial statements. See Note 14, 
Davis-Bacon Act Trust Function. 

Basis of Accounting: 

GAO’s financial statements have been prepared on the accrual basis and 
the budgetary basis of accounting in conformity with generally 
accepted accounting principles for the federal government. 
Accordingly, revenues are recognized when earned and expenses are 
recognized when incurred, without regard to the receipt or payment of 
cash. These principles differ from budgetary reporting principles. The 
differences relate primarily to the capitalization and depreciation of 
property and equipment, as well as the recognition of other long-term 
assets and liabilities. The statements were also prepared in 
conformity with OMB Circular A-136, Financial Reporting Requirements, 
as amended. 

Assets: 

Intragovernmental assets are those assets that arise from transactions 
with other federal entities. Funds with the U.S. Treasury comprise the 
majority of intragovernmental assets on GAO’s balance sheets. 

Funds with the U.S. Treasury: 

The U.S. Treasury processes GAO’s receipts and disbursements. Funds 
with the U.S. Treasury represent appropriated funds Treasury will 
provide to pay liabilities and to finance authorized purchase 
commitments. 

Accounts Receivable: 

GAO’s accounts receivable are due principally from federal agencies 
for reimbursable services; therefore, GAO has not established an 
allowance for doubtful accounts. 

Property and Equipment: 

The GAO headquarters building qualifies as a multiuse heritage asset, 
is GAO’s only heritage asset, and is reported with property and 
equipment on the balance sheets. The building’s designation as a 
multiuse heritage asset is a result of both being listed in the 
National Register of Historic Places and being used in general 
government operations. Statement of Federal Financial Accounting 
Standards No. 29 requires accounting for multiuse heritage assets as 
general property, plant, and equipment to be included in the balance 
sheet and depreciated. Maintenance of the building has been kept on a 
current basis. The building is depreciated on a straight-line basis 
over 25 years. 

Generally, property and equipment individually costing more than 
$15,000 are capitalized at cost. Building improvements and leasehold 
improvements are capitalized when the cost is $25,000 or greater. Bulk 
purchases of lesser-value items that aggregate more than $150,000 are 
also capitalized at cost. Assets are depreciated on a straight-line 
basis over the estimated useful life of the property as follows: 
building improvements, 10 years; computer equipment, software, and 
capital lease assets, ranging from 3 to 6 years; leasehold 
improvements, 5 years; and other equipment, ranging from 5 to 20 
years. GAO’s property and equipment have no restrictions as to use or 
convertibility except for the restrictions related to the GAO building’
s classification as a multiuse heritage asset. 

Liabilities: 

Liabilities represent amounts that are likely to be paid by GAO as a 
result of transactions that have already occurred. 

Accounts Payable: 

Accounts Payable consists of amounts owed to federal agencies and 
commercial vendors for goods and services received. 

Federal Employee Benefits: 

GAO recognizes its share of the cost of providing future pension 
benefits to eligible employees over the period of time that they 
render services to GAO. The pension expense recognized in the 
financial statements equals the current service cost for GAO’s 
employees for the accounting period less the amount contributed by the 
employees. OPM, the administrator of the plan, supplies GAO with 
factors to apply in the calculation of the service cost. These factors 
are derived through actuarial cost methods and assumptions. The excess 
of the recognized pension expense over the amount contributed by GAO 
and employees represents the amount being financed directly through 
the Civil Service Retirement and Disability Fund administered by OPM. 
This amount is considered imputed financing to GAO (see Note 6). 

The Federal Employees’ Compensation Act (FECA) provides income and 
medical cost protection to covered federal civilian employees injured 
on the job, employees who have incurred a work-related occupational 
disease, and beneficiaries of employees whose deaths are attributable 
to job-related injury or occupational disease. Claims incurred for 
benefits for GAO employees under FECA are administered by the 
Department of Labor (DOL) and are paid, ultimately, by GAO (see Note 
7). 

GAO recognizes a current-period expense for the future cost of 
postretirement health benefits and life insurance for its employees 
while they are still working. GAO accounts for and reports this 
expense in its financial statements in a manner similar to that used 
for pensions, with the exception that employees and GAO do not make 
current contributions to fund these future benefits. 

Federal employee benefit costs paid by OPM and imputed to GAO are 
reported as a financing source on the statements of changes in net 
position and are also included as a component of net cost by goal on 
the statements of net cost. 

Annual, Sick, and Other Leave: 

Annual leave is recognized as an expense and a liability as it is 
earned; the liability is reduced as leave is taken. The accrued leave 
liability is principally long term in nature. Sick leave and other 
types of leave are expensed as leave is taken. All leave is funded 
when taken. 

Contingencies: 

GAO has certain claims and lawsuits pending against it. GAO’s policy 
is to include provision in the financial statements for any losses 
considered probable and estimable. Management believes that losses 
from certain other claims and lawsuits are reasonably possible but are 
not material to the fair presentation of GAO’s financial statements, 
and provision for these losses is not included in the financial 
statements. 

Estimates: 

Management has made certain estimates and assumptions when reporting 
assets, liabilities, revenue, expenses, and in the note disclosures. 
Actual results could differ from these estimates. 

Reclassifications: 

Certain prior year amounts in the statement of net costs have been 
reclassified to conform to the current year presentation. 

Note 2. Intragovernmental and Public Costs and Exchange Revenue: 

Intragovernmental costs arise from exchange transactions made between 
two reporting entities within the federal government in contrast with 
public costs, which arise from exchange transactions made with a 
nonfederal entity. Intragovernmental and public costs and exchange 
revenue for the periods ended September 30, 2011, and September 30, 
2010, are as follows: 

Dollars in thousands: 

Goal 1: Well-being/Financial Security of American People: 

Intragovernmental costs: 
2011: $65,880; 
2010: $59,127. 

Public costs: 
2011: $181,243; 
2010: $159,150. 

Total goal 1 costs: 
2011: $247,123; 
2010: $218,277. 

Goal 1 intragovernmental earned revenue: 
2011: ($2,089); 
2010: ($5,153). 

Net goal 1 costs: 
2011: $245,034; 
2010: $213,124. 

Goal 2: Changing Security Threats/Challenges of Global Interdependence: 

Intragovernmental costs: 
2011: $39,505; 
2010: $46,069. 

Public costs: 
2011: $107,825; 
2010: $125,528. 

Total goal 2 costs: 
2011: $147,330; 
2010: $171,597. 

Goal 3: Transform the Federal Government to Address National 
Challenges: 

Intragovernmental costs: 
2011: $42,276; 
2010: $52,717. 

Public costs: 
2011: $135,126; 
2010: $154,498. 

Total goal 3 costs: 
2011: $177,402; 
2010: $207,215. 

Goal 3 intragovernmental earned revenue: 
2011: ($13,211); 
2010: ($11,802). 

Net goal 3 costs: 
2011: $164,191; 
2010: $195,413. 

Goal 4: Maximize the Value of GAO: 

Intragovernmental costs: 
2011: $6,288; 
2010: $9,510. 

Public costs: 
2011: $13,806; 
2010: $19,931. 

Total goal 4 costs: 
2011: $20,094; 
2010: $29,441. 

Earned revenue not attributable to goals: 

Intragovernmental: 
2011: ($6,983); 
2010: ($6,315). 

Public: 
2011: ($169); 
2010: ($304). 

Total earned revenue not attributable to goals: 
2011: ($7,152); 
2010: ($6,619). 

Goals 2 and 4 have no associated year-to-date intragovernmental 
revenues and all public earned revenue collected is not attributable 
to goals. 

[End of Table: Intragovernmental and Public Costs and Exchange Revenue] 

Note 3. Funds with the U.S. Treasury: 

GAO’s funds with the U.S. Treasury consist of only appropriated funds. 
The status of these funds as of September 30, 2011, and September 30, 
2010, is as follows: 

Dollars in thousands: 

Unobligated balance: Available; 
2011: $8,479; 
2010: $6,515. 

Unobligated balance: Unavailable; 
2011: $10,404; 
2010: $4,311. 

