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[Begin Cover]

GAO: Serving the Congress and the Nation: 

Performance Plan: Fiscal Year 2005: 

United States General Accounting Office: 

[End of Cover]

[Begin Contents]

Contents: 

Abbreviations: 

Comptroller General's Letter: 

Our Mission and Structure: Our Mission: 

Our Mission and Structure: Our Goals: 

Our Mission and Structure: Our Organizational Structure: 

Measuring Our Performance: Our Planning Structure: 

Measuring Our Performance: Annual Performance Assessments: 

Our Planned Performance for Fiscal Year 2005: Agencywide Performance: 

Our Planned Performance for Fiscal Year 2005: Goal 1's Performance 
Goals and Targets: 

Our Planned Performance for Fiscal Year 2005: Goal 2's Performance 
Goals and Targets: 

Our Planned Performance for Fiscal Year 2005: Goal 3's Performance 
Goals and Targets: 

Our Planned Performance for Fiscal Year 2005: Goal 4's Performance 
Goals and Targets: 

Strategies and Means: Strategies for Achieving Our Goals and 
Coordinating with Others: 

Strategies and Means: Selected Initiatives Planned for Fiscal Year 
2005: 

Strategies and Means: Resources Needed for Fiscal Year 2005 to Achieve 
the Goals: 

Verification and Validation of Performance Data: 

Obtaining GAO Documents: 

Tables: 

Table 1: Annual Measures of Results: 

Table 2: Annual Measures of Client Service: 

Table 3: Preliminary Measures Related to Our People: 

Table 4: Agencywide Annual Performance Results and Targets: 

Table 5: Strategic Goal 1's Annual Performance Results and Targets: 

Table 6: Strategic Goal 2's Annual Performance Results and Targets: 

Table 7: Strategic Goal 3's Annual Performance Results and Targets: 

Table 8: Resources by Funding Source: 

Table 9: Resources by Strategic Goal: 

Table 10: How We Ensure Data Quality for the Qualitative Performance 
Goals: 

Table 11: How We Ensure Data Quality for the Annual Performance 
Measures: 

Figure: 

Figure 1: Organizational Structure: 

[End Contents]

[Begin Abbreviations]

Abbreviations: 

AIDS: Acquired Immune Deficiency Syndrome: 

ARM: Applied Research and Methods: 

ASM: Acquisition and Sourcing Management: 

CASO: Controller/Administrative Services Office: 

DCM: Defense Capabilities and Management: 

DOD: Department of Defense: 

EWIS: Education, Workforce, and Income Security: 

FMA: Financial Management and Assurance: 

FMCI: Financial Markets and Community Investment: 

GAO: General Accounting Office: 

HC: Health Care: 

HCO: Human Capital Office: 

HSJ: Homeland Security and Justice: 

IAT: International Affairs and Trade: 

IG: Office of the Inspector General: 

INTOSAI: International Organization of Supreme Audit Institutions: 

ISTS: Information Systems and Technology Services: 

IT: Information Technology: 

KS: Knowledge Services: 

NRE: Natural Resources and Environment: 

PDP: Professional Development Program: 

PI: Physical Infrastructure: 

QCI: Quality and Continuous Improvement: 

SEC: Securities and Exchange Commission: 

SI: Strategic Issues: 

VA: Department of Veterans Affairs: 

[End Abbreviations]

[Begin Letter]

Comptroller General's Letter: 

May 2004: 

I am pleased to present the General Accounting Office's (GAO) 
Performance Plan for Fiscal Year 2005. In the spirit of the Government 
Performance and Results Act, this annual plan informs the Congress and 
the American people about what we expect to accomplish on their behalf 
in the coming fiscal year. It sets forth our plan to make progress 
toward achieving our strategic goals for serving the Congress and the 
American people. The plan is based on our strategic plan, which was 
prepared in consultation with members of the Congress and other key 
stakeholders and was issued in March 2004.

This performance plan takes into account that about 90 percent of our 
resources are devoted to current and anticipated congressional mandates 
and requests for our work. As such, this plan includes work related to 
long-standing national challenges, such as the educational needs of the 
nation's children, the long-term viability of Social Security and 
Medicare, the rising cost of health care and the millions of Americans 
who are uninsured, and the vulnerability of the government's computer 
systems to sabotage. At the same time, the plan recognizes the 
continuing impact of certain new and unprecedented challenges for the 
federal government, such as securing the safety of Americans at home 
and abroad and managing the large and growing long-term fiscal 
imbalance facing the nation. We also include information that would be 
useful for appropriations and oversight by the Congress and for major 
current and emerging congressional and executive branch initiatives. 
And we plan to invest a small percentage of our resources in important 
discretionary research and development work to identify and help the 
Congress address emerging issues facing the nation and its citizens.

Fiscal year 2005 promises to be a challenging year for us, especially 
given increasing budgetary constraints. Nonetheless, I believe that our 
planned work will, as in past years, result in an excellent return on 
the taxpayers' investment in us.

David M. Walker: 
Comptroller General of the United States: 

[End Letter]

[Begin Mission and Structure]

Our Mission and Structure: 

Our Mission: 

GAO is an independent, nonpartisan, professional services agency in the 
legislative branch that is commonly regarded as the audit, evaluation, 
and investigative arm of the Congress. 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. We accomplish our 
mission by providing information and making recommendations for 
improvement, when appropriate, on a wide variety of issues. Most of our 
work is undertaken in response to congressional requests. However, as 
authorized by our enabling legislation, we also independently initiate 
a limited portion of our resources for research and development that 
enables us to (1) invest in issues the Congress may need to address in 
the future and (2) provide products of broad institutional interest to 
the Congress. The three core values shown below form the basis for all 
of our work, regardless of its origin.

Core Values: 

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 reputation, and the GAO approach is 
designed to ensure both. 

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. 

Our efforts to support the Congress and inform the general public 
include: 

[Begin list] 

* engaging in a range of oversight, insight, and foresight activities 
that span the full breadth and scope of federal programs, policies, 
operations, and performance;

* overseeing government operations through financial and other management 
audits to determine whether public funds are being spent efficiently 
and effectively;

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

* investigating whether illegal or improper activities are occurring;

* analyzing the financing for government activities;

* conducting constructive engagements in which we work proactively with 
agencies, when appropriate, to help guide their efforts toward 
achieving positive results;

* studying national and international trends and challenges to 
anticipate their implications for public policy;

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

* publishing thousands of reports and other documents annually; and: 

* testifying before the Congress.

[End list]

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 Goals: 

Our work is primarily aligned under three broad strategic goals that 
span both domestic and international issues that affect the lives of 
all Americans as well as the issues specific to governance that 
influence how well the nation's current and future interests are served 
by the U.S. government. In addition, we have a fourth internal 
strategic goal aimed at maximizing our productivity through such 
efforts as steady investments in information technology and ensuring 
the safety and security of our people, information, and assets.

Our four strategic goals are: 

[Begin list]

* 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's Role and 
How It Does Business to Meet 21st Century Challenges: 

* Strategic Goal 4: Maximize the Value of GAO by Being a Model Federal 
Agency and a World-Class Professional Services Organization: 

[End list]

We revisit the focus and appropriateness of these four strategic goals 
as we update our strategic plan and reassess the needs of the Congress 
and the nation in light of rapidly changing trends and developments 
here at home and around the world. Our strategic plan covering fiscal 
years 2004 to 2009, our annual performance plans since fiscal year 
1999, and our performance and accountability reports since fiscal year 
2001 are available through our Web site at www.gao.gov.

