GAO UPDATE
by Jeanette Franzel and Maxine Hattery
From the Comptroller General's Office:
Taxes, Health Care, and Performance Budgeting
Forum Explores Options for Closing the Tax Gap
Together with the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT), GAO sponsored a forum, "Tax Compliance: Options for Improvement and Their Budgetary Potential," in September.
The purpose of the joint forum was to encourage an exchange of views on how to rank options for improving tax compliance, the improvement in the government's fiscal situation that can be expected from each option, and identifying related research needs. Participants in the forum included Comptroller General David M. Walker; CBO Director Peter Orszag; and both Tom Barthold, Acting Chief of Staff, and Ed Kleinbard, the newly appointed Chief of Staff of the Joint Committee on Taxation; national and state leaders; and experts on tax compliance.
The half-day forum was held on Capitol Hill to encourage participation by members of Congress and their staff. As with similar Comptroller General forums, the discussion was not-for-attribution to encourage a candid exchange of views. GAO plans to publish a summary of the proceedings in early 2008.
Forum on the Fiscal Future of Health Care
The critical importance of the fiscal future of health care is a critical factor in the federal budget and the nation's fiscal future. In May 2007, Mr. Walker convened a forum on health care in the public and private sectors, and in September 2007, GAO issued a summary of the forum discussion sessions focusing on cost and personal responsibility; coverage of the uninsured; and quality, standards, and outcomes.
Participants in the discussion included health policy experts, business leaders, and public officials selected for their subject matter knowledge and representation of various perspectives. Discussion sessions were led by distinguished economists Robert Reischauer and Mark Pauly and other leading health care authorities. Nationally known health insurance expert Leonard Schaeffer served as the keynote speaker. At the conclusion of the forum, participants were anonymously polled for their views on points raised during the discussions.
Health care spending. Participants did not reach agreement on whether the federal government should have an aggregate spending limit, such as a percentage of the federal budget, but supported other measures, such as federal value-based purchasing, reformed tax treatment of health care, and limits on direct-to-consumer advertising of prescription drugs.
Health insurance coverage. There was near unanimity that ensuring the provision of health care coverage for all Americans should be a federal responsibility. The group also strongly agreed that the federal government should assure the existence of a well-functioning health insurance market, whereas they did not agree on whether the nation should continue to rely on employer-provided insurance as the dominant method through which most Americans obtain their health insurance coverage.
Performance measures. Participants strongly supported the federal government's taking the lead in developing new indicators of health system outcomes and performance. The group also strongly favored having a broad-based independent body develop national, evidence-based practice standards.
Policy challenges. The keynote speaker opined that a limited window of time—about 8 to 10 years—remains for the health care community to engage in effective reform. After that, he noted, budget and national security concerns will dominate. Because neither purely regulatory nor purely market-based approaches are politically viable, pragmatism rather than ideology should drive health policy. He concluded that we need a blended strategy, stating, "We have to shape our future now or be its victim."
Health Care 20 Years from Now: Taking Steps Today to Meet Tomorrow's Challenges (GAO-07-1155SP). For more information, contact A. Bruce Steinwald at (202) 512-7114 or steinwalda@gao.gov.
Testimony on Reexamining Programs with Performance Budgeting
In testimony before the House Committee on the Budget, the Comptroller General recommended the use of performance budgeting in a reexamination of federal programs. To ensure that performance budgeting produces information that is "useful and used," Mr. Walker recommended that Congress "develop structures and processes that are flexible, adaptable, and inclusive of various perspectives to conduct successful performance reviews on those issues that cross jurisdictional boundaries."
Mr. Walker has called for reexamination of federal programs in speeches and the Fiscal Wake-Up Tour and set out the goal in his testimony" "to enhance the government's capacity to assess competing claims for federal dollars by arming decision makers with better information both on the results of individual programs as well as on entire portfolios of programs and tools—encompassing a wide range of discretionary, entitlement, tax, and regulatory approaches—addressing common goals."
His testimony focused on three main points:
- the extent of the nation's long-term fiscal and governance challenges necessitates a thorough reexamination of government programs and spending;
- performance budgeting can help accomplish the goal of reexamination; and
- congressional support and comprehensive crosscutting program assessments are critical to reexamination.
"GAO stands ready," Mr. Walker said, "to assist Congress in addressing the much needed baseline review of existing federal programs, policies, functions, and activities."
21st Century Challenges: How Performance Budgeting Can Help (GAO-07-1194T) September 20, 2007.
INCOSAI: The International Congress of Supreme Audit Institutions
In November 2007, representatives from GAO will attend an important international meeting of national, government audit offices referred to as "Supreme Audit Institutions" from other UN-member countries. The Congress will be convened by the International Organization of Supreme Audit Institutions (INTOSAI).
For more than 50 years INTOSAI has provided an institutionalized framework for supreme audit institutions to promote development and transfer of knowledge; improve government auditing worldwide; and enhance professional capacities, standing and influence of member SAIs in their respective countries.
Founded in 1953, INTOSAI is autonomous, independent, and nonpolitical. It is a nongovernmental organization with special consultative status with the Economic and Social Council (ECOSOC) of the United Nations. At the time of its first meeting, INTOSAI comprised 34 member SAIs; today, there are 186 members.