Obligated balances not yet disbursed; 
2011: $65,370; 
2010: $77,418. 

Total funds with U.S. Treasury; 
2011: $84,253. 
2010: $88,244. 

[End of Table: Funds with the U.S. Treasury] 

In fiscal year 2011, GAO collected amounts for reimbursable services 
that it did not have authority to spend. This restriction of spending 
authority of these funds added to the increase in the unobligated- 
unavailable balance. 

Note 4. Property and Equipment, Net: 

The composition of property and equipment as of September 30, 2011, is 
as follows: 

Dollars in thousands: 

Classes of property and equipment: Building; 
Acquisition value: $15,664; 
Accumulated depreciation: $14,411; 
Book value: $1,253. 

Classes of property and equipment: Land; 
Acquisition value: $1,191; 
Accumulated depreciation: [Empty]; 
Book value: $1,191. 

Classes of property and equipment: Building improvements; 
Acquisition value: $122,900; 
Accumulated depreciation: $100,825; 
Book value: $22,075. 

Classes of property and equipment: Computer and other equipment and 
software; 
Acquisition value: $44,365; 
Accumulated depreciation: $33,013; 
Book value: $11,352. 

Classes of property and equipment: Leasehold improvements; 
Acquisition value: $4,340; 
Accumulated depreciation: $4,222; 
Book value: $118. 

Classes of property and equipment: Assets under capital lease; 
Acquisition value: $18,557; 
Accumulated depreciation: $17,801; 
Book value: $756. 

Classes of property and equipment: Total property and equipment; 
Acquisition value: $207,017; 
Accumulated depreciation: $170,272; 
Book value: $36,745. 

The composition of property and equipment as of September 30, 2010, is 
as follows: 

Dollars in thousands: 

Classes of property and equipment: Building; 
Acquisition value: $15,664; 
Accumulated depreciation: $13,784; 
Book value: $1,880. 

Classes of property and equipment: Land; 
Acquisition value: $1,191; 
Accumulated depreciation: [Empty]; 
Book value: $1,191. 

Classes of property and equipment: Building improvements; 
Acquisition value: $115,736; 
Accumulated depreciation: $99,530; 
Book value: $16,206. 

Classes of property and equipment: Computer and other equipment and 
software; 
Acquisition value: $41,059; 
Accumulated depreciation: $30,513; 
Book value: $10,546. 

Classes of property and equipment: Leasehold improvements; 
Acquisition value: $6,203; 
Accumulated depreciation: $5,982; 
Book value: $221. 

Classes of property and equipment: Assets under capital lease; 
Acquisition value: $19,432; 
Accumulated depreciation: $16,652; 
Book value: $2,780. 

Classes of property and equipment: Total property and equipment; 
Acquisition value: $199,285; 
Accumulated depreciation: $166,461; 
Book value: $32,824. 

[End of Table: Property and Equipment, Net] 

Note 5. Liabilities Not Covered by Budgetary Resources: 

The liabilities on GAO’s balance sheets as of September 30, 2011, and 
September 30, 2010, include liabilities not covered by budgetary 
resources, which are liabilities for which congressional action is 
needed before budgetary resources can be provided. Although future 
appropriations to fund these liabilities are likely and anticipated, 
it is not certain that appropriations will be enacted to fund these 
liabilities. The composition of liabilities not covered by budgetary 
resources as of September 30, 2011, and September 30, 2010, is as 
follows: 

Dollars in thousands: 

Intragovernmental liabilities--Workers' compensation; 
2011: $2,554; 
2010: $2,620. 

Salaries and benefits--Comptrollers' General retirement plan[A]; 
2011: $1,431; 
2010: $1,878. 

Accrued annual leave and other; 
2011: $32,241; 
2010: $35,178. 

Workers' compensation[B]; 
2011: $16,181; 
2010: $15,217. 

Capital leases; 
2011: [Empty]; 
2010: $2,637. 

Notes payable; 
2011: $2,931; 
2010: [Empty]. 

Total liabilities not covered by budgetary resources; 
2011: $55,338; 
2010: $57,530. 

[A] See Note 6 for further discussion of the Comptrollers’ General 
retirement plan. 

[B] See Note 7 for further discussion of workers’ compensation. 

[End of Table: Liabilities Not Covered by Budgetary Resources] 

In fiscal year 2011, GAO fully funded the balance of outstanding 
capital leases. This fiscal year GAO also entered into an agreement to 
finance the replacement of the building’s hot water boilers under the 
Federal Energy Management Program following Section 201(a)(3) of the 
Federal Property Act. Financing guidance under this program allows 
participating agencies to obligate only the annual payments. The 
balance of the note payable is scheduled to be paid in fiscal years 
2012 though 2015 with annual payments, including interest of 
approximately $733,000. 

Note 6. Federal Employee Benefits: 

All permanent employees participate in either the contributory Civil 
Service Retirement System (CSRS) or the Federal Employees Retirement 
System (FERS). Temporary employees and employees participating in FERS 
are covered under the Federal Insurance Contributions Act (FICA). To 
the extent that employees are covered by FICA, the taxes they pay to 
the program and the benefits they will eventually receive are not 
recognized in GAO’s financial statements. GAO makes contributions to 
CSRS, FERS, and FICA and matches certain employee contributions to the 
thrift savings component of FERS. All of these payments are recognized 
as operating expenses. 

In addition, all permanent employees are eligible to participate in 
the contributory Federal Employees Health Benefit Program (FEHBP) and 
the Federal Employees Group Life Insurance (FEGLI) Program and may 
continue to participate after retirement. GAO makes contributions 
through OPM to FEHBP and FEGLI for active employees to pay for their 
current benefits. GAO’s contributions for active employees are 
recognized as operating expenses. Using the cost factors supplied by 
OPM, GAO has also recognized an expense in its financial statements 
for the estimated future cost of postretirement health benefits and 
life insurance for its employees. These costs are financed by OPM and 
imputed to GAO. 

Amounts owed to OPM and Treasury as of September 30, 2011, and 
September 30, 2010, are $4,632,000 and $4,404,000, respectively, for 
FEHBP, FEGLI, FICA, FERS, and CSRS contributions and are shown on the 
balance sheets as an employee benefits liability. 

Details of the major components of GAO’s federal employee benefit 
costs for the periods ended September 30, 2011, and September 30, 
2010, are as follows: 

Dollars in thousands: 

Federal Employee Benefits Costs: 

Federal employee retirement benefit costs paid by OPM and imputed to 
GAO: 
Estimated future pension costs(CSRS/FERS); 
2011: $13,444; 
2010: $15,816. 

Federal Employee Benefits Costs: Federal employee retirement benefit 
costs paid by OPM and imputed to GAO: Estimated future postretirement 
health and life insurance (FEHBP/FEGLIP); 
2011: $17,417; 
2010: $17,479. 

Federal Employee Benefits Costs: Federal employee retirement benefit 
costs paid by OPM and imputed to GAO: Total; 
2011: $30,861; 
2010: $33,295. 

Federal Employee Benefits Costs: Pension expenses(CSRS/FERS); 
2011: $37,971; 
2010: $36,386. 

Federal Employee Benefits Costs: Health and life insurance expenses 
(FEHBP/FEGLIP); 
2011: $20,640; 
2010: $19,283. 

Federal Employee Benefits Costs: FICA payment made by GAO; 
2011: $20,762; 
2010: $21,796. 

Federal Employee Benefits Costs: Thrift Savings Plan-matching 
contribution by GAO; 
2011: $13,188; 
2010: $12,898. 

[End of Table: Federal Employee Benefits] 

Comptrollers general and their surviving beneficiaries who qualify and 
so elect to participate are paid retirement benefits by GAO under a 
separate retirement plan. These benefits are paid from current year 
appropriations. Because GAO is responsible for future payments under 
this plan, the estimated present value of accumulated plan benefits of 
$1,431,000 as of September 30, 2011, and $1,878,000 as of September 
30, 2010, is included as a component of salary and benefit liabilities 
on GAO’s balance sheets. The following summarizes the changes in the 
actuarial liability for current plan year: 

Dollars in thousands: 

Actuarial liability as of September 30, 2010: $1,878; 

Expense: Interest on the liability balance: $78; 

Expense: Actuarial loss: From experience: ($241); 

Expense: Actuarial loss: From assumption changes: $17; 

Total gain: ($146); 

Less benefits paid: ($301); 

Actuarial liability as of September 30, 2011: $1,431. 