Our Organizational Structure: 

As the Comptroller General of the United States, David M. Walker is the 
head of GAO and is serving a 15-year term that began in November 1998. 
The Comptroller General is assisted by an executive committee 
consisting of Chief Operating Officer Gene L. Dodaro, Chief 
Administrative Officer/Chief Financial Officer Sallyanne Harper, and 
General Counsel Anthony Gamboa. To achieve our strategic goals, we 
maintain a workforce of highly trained professionals with degrees in 
many academic disciplines, including accounting, law, engineering, 
public and business administration, economics, and the social and 
physical sciences. About three-quarters of our approximately 3,300 
employees are based at our headquarters in Washington, D.C.; the rest 
are deployed in 11 field offices across the country. These staff are 
arrayed in 13 research, audit, and evaluation teams supported by staff 
offices and mission support units (see fig. 1).

Figure 1: Organizational Structure: 

[Begin image]

[See PDF for image] - graphic text:

An organization chart showing GAO’s basic structure. The agency’s top 
level of organization was the Executive Committee, which includes the 
Comptroller General, the Chief Operating Officer, the Chief 
Administrative Officer/Chief Financial Officer, and the General 
Counsel. Twenty-three units reported directly to the Comptroller 
General and the Chief Operating Officer. The units included the 
following staff offices: Public Affairs, Strategic Planning and 
External Liaison, Congressional Relations, Opportunity and 
Inclusiveness, Inspector General, Quality and Continuous Improvement,
the Office of Special Investigations, and GAO’s Field Operations. 

The units also included the following teams that conduct audits, 
evaluations, and research; these teams perform work primarily 
supporting one of three strategic goals (discussed below): 

Goal 1: 

* Education, Workforce, and Income Security (EWIS); 
* Financial Markets and Community Investment (FMCI); 
* Health care (HC); 
* Homeland Security and Justice (HSJ); 
* Natural Resources and Environment (NRE); 
* Physical Infrastructure (PI); 

Goal 2: 

* Acquisition and Sourcing Management (ASM); 
* Defense Capabilities and Management (DCM); 
* International Affairs and Trade (IAT); 

Goal 3: 

* Applied Research and Methods (ARM); 
* Financial Management and Assurance (FMA); 
* Information Technology (IT); 
* Strategic Issues (SI); 

The Office of General Counsel reports to the Comptroller General and 
Chief Operating Officer through the General Counsel, and performs work 
in support of strategic goals 1, 2, and 3. 

Units supporting strategic goal 4 report to the Comptroller General 
and Chief Operating Officer through the Chief Administrative Officer/
Chief Financial Officer, and include Controller/Administrative 
Services Office (CASO); Human Capital Office (HCO); Information 
Systems and Technology Services (ISTS); Knowledge Services (KS); and 
Professional Development Program (PDP).

Note: Several teams perform work in support of multiple strategic 
goals. 

Source: GAO.

[End of image]

[End Mission and Structure]

[Begin Measuring Our Performance]

Measuring Our Performance: 

Our Planning Structure: 

In order to discuss how we measure our performance, we should first 
describe the terminology that we use here, as well as in our strategic 
plan and our performance and accountability report. At the broadest 
level, we describe our performance in terms of four strategic goals, 
which were introduced earlier in this plan. These strategic goals and 
the 21 strategic objectives that support them are listed in the 
Strategic Plan Framework shown below.

[Begin Strategic Plan Framework]

[See PDF for image] - graphic text:

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.

Themes: 

* Long-term Fiscal Imbalance; 

* National Security; 

* Global interdependence; 

* Changing Economy; 

* Demographics; 

* Science and Technology; 

* Quality of Life; 

* Governance; 

Goals and Objectives:

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 related to:

* Health care needs and financing; 

* Education and protection of children; 

* Work opportunities and worker protection; 

* Retirement income security; 

* Effective system of justice; 

* Viable communities; 

* Natural resources use and environmental protection; 

* Physical infrastructure; 

Provide Timely, Quality Service to the Congress and the Federal 
Government to Respond to Changing Security Threats and the Challenges 
of Global Interdependence involving:

* Emerging threats; 

* Military capabilities and readiness; 

* Advancement of U.S. interests; 

* Global market forces; 

Help Transform the Federal Government’s Role and How It Does 
Business to Meet 21st Century Challenges by assessing:

* Roles in achieving federal objectives; 

* Government transformation; 

* Key management challenges and program risks; 

* Fiscal position and financing of the government; 

Maximize the Value of GAO by Being a Model Federal Agency and a 
World-Class Professional Services Organization in the areas of:

* Client and customer satisfaction; 

* Strategic leadership; 

* Institutional knowledge and experience; 

* Process improvement; 

* Employer of choice; 

Core Values: 

* Accountability; 

* Integrity; 

* Reliability; 

Source: GAO.

GAO Strategic Plan 2004-2009.

[End of Strategic Plan Framework]

The strategic objectives are further defined by about 100 qualitative 
performance goals that describe major areas in which we expect to make 
a contribution over 2 or more years. These performance goals constitute 
our strategies for achieving our strategic goals and objectives; they 
are listed later in this plan in the sections describing the 
performance goals and targets for each strategic goal. Finally, more 
than 400 key efforts describe the work we must do to accomplish our 
performance goals. This hierarchy can best be illustrated using the 
following example: 

Strategic goal 1 consists of eight strategic objectives that cover 
issues ranging from health care needs and financing to a secure and 
effective national physical infrastructure. One of these strategic 
objectives--addressing the health needs of an aging and diverse 
population--is supported by seven performance goals. And one of the 
performance goals--evaluating Medicare reform, financing, and 
operations--has five key efforts, two of which are analyzing the 
potential consequences of Medicare structural reforms and evaluating 
Medicare payment methods for health care providers.

Our strategic plan, which includes a list of all of our key efforts, is 
available on our Web site at [Hyperlink, 
http://www.gao.gov/sp/d04534sp.pdf].

Our organizational units often contribute to achieving more than one 
strategic objective, with some units working toward more than one 
strategic goal as well. This collaborative process, which we refer to 
as matrixing, increases our effectiveness, flexibility, and efficiency 
in using our expertise and resources to meet congressional requests on 
complex issues.

[Begin Annual Performance Assessments]

Annual Performance Assessments: 

Each year, we measure our performance by (1) assessing our progress in 
performing work related to the qualitative performance goals and (2) 
evaluating our annual performance on measures that cover some of the 
outcomes, intermediate outcomes, and outputs related to our work. We 
also are working toward adding measures related to how well we deal 
with our clients and how well we treat our people. For more information 
on how we ensure the completeness and reliability of our performance 
data, see the section of this plan called Verification and Validation 
of Performance Data.

Assessing Qualitative Performance Goals: 

Our performance goals generally are established in our strategic plan. 
If we have met most of our performance goals, we have made progress in 
achieving our strategic objectives and the broader set of four goals. 
To make assessments, we examine the work completed under the 
performance goal's key efforts. For a performance goal to be met, the 
responsible senior executive considers the amount of work conducted or 
recommendations made for each key effort as well as any other 
assistance provided to the client or customer that is related to these 
key efforts. These senior executives then judge whether the work 
completed collectively for all key efforts achieved the performance 
goal.

With our strategic plan that was updated in March 2004 to cover fiscal 
years 2004 through 2009, we established new performance goals and 
initiated a new multiyear cycle. In the fiscal year 2004 performance 
and accountability report, which will be issued in the fall of 2004, we 
will assess the extent to which we are on track to meet the new 
performance goals. And in the fiscal year 2005 performance and 
accountability report, we will assess the extent to which we met these 
performance goals.