Comprising all members of the organization, INCOSAI meets once every three years and offers INTOSAI members an opportunity to share experiences, discuss issues, and pass resolutions and recommendations to improve government accountability worldwide. Participants include delegations of member SAIs as well as representatives of the United Nations, the World Bank, and other international and professional organizations.
INCOSAI XIX will be held November 5 through 10, 2007, in Mexico City. There will be two themes for the meeting: Theme I, the management, accountability, and audit of public debt; and Theme II, performance evaluation systems based on universally accepted In addition, the committees, working groups, and task forces that work to advance INTOSAI's technical agendas between the 3-year Congress meetings will report to delegates on the results of their work.
A key INTOSAI project related to financial auditing is being carried out by the Financial Audit Guidelines Subcommittee. The objective is to develop a high-quality, globally accepted set of guidelines for the audit of financial statements in the public sector. The project utilizes the International Standard on Audits (ISAs) as the starting point. The INTOSAI subcommittee is in the process of drafting practice notes for all ISAs in order to provide guidance regarding special considerations for the private sector. GAO has been participating in this effort. The INTOSAI subcommittee hopes to have 12 practice notes ready for endorsement by INCOSAI in November 2007. The overall goal is to have the full set of guidance completed for 2010.
Information is available on the INTOSAI Financial Audit Guidelines Subcommittee Web site at http://psc.rigsrevisionen.dk/fas, or fax or e-mail the FAS Project Secretariat: fax, ++46-8-5171 4111; e-mail, projectsecretariat@riksrevisionen.se.
FAM: A Valuable Tool Is Getting an Update
The GAO/PCIE Financial Audit Manual (FAM) was first issued in 2001, a joint project of GAO and the President's Council on Integrity and Efficiency (PCIE), the organization of presidentially appointed Inspectors General. Based on the Yellow Book, the FAM was developed to guide auditors of the financial statements of federal government departments and agencies and presents a methodology for performing the audits in accordance with professional standards. A valuable tool for strengthening government accountability for tax dollars, the manual comes in three volumes and includes two checklists, for federal accounting (FAM 2010) and federal reporting and disclosure (FAM 2020).
The last major revisions to the FAM were issued in July 2004 and, to keep up with continuing rapid change in accountability, a major update began in January 2007. GAO and the PCIE created a joint FAM Working Group that comprises 18 GAO auditors and 18 PCIE representatives from offices of Inspectors General experienced in conducting federal government financial audits. After a 30-day exposure and the incorporation of suggested changes, the updated FAM Volume 3, "Accounting and Reporting Checklists," is now available on the Web. Public exposure drafts of FAM Volume 1, "Audit Methodology" (GAO-07-1173G), and Volume 2, "Audit Tools," are available online with the exposure period ending January 31, 2008. The final version is expected to be issued online by March 31, 2008.
Information is available on the GAO Web site at http://www.gao.gov/. (See "Key References" and click on "Financial Audit Manual" to access the current FAM.) Volume 3 checklists in a fillable Word format are also available for download in a zipped file as are (unrevised) sections of Volumes 1 and 2. If you have questions about the FAM or wish to provide public comments, e-mail fam@gao.gov.
Selected Reports and Testimonies
Federal Emergency Management Agency: Ongoing Challenges Facing the National Flood Insurance Program (GAO-08-118T) October 2, 2007.
The Nation's Long-Term Fiscal Outlook, August 2007 Update: Despite Recent Improvement in the Annual Deficit, Federal Fiscal Policy Remains Unsustainable (GAO-07-1261R) September 28, 2007.
U.S.-China Economic And Security Review Commission: Actions Needed to Improve Controls over Key Management Functions (GAO-07-1128) September 28, 2007.
Smithsonian Institution: Funding Challenges Affect Facilities' Conditions and Security, Endangering Collections (GAO-07-1127) September 28, 2007.
DOD Should Provide Congress and the American Public with Monthly Data on Enemy-Initiated Attacks in Iraq in a Timely Manner (GAO-07-1048R) September 28, 2007.
Influenza Pandemic: Opportunities Exist to Clarify Federal Leadership Roles and Improve Pandemic Planning (GAO-07-1257T) September 26, 2007.
Highlights of a Forum: Health Care 20 Years from Now—Taking Steps Today to Meet Tomorrow's Challenges (GAO-07-1155SP) September 7, 2007.
National Flood Insurance Program: FEMA's Management and Oversight of Payments for Insurance Company Services Should Be Improved (GAO-07-1078) September 5, 2007.
No Child Left Behind Act: Education Should Clarify Guidance and Address Potential Compliance Issues for Schools in Corrective Action and Restructuring Status (GAO-07-1035) September 5, 2007
Disaster Housing: Implementation of FEMA's Alternative Housing Pilot Program Provides Lessons for Improving Future Competitions (GAO-07-1143R) August 31, 2007
Financial Management: Long-standing Financial Systems Weaknesses Present a Formidable Challenge (GAO-07-914) August 3, 2007
Gulf Coast Rebuilding: Observations on Federal Financial Implications (GAO-07-1079T) August 2, 2007
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