[End of table] 

Note 7. Workers’ Compensation: 

GAO utilizes the services of an independent actuarial firm to 
calculate its FECA liability. GAO recorded an estimated liability for 
claims incurred but not reported as of September 30, 2011, and 
September 30, 2010, which is expected to be paid in future periods. 
This estimated liability of $16,181,000 and $15,217,000 as of 
September 30, 2011, and September 30, 2010, respectively, is reported 
on GAO’s balance sheets. GAO also recorded a liability for amounts 
paid to claimants by DOL as of September 30, 2011, and September 30, 
2010, of $2,554,000 and $2,620,000, respectively, but not yet 
reimbursed to DOL by GAO. The amount owed to DOL is reported on GAO’s 
balance sheets as an intragovernmental liability. 

Note 8. Building Lease Revenue: 

At the end of fiscal year 2010 the existing 10-year lease with the 
U.S. Army Corps of Engineers (USACE) expired and GAO entered into a 
new 10 year lease agreement to continue to lease the entire third 
floor and part of the sixth floor of the GAO building. The period of 
this new agreement began with fiscal year 2011 with an option to renew 
each year through fiscal year 2020. Total rental revenue to GAO 
includes a fixed base rent plus operating expense reimbursements, with 
escalation clauses each year, if the option years are exercised. 

Rent received by GAO for fiscal years 2011 and 2010 was $6,845,000 and 
$5,338,000, respectively. These amounts are included in reimbursable 
services shown on the statements of net cost. Total rental revenue for 
the future periods of the new 10-year lease is as follows: 

Dollars in thousands: 

Fiscal year ending September 30: 2012; 
Total Projected Receipts[A]: $6,928. 

Fiscal year ending September 30: 2013; 
Total Projected Receipts[A]: $7,014. 

Fiscal year ending September 30: 2014; 
Total Projected Receipts[A]: $7,102. 

Fiscal year ending September 30: 2015; 
Total Projected Receipts[A]: $7,194. 

Fiscal year ending September 30: 2016; 
Total Projected Receipts[A]: $7,288. 

Fiscal year ending September 30: 2017-2020; 
Total Projected Receipts[A]: $30,164. 

Total: $65,690. 

[A] If option years are exercised. 

[End of Table: Building Leases] 

Note 9. Leases: 

Capital Leases: 

GAO has entered into capital leases for office equipment and computer 
equipment under which the ownership of the equipment covered under the 
leases transfers to GAO when the leases expire. When GAO enters into 
these leases, the present value of the future lease payments is 
capitalized, net of imputed interest, and recorded as a liability. The 
acquisition value and accumulated depreciation of GAO’s capital leases 
are shown in Note 4, Property and Equipment, Net. As of September 30, 
2011, and September 30, 2010, the capital lease liability was $23,000 
and $2,637,000, respectively. In fiscal year 2011, GAO paid off 
balances of the majority of these leases. 

These lease agreements are written as contracts with a base year and 
option years. The option years are subject to the availability of 
funds. Early termination of the leases for reasons other than default 
is subject to negotiation between the parties. These leases are lease- 
to-ownership agreements. GAO’s leases are short term in nature and no 
liability exists beyond the years shown in the table below. GAO’s 
estimated future minimum lease payments under the terms of the leases 
are as follows: 

Dollars in thousands: 

Fiscal year ending September 30: 2012; 
Total: $24; 

Fiscal year ending September 30: 2013; 
Total: $2; 

Total estimated future lease payments: $26. 

Less: imputed interest: ($3). 

Net capital lease liability: $23. 

[End of Table: Capital Leases] 

Operating Leases: 

GAO leases office space, predominately for field offices, from the 
General Services Administration and has entered into various other 
operating leases for office communication and computer equipment. 
Lease costs for office space and equipment for fiscal year 2011 and 
fiscal year 2010 amounted to approximately $12,619,000 and 
$13,963,000, respectively. Leases for equipment under operating leases 
are generally for less than 1 year; therefore there are no associated 
future minimum lease payments. Estimated future minimum lease payments 
for field office space under the terms of the leases are as follows: 

Dollars in thousands: 

Fiscal year ending September 30: 2012; 
Total: $9,115. 

Fiscal year ending September 30: 2013; 
Total: $6,240. 

Fiscal year ending September 30: 2014; 
Total: $5,401. 

Fiscal year ending September 30: 2015; 
Total: $4,113. 

Fiscal year ending September 30: 2016; 
Total: $3,289. 

Fiscal year ending September 30: 2017 and thereafter; 
Total: $5,356. 

Total estimated future lease payments: $33,514. 

[End of Table: Operating Leases] 

Leased property and equipment must be capitalized if certain criteria 
are met (see Capital Leases description). Because property and 
equipment covered under GAO’s operating leases do not satisfy these 
criteria, GAO’s operating leases are not reflected on the balance 
sheets. However, annual lease costs under the operating leases are 
included as components of net cost by goal in the statements of net 
cost. 

Note 10. Net Cost of Operations: 

Expenses for salaries and related benefits for fiscal year 2011 and 
fiscal year 2010 amounted to $467,064,000 and $475,530,000, 
respectively, about 82 and 79 percent of GAO’s net cost of operations 
in fiscal year 2011 and fiscal year 2010, respectively. Included in 
the net cost of operations are federal employee benefit costs paid by 
OPM and imputed to GAO of $30,861,000 in fiscal year 2011 and 
$33,295,000 in fiscal year 2010. 

Revenues from reimbursable services are shown as an offset against the 
full cost of the goal to arrive at its net cost. Earned revenues that 
are insignificant or cannot be associated with a major goal are shown 
in total, the largest component of which is rental revenue from the 
lease of space in the GAO building. Revenues from reimbursable 
services for fiscal year 2011 and fiscal year 2010 amounted to 
$22,452,000 and $23,574,000, respectively. Further details of the 
intragovernmental components are provided in Note 2. 

The net cost of operations represents GAO’s operating costs that must 
be funded by financing sources other than revenues earned from 
reimbursable services. These financing sources are presented in the 
statements of changes in net position. 

Note 11. Budgetary Resources: 

Budgetary resources available to GAO during fiscal year 2011 include 
current year appropriations, prior years’ unobligated balances, 
reimbursements earned by GAO from providing goods and services to 
other federal entities for a price (reimbursable services), and cost- 
sharing arrangements with other federal entities. In fiscal year 2010, 
in addition to the appropriation and reimbursements earned, the prior 
year’s unobligated balance includes almost $21,000,000 available 
through fiscal year 2010 to cover program reviews required by the 
American Recovery and Reinvestment Act of 2009. 

Earned reimbursements consist primarily of rent collected from USACE 
for lease of space and related services in the GAO headquarters 
building and program and financial audits of federal entities, 
including the Department of the Treasury, Securities and Exchange 
Commission, Federal Deposit Insurance Corporation, Consumer Financial 
Protection Bureau, and Federal Housing Finance Agency. Earned revenue 
from rent is available indefinitely, subject to annual obligation 
ceilings, and must be used to offset the cost of operating and 
maintaining the GAO headquarters building. Reimbursements from program 
and financial audits are available without limitations on their use 
and may be subject to annual obligation ceilings. GAO’s pricing policy 
for reimbursable services is to seek reimbursement for actual costs 
incurred, including overhead costs where allowed by law. The costs and 
reimbursements for cost-sharing arrangements from other federal 
entities for the support of the Federal Accounting Standards Advisory 
Board are not included in the statements of net cost. 

Fiscal years 2011 and 2010 budgetary resources do not include any 
transfers of budget authority. 

