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United States Government Accountability Office: 
GAO: 

Auditing and Advising in a Time of Transition: 

17th Biennial Forum of Government Auditors: 
Philadelphia, PA: 
May 21, 2008: 

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

GAO-08-842CG: 

Presentation Overview: 

* Upcoming transitions and GAO’s role. 

* Common challenges confronting federal, state, and local governments. 

* Implications of global developments. 

Upcoming Transitions: 

* The first time since 1952 that there is neither an incumbent 
President nor Vice President running. 

* Only the second major transition in the last 16 years; the first in a 
post 9/11 environment. 

* Eleven states and two territories holding gubernatorial elections. 

Presidential Transition Act: 

* Enacted in 1964 for an orderly transfer of executive power; 

* Provides for federal funding and disclosures; 

* Recognizes GAO as important resource. 

GAO’s Evolving Strategy to Serve the Congress and the Nation: 

* Continue identifying major risks, 21st century challenges, and 
opportunities; 

* Press forward on key management reforms; 

* Sustain attention on the nation’s long-term fiscal imbalance. 

GAO’s Role in Transition Efforts: 

* Update the high-risk list, which covers four areas: 
- broad-based transformations; 
- federal contracting; 
- tax law administration; 
- insurance and benefit programs; 

* Outreach to new members and their staff; 

* Develop transition websites and materials: 
- salient points from key GAO products; 
- agency-specific program and management issues; 
- crosscutting/government-wide issues; 
- open recommendations. 

* Reviewing agencies' plans, with a particular focus on homeland 
security; 

* Monitoring the presidential transition to capture and highlight 
lessons learned and possible future revisions to the Presidential 
Transition Act. 

Common Challenges: 

In light of transitions, federal, state, and local governments will 
need to maintain focus on: 

* emergency preparedness & homeland defense; 

* critical infrastructure systems; 

* 2010 Census. 

Emergency Preparedness and Homeland Defense: 

* Role of the “new” FEMA; 

* Gaps in NORTHCOM collaboration; 

* National Guard and Reserve readiness; 

* Public health systems and pandemic planning. 

The New FEMA: 

* FEMA given the lead to prepare for and respond to major disasters, 
including catastrophic disasters and terrorist incidents; 

* FEMA, rather than the Red Cross, designated as the lead for mass care 
and shelter; 

* FEMA to build robust partnerships with states, local governments, and 
nonprofit/private organizations. 

FEMA has enhanced its responsibilities for coordinating the activities 
of voluntary organizations: 

* established a national council and 10 regional advisory councils; 

* created regional planning positions to facilitate coordinated 
federal, state, and local emergency preparedness plans. 

However, GAO has found that FEMA does not currently have a sufficient 
number of specialized staff to meet this responsibility. 

Gaps in NORTHCOM’s Collaboration: 

* NORTHCOM officials minimally involved the states in developing 
homeland defense and civil support plans; 

* NORTHCOM officials were unfamiliar with state emergency response 
plans; 

* Existing agreement between NORTHCOM and National Guard Bureau does 
not clearly define roles and responsibilities. 

National Guard and Reserve Readiness: 

* Balancing Guard’s work on overseas missions with efforts related to 
domestic catastrophe; 

* Improving planning efforts to identify the Guard’s requirements for 
responding to large-scale, multi-state civil support missions; 

* Using alternative funding sources for the Guard’s civil support role. 

Public Health System and Pandemic Planning: 

In consideration of a mass casualty event or public health crisis: 

* Assessing states’ preparation for a medical surge and efforts to 
clarify the role of first responders (ongoing); 

* Enhancing the tools of state audit offices to evaluate pandemic 
planning at the local level (e.g., partnership efforts of the Domestic 
Working Group). 

Critical Infrastructure Systems: 

* Power distribution; 
* Water supply; 
* Telecommunications; 
* National defense; 
* Emergency services. 

All rely on computerized information and electronic data. 

Protecting Critical Infrastructure Systems: 

* Improving physical security; 
* Guarding sensitive information (cyber CIP). 

Financing Critical Infrastructure Systems: 

* Recognizing that traditional sources of funds may be insufficient; 

* Exploring alternative financing mechanisms. 

The 2010 Census: 

Long-standing deficiencies and emerging challenges with the 2010 Census 
include: 

* shortcomings in managing information technology; 

* uncertainty of cost estimates; 

* the elimination of several dress rehearsal activities. 

Examples of Relevant CG Forums on Cross-cutting Domestic Issues: 

Recent Forums: 

* Counter-terrorism; 

* Homeland security risk management; 

* Natural resources and environmental sustainability; 

* Transportation policy; 

* Future of health care; 

* Global competitiveness & higher education. 