[Begin Evaluating Annual Performance Measures]

Evaluating Annual Performance Measures: 

For several years, we have measured our performance using indicators 
that are related to the results of our work and its usefulness to our 
primary client--the Congress. Beginning with fiscal year 2005, we are 
including several indicators related to how well we manage our people. 
We anticipate that these indicators, which we have been developing over 
the last 4 years, will help us develop a more balanced, comprehensive 
view of our performance. This approach recognizes that in a knowledge-
based age, investments in an organization's intangible assets--
employees, databases, and information technologies--are as critical to 
its success as its tangible assets--physical assets and access to 
capital. Thus, the balanced approach to measuring performance will 
supplement measures of the outcomes of our work performance with other 
measures that indicate, for example, how well the organization is 
developing, nurturing, and mobilizing its employees to accomplish the 
mission of the organization.

The balanced set of measures that we are developing reflects our 
mission and strategic goals for serving the Congress and will focus on 
three key areas: results, clients, and people.

[Begin list]

* Results. Focusing on results and the effectiveness of the processes 
needed to achieve them is fundamental to accomplishing our mission. Our 
strategy in this area has been to revisit, modify, and restructure our 
current measures. To assess our results, we will continue to use the 
performance measures that we have used for the past several years: 
financial benefits, other (nonfinancial) benefits, recommendations 
implemented, recommendations made, and percentage of new products with 
recommendations.

* Clients. Our strategy in this area draws upon a variety of data 
sources to obtain information on the services we are providing to our 
congressional clients. To judge how well we are serving our clients, we 
will continue to measure the number of times we are asked to present 
expert testimony at congressional hearings as well as our timeliness in 
delivering products to the Congress.

* People. As our most important asset, our people define our character 
and capacity to perform. Our strategy in this area draws upon a variety 
of data sources to create a comprehensive picture of our performance. 
Specifically, we plan to measure how well we are attracting and 
retaining high-quality staff and how well we are developing, 
supporting, using, and leading staff. Our annual confidential survey of 
employees will provide some of the information that we will use to 
gauge our performance on how well staff believe their skills are being 
developed and used and whether we engender a positive, productive work 
environment and provide effective leadership.

[End list]

To establish targets for these measures, we examine what we have been 
able to achieve in the past and the external factors that influence our 
work (those factors are discussed in the section of this plan called 
Strategies and Means). The teams and offices that are directly engaged 
in the work discuss their views of what must be accomplished in the 
upcoming fiscal year with our top executives, who then establish 
targets for the performance measures. Once approved by the Comptroller 
General, the targets become final and are published in our annual 
performance plan. In some cases, we may adjust the future targets after 
they are initially published, based on our analysis of our past 
performance and expected future work or based on the level of funding 
provided. In these cases, we include the modified targets in later 
documents, such as a performance and accountability report, and 
annotate them as being modified.

Measuring the Results of Our Work: 

We measure the results of our work by using five annual measures to 
assess our efforts to provide the kind of information and 
recommendations that will lead to benefits for the American people. 
These measures are briefly described in table 1.

[Begin table]

Table 1: Annual Measures of Results: 

Measure: Financial benefits; 
Description: Benefits to the federal government that can be estimated 
in dollar terms, such as decreased costs, increased revenues, or 
monetary resources that are made available for other purposes as a 
result of work that we completed over the past several years.

Measure: Other benefits; 
Description: Benefits to the federal government that cannot be 
estimated in dollar terms, such as improved services to the public, 
improved statutes or regulations, or improved government business 
operations that occurred as a result of work that we completed over the 
past several years.

Measure: New recommendations made; 
Description: The number of recommendations made in products issued 
within the fiscal year.

Measure: Past recommendations implemented; 
Description: Of the recommendations made 4 fiscal years prior to the 
current fiscal year, the percentage of recommendations that were 
implemented.

Measure: Percentage of products with recommendations[Note: Not all 
products that we issue during the fiscal year contain recommendations--
some are purely informational. This measure allows us to respond to a 
variety of requests that may not result in recommendations.]; 
Description: Of the written products issued in the fiscal year, the 
percentage that included at least one recommendation. 

Source: GAO.

[End of table]

For financial benefits, other benefits, and new recommendations made, 
we first set targets for the agency as a whole and then we set targets 
for each of the external goals--that is, goals 1, 2, and 3--so that the 
sum of the targets for the goals will equal the agencywide targets. For 
the remaining two measures--past recommendations implemented and 
percentage of products with recommendations--we set targets and report 
performance for the agency as a whole because we want our performance 
on these measures to be consistent across goals. We track our 
performance by strategic goal in order to understand why we met or did 
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 in which they need 
to improve.

Financial benefits and other benefits provide quantitative and 
qualitative information, respectively, on the outcomes or results that 
were achieved from our work. They often represent outcomes that 
occurred 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 or other benefits.

Measuring Client Service: 

We use two performance measures--the number of testimonies and the 
timeliness of our products--as indicators of how well we are meeting 
our clients' needs (see table 2). We consider requests to present 
testimony as an indicator that our clients are sufficiently satisfied 
with our work that we would add value to their decision-making process. 
We set a target at the agencywide level for the number of testimonies 
and then assign a portion of the testimonies as a target for the teams 
that contribute to each of the external goals--that is, goals 1, 2, and 
3--based on their expected contribution to the agencywide total. We 
track our progress on this measure at the goal level.

We also believe that our ability to provide products by the agreed-upon 
date means that we have met the clients' needs for providing 
information in time for it to be of value to them. We set agencywide 
targets for timeliness because we want our performance on these 
measures to be consistent across goals. We track our timeliness by 
strategic goal in order to understand why we met or did 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 in which they need to improve.

[Begin table]

Table 2: Annual Measures of Client Service: 

Measure: Testimonies; 
Description: The number of hearings at which we presented testimony.

Measure: Timeliness; 
Description: Of the products issued in the fiscal year, the percentage 
that were issued by the date agreed upon with the client or, for our 
research and development work, by the date agreed to internally.

Source: GAO.

[End of table]

Measuring Our Management of People: 

As our most important asset, our people determine our capacity to 
perform. Therefore, beginning with fiscal year 2005, we are adding 
performance measures that will help us determine how well we are 
attracting, retaining, using, and leading our human resources. Table 3 
describes the measures that we are using to assess our performance in 
this area. Each year, we will set an agencywide target for each of 
these measures. The information needed for these measures will come 
from a variety of sources, including the Department of Agriculture's 
National Finance Center database--which handles payroll and personnel 
data for GAO and other agencies--and our annual confidential survey of 
employees.

[Begin table]

Table 3: Measures Related to Our People: 

Measure: New hire rate; 
Description: The ratio of the number of people hired to the number we 
planned to hire.

Measure: Acceptance rate; 
Description: The ratio of the number of applicants accepting offers to 
the number of offers made.

Measure: Retention rate; 
Description: The ratio of the number of people who did not leave GAO 
during the fiscal year to the average number of people on board during 
the year.

Measure: Staff development; 
Description: From the annual employee survey, the percentage of people 
responding favorably to questions on internal, external, and on-the-job 
training.

Measure: Staff utilization; 
Description: From the annual employee survey, the percentage of people 
responding favorably to questions on our use of staff's knowledge and 
skills.