Comparison of GAO’s fiscal year 2010 statement of budgetary resources 
with the corresponding information presented in the 2012 President’s 
Budget is as follows: 

Dollars in thousands: 

Fiscal year 2010 Statement of Budgetary Resources; 
Budgetary Resources: $612,965; 
Obligations Incurred: $602,127. 

Unobligated balances, beginning of year - (funds activity, expired 
accounts); 
Budgetary Resources: ($5,384); 
Obligations Incurred: [Empty]. 

Recovery of prior-year unpaid obligations; 
Budgetary Resources: ($2,344); 
Obligations Incurred: [Empty]. 

Obligations incurred – expired years; 
Budgetary Resources: [Empty]; 
Obligations Incurred: ($1,831). 

Permanently not available – (funds activity, expired accounts); 
Budgetary Resources: ($1,522); 
Obligations Incurred: [Empty]. 

Spending Authority from offsetting collections – (funds activity, 
expired accounts); 
Budgetary Resources: ($861); 
Obligations Incurred: [Empty]. 

Other - rounding in President's Budget; 
Budgetary Resources: $380; 
Obligations Incurred: ($296). 

2011 President's Budget - fiscal year 2009, actual; 
Budgetary Resources: $608,000; 
Obligations Incurred: $600,000. 

[End of Table: Budgetary Resources] 

As the fiscal year 2013 President’s Budget will not be published until 
February 2012, a comparison between the fiscal year 2011 data 
reflected on the statement of budgetary resources and fiscal year 2011 
data in the President’s Budget cannot be performed, though we expect 
similar differences will exist. The fiscal year 2013 President’s 
Budget will be available on the OMB’s website and directly from the 
Government Printing Office. 

Budgetary resources obligated for undelivered orders at the end of 
fiscal year 2011 and the end of fiscal year 2010 totaled $21,269,000 
and $24,906,000, respectively. GAO’s apportionments fall under 
Category A, quarterly apportionment. Apportionment categories of 
obligations incurred for fiscal years 2011 and 2010 are as follows: 

Dollars in thousands: 

Fiscal year ending September 30: Direct-Category A; 
2011: $550,308; 
2010: $581,262. 

Fiscal year ending September 30: Reimbursable-Category A; 
2011: $22,315; 
2010: $20,865. 

Fiscal year ending September 30: Total obligations incurred; 
2011: $572,623; 
2010: $602,127. 

[End of table] 

Note 12. Reconciliation of Net Costs of Operations to Budget: 

Details of the relationship between budgetary resources obligated and 
the net costs of operations for the fiscal years ending September 30, 
2011 and 2010, are as follows: 

Dollars in thousands: 

Fiscal year ending September 30: 

Resources Used to Finance Activities: Budgetary Resources Obligated: 
Obligation incurred; 
2011: $572,623; 
2010: $602,127. 

Resources Used to Finance Activities: Budgetary Resources Obligated: 
Less: spending authority from offsetting collections and recoveries; 
2011: ($36,182); 
2010: ($26,265). 

Resources Used to Finance Activities: Budgetary Resources Obligated: 
Obligations net of offsetting collections and recoveries; 
2011: $536,441; 
2010: $575,862. 

Resources Used to Finance Activities: Other resources: 
Intragovernmental transfer of property and equipment; 
2011: [Empty]; 
2010: ($14). 

Resources Used to Finance Activities: Other resources: Federal 
employee retirement benefit costs paid by OPM imputed to GAO; 
2011: $30,861; 
2010: $33,295. 

Resources Used to Finance Activities: Other resources: Net other 
resources used to finance activities; 
2011: $30,861; 
2010: $33,281. 

Resources Used to Finance Activities: Other resources: Total resources 
used to finance activities; 
2011: $567,302; 
2010: $609,143. 

Resources used to finance items not part of the net cost of 
operations; Change in unliquidated obligations; 
2011: $8,432; 
2010: ($4,320). 

Resources used to finance items not part of the net cost of 
operations; Reduction in lease liability and other; 
2011: $317; 
2010: ($2,177). 

Resources used to finance items not part of the net cost of 
operations: Assets capitalized; 
2011: ($14,057); 
2010: ($9,975). 

Resources used to finance items not part of the net cost of operations; 
Net decrease in receivables not generating resources until collected 
and other adjustments; 
2011: ($154); 
2010: $17. 

Resources used to finance items not part of the net cost of 
operations: Total resources used to fund items not part of the net 
cost of operations; 
2011: ($5,462); 
2010: ($16,455). 

Fiscal year ending September 30: Resources used to finance items not 
part of the net cost of operations: Total resources used to finance 
Net Cost of Operations; 
2011: $561,840; 
2010: $592,688. 

Components of net costs that will not require or generate resources in 
the current period; Increase/(Decrease) in workers’ compensation; 
2011: $898; 
2010: ($1,259). 

Components of net costs that will not require or generate resources in 
the current period; (Decrease)/Increase in accrued annual leave; 
2011: ($2,937); 
2010: $1,827. 

Components of net costs that will not require or generate resources in 
the current period: Total Components of net cost that will not require 
or generate resources in the current period; 
2011: ($2,486); 
2010: $485. 

Costs that do not require resources: Depreciation and other; 
2011: $10,143; 
2010: $9,783. 

Net Cost of Operations; 
2011: $569,497; 
2010: $602,956. 

[End of Table: Reconciliation of Net Costs of Operations to Budget] 

Note 13. Net Position: 

Net position on the balance sheets comprises unexpended appropriations 
and cumulative results of operations. Unexpended appropriations are 
the sum of the total unobligated appropriations and undelivered goods 
and services. Cumulative results of operations represent the excess of 
financing sources over expenses since inception. Details of the 
components of GAO’s cumulative results of operations for the fiscal 
years ended September 30, 2011, and 2010, are as follows: 

Dollars in thousands: 

Investment in property and equipment, net; 
2011: $36,745; 
2010: $32,824. 

Rent related reimbursable funds expended in current year; 
2011: $5,355; 
2010: $6,892. 

Other--supplies inventory; 
2011: $385; 
2010: $270. 

Liabilities not covered by budgetary resources; 
2011: ($55,338); 
2010: ($57,530). 

Cumulative results of operations; 
2011: ($12,853); 
2010: ($17,544). 

[End of Table: Net Position] 

Liabilities not covered by budgetary resources are liabilities for 
which congressional action is needed before budgetary resources can be 
provided. See Note 5 for components. 

Note 14. Davis-Bacon Act Trust Function: 

GAO is responsible for administering for the federal government the 
trust function of the Davis-Bacon Act revenue and costs related to 
beneficiary payments and prepares separate audited financial schedules 
for this fund. GAO maintains this fund to pay claims relating to 
violations of the Davis-Bacon Act and Contract Work Hours and Safety 
Standards Act. Under these acts, DOL investigates violation 
allegations to determine if federal contractors owe additional wages 
to covered employees. If DOL concludes that a violation has occurred, 
GAO collects the amount owed from the contracting federal agency, 
deposits the funds into an account with the U.S. Treasury, and remits 
payment to the claimant. GAO is accountable to the Congress and to the 
public for the proper administration of the assets held in the trust. 
Trust assets and liabilities under GAO’s administration as of 
September 30, 2011 and 2010, totaled approximately $5,037,000 and 
$4,937,000, respectively. These assets are not the assets of GAO or 
the federal government and are held for distribution to appropriate 
claimants. Revenues and costs related to beneficiary payments in the 
trust amounted to $1,264,000 in fiscal year 2011 and $801,000 in 
fiscal year 2010. 

[End of Notes to Financial Statements] 

[End of Part III: Financial Information] 

Part IV: Inspector General’s View of GAO’s Management Challenges: 

OIG: 
Office of the Inspector General: United States Government 
Accountability Office: 

Memorandum: 

Date: October 27, 2011: 

To: Comptroller General Gene L. Dodaro: 

From: [Signed by] Inspector General Frances Garcia: 

Subject: GAO Management Challenges: 

In October 2010, the OIG reported that the management challenges 
identified by GAO had remained unchanged for many years. We are 
pleased to report that GAO responded to our recommendations to 
determine whether (1) significant actions have been taken in the areas 
of physical security, information security, or human capital to 
justify removal of any of these management challenges and (2) other 
risks have emerged that may also warrant designation as GAO management 
challenges. 