Upcoming Forums: 

* Investing in children and families; 

* Building a strong human capital base in the government accountability 
community. 

State and Local Fiscal Challenges Add to the Nation’s Fiscal 
Difficulties: 

[See PDF for image] 

This is a line graph with two lines (Federal Surplus/Deficit and 
Combined Surplus/Deficit). The vertical axis represents Percent of GDP 
from -20 to +5 and the horizontal axis represents fiscal years 2000 
through 2050. 

The following data is depicted: 

Fiscal year: 2000: 		
Federal Surplus/Deficit[A]: 2.4; 
Combined Surplus/Deficit: 2.141. 

Fiscal year: 2001: 	
Federal Surplus/Deficit[A]: 1.3; 
Combined Surplus/Deficit: 0.596. 

Fiscal year: 2002: 	
Federal Surplus/Deficit[A]: -1.5; 
Combined Surplus/Deficit: -2.624. 

Fiscal year: 2003: 	
Federal Surplus/Deficit[A]: -3.5; 
Combined Surplus/Deficit: -4.577. 

Fiscal year: 2004: 	
Federal Surplus/Deficit[A]: -3.6; 
Combined Surplus/Deficit: -4.516. 

Fiscal year: 2005: 	
Federal Surplus/Deficit[A]: -2.6; 
Combined Surplus/Deficit: -3.389. 

Fiscal year: 2006: 
Federal Surplus/Deficit[A]: -1.9; 
Combined Surplus/Deficit: - 2.677. 

Fiscal year: 2007: 
Federal Surplus/Deficit[A]: -1.2; 
Combined Surplus/Deficit: -1.8. 

Fiscal year: 2008: 
Federal Surplus/Deficit[A]: -1.6; 
Combined Surplus/Deficit: -2.2. 

Fiscal year: 2009: 
Federal Surplus/Deficit[A]: -2; 
Combined Surplus/Deficit: -2.6. 

Fiscal year: 2010: 
Federal Surplus/Deficit[A]: -2.6; 
Combined Surplus/Deficit: -3.2. 

Fiscal year: 2011: 
Federal Surplus/Deficit[A]: -2.9; 
Combined Surplus/Deficit: -3.5. 

Fiscal year: 2012: 
Federal Surplus/Deficit[A]: -2.8
Combined Surplus/Deficit: -3.5. 

Fiscal year: 2013: 
Federal Surplus/Deficit[A]: -3.3; 
Combined Surplus/Deficit: -4. 

Fiscal year: 2014: 
Federal Surplus/Deficit[A]: -3.6; 
Combined Surplus/Deficit: -4.3. 

Fiscal year: 2015: 
Federal Surplus/Deficit[A]: -3.8; 
Combined Surplus/Deficit: -4.5. 

Fiscal year: 2016: 
Federal Surplus/Deficit[A]: -4.2; 
Combined Surplus/Deficit: -4.9. 

Fiscal year: 2017: 
Federal Surplus/Deficit[A]: -4.4; 
Combined Surplus/Deficit: -5.2. 

Fiscal year: 2018: 
Federal Surplus/Deficit[A]: -4.8; 
Combined Surplus/Deficit: -5.7. 

Fiscal year: 2019: 
Federal Surplus/Deficit[A]: -5.2; 
Combined Surplus/Deficit: -6.1. 

Fiscal year: 2020: 
Federal Surplus/Deficit[A]: -5.6; 
Combined Surplus/Deficit: -6.6. 

Fiscal year: 2021: 
Federal Surplus/Deficit[A]: -6.1; 
Combined Surplus/Deficit: -7.2. 

Fiscal year: 2022: 
Federal Surplus/Deficit[A]: -6.7; 
Combined Surplus/Deficit: -7.8. 

Fiscal year: 2023: 
Federal Surplus/Deficit[A]: -7.2; 
Combined Surplus/Deficit: -8.4. 

Fiscal year: 2024: 
Federal Surplus/Deficit[A]: -7.8; 
Combined Surplus/Deficit: -9.2. 

Fiscal year: 2025: 
Federal Surplus/Deficit[A]: -8.5; 
Combined Surplus/Deficit: -9.9. 

Fiscal year: 2026: 
Federal Surplus/Deficit[A]: -9; 
Combined Surplus/Deficit: -10.6. 

Fiscal year: 2027: 
Federal Surplus/Deficit[A]: -9.7; 
Combined Surplus/Deficit: -11.3. 

Fiscal year: 2028: 
Federal Surplus/Deficit[A]: -10.3; 
Combined Surplus/Deficit: -12. 