Measure: Leadership; 
Description: From the annual employee survey, the percentage of people 
responding favorably to questions about specific qualities of our 
managers, such as whether leaders treated staff fairly, made timely 
decisions, demonstrated GAO's core values, implemented change 
effectively, and dealt effectively with diversity issues.

Measure: Organizational climate; 
Description: From the annual employee survey, the percentage of people 
responding favorably to questions on teamwork, morale, and overall 
satisfaction.

Source: GAO.

[End of table]

[End Evaluating Annual Performance Measures]

[End Annual Performance Assessments] 

[End Measuring Our Performance]

[Begin Our Planned Performance for Fiscal Year 2005]

Our Planned Performance for Fiscal Year 2005: 

[Begin Agencywide Performance]

Agencywide Performance: 

While much of our performance is planned, managed, and tracked at the 
goal level, to gauge our collective performance, we set targets for the 
agency as a whole for our annual performance measures. Table 4 reflects 
our agencywide performance during the last 5 fiscal years for these 
measures, along with the agencywide targets for fiscal years 2004 and 
2005.

[Begin table]

Table 4: Agencywide Annual Performance Results and Targets: 

Performance measure: Financial benefits (dollars in billions); 
1999 Actual: $20.1; 
2000 Actual: $23.2; 
2001 Actual: $26.4; 
2002 Actual: $37.7; 
2003 Actual: $35.4; 
2004 Target: $35.0; 
2005 Target: $36.0.

Performance measure: Other benefits; 
1999 Actual: 607; 
2000 Actual: 788; 
2001 Actual: 799; 
2002 Actual: 906; 
2003 Actual: 1,043; 
2004 Target: 900[A]; 
2005 Target: 950

Performance measure: New recommendations made; 
1999 Actual: 940; 
2000 Actual: 1,224; 
2001 Actual: 1,563; 
2002 Actual: 1,950; 
2003 Actual: 2,175; 
2004 Target: 1,500[A]; 
2005 Target: 1,800.

Performance measure: Past recommendations implemented; 
1999 Actual: 70%; 
2000 Actual: 78%; 
2001 Actual: 79%; 
2002 Actual: 79%; 
2003 Actual: 82%; 
2004 Target: 79%[A]; 
2005 Target: 80%.

Performance measure: Percentage of products with recommendations; 
1999 Actual: 33%; 
2000 Actual: 39%; 
2001 Actual: 44%; 
2002 Actual: 53%; 
2003 Actual: 55%; 
2004 Target: 50%; 
2005 Target: 50%.

Performance measure: Testimonies; 
1999 Actual: 229; 
2000 Actual: 263; 
2001 Actual: 151; 
2002 Actual: 216; 
2003 Actual: 189; 
2004 Target: 190[A]; 
2005 Target: 180

Performance measure: Timeliness; 
1999 Actual: 96%; 
2000 Actual: 96%; 
2001 Actual: 95%; 
2002 Actual: 96%; 
2003 Actual: 97%; 
2004 Target: 98%; 
2005 Target: 98%.

Performance measure: New hire rate[B]; 
1999 Actual: N/A; 
2000 Actual: N/A; 
2001 Actual: N/A; 
2002 Actual: 96%; 
2003 Actual: 98%; 
2004 Target: N/A; 
2005 Target: 97%.

Performance measure: Acceptance rate[B]; 
1999 Actual: N/A; 
2000 Actual: N/A; 
2001 Actual: N/A; 
2002 Actual: 81%; 
2003 Actual: 72%; 
2004 Target: N/A; 
2005 Target: 75%.

Performance measure: Retention rate[B]; 
1999 Actual: N/A; 
2000 Actual: N/A; 
2001 Actual: N/A; 
2002 Actual: 91%; 
2003 Actual: 92%; 
2004 Target: N/A; 
2005 Target: 90%.

Performance measure: Staff development[B]; 
1999 Actual: N/A; 
2000 Actual: N/A; 
2001 Actual: N/A; 
2002 Actual: 71%; 
2003 Actual: 72%; 
2004 Target: N/A; 
2005 Target: 70%.

Performance measure: Staff utilization[B]; 
1999 Actual: N/A; 
2000 Actual: N/A; 
2001 Actual: N/A; 
2002 Actual: 67%; 
2003 Actual: 71%; 
2004 Target: N/A; 
2005 Target: 70%.

Performance measure: Leadership[B]; 
1999 Actual: N/A; 
2000 Actual: N/A; 
2001 Actual: N/A; 
2002 Actual: 75%; 
2003 Actual: 78%; 
2004 Target: N/A; 
2005 Target: 75%.

Performance measure: Organizational climate[B]; 
1999 Actual: N/A; 
2000 Actual: N/A; 
2001 Actual: N/A; 
2002 Actual: 67%; 
2003 Actual: 71%; 
2004 Target: N/A; 
2005 Target: 70%.

Source: GAO.

Note: N/A indicates that the data are not available.

[A] On the basis of past performance and expected future work, we 
revised four targets after we issued our performance plan for fiscal 
year 2004. The targets increased from 820 for other benefits, from 77 
percent for past recommendations, and from 1,250 for new 
recommendations made. The target for testimonies decreased from 200.

[B] These measures are new beginning in fiscal year 2005. We provide 
actual data where available.

[End of table]

To set targets, we start with our past performance. We then hold 
discussions with senior managers regarding internal and external 
factors that might influence future work and we set targets 
accordingly. In some cases, this means that the target for a future 
year will be lower than the actual performance in a past year. We also 
try to set targets that are in round numbers in order to reflect that 
they are estimates and not precise targets. While we try to attain the 
target levels that we set, we expect that actual performance may 
deviate from the targets by as much as 5 percent. Therefore, we would 
consider a target that is missed by less than 5 percent to be in the 
expected range of performance, given the many factors outside of our 
control that can influence our performance; and, in those cases, we 
would take corrective measures only if we identified that the target 
was missed because of factors within our control.

The following sections describe the targets for goals 1, 2, and 3--our 
external goals--for the annual measures that we assess at the goal 
level. The sections also include a description of the qualitative 
performance goals, which we will assess by examining the work completed 
under the performance goal's key efforts over a multiyear time period.

[End Agencywide Performance]

[Begin Goal 1's Performance Goals and Targets]

Goal 1's Performance Goals and Targets: 

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.

In keeping with our mission to support the Congress in carrying out its 
constitutional responsibilities, our first strategic goal focuses on 
helping the Congress and the federal government address the challenges 
that affect the well-being and financial security of the American 
people. The stakes involved with the federal policies and programs 
covered under Goal 1 are high, because their benefits are critical to 
the well-being of families, businesses, state and local governments, 
and other key sectors of the nation's economy and society. Moreover, as 
the nation addresses the challenges of homeland security, it is 
becoming apparent that a wide range of domestic policies and programs 
are relevant to protecting the nation against terrorist threats. At the 
same time, the reemergence of deficits should prompt greater scrutiny 
of the performance and costs of many of these programs, and we expect 
to be a major contributor to the debates on these issues through our 
audit and evaluation work.

Our objectives for this goal are to support congressional and federal 
efforts on: 

[Begin list]

* the health needs of an aging and diverse population;

* the education and protection of the nation's children;

* the promotion of work opportunities and the protection of workers;

* a secure retirement for older Americans;

* an effective system of justice;

* the promotion of viable communities;

* responsible stewardship of natural resources and the environment; 
and 

* a safe, secure, and effective national physical infrastructure.