We reviewed management's assessment and decision to remove physical 
and information security and to retain human capital as management 
challenges for fiscal year 2011. Based on our work and institutional 
knowledge, we believe that GAO has taken sufficient action to 
establish an appropriate framework of policies, processes, procedures, 
and personnel to effectively comply with federal requirements intended 
to mitigate physical and information security risks and adapt as new 
threats evolve. As a result, we support management's decision to remove 
physical security and information technology as management challenges that 
may affect GAO's performance. Further, we agree that while improvements 
have been made in GAO's human capital management, this area continues 
to represent a management challenge for the agency as it strives to 
maintain an agile and effective workforce. 

In 2011, GAO identified "engagement efficiency" as a new management 
challenge in recognition of its need to find ways to improve its 
efficiency in producing quality work in support of the Congress within 
a declining resource environment. We concur with GAO's decision to 
recognize the importance of these efforts by designating engagement 
efficiency as a management challenge. 

[End of Part IV: Inspector General’s View of GAO’s Management 
Challenges] 

Part V: Appendix on Data Quality: 

Table 19: How We Ensure Data Quality for Our Annual Performance 
Measures: 

Results measures: 

Financial benefits: 

Definition and background: 
Our work—-including our findings and recommendations-—may produce 
benefits to the federal government that can be estimated in dollar 
terms. These benefits can result in better services to the public, 
changes to statutes or regulations, or improved government business 
operations. A financial benefit is an estimate of the federal cost 
reduction of agency or congressional actions. These financial benefits 
generally result from work that we completed over the past several 
years. The estimated benefit is based on actions taken in response to 
our work, such as reducing government expenditures, increasing 
revenues, or reallocating funds to other areas. 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. In some cases, we can claim financial benefits over 
multiple years based on a single agency or congressional action. 

Financial benefits are linked to specific recommendations or other 
work. To claim that financial benefits have been achieved, our staff 
must file an accomplishment report documenting that (1) the actions 
taken as a result of our work have been completed or substantially 
completed, (2) the actions generally were taken within 2 fiscal years 
prior to the filing of the accomplishment report, (3) a cause-and- 
effect relationship exists between the benefits reported and our 
recommendation or work performed, and (4) estimates of financial 
benefits were based on information obtained from non-GAO sources. To 
help 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. Financial benefits can be claimed for past or future 
years. For financial benefits involving events that occur on a regular 
but infrequent basis—such as the decennial census—we may extend the 
measurement period until the event occurs in order to compute the 
associated financial benefits using our present value calculator. 

Managing directors decide when their staff can claim financial 
benefits. A managing director may choose to claim a financial benefit 
all in 1 year or over several years, if the benefit spans future years 
and the managing director wants greater precision as to the amount of 
the benefit. 

Data sources: 
Our Accomplishment Reporting System provides the data for this 
measure. Teams use this web-based data system to prepare, review, and 
approve accomplishments and forward them to our Office of Quality and 
Continuous Improvement (QCI) for review. Once accomplishment reports 
are approved, they are entered into our Engagement Reporting System 
(ERS), which is the official reporting database. 

Verification and validation: 
Our policies and procedures require us to use the Accomplishment 
Reporting System to record the financial benefits that result from our 
work. They also provide guidance on estimating those financial 
benefits. The team identifies when a financial benefit has occurred as 
a result of our work. The team develops estimates based on non-GAO 
sources, such as the agency that acted on our work, a congressional 
committee, or the Congressional Budget Office, and files 
accomplishment reports based on those estimates. When non-GAO 
estimates are not readily available, teams may use GAO estimates—- 
developed in consultation with our experts, such as the Chief 
Economist, Chief Actuary, or Chief Statistician, and corroborated with 
a knowledgeable program official from the executive agency involved. 
The estimates are reduced by significant identifiable offsetting 
costs. The team develops documentation to support accomplishments with 
evidence that meets our evidence standard, supervisors review the 
documentation, and an independent person within GAO reviews the 
accomplishment report. For all financial accomplishment reports the 
managing director prepares a memorandum addressed to the Chief Quality 
Officer attesting that the accomplishment report meets our standards 
for accomplishment reporting. The memorandum specifically (1) 
addresses how linkage to GAO is established and (2) attests that the 
financial benefits are claimed in accordance with our procedures. 
Beginning in fiscal year 2010, teams are also required to consult with 
our Center for Economics on the calculation for financial benefits of 
$500 million or more. For each of the financial accomplishment 
reports, an economist reviewed and approved the methodology for 
calculating the proposed financial benefit. The assessment results 
were documented in the accomplishment’s supporting documentation and 
provided to the second reviewers. 

The team’s managing director is authorized to approve financial 
accomplishment reports with benefits of less than $100 million. The 
team forwards the report to QCI, which reviews all accomplishment 
reports and approves accomplishment reports claiming benefits of $100 
million or more. In fiscal year 2011, QCI approved accomplishment 
reports covering 96 percent of the dollar value of financial benefits 
we reported. 

In fiscal year 2011, accomplishments of $500 million or more were also 
reviewed by independent second and third reviewers (reemployed GAO 
annuitants), who have substantial experience and knowledge of our 
accomplishment reporting policies and procedures. Our total fiscal 
year 2011 reported financial benefits reflect the views of the 
independent reviewers. 

Data limitations: 
Not every financial benefit from our work can be readily estimated or 
documented as attributable to our work. As a result, the amount of 
financial benefits is a conservative estimate. Estimates are based on 
information from non-GAO sources and are based on both objective and 
subjective data, and as a result, professional judgment is required in 
reviewing accomplishment reports. We feel that the verification and 
validation steps that we take minimize any adverse impact from this 
limitation. 

Nonfinancial benefits: 

Definition and background: 
Our work—-including our findings and recommendations-—may produce 
benefits to the government that cannot be estimated in dollar terms. 
These nonfinancial benefits can result in better services to the 
public, changes to statutes or regulations, or improved government 
business operations. Nonfinancial benefits generally result from past 
work that we completed. 

Nonfinancial benefits are linked to specific recommendations or other 
work that we completed over several years. To claim that nonfinancial 
benefits have been achieved, staff must file an accomplishment report 
that documents that (1) the actions taken as a result of our work have 
been completed or substantially completed, (2) the actions generally 
were taken within the past 2 fiscal years of filing the accomplishment 
report, and (3) a cause-and-effect relationship exists between the 
benefits reported and our recommendation or work performed. 

Data sources: 
Our Accomplishment Reporting System provides the data for this 
measure. Teams use this automated system to prepare, review, and 
approve accomplishments and forward them to QCI for its review. Once 
accomplishment reports are approved, they are entered into ERS, which 
is the official reporting system. 

Verification and validation: 
We use the Accomplishment Reporting System to record the nonfinancial 
benefits that result from our findings and recommendations. Staff in 
the team file accomplishment reports to claim benefits resulting from 
our work. The team develops documentation to support accomplishments 
with evidence that meets our standards. Supervisors review the 
documentation; an independent staff person checks the facts of the 
accomplishment report; and the team’s managing director, director, or 
both approve the accomplishment report to ensure its appropriateness, 
including attribution to our work. 

The team forwards the report to QCI, where it is reviewed for 
appropriateness. QCI provides summary data on nonfinancial benefits to 
team managers, who check the data on a regular basis to make sure that 
approved accomplishments from their staff have been accurately 
recorded. 

Data limitations: 
The data may be underreported because we cannot always document a 
direct cause-and-effect relationship between our work and the 
resulting benefits. Therefore, the data represent a conservative 
measure of our overall contribution toward improving government. 

Percentage of products with recommendations: 

Definition and background: 
We measure the percentage of our written reports and numbered 
correspondence issued in the fiscal year that included at least one 
recommendation. We make recommendations that specify actions that can 
be taken to improve federal operations or programs. We strive to 
ensure that recommendations are directed at resolving the cause of 
identified problems; that are addressed to parties who have the 
authority to act; and are specific, feasible, and cost-effective. Some 
of our products are informational and do not contain recommendations. 