Fiscal year: 2029: 
Federal Surplus/Deficit[A]: -10.9; 
Combined Surplus/Deficit: -12.7. 

Fiscal year: 2030: 
Federal Surplus/Deficit[A]: -11.5; 
Combined Surplus/Deficit: -13.4. 

Fiscal year: 2031: 
Federal Surplus/Deficit[A]: -12.2; 
Combined Surplus/Deficit: -14.2. 

Fiscal year: 2032: 
Federal Surplus/Deficit[A]: -12.8; 
Combined Surplus/Deficit: -14.9. 

Fiscal year: 2033: 
Federal Surplus/Deficit[A]: -13.5; 
Combined Surplus/Deficit:-15.7. 

Fiscal year: 2034: 
Federal Surplus/Deficit[A]: -14.2; 
Combined Surplus/Deficit: -16.6. 

Fiscal year: 2035: 
Federal Surplus/Deficit[A]: -14.8; 
Combined Surplus/Deficit: -17.3. 

Fiscal year: 2036: 
Federal Surplus/Deficit[A]: -15.5; 
Combined Surplus/Deficit: -18.1. 

Fiscal year: 2037: 
Federal Surplus/Deficit[A]: -16.3; 
Combined Surplus/Deficit: -18.9. 

Fiscal year: 2038: 
Federal Surplus/Deficit[A]: -16.9; 
Combined Surplus/Deficit: -19.7. 

Fiscal year: 2039: 
Federal Surplus/Deficit[A]: -17.6; 
Combined Surplus/Deficit: -20.5. 

Fiscal year: 2040: 
Federal Surplus/Deficit[A]: -18.3; 
Combined Surplus/Deficit: -21.3. 

Fiscal year: 2041: 
Federal Surplus/Deficit[A]: -19; 
Combined Surplus/Deficit: -22.1. 

Fiscal year: 2042: 
Federal Surplus/Deficit[A]: -19.8; 
Combined Surplus/Deficit: -23. 

Fiscal year: 2043: 
Federal Surplus/Deficit[A]: -20.4; 
Combined Surplus/Deficit: -23.8. 

Fiscal year: 2044: 
Federal Surplus/Deficit[A]: -21.2; 
Combined Surplus/Deficit: -24.6. 

Fiscal year: 2045: 
Federal Surplus/Deficit[A]: -21.9; 
Combined Surplus/Deficit: -25.5. 

Fiscal year: 2046: 
Federal Surplus/Deficit[A]: -22.7; 
Combined Surplus/Deficit: -26.4. 

Fiscal year: 2047: 
Federal Surplus/Deficit[A]: -23.4; 
Combined Surplus/Deficit: -27.2. 

Fiscal year: 2048: 
Federal Surplus/Deficit[A]: -24.2; 
Combined Surplus/Deficit: -28.1. 

Fiscal year: 2049: 
Federal Surplus/Deficit[A]: -24.9; 
Combined Surplus/Deficit:- 29. 

Fiscal year: 2050: 
Federal Surplus/Deficit[A]: -25.8; 
Combined Surplus/Deficit: -29.9. 

Source: GAO’s April 2008 analysis. 

[A] Under GAO’s Alternative simulation. 

[End of graph] 

Implications of Global Developments: 

* Food and drug safety; 

* Food and energy supply; 

* Debt finance and financial markets. 

Food and Drug Safety: 

* Federal oversight of food safety added to GAO’s high risk list in 
2007; 

* Global food and drug supply issues critical: 
– Weaknesses in FDA’s inspections of foreign drug and foreign medical 
device manufacturers; 
– accidental contamination of FDA-regulated food products. 

Food and Energy Supply: 

Ongoing work: 

* Threats to food security and World Food Summit improvement efforts; 

* Foreign countries’ responses to food borne illnesses; 

* Global Nuclear Energy Partnership. 

Foreign Ownership Share of Federal Debt Held by the Public Has 
Increased: 

[See PDF for image] 

This figure contains two pie charts, with the following compositions of 
federal debt by category: 

1996: Total Debt held by the public: $3.73 trillion:
Domestic investors and state and local governments: 62%;
Foreign and international investors: 28%; 
Federal Reserve: 10%. 

2007: Total Debt held by the public: $5.04 trillion:
Domestic investors and state and local governments: 40%;
Foreign and international investors: 45%; 
Federal Reserve: 15%. 

Source: Department of the Treasury. 

Note: Totals and percent increases may not add due to rounding. 

[End of graph] 

Debt Finance and Financial Markets: 

Ongoing work: 

* Implications of sovereign wealth funds; 

* Poor country debt relief; 

* U.S. financial regulatory structure. 

[End of presentation] 

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