[End list]

These objectives are discussed in more detail in the sections that 
follow; the qualitative performance goals for each objective are listed 
as well. The results achieved for strategic goal 1 under our annual 
performance measures during the last 5 fiscal years are shown in table 
5 below, along with the goal's targets for fiscal years 2004 and 2005.

[Begin table]

Table 5: Strategic Goal 1's Annual Performance Results and Targets: 

Performance measure: Financial benefits (dollars in billions); 
1999 Actual: $13.8; 
2000 Actual: $14.1; 
2001 Actual: $8.9; 
2002 Actual: $24.1; 
2003 Actual: $23.6; 
2004 Target[A]: $23.3; 
2005 Target[B]: $18.8. 

Performance measure: Other benefits; 
1999 Actual: 140; 
2000 Actual: 182; 
2001 Actual: 210; 
2002 Actual: 226; 
2003 Actual: 217; 
2004 Target[A]: 215; 
2005 Target[B]: 215

Performance measure: New recommendations made; 
1999 Actual: 350; 
2000 Actual: 435; 
2001 Actual: 396; 
2002 Actual: 524; 
2003 Actual: 557; 
2004 Target[A]: 328; 
2005 Target[B]: 390

Performance measure: Testimonies; 
1999 Actual: 123; 
2000 Actual: 131; 
2001 Actual: 73; 
2002 Actual: 111; 
2003 Actual: 80; 
2004 Target[A]: 77; 
2005 Target[B]: 74

Source: GAO.

[A] On the basis of past performance and expected future work, we 
revised these targets after we issued our performance plan for fiscal 
year 2004. The target for financial benefits increased from $21.3 
billion, the target for new recommendations made decreased from 363, 
and the target for testimonies decreased from 90. The target for other 
benefits was rounded from 216 to 215.

[B] These targets are based on projected work within the goal. In some 
cases, this means that a target for fiscal year 2005 is lower than 
actual performance in prior years.

[End of table]

The Health Needs of an Aging and Diverse Population: 

Several issues form the context of our work on health care. Federal 
health care spending has grown at an average annual rate three times 
that of the rest of the federal budget over the last 20 or so years. 
Expenditures on health-related programs are one of the largest 
components of federal spending, totaling about $468 billion in fiscal 
year 2002, or about 23 percent of all federal spending that year. The 
Medicare Hospital Insurance Trust Fund is projected to begin running a 
deficit in 2004 and to be depleted by 2019. The Department of Veterans 
Affairs' (VA) $23 billion-a-year health system has many obsolete 
facilities with excess capacity and the size and requirements for the 
Department of Defense's (DOD) health system requirements also are at 
issue.

The efficiency and effectiveness of the government's public health 
programs are other areas of concern; these programs include those 
administered by the National Institutes of Health, the Food and Drug 
Administration, the Centers for Disease Control and Prevention, and the 
Health Resources and Services Administration. These programs support 
and conduct research; provide grants to states for public health 
programs, such as maternal and child health services and AIDS 
prevention and treatment; and conduct regulatory oversight of the 
United States' new drug and medical device research.

The threat of terrorists using biological weapons of mass destruction, 
such as anthrax and smallpox, has raised concerns about the nation's 
ability to adequately respond to bioterrorist attacks. This has 
heightened concern about the adequacy of trained personnel, laboratory 
capacity, disease surveillance systems, and coordinated communication 
systems among state and local emergency responders. Greater attention 
has been given to state and local communities' capacity to develop 
coordinated plans for dealing with a potential biological attack and to 
develop emergency response systems linking hospitals, health personnel, 
and fire and police efforts to respond to any form of terrorism.

Finally, the baby boom generation will undoubtedly place increasing 
pressure on the federal/state Medicaid program to help pay for nursing 
home and other community-based forms of long-term care services. At the 
other end of the population spectrum are millions of children whose 
families have no health insurance. Accounting for and overseeing 
Medicaid and the State Children's Health Insurance Program, which help 
cover the health insurance costs of these low-income Americans, 
represent a formidable challenge for the federal government because of 
the variation in state policies, procedures, and delivery systems.

To support efforts by the Congress and the federal government to 
address these issues, we will: 

[Begin list]

* evaluate Medicare reform, financing, and operations;

* assess trends and issues in private health insurance coverage;

* assess actions and options for improving VA's and DOD's health care 
services;

* evaluate the effectiveness of federal programs to promote and protect 
the public health;

* evaluate the effectiveness of federal programs to improve the 
nation's preparedness for the public health and medical consequences of 
bioterrorism;

* evaluate federal and state program strategies for financing and 
overseeing long-term health care; and: 

* assess state experiences in providing health insurance coverage for 
low-income populations.

[End list]

The Education and Protection of the Nation's Children: 

Educating and protecting children are key to the continued vitality of 
our democratic society and to our long-term ability to compete in a 
global marketplace. To this end, the federal government, through 
multiple departments and programs, invests more than $110 billion a 
year on programs that foster the development, education, and protection 
of children from infancy through postsecondary education. In spite of 
these investments, there is concern about program fragmentation, 
overlap, and effectiveness. The United States places a high priority on 
educating its children at the elementary and secondary levels and has 
increased the Department of Education's investment from over $20 
billion in fiscal year 2000 to about $35 billion in fiscal year 2003. 
The increased investment is accompanied by an increased emphasis on 
accountability for schools to raise all students to proficient levels 
in math, reading, and science. With recent passage of the No Child Left 
Behind Act, the Congress has placed additional requirements on states 
for student testing and teacher qualifications and mandated actions for 
schools that fail to improve student performance.

There are also concerns about protecting children and ensuring that 
families are financially able to provide for their needs. While 
responsibility in these areas falls primarily to state child protective 
service agencies, the federal government invests approximately $7 
billion annually in related areas.

Beyond providing for basic educational needs, a competitive national 
economy depends, in part, on effectively preparing workers to compete 
in the labor workforce. To this end, the federal government currently 
provides about $63 billion annually to enhance the quality and access 
to postsecondary, vocational, and adult education. A major concern with 
the nation's investment in postsecondary education is its exposure to 
significant losses. To support the Congress and the federal government 
in addressing these matters, our performance goals are to: 

[Begin list]

* analyze the effectiveness and efficiency of early childhood 
education, care, and nutrition programs in serving their target 
populations;

* assess options for federal programs to effectively address the 
educational and nutritional needs of elementary and secondary students;

* determine the effectiveness and efficiency of child support 
enforcement and child welfare programs in serving their target 
populations; and 

* identify opportunities to better manage postsecondary, vocational, 
and adult education programs and deliver more effective services.

[End list]

The Promotion of Work Opportunities and the Protection of Workers: 

A strong national economy depends, in part, on effectively preparing 
youth and new workers to compete in the labor force, efficiently 
helping employers locate qualified job candidates, providing a work 
environment that safely promotes productivity, finding ways to help 
workers when they become unemployed, and providing assistance to 
workers with disabilities. To this end, the federal government 
currently invests more than $150 billion annually on programs that help 
new entrants to the workforce, support those who have become dislocated 
from their jobs and assist them to become reemployed, rehabilitate 
disabled and injured workers, help employers obtain adequate supplies 
of high-quality skilled labor, as well as protect employees' rights to 
fair and safe workplaces without unduly burdening employers. In 
addition, federal policies for providing income support for the low-
income population have increasingly focused on promoting work in 
exchange for government assistance.