We track the percentage of our written products that are issued during 
the fiscal year and contain recommendations. This indicator recognizes 
that our products do not always include recommendations. 

Data sources: 
Our Publications Database incorporates recommendations from products 
as they are issued. The database is updated daily. 

Verification and validation: 
Our Information Management team enters data on recommendations into a 
"staging” system where they are reviewed for accuracy and 
completeness. Once reviewed, the data are posted to the Publications 
Database. We provide our managers with reports on the recommendations 
being tracked to help ensure that all recommendations have been 
captured and that each recommendation has been completely and 
accurately stated. 

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

Past recommendations implemented: 

Definition and background: 
We make recommendations designed to improve the operations of the 
federal government. For our work to produce financial or nonfinancial 
benefits, the Congress or federal agencies must implement these 
recommendations. As part of our audit responsibilities under generally 
accepted government auditing standards, we follow up on 
recommendations we have made and report to the Congress on their 
status. Experience has shown that it takes time for some 
recommendations to be implemented. For this reason, this measure is 
the percentage rate of implementation of recommendations made 4 years 
prior to a given fiscal year (e.g., the fiscal year 2011 
implementation rate is the percentage of recommendations made in 
fiscal year 2007 products that were implemented by the end of fiscal 
year 2011). Our experience has shown that if a recommendation has not 
been implemented within 4 years, it is not likely to be implemented. 

Data sources: 
Our Publications Database incorporates recommendations as products are 
issued. The database is updated daily. As our staff monitor 
implementation of recommendations, they submit updated information to 
the database. 

Verification and validation: 
Our policies and procedures specify that our staff must verify and 
document that an agency’s reported actions are adequately being 
implemented. Staff update the status of the recommendations on a 
periodic basis. To accomplish this, our staff may interview agency 
officials, obtain agency documents, access agency databases, or obtain 
information from an agency’s IG. Recommendations that are reported as 
implemented are reviewed by a senior executive in the team and by QCI. 

Summary data are provided to the teams that issued the 
recommendations. The teams check the data regularly to make sure that 
the recommendations they have reported as implemented have been 
accurately recorded. We also provide to the Congress a database with 
the status of recommendations that have not been implemented, and we 
maintain a publicly available database of open recommendations that is 
updated daily. 

Data limitations: 
The data may be underreported because, in some cases, a recommendation 
may require more than 4 years to implement. We also may not count 
cases in which a recommendation is partially implemented. Therefore, 
the data represent a conservative measure of our overall contribution 
toward improving government. 

Client measures: 

Testimonies: 

Definition and background: 
The Congress asks us to testify at hearings on various issues, and 
these hearings are the basis for this measure. Participation in 
hearings is one of our most important forms of communication with the 
Congress, and the hearings at which we testify reflect the importance 
and value of our institutional knowledge in assisting congressional 
decision making. When we have multiple witnesses with separate 
testimonies at a single hearing, we count this as a single testimony. 
We do not count statements submitted for the record when our witness 
does not appear. 

Data sources: 
The data on hearings at which we testified are compiled in our 
Congressional Hearing System managed by staff in our Office of 
Congressional Relations (Congressional Relations). 

Verification and validation: 
The teams responding to requests for testimony are responsible for 
entering data into the Congressional Hearing System. After we have 
testified at a hearing, Congressional Relations verifies that the data 
in the system are correct and records the hearing as one at which we 
testified. Congressional Relations provides weekly status reports to 
unit managers, who check to make sure that the data are complete and 
accurate. 

Data limitations: 
This measure does not include statements for the record that we 
prepare for congressional hearings. Also, this measure may be 
influenced by factors other than the quality of our performance in any 
specific year. The number of hearings held each year depends on the 
Congress’s agenda, and the number of times we are asked to testify may 
reflect congressional interest in work in progress as well as work 
completed that year or the previous year. To mitigate this limitation, 
we try to adjust our target to reflect cyclical changes in the 
congressional schedule. We also outreach to our clients on a 
continuing basis to increase their awareness of our readiness to 
participate in hearings. 

Timeliness: 

Definition and background: 
The likelihood that our products will be used is enhanced if they are 
delivered when needed to support congressional and agency decision 
making. To determine whether our products are timely, we solicit 
feedback from the client using an electronic form. We compute the 
proportion of favorable responses to a question related to timeliness. 
Because our products often have multiple congressional clients, we 
often outreach to more than one congressional staff person per 
product. We send a form to key staff working for requesters of our 
testimony statements and to clients of our more significant written 
products—specifically, engagements assigned an interest level of “high”
 by our senior management and those requiring an expected investment 
of 500 staff days or more. One question asks the respondent whether 
the product was delivered on time. When a product that meets our 
criteria is released to the public, we electronically send relevant 
congressional staff an e-mail message containing a link to the form. 
When this link is accessed, the form recipient is asked to respond to 
the timeliness question using a five-point scale—”strongly agree,” “ 
generally agree,” “neither agree nor disagree,” “generally disagree,” 
or “strongly disagree”—or to choose “not applicable/no answer.” For 
this measure, favorable responses are “strongly agree” and “generally 
agree.” 

Data sources: 
To identify the products that meet our criteria (testimonies and other 
products that are high interest or expected to reach 500 staff days or 
more), we run a query against our Publications Database, which is 
maintained by a contractor. To identify appropriate recipients of the 
form for products meeting our criteria, we ask the engagement teams to 
provide in our Product Numbering Database e-mail addresses for 
congressional staff serving as contacts on a product. Relevant 
information from both of these databases is fed into another database 
that is managed by QCI. This database then combines product, form 
recipient, and data from our Congressional Relations staff and creates 
an e-mail message with a web link to the form. (Congressional 
Relations staff serve as the contacts for form recipients.) The e-mail 
message also contains an embedded client password and unique client 
identifier to ensure that a recipient is linked with the appropriate 
form. Our Client Feedback Database creates a record with the product 
title and number and captures the responses to every form sent back to 
us electronically. 

Verification and validation: 
QCI staff review released GAO products to check the accuracy of the 
addressee information in the QCI database. QCI staff also check the 
congressional staff directory to ensure that form recipients listed in 
the QCI database appear there. In addition, our Congressional 
Relations staff review the list of form recipients entered by the 
engagement teams and identify the most appropriate congressional staff 
person to receive a form for each client. E-mail messages that are 
inadvertently sent with incorrect e-mail addresses automatically 
reappear in the form approval system. When this happens, QCI staff 
correct the errors and resend the e-mail message. 

Data limitations: 
Testimonies and written products that met our criteria for this 
measure represented about 56 percent of the congressionally requested 
written products we issued during fiscal year 2011. We exclude from 
our timeliness measure low, and medium-interest reports expected to 
take fewer than 500 staff days when completed, reports addressed to 
agency heads or commissions, some reports mandated by the Congress, 
classified reports, and reports completed under the Comptroller 
General's authority. Also, if a requester indicates that he or she 
does not want to complete a form, we will not send one to this person 
again, even though a product subsequently requested meets our criteria. 
The response rate for the form is 25 percent, and 98 percent of those 
who responded answered the timeliness question. We received responses 
from one or more people for about 50 percent of the products for which 
we sent a form in fiscal year 2011. 

People measures: 

New hire rate: 

Definition and background: 
This performance measure 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 our strategic goals; projected workload 
changes; and other changes such as retirements, other attrition, 
promotions, and skill gaps. The workforce plan for the upcoming year 
specifies the number of planned hires. The Chief Operating Officer, 
Chief Administrative Officer, Deputy Chief Administrative Officer, 
Chief Human Capital Officer, and Controller meet monthly to monitor 
progress toward achieving the workforce plan. Adjustments to the 
workforce plan are made throughout the year, if necessary, to reflect 
changing needs and conditions. 

Data sources: 
The Executive Committee approves the workforce plan. The workforce 
plan is coordinated and maintained by the Chief Administrative 
Officer. Data on accessions—that is, new hires coming on board—is 
taken from a database that contains employee data from the Department 
of Agriculture’s National Finance Center (NFC) database, which handles 
payroll and personnel data for us and other agencies. 

