GAO UPDATE

By Jeanette Franzel and Maxine Hattery**

Helping a New Administration and Congress with the Job Ahead
GAO is accustomed to supporting the new President, members of Congress, and appointees as a new administration arrives and a new congressional session opens. But the next administration and the 111th Congress take over the reins of governance at a crucial moment in U.S. history. The 2009 presidential transition will be a “critical period for the United States,” Acting Comptroller General Gene Dodaro told the Government Oversight Subcommittee of Senate Committee on Homeland Security and Governmental Affairs. In September 2008 testimony before the subcommittee, he said, “Our nation faces a wartime presidential transition for the first time in 40 years. In addition, this will be the first post-9/11 transition, with a relatively new Department of Homeland Security grappling with the threats we face here at home while experiencing its first change in administration.”

Mr. Dodaro went on to say that the nation’s critical, long-term fiscal challenge is complicated by the turmoil in the housing and financial markets. The crisis has “renewed concerns,” he said, “about whether the current system for overseeing and regulating financial institutions and markets is best suited to meet the nation's evolving needs and 21st century challenges.” GAO plans to issue a report later this year on the evolution of the current regulatory structure and the challenges introduced by changes in the market. As part of this work, GAO is developing a framework to assist Congress in evaluating alternative regulatory reform proposals.

The core of GAO’s contribution to the transition is its synthesis of information gathered and recommendations made in hundreds of audits and the analysis found in audit reports, special reports, and testimonies. A key report, updated with the start of each new Congress, is GAO’s High-Risk list, which focuses attention on areas in need of broad-based transformation or susceptible to waste, fraud, abuse, and mismanagement. Also for the new Congress, GAO will develop a set of questions for use in Senate confirmation hearings for presidential appointees. And in briefings and other formats, GAO will emphasize the need for the administration and Congress to develop strategies for the long-term fiscal sustainability of the federal government.
GAO will be launching a Web site, to be mounted shortly after the election, to provide the new administration and Congress with easy access to transition information. The site will offer information on major challenges facing departments and agencies and will list all open recommendations from GAO audits. The site will also contain information on issues that cut across management and programmatic areas. Background information on the nation’s long-term fiscal sustainability will be available to help members of Congress and the administration increase their understanding and prepare for action on the challenges facing the nation.
From its federal government–wide body of work, GAO will highlight for Congress and the administration, through multiple formats, certain areas of importance, such as

• improper payments in programs that include Medicaid, food stamps, unemployment insurance, and Medicare,
• DOD cost overruns and excess inventory,
• the long-standing problem that has resisted the efforts of Congress and the IRS—the difference between taxes legally owed and taxes paid on time, commonly know as the “tax gap,”
• on the war front, efforts in Iraq and Afghanistan and the Defense Department’s need to meet competing demands and make sound decisions in its investments as it reassesses the military’s readiness; also, the care of service members and veterans, including those wounded in action, many with multiple serious injuries and post-traumatic stress disorder,
• on the home front, challenges in securing the nation’s borders, enforcing immigration laws, and serving those applying for immigration benefits and in strengthening the nation’s critical infrastructure against acts of terrorism,
• health care and the spread of infectious diseases in the global environment,
• the splintered federal responsibility for food safety,
• the drain on the economy from gridlock in our transportation system and our dependence on fossil fuels, and
• lack of a comprehensive process to assess the nation’s capabilities for responding to manmade and natural disasters.

To address the nation’s multidimensional problems, GAO will call attention to the need for integrated solutions. One such solution is the National Response Plan, which establishes a framework for managing domestic incidents that require the involvement of many levels of government, the private sector, and nonprofit organizations.
In keeping with its truth-telling mission, Mr. Dodaro said, GAO hopes to ease the transition of the Congress and the executive branch with clear facts, constructive options, and suggestions that elected officials can use in making policy choices in a pivotal year.

Sharing and Working with Auditors around the World
In this age of increasing globalization, GAO believes that transparency, accountability, and integrity are important in nations around the world, not just for the good of the individual nations but for all nations, including the U.S. The efficient functioning of the global marketplace requires nations to work together to harmonize standards and practices, and so GAO has for many years reached out to our international counterparts in meetings and discussions here at GAO and abroad.

Hundreds of international visitors come to GAO each year to obtain information on our audit practices and the impact of GAO's work. Some come as participants in GAO’s International Auditor Fellowship Program, others as visitors. In turn, GAO officials and analysts reach out to their counterparts in other countries. 

GAO’s annual International Auditor Fellowship Program, a 4-month intensive study course, is designed to strengthen the ability of supreme audit institutions (SAI) to fulfill their missions and to enhance accountability and governance worldwide. Since the program’s inception in 1979, over 375 mid- to senior-level officials from the SAIs of more than 90 countries have graduated from the program. Many of them have become Auditors General, Deputy Auditors General, or Government Ministers.

The Fellows program includes classroom instruction, on-the-job training, intergovernmental experience, and the development of strategies to implement change in SAIs. The fellows join in dialogues with international financial institutions; federal, state, and local government officials; congressional committee staff; inspectors general; internal auditors; and the media. Finally, a global forum is held for sharing experiences and best practices in auditing. Once the fellows have returned home, GAO continues to support their development with mentoring and post-program follow-up.

Hundreds of other international visitors come to GAO each year for information on audit practices and the results of GAO's work. The information shared provides a valuable interchange of ideas and helps GAO to develop a wide network of international contacts. Recent visitors include the Auditor General of Japan, Auditor General of Ethiopia and the chair of the Ethiopian Parliament Public Accounts Committee, Inspector General of France, and members of the Swedish Parliament.

GAO staff also go abroad to learn from other countries and to share the U.S. experience. GAO attended a meeting of the European Congress of Auditors in Poland in June at which the President of Poland spoke. The topics of the meeting included enhancing audit quality, conducting audits of programs for the disabled in the workforce, and education.

Luxembourg was the location of a meeting with the European Union Audit Commission where GAO discussed transforming audit organizations for filling a broader accountability role beyond audit. GAO found its quality assurance program of great interest to the Europeans, particularly against the background of the European process, which includes a committee of representatives from 27 member nations.

GAO was also invited to give a presentation on acquisition law under the auspices of the United States Trade Representative in Beijing, China, and visited the Chinese National Audit Office while there. All of these overseas visits were paid for by the sponsoring organizations.

Independent Peer Review Teams Cite GAO’s Best Practices
Two independent peer reviews—one conducted by a team of international auditors, the other by one of the nation’s leading accounting firms—have given GAO clean opinions on the design and implementation of its quality assurance systems.
The international team, lead by the office of the Auditor General of Canada, examined GAO’s performance audits. Canada led the audit team, which included Australia, the Netherlands, and the United Kingdom. The accounting firm KPMG LLP focused on GAO’s financial audit work and attestation engagements.

Under Generally Accepted Government Auditing Standards, GAO is required to undergo an independent external assessment of its quality assurance systems every three years. The 2004 assessments of GAO’s quality assurance system also provided a clean opinion. Those reviews were also led by KPMG and the Office of the Auditor General of Canada—with assistance from counterpart audit institutions in Australia, Mexico, the Netherlands, Norway, South Africa, and Sweden.

The reports from the international peer review and KPMG LLP are posted on the Internet at http://www.gao.gov/about/review.html.

**Jeanette Franzel, Director, Financial Management and Assurance;
Maxine Hattery, Financial Management and Assurance; U.S. Government
Accountability Office

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