GAO Update

by Jeanette Franzel & Maxine Hattery**

Serving Congress & the Nation: What’s in Store for the Next 5 Years
As the audit and investigative arm of the U.S. Congress, the U.S. Government Accountability Office has oversight responsibilities that encompass the federal government, its service to the nation, and its role in the global community. While a single GAO engagement may drill deep into one program, that work is affected by national and worldwide trends. Strategic planning for GAO is a roadmap for its efforts, but it also offers a panoramic view of our government and the challenges we face as a nation. As in previous editions, GAO’s Strategic Plan: Serving the Congress and the Nation for fiscal years 2010 through 2015 identifies trends that frame proposed goals and strategies.

Pressures to reduce the federal deficit are occurring as the nation is looking toward economic recovery. The need for analysis of programs and their effectiveness remains critical. Strategic financial management issues have taken on even greater importance as the federal government and the nation struggle with recovery act programs and issues. Fostering the improvements in the federal government’s financial management and assurance will be critical in addressing GAO’s strategic goals.

Identifying fraud, waste, and abuse has been raised to the level of a strategic objective with four performance goals: to perform forensic audits to identify and address vulnerabilities; conduct special investigations and security and vulnerability assessments; investigate allegations received through GAO’s whistleblower hotline, FraudNET; and identify ways to strengthen accountability for the federal government’s assets and operations.

At a time when the tension between environmental and energy needs could hardly be clearer, such issues receive strengthened emphasis in the revised plan. One of GAO’s new performance goals is to “assess the nation’s ability to ensure reliable and environmentally sound energy for current and future generations.”

GAO invited comments on a draft of the plan from members of Congress and their staff; the Comptroller General’s Advisory Board as well as other GAO advisory entities, which include representatives from the federal Inspector General, state and local government audit communities, and academia; GAO’s sister agencies, the Congressional Budget Office, and the Congressional Research Service.

The plan comprises 4 strategic goals, 20 strategic objectives, 96 performance goals, and more than 300 key efforts. The following eight trends in the nation and the world have shaped GAO’s goals and focus for serving Congress and the American people.

Trend: Evolving security threats
U.S. national security faces threats from global insecurity brought by the global recession; nuclear, biological, chemical, and other dangerous weapons; terrorism at home and abroad; regional instability in the Middle East, Afghanistan, Pakistan, and East Africa; and attacks on the U.S. information technology infrastructure.

GAO has also identified emerging threats brought on by competition for scarce energy resources and effects of climate change that could increase global poverty, social tensions, environmental degradation, and food scarcity.

To manage the demands of these threats, the government will need to develop new capabilities while under intense pressure to reduce most federal agencies’ budgets. GAO can play a useful role in evaluating long-term costs and trade-offs for restructuring U.S. capabilities.

Trend: Urgent fiscal sustainability and debt challenges
For more than a decade, each of GAO’s fiscal simulations have shown the federal government to be on a path of unsustainable deficits and debt path due to spending pressures. One of GAO’s fiscal simulations (which are based on historical trends and policy preferences) shows that if the federal government doesn’t change its policies, debt held by the public as a share of national income or gross domestic product (GDP) could exceed the historical high reached in the aftermath of World War II by 2020—10 years sooner than the simulation showed just 2 years ago.

Challenges Affecting the Federal Budget in the Near Term

Source: GAO.
a - Based on Congressional Budget Office’s (CBO) January 2010 baseline projections.
b - Based on 2009 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds (May 12, 2009). Projections showing the percentage of funding from general revenue reaching 45 percent by law trigger a “Medicare funding warning,” requiring a proposal from the President in response.

GAO will continue to assist Congress by identifying opportunities to reduce spending; lower the risk of waste, fraud, abuse, and improper payments; identify areas for potential reform; narrow the gap between taxes owed and taxes collected; and fulfill its new mandate to assess duplication and overlap among federal programs and agencies. To help Congress monitor the government’s financial and fiscal condition, GAO will continue to conduct financial statement audits and develop long-term fiscal simulations and analyses of federal deficits, federal debt levels, and the state and local sector.

Trend: Economic recovery and restored job growth
GAO staff have joined with their colleagues at other national audit institutions around the world to examine the causes of the national and global financial crisis and devise means to protect taxpayers and assure program integrity in the future.

GAO’s current work includes statutory responsibilities for TARP under the Emergency Economic Stability Act and the Recovery Act that include bimonthly reports. GAO also plans work on financial market oversight and reform; efforts to ensure the stability of banking, housing, and financial markets; functioning of the mortgage market and disposition of Fannie Mae and Freddie Mac; monitoring services to assist job seekers and low-income families; plans to boost the economy; the world financial system and trade promotion; and state fiscal conditions.

Trend: Changing dynamics of global interdependence and shifts in power
To respond to the challenges and opportunities of global interdependence, GAO proposes to build on past work to inform Congress and policymakers about the complexities of regulating financial institutions and markets in a globally interconnected and competitive world. GAO also plans cross-border work on regulating the safety of medical products, food, and consumer products to help the Congress monitor and oversee regulatory efforts in these areas.

GAO will evaluate the government’s efforts to prevent, prepare for, and respond to public health emergencies; improve the U.S. image abroad; promote exports and job creation. 

Trend: Advances in science, technology, engineering, and mathematics
The rapid growth of nano-, biomedical, and information technology carries with it both promise and risks. To support the increasing number and sophistication of congressional requests on complex issues, GAO proposes to expand its knowledge and expertise and has already increased staffing and established a Center for Science, Technology, and Engineering.

For 2010 through 2015, GAO’s assessments in science and technology will include nanomaterials, climate remediation, counterterrorism, next-generation space systems, and technology-related social and behavioral norms.

Trend: Increasing impact of networks and virtualization
The growing influence of networks and virtualization is a trend newly recognized in GAO’s strategic planning. Falling costs, increasing performance, and wider availability of information networks and virtualization are leading to changes in the way information is created and shared.This change affects not only how people work and learn, but also how they think and what they expect from their government.

GAO will assess federal efforts to promote affordable access to telephone and the Internet, management of government telecommunications and interconnected systems, efforts to strengthen the resiliency of critical national assets, networks, and systems, and improve the federal workforce infrastructure.

Trend: Shifting roles in government and governance
The line between government and nongovernmental work is less clear than it once was: private contractors perform support services for government while government takes on additional roles, responsibilities, and even financial stakes in the private sector. Roles have also shifted between state and local government and the federal government and between government and nongovernmental organizations.

GAO will assess the federal government’s strategy for managing its reliance on contractors and identify ways to improve acquisition in federal agencies and opportunities to improve the coordination, collaboration, and governance of networks of governmental and nongovernmental organizations. GAO will also focus efforts on such high-risk areas as the U.S. Postal Service’s financial condition, oversight of food and drug safety, and cybersecurity efforts.

Trend: Demographic and societal changes confronting the young and old
To meet the challenges of worldwide population growth, migration, and aging, government policymakers will need solid information and analysis. The federal statistical system is a major contributor of such data and analysis, and so GAO will identify gaps in information and advise agencies on increasing the value of their information products.

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