Verification and validation: 
The Chief Administrative Officer maintains a database that monitors 
and tracks all our hiring offers, declinations, and accessions. In 
coordination with our Human Capital Office, our CAO staff enter 
workforce information supporting this measure into the CAO database. 
While the database is updated on a daily basis, CAO staff provide 
monthly reports to the Chief Operating Officer and the Chief 
Administrative Officer that allow them to monitor progress by unit in 
achieving workforce plan hiring targets. The CAO continually monitors 
and reviews accessions maintained in the NFC database against its 
database to ensure consistency and to resolve discrepancies. 

Data limitations: 
There is a lag of one to two pay periods (up to 4 weeks) before the 
NFC database reflects actual data. We generally allow sufficient time 
before requesting data for this measure to ensure that we get accurate 
results. 

Retention rate: 

Definition and background: 
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 to retain them. This measure is one indicator that we are 
attaining that objective and is the complement of attrition. 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 onboard strength. We calculate this measure with and 
without retirements. 

Data sources: 
Data on retention-—that is, people who are on board at the beginning 
of the fiscal year and people on board at the end of the fiscal year— 
are taken from a CAO database that contains some data from the NFC 
database, which handles payroll and personnel data for us and other 
agencies. 

Verification and validation: 
CAO staff continually monitor and review accessions and attritions 
against their database that contains NFC data and follow up on any 
discrepancies. In fiscal year 2009, we developed standard operating 
procedures, which are still in effect, to document how we calculate 
and ensure quality control over data relevant to this measure. 

Data limitations: 
See New hire rate, Data limitations. 

Staff development: 

Definition and background: 
One way that we measure how well we are doing and identify areas for 
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 GAO’s overall operations, work 
environment, and organizational culture and how they rate our 
managers—-from the immediate supervisor to the Executive Committee-—on 
key aspects of their leadership styles. The survey consists of over 
100 questions. To further ensure confidentiality, in fiscal year 2011 
the contractor also analyzed the data. 

This measure is based on staff’s favorable responses to three of the 
six questions related to staff development on our annual employee 
survey. This subset of questions was selected on the basis of senior 
management’s judgment about the questions’ relevance to the measure 
and specialists’ knowledge about the development of indexes. Staff 
were asked to respond to three questions on a five-point scale or 
choose “no basis to judge/not applicable” or “no answer.” 

Data sources: 
The survey questions we used for this measure ask staff how much 
positive or negative impact (1) external training and conferences and 
(2) on-the-job training had on their ability to do their jobs during 
the last 12 months. From the staff who expressed an opinion, we 
calculated the percentage of staff selecting the two categories that 
indicate satisfaction with or a favorable response to the question. 
For this measure, the favorable responses were either “very positive 
impact” or “generally positive impact.” In addition, the survey 
question asked how useful and relevant to your work did you find 
internal (Learning Center) training courses. From staff who expressed 
an opinion, we calculated the percentage of staff selecting the three 
categories that indicate satisfaction with or a favorable response to 
the question. For this measure, the favorable responses were “very 
greatly useful and relevant,” “greatly useful and relevant,” and 
"moderately useful and relevant.” Responses of “no basis to judge/not 
applicable” or “no answer” were excluded from the calculation. While 
including “no basis to judge/not applicable” or “no answer” in the 
calculation would result in a different percentage, our method of 
calculation is an acceptable survey practice, and we believe it 
produces a better and more valid measure because it represents only 
those employees who have an opinion on the questions. 

Verification and validation: 
The employee feedback survey gathers staff opinions on a variety of 
topics. The survey is password protected, and only the outside 
contractor has access to passwords. In addition, when the survey 
instrument was developed, extensive focus groups and pretests were 
undertaken to refine the questions and provide definitions as needed. 
In fiscal year 2011, our response rate to this survey was about 70 
percent, which indicates that its results are largely representative 
of the GAO population. In addition, many teams and work units conduct 
follow-on work to gain a better understanding of the information from 
the survey. 

Data limitations: 
The information contained in the survey is the self-reported opinions 
of staff expressed under conditions of confidentiality. Accordingly, 
there is no way to further validate those expressions of opinion. 

The practical difficulties of conducting any survey may introduce 
errors, commonly referred to as nonsampling errors. These errors could 
result from, for example, respondents misinterpreting a question or 
data entry staff incorrectly entering data into a database used to 
analyze the survey responses. Such errors can introduce unwanted 
variability into the survey results. We took steps in the development 
of the survey to minimize nonsampling errors. Specifically, when we 
developed the survey instrument we held extensive focus groups and 
pretests to refine the questions and define terms used to decrease the 
chances that respondents would misunderstand the questions. We also 
limited the chances of introducing nonsampling errors by creating a 
web-based survey for which respondents entered their answers directly 
into an electronic questionnaire rather than entering the data into a 
database, thus eliminating a potential source of error. 

Staff utilization: 

Definition and background: 
This measure is based on staff’s favorable responses to three of the 
six questions related to staff utilization on our annual employee 
survey. This subset of questions was selected on the basis of senior 
management’s judgment about the questions’ relevance to the measure 
and specialists’ knowledge about the development of indexes. Staff 
were asked to respond to these three questions on a five-point scale 
or choose “no basis to judge/not applicable” or “no answer.” (For 
background information about our entire employee feedback survey, see 
Staff development.) 

Data sources: 
These data come from our staff’s responses to an annual web-based 
survey. The survey questions we used for this measure ask 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 (3) in general, I was utilized effectively. See 
also Staff development, Data sources. 

Verification and validation: 
See Staff development, Verification and validation. 

Data limitations: 
See Staff development, Data limitations. 

Effective leadership by supervisors: 

Definition and background: 
This measure is based on staff’s favorable responses to 10 of 20 
questions related to six areas of supervisory leadership on our annual 
employee survey. This subset of questions was selected on the basis of 
senior management’s judgment about the questions’ relevance to the 
measure and specialists’ knowledge about the development of indexes. 
Specifically, our calculation included responses to 1 of 4 questions 
related to empowerment, 2 of 4 questions related to trust, all 3 
questions related to recognition, 1 of 3 questions related to 
decisiveness, 2 of 3 questions related to leading by example, and 1 of 
3 questions related to work life. Staff were asked to respond to these 
10 questions on a five-point scale or choose “no basis to judge/not 
applicable” or “no answer.” In fiscal year 2009 we changed the name of 
this measure from “Leadership” to its current nomenclature to clarify 
that the measure reflects employee satisfaction with the immediate 
supervisor’s leadership. 

Data sources: 
These data come from our staff’s responses to an annual web-based 
survey. The survey questions we used for this measure ask staff about 
empowerment, trust, recognition, decisiveness, leading by example, and 
work life as they pertain to the respondent’s immediate supervisor. 
Specifically, the survey asked staff the following questions about 
their immediate supervisor during the last 12 months: (1) gave me the 
opportunity to do what I do best; (2) treated me fairly; (3) acted 
with honesty and integrity toward me; (4) ensured that there was a 
clear link between my performance and recognition of it; (5) gave me 
the sense that my work is valued; (6) provided me meaningful 
incentives for high performance; (7) made decisions in a timely 
manner; (8) demonstrated GAO’s core values of accountability, 
integrity, and reliability; (9) implemented change effectively; and 
(10) dealt effectively with equal employment opportunity and 
discrimination issues. See also Staff development, Data sources. 

Verification and validation: 
See Staff development, Verification and validation. 

Data limitations: 
See Staff development, Data limitations. 

Organizational climate: 

Definition and background: 
This measure is based on staff’s favorable responses to 5 of the 13 
questions related to organizational climate on our annual employee 
survey. This subset of questions was selected on the basis of senior 
management’s judgment about the questions’ relevance to the measure 
and specialists’ knowledge about the development of indexes. Staff 
were asked to respond to these 5 questions on a five-point scale or 
choose “no basis to judge” or “no answer.” 