Technology is redefining the labor market for workers and employers, 
and federal employment support and worker protection programs must deal 
with these new challenges. New technologies, increased marketplace 
competition, and very tight labor markets have prompted employers to 
downsize, change employment patterns, move abroad, or seek qualified 
foreign workers to meet their needs. To support the Congress and the 
federal government in addressing this challenge, our performance goals 
are to: 

[Begin list]

* assess the effectiveness of federal efforts to help adults leave 
welfare for work and to assist other low-income individuals,

* analyze the impact of programs designed to maintain a skilled 
workforce and ensure that employers have the workers they need,

* assess the success of various enforcement strategies to protect 
workers while minimizing employers' burden in the changing work 
environment, and 

* identify ways to improve federal support for people with 
disabilities.

[End list]

A Secure Retirement for Older Americans: 

Social Security has long served as the foundation of the nation's 
retirement income system. For nearly one-fifth of the elderly, Social 
Security is the sole source of retirement income. Yet Social Security 
expenditures are expected to exceed payroll tax revenues in the future, 
which may ultimately result in the trust fund being depleted. Also, 
tens of millions of U.S. workers have no individual pension coverage. 
Of those with pensions, some workers are increasingly being enrolled in 
a new kind of plan--a defined contribution plan. Further, some 
employers are shifting to hybrid systems that retain the defined 
benefit structure while adopting certain features of defined 
contribution plans. These changes pose new challenges to workers, 
government regulators, and policy makers. Accordingly, to help the 
Congress and the federal government provide a secure retirement for 
older Americans, our performance goals are to: 

[Begin list] 

* assess the policy challenges facing the future of the Social Security 
system and the need for reform;

* bolster retirement security by identifying opportunities to foster 
greater pension coverage, raise personal saving, and increase the 
employment earnings of seasoned workers;

* identify opportunities to improve the ability of government agencies 
to administer and protect workers' retirement benefits; and 

* assess the role of the Social Security number in improving government 
operations, minimizing fraud and abuse, and protecting citizens from 
identity theft and other illegal activity.

[End list]

An Effective System of Justice: 

Spending on the administration of justice continues to grow. In 
constant 2004 dollars, the federal government will disburse over 
$39 billion in fiscal year 2004, up from $18 billion in 1994. Most of 
the increase has been to accommodate a shift in focus at the federal 
level from helping local governments control crime to emphasizing more 
distinct federal responsibilities, such as controlling illegal 
immigration and, more recently, preventing terrorist attacks.

During the past several years, overall crime levels have been reduced. 
For example, preliminary data for 2002 from the Federal Bureau of 
Investigation's Uniform Crime Reporting Program indicate a 0.2 percent 
decrease in the nation's Crime Index from the 2001 figure. 
Nevertheless, the Congress and the public remain concerned and look to 
the federal government for leadership in controlling domestic and 
transnational crime, including terrorism, while protecting civil 
liberties; reducing illegal drug use; protecting the nation's borders; 
and controlling prison costs. The USA Patriot Act, passed in October 
2001, significantly expanded federal law enforcement and investigative 
authority and, with billions of dollars in additional funding, greatly 
increased the federal counterterrorism role. In addition, the newly 
created Department of Homeland Security is expected to lead efforts to 
detect, prepare for, prevent, respond to, and recover from terrorist 
attacks within the United States. Many of these functions are the 
primary roles of law enforcement at the federal, state, and local 
levels--a fact that heightens the importance of effective coordination 
and cooperation. Also, the Justice Department has begun to restructure 
the Federal Bureau of Investigation and is in the process of redefining 
its mission and priorities in light of the increased focus on 
antiterrorism.

After several years of mandatory minimum sentencing, "three strikes and 
you're out" laws, and truth-in-sentencing grants, federal and state 
prisons are overcrowded. The size of the prison population will be the 
subject of increasing public debate as these policies' cost to the 
public escalates. Moreover, in constant 2004 dollars, the federal 
judiciary will disburse an estimated $5.7 billion in fiscal year 2004-
-more than one and a half times its fiscal year 1994 spending of about 
$3.2 billion. In addition, the judiciary has faced an imbalance in its 
workload in recent years, particularly its criminal caseload, with some 
courts facing much higher workloads than others. Thus, the judiciary 
faces a major challenge in determining how to use its resources 
efficiently and effectively to address such workload imbalances and to 
coordinate its strategy with other affected agencies, particularly 
along the southwest border. Also, the number of prisoners being 
released from federal prisons is growing rapidly, making successful 
reintegration an increasingly important issue.

To support efforts by the Congress and the federal government to 
address these issues, we will: 

[Begin list] 

* identify ways to improve federal agencies' ability to prevent and 
respond to terrorism and other major crimes,

* assess the effectiveness of federal programs to control illegal drug 
use,

* assess federal efforts to enforce immigration and customs laws, and 

* assess the administrative efficiency and effectiveness of the federal 
court and prison systems.

[End list]

The Promotion of Viable Communities: 

Federal commitment to strong and stable communities is demonstrated 
through the diversity of federal economic development assistance 
programs. More than 100 federal programs provide direct economic 
development assistance in the form of grants, loans, loan guarantees, 
and other types of assistance for community and economic development 
involving billions of dollars each year. The federal government 
supports housing finance through various programs, incentives, and 
requirements. America's small businesses also play a critical role in 
the nation's economy. In addition, the federal government provides 
assistance to victims of disasters and emergencies.

To promote home ownership, a key element of a vibrant community, the 
federal government provides mortgage assistance through mortgage 
guarantees provided by the Federal Housing Administration and the 
Department of Veterans Affairs and guarantees of mortgage securities by 
the Government National Mortgage Association. It also provides a 
federal charter and other direct and indirect benefits to three 
government-sponsored enterprises--Fannie Mae, Freddie Mac, and the 
Federal Home Loan Banks--that support the mortgage market. Recently, 
the effectiveness of the regulatory structure for government-sponsored 
enterprises has been called into question. The federal government also 
promotes home ownership through tax incentives and requirements placed 
on mortgage market participants. It must balance the benefits of 
increasing home ownership, especially among the underserved, against 
the financial risk taken on directly (through mortgage guarantees) or 
indirectly (through government-sponsored enterprises).

To help promote sound, sustainable investment in America's communities 
and aid the Congress and the federal government in the decision-making 
process on these issues, our performance goals are to assess: 

[Begin list] 

* federal community and economic development assistance and its impact 
on communities,

* the effectiveness of federal initiatives to assist small and 
minority-owned businesses,

* how the federal government can balance the promotion of home 
ownership with financial risk,

* federal efforts to enhance national preparedness and capacity to 
respond to and recover from natural and man-made disasters, and 

* how well federal programs that support affordable rental housing meet 
objectives, manage financial risk, and improve recipients' well-being.

[End list]

Responsible Stewardship of Natural Resources and the Environment: 

The nation's natural resources and the systems associated with their 
use are under unprecedented stress, generating intense debate and 
posing daunting challenges to policy makers at all levels of 
government. In part, this is the consequence of the country's growing 
population and economy, but other stress factors exist as well, such as 
the globalization of the world's economy. Additionally, the need to 
protect ourselves from those that would attack our nation by 
contaminating our air, water, and food or damaging our energy supplies 
has added a new dimension to managing our nation's natural resources. 
In addition, this strategic objective covers 6 sectors--energy, water, 
chemical industry and hazardous materials, agriculture, food (except 
meat and poultry), and meat and poultry--out of the 14 critical 
infrastructure sectors listed in the President's decision document 
"National Strategy for Homeland Security." 