Data sources: 
These data come from our staff’s responses to an annual web-based 
survey. The survey questions we used for this measure ask staff to 
think back over the last 12 months and indicate how strongly they 
agree or disagree with each of the following statements: (1) a spirit 
of cooperation and teamwork exists in my work unit; (2) I am treated 
fairly and with respect in my work unit; (3) my morale is good; (4) 
sufficient effort is made in my work unit to get the opinions and 
thinking of people who work here; and (5) overall, I am satisfied with 
my job. See also Staff development, Data sources. 

Verification and validation: 
See Staff development, Verification and validation. 

Data limitations: 
See Staff development, Data limitations. 

Internal operations measures: 

Help get job done and quality of work life: 

Definition and background: 
To measure how well we are doing at delivering internal administrative 
services to our employees and identify areas for improvement, we 
conduct an annual web-based survey in November. The customer 
satisfaction survey on administrative services, conducted by an 
outside contractor, is administered to all of our employees. Through 
the survey we encourage our staff to indicate how satisfied they are 
with 17 services that help them get their jobs done and another 15 
services that affect their quality of work life. 

As part of the survey, employees are asked to rate, on a scale of 1 
(low) to 5 (high), those services that are important to them and that 
they have experience with or have used recently. Then, for each 
selected service, employees are asked to indicate their level of 
satisfaction from 1 (low) to 5 (high), and provide a written reason 
for their rating and recommendations for improvement if desired. Based 
on employees’ responses to these questions, we calculate a composite 
score. 

Data sources: 
These data come from our staff’s responses to an annual web-based 
survey. To determine how satisfied our employees are with internal 
administrative services, we calculate composite scores for two 
measures. One measure reflects the satisfaction with the 17 services 
that help employees get their jobs done. These services include 
Internet and intranet services, information technology customer 
support, mail services, and voice communication services. The second 
measure reflects satisfaction with another 15 services that affect 
quality of work life. These services include assistance related to pay 
and benefits, building maintenance and security, and workplace safety 
and health. The composite score represents how employees rated their 
satisfaction with services in each of these areas relative to how they 
rated the importance of those services to them. The importance scores 
and satisfaction levels are both rated on a scale of 1 (low) to 5 
(high). 

Verification and validation: 
The satisfaction survey on administrative services is housed on a 
website maintained by a contractor, and only the contractor has the 
ability to link the survey results with individual staff. Our survey 
response rate was 56 percent in 2010. To ensure that the results are 
largely representative of our population, we analyze them by 
demographic representation (unit, tenure, location, band level, and 
job type). Each unit responsible for administrative services conducts 
follow-on work, including analyzing written comments to gain a better 
understanding of the information from the survey. 

Data limitations: 
The information contained in the survey is the self-reported opinions 
of staff expressed under conditions of confidentiality. Accordingly, 
there is no way to further validate those expressions of opinion. We 
do not plan any actions to remedy this limitation because we feel it 
would violate the pledge of confidentiality that we make to our staff 
regarding the survey responses. 

The practical difficulties of conducting any survey may introduce 
errors, commonly referred to as nonsampling errors. These errors could 
result, for example, from respondents misinterpreting a question or 
entering their data incorrectly. Such errors can introduce unwanted 
variability into the survey results. We limit the chances of 
introducing nonsampling errors by using a web-based survey for which 
respondents enter their answers directly into an electronic 
questionnaire. This eliminates the need to have the data entered into 
a database by someone other than the respondent, thus eliminating a 
potential source of error. 

Source: GAO. 

[End of Table 19: How We Ensure Data Quality for Our Annual 
Performance Measures] 

[End of Part V: Appendix on Data Quality] 

Image Sources: 

This section contains credit and copyright information for images and 
graphics in this product, as appropriate, when that information was 
not listed adjacent to the image or graphic. 

Front cover: GAO (Capitol, flag, and stars). 

Inside front cover: GAO (Capitol). 

Page i: GAO (Capitol, flag and stars). 

Pages 1, 21, 65, 97, 123, and 125: GAO (flag and stars). 

Page 2: GAO (GAO building, flag, and stars). 

Page 6: GAO (flag and stars). 

Page 14: Map Resources (map). 

Page 26: PhotoDisc (bills), GAO (flag and stars). 

Page 29: Comstock (Lincoln), GAO (flag and stars). 

Page 67: PhotoDisc (School children), GAO (flag and stars). 

Page 76: DoD (Aircraft), GAO (flag and stars). 

Page 83: PhotoDisc (cogs), GAO (flag and stars). 

Page 90: GAO (GAO entrance, flag and stars). 

Page 98: PhotoDisc (Capitol windows), GAO (flag and stars). 

Inside back cover: PhotoDisc (Capitol). 

[End of Image Sources] 

Providing Comments on This Report: 

To provide comments for improving this report, please contact our 
Chief Quality Officer, who can be reached at (202) 512-6100, at 
qci@gao.gov, or at the following address: 

U.S. Government Accountability Office: 441 G Street NW, Room 6K17Q: 
Washington, D.C. 20548: 

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Other web pages of possible interest: 

Legal products: 

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Source: See Image Sources. 

[End of section] 

Footnotes: 

[1] FMFIA requires ongoing evaluations and annual reports on the 
adequacy of internal accounting and administrative control systems of 
each agency. GPRA seeks to improve public confidence in federal agency 
performance by requiring that federally funded agencies develop and 
implement accountability systems based on performance measurement that 
include goals and objectives and measure progress toward them. The 
GPRA Modernization Act of 2010 incorporates additional requirements 
for reporting and transparency, which we have begun to implement. 
FFMIA emphasizes the need to improve federal financial management by 
requiring that federal agencies implement and maintain systems that 
comply with federal financial management systems requirements, 
applicable federal accounting standards, and the U.S. Government 
Standard General Ledger at the transaction level. 

[2] In fiscal years 2009 and 2010, the work performed under the 
Comptroller General’s authority represented 5 percent of our 
engagement efforts each year. 

[3] GAO, The Federal Government’s Long-Term Fiscal Outlook: January 
2011 Update, [hyperlink, http://www.gao.gov/products/GAO-11-451SP] 
(Washington, D.C.: January 2011); GAO, Bid Protest Annual Report to 
the Congress for Fiscal Year 2010, [hyperlink, 
http://www.gao.gov/products/GAO-11-211SP] (Washington, D.C.: Nov. 23, 
2010); and Principles of Federal Appropriations Law: Annual Update of 
the Third Edition, [hyperlink, 
http://www.gao.gov/products/GAO-11-210SP] (Washington, D.C.: March 
2011). 

[4] Our most recent performance plan is available on our website at 
[hyperlink, http://www.gao.gov/products/GAO-11-343SP]. 

[5] A financial benefit is an estimate of the federal cost reduction 
of agency or congressional actions. 

[6] As part of our risk-based engagement management process, we 
identify a new engagement as high interest if the work we need to 
perform will likely require a large investment of our resources, 
involve a complex methodology, or examine controversial or sensitive 
issues. 

[7] Pub. L. No. 111-139, § 21, 124 Stat. 29 (2010), 31 U.S.C. § 712 
Note. 

[8] In comparison, nearly 2,300 bid protests were filed in fiscal year 
2010 and 1,989 in fiscal year 2009. 

[9] B-321063/GAO-11-664, July 21, 2011. 

[10] B-321295, January 31, 2011. 

[11] B-318274, December 23, 2010. 

[12] B-320998, May 4, 2011. 

[13] B-321387, March 30, 2011. 

[14] Note 14 to the financial statements describes our Davis-Bacon Act 
trust function. For more detailed Davis-Bacon Act financial 
information, contact our General Counsel’s Office. 

[15] In fiscal year 2011, GAO operations were segmented into 10 
business cycles: Entity-wide Controls, IT Controls, Property, Travel, 
Procurement, Disbursements, Budget, Fund Balance with Treasury, 
Financial Reporting, and Payroll/Human Capital. 

[End of Footnotes] 

[End of United States Government Accountability Office's Performance 
and Accountability Report Fiscal Year 2011]