In recent decades, the United States has experienced multiple energy 
crises--the 2000 and 2003 electricity emergencies affecting much of the 
country were notable examples--and remains perpetually on the cusp of 
critical supply/demand imbalances. If prudence and foresight are not 
applied in crafting the nation's strategic energy plan, then the 
electricity, natural gas, heating oil, and gasoline markets are at risk 
of being thrown into turmoil at any time. Stress is also evident in the 
management of the country's lands and waters, where difficult choices 
must be made on balancing the demands of often competing objectives--
namely, economic growth for today versus natural resource protection 
for the future.

The increasing globalization of natural resource issues also affects 
environmental protection matters, as seen in the federal government's 
discussions with other governments about global warming and what should 
be done about it. Such discussions add a new layer of complexity to the 
already difficult question of how to sustain economic growth when the 
engines of that growth--factories, cars and trucks, fertilizers, 
electricity generating plants--can adversely affect our air and water 
quality. Significant challenges also remain in cleaning the country's 
hazardous and nuclear waste sites. These sites' continued existence 
poses not only potential health and safety problems, but also fiscal 
and economic problems as well. Finally, food safety lies at the 
forefront of concerns about the country's agricultural resources, an 
urgent matter given the potential for agricultural bioterrorism. To 
support the Congress and help the federal government carry out its land 
management and environmental protection responsibilities, our 
performance goals are to assess: 

[Begin list] 

* the nation's ability to ensure reliable and environmentally sound 
energy for current and future generations;

* federal strategies for managing land and water resources in 
sustainable fashion for multiple uses;

* environmental protection strategies and programs;

* efforts to reduce the threats posed by hazardous and nuclear wastes; 
and 

* federal programs' ability to ensure a plentiful and safe food supply, 
provide economic security for farmers, and minimize agricultural 
environmental damage.

[End list]

A Safe, Secure, and Effective National Physical Infrastructure: 

The nation's economic vitality and the safety of its citizens are 
heavily dependent on a physical infrastructure composed of, among other 
things, transportation networks, telecommunications systems, water 
supply systems, wastewater treatment and solid waste disposal 
facilities, federal real property, and postal facilities. The nation 
faces important infrastructure challenges as federal, state, and local 
governments confront aging systems; new demands created by changes in 
demographics, technology, and lifestyles; and our infrastructure's 
vulnerability to terrorist threats. Our nation's responses to these 
challenges will have important consequences in the future because of 
their effects on the quality of our lives and their significant costs. 
To support the Congress in addressing this challenge, our performance 
goals are to assess: 

[Begin list] 

* strategies for identifying, evaluating, prioritizing, financing, and 
implementing integrated solutions to the nation's transportation 
infrastructure challenges;

* the impact of transportation and telecommunications policies and 
practices on competition and consumers;

* the federal government's role in fostering and overseeing 
telecommunications in the public interest;

* efforts to improve safety in moving people and goods across the 
nation's transportation system;

* efforts to improve security in all transportation modes;

* the U.S. Postal Service's transformation efforts to ensure its 
viability and accomplish its mission; and 

* federal efforts to plan for, acquire, manage, maintain, secure, and 
dispose of the government's real property assets.

[End list]

[End Goal 1's Performance Goals and Targets]

[Begin Goal 2's Performance Goals and Targets]

Goal 2's Performance Goals and Targets: 

The nature of the threats to national and international security and 
the means of attack have changed significantly in the post-Cold War 
era, and even more so since the terrorist attacks of September 11, 
2001. The nation must assess and defend against a wide range of means 
and methods of attack against U.S. interests both at home and abroad. 
Adversaries are more likely to strike vulnerable civilian or military 
targets at home and overseas in nontraditional ways to avoid direct 
confrontation with U.S. military forces or their allies on the 
battlefield. Nonetheless, the United States faces the challenge of 
transforming its military capabilities to maintain its technological 
edge while executing a global war on terrorism and recognizing that 
military power alone cannot respond to today's new threats. Responding 
to those threats requires new rules and new roles for all levels of 
government, best represented by the federal government's structural 
changes associated with creation of the new Department of Homeland 
Security.

As the world grows increasingly interconnected through more open 
markets and rapidly developing technology, the globalization of markets 
has created new opportunities for the nation as a whole and for 
American producers and consumers. At the same time, the United States 
is facing increasing challenges and threats to its security and economy 
from sources that range from terrorism to regional conflicts to 
instability sparked by adverse economic conditions, corruption, ethnic 
hatred, nationalism, and disease. In today's environment, advancing and 
protecting U.S. international interests has required interventions 
abroad to address terrorism at its roots or other interventions to make 
or keep the peace. While seeking to anticipate and address emerging 
threats to the nation's security and economy, the federal government 
also tries to promote foreign policy goals, sound trade policies, and 
other strategies to advance the interests of the United States and 
those of U.S. trading partners and allies in every corner of the world. 
In light of the globalization, technology, and security trends, our 
second strategic goal is to help the Congress and the federal 
government respond to changing security threats and the challenges of 
global interdependence.

Our specific objectives are to support congressional and federal 
efforts to: 

[Begin list] 

* respond to emerging threats to security,

* ensure military capabilities and readiness,

* advance and protect U.S. international interests, and 

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

[End list]

These objectives are discussed in more detail in the sections that 
follow; the qualitative performance goals for each objective are listed 
as well. The results achieved for strategic goal 2 under our annual 
performance measures during the last 5 fiscal years are shown in table 
6 below, along with the goal's targets for fiscal years 2004 and 2005.

[Begin table]

Table 6: Strategic Goal 2's Annual Performance Results and Targets: 

Performance measure: Financial benefits (dollars in billions); 
1999 Actual: $3.0; 
2000 Actual: $5.5; 
2001 Actual: $10.5; 
2002 Actual: $8.4; 
2003 Actual: $7.1; 
2004 Target[A]: $7.0; 
2005 Target[B]: $9.2.

Performance measure: Other benefits; 
1999 Actual: 80; 
2000 Actual: 129; 
2001 Actual: 188; 
2002 Actual: 218; 
2003 Actual: 273; 
2004 Target[A]: 244; 
2005 Target[B]: 275

Performance measure: New recommendations made; 
1999 Actual: 255; 
2000 Actual: 376; 
2001 Actual: 618; 
2002 Actual: 618; 
2003 Actual: 846; 
2004 Target[A]: 602; 
2005 Target[B]: 750

Performance measure: Testimonies; 
1999 Actual: 37; 
2000 Actual: 56; 
2001 Actual: 34; 
2002 Actual: 38; 
2003 Actual: 48; 
2004 Target[A]: 56; 
2005 Target[B]: 50

Source: GAO.

[A] We increased these targets after we issued our performance plan for 
fiscal year 2004. The original targets were financial benefits, $5.6 
billion; other benefits, 200; new recommendations made, 521; and 
testimonies, 43.

[B] These targets are based on projected work within the goal. In some 
cases, this means that a target for fiscal year 2005 is lower than 
actual performance in prior years.

[End of table]

Respond to Emerging Threats to Security: 

National and international security threats stem not only from 
differences in national or state ideologies and geopolitical economic 
and strategic considerations, but now increasingly from religious 
conflicts and the aims of non-state-sponsored groups. Adversaries are 
more likely to strike vulnerable targets at home and overseas in 
nontraditional ways to avoid direct confrontation with U.S. military 
forces or their allies.

These threats put at risk the nation's values, economic interests, and 
way of life and the personal security of its citizens at home and 
abroad. National strategies propose homeland security and combating 
terrorism initiatives to address these threats, yet their 
implementation and their associated costs, both direct and indirect, 
remain unclear. Decision-making approaches based on risk analysis and 
cost-benefit effectiveness and the alignment of federal funding with 
state, local, and private sector investments are still works in 
progress. In the international arena, U.S. efforts to prevent the 
proliferation of weapons of mass destruction directly support domestic 
homeland security missions, yet much remains to be done.

Preparing for and responding to emerging security threats will entail a 
national effort involving defense and domestic federal agencies and 
programs; state, local, and regional governments and organizations; the 
private sector; and the international community. At the federal level, 
the effectiveness of major structural changes to provide leadership 
will be important. The primary mission of the newly formed Department 
of Homeland Security is to prevent, reduce vulnerability to, and aid in 
recovery from domestic terrorist attacks. Responsibility for oversight 
and coordination across the executive branch with the Executive Office 
of the President is also still evolving.

Internationally, the cooperation of the United States and its allies is 
needed to prevent terrorists and others from using dangerous weapons to 
carry out threats to the nation's security. In addition, long-term 
success in homeland security will mean seamlessly integrating homeland 
security concepts into normal business decisions and practices across 
government and within the areas of the private sector responsible for 
critical infrastructures and key assets so that efforts are sustainable 
over the long term and balanced with important non-homeland-security 
objectives.

To support congressional and federal decision making on national 
preparation for and response to emerging threats to security, we will: 

[Begin list] 

* assess federal homeland security management, responsibility, 
effectiveness, and achievement of mission goals;

* identify ways to strengthen strategies related to homeland security 
and their implementation;

* evaluate homeland security resource priorities, costs, and approaches 
to stimulate desired investments;

* identify opportunities to embed homeland security concepts in ongoing 
national initiatives;

* evaluate ways to strengthen government information security and 
protect computer and telecommunications systems that support the 
nation's critical infrastructures; and 

* assess the effectiveness of U.S. and international efforts to prevent 
the proliferation of nuclear, biological, chemical, and conventional 
weapons and sensitive technologies.

[End list]

Ensure Military Capabilities and Readiness: 

After dropping below $300 billion in prior years, the total defense 
budget authority will exceed $465 billion in fiscal year 2004, 
including substantial supplemental funding to support ongoing military 
operations. The budget included additional resources for operations and 
maintenance, quality-of-life programs, pay raises, and improvements to 
crumbling facilities. The most recent Quadrennial Defense Review charts 
a new defense strategy emphasizing homeland security, military 
transformation, joint operations, and advanced capabilities related to 
information technology (IT), intelligence, and space operations. DOD 
has begun reassessing U.S. force structure and capabilities and DOD's 
presence and location of its bases overseas. The new defense strategy 
also highlights the criticality of reforming DOD's business practices 
and human capital management, streamlining organizational structures, 
and eliminating excess infrastructure that unnecessarily diverts 
resources from other defense priorities. The debate about what 
capabilities DOD must maintain and develop, where they should exist, 
and to what extent additional defense spending is required will be 
significantly shaped by the debate over the military's role in homeland 
security and the augmentation of the civilian agencies' roles in the 
fight against terrorism. To support the Congress and the federal 
government's efforts to improve military capabilities and readiness, 
our performance goals are to: 

[Begin list] 

* assess DOD's ability to maintain adequate readiness levels while 
addressing the force structure changes needed in the 21st century;

* assess overall human capital management practices to ensure a high-
quality total force;

* assess the ability of weapon system acquisition programs and 
processes to achieve desired outcomes;

* identify ways to improve the economy, efficiency, and effectiveness 
of DOD's support infrastructure and business systems and processes;

* assess the National Nuclear Security Administration's efforts to 
maintain a safe and reliable nuclear weapons stockpile;

* assess whether DOD and the services have developed integrated 
systems, procedures, and doctrines to support joint and coalition 
forces on the battlefield safely and effectively; and 

* analyze and support DOD's efforts to improve planning, programming, 
budgeting, execution, and program performance.

[End list]

Advance and Protect U.S. International Interests: 

Although U.S. leaders agree on the ultimate goal of promoting global 
peace, prosperity, and stability, intense debate is occurring over how 
to achieve that goal. Military and humanitarian interventions to make 
or keep the peace, stabilize and rebuild failed states, and deal with 
humanitarian emergencies have become major activities for the United 
States. These interventions include U.S. and coalition activities 
intended to stabilize and rebuild Iraq and Afghanistan and manage their 
transition to a secure, sustainable, and desired outcome. Countries in 
transition to democracy and a private market structure are critical to 
U.S. economic and security interests. Strategic alliances established 
decades ago are undergoing changes to better reflect current and future 
needs and priorities. Conducting foreign affairs is becoming more 
complicated as the lines between domestic and international issues blur 
and the threat of terrorist attacks on U.S. facilities and personnel 
overseas changes how America does business. To help the Congress and 
the federal government advance and protect U.S. international 
interests, our performance goals are to: 

[Begin list] 

* analyze the plans, strategies, roles, costs, and results of the 
United States and its allies in conflict interventions;

* analyze the effectiveness and management of U.S. foreign aid and 
developmental and humanitarian programs and the tools used to implement 
them;

* analyze the plans, costs, and outcomes of responding to challenges to 
U.S. strategic interests;

* evaluate the extent to which U.S. interests are effectively served by 
U.S. participation in multilateral organizations; and 

* assess the strategies and management practices for U.S. foreign 
affairs functions and activities.

[End list]

Respond to the Impact of Global Market Forces on U.S. Economic and 
Security Interests: 

The increasing interdependence of the world's economies has a 
significant impact on the national security and the economic well-being 
of the American people. U.S. exports have grown much faster than the 
economy. Moreover, the United States has been the principal architect 
of an open world trading system and, as the world's largest exporter of 
goods and services, has benefited immensely from global trade. But 
segments of U.S. and world populations have not shared equally in these 
benefits and may not do so in the future. Moreover, global market 
forces have made the United States more vulnerable to overseas economic 
crises. In addition, it has become more difficult for the United States 
to maintain control over critical technologies and the industrial base 
on which U.S. economic and military security depends. Also, the United 
States has faced terrorist threats emanating from some of the least 
integrated countries in the world as well as health threats from some 
of the most integrated regions of the world. For policy makers, several 
aspects of these trends require particular attention.

Trade agreements are increasing in number and importance to the U.S. 
economy. More than 300 international trade agreements affect hundreds 
of billions of dollars in trade and millions of U.S. jobs. The mutual 
dependence of international markets and the U.S. economy is expected to 
increase even further with China's admission to the World Trade 
Organization. In addition, the United States is currently involved in a 
major regional trade negotiation (the Free Trade Area of the Americas), 
multilateral negotiations in the World Trade Organization, as well as 
numerous free trade agreements with other partners. Over 10 U.S. 
agencies have programs to promote U.S. exports. These programs include 
providing financial assistance through loans, loan guarantees, and 
grants as well as providing U.S. businesses with information on the 
export process.

The globalization of the industrial base is driving changes in the way 
the United States obtains technologies and capabilities to protect its 
national security interests. As companies increasingly engage in a wide 
variety of business arrangements across national borders, DOD is 
seeking new ways to benefit from the competitive sources and innovative 
technologies that a diverse industrial base may provide. For example, 
the department is partnering with foreign countries to develop major 
weapon systems, such as the Joint Strike Fighter aircraft program. 
Although globalization has the potential to speed innovation and reduce 
costs, it also carries potential threats to the technological 
superiority of the U.S. military and may require new approaches to 
protect national security interests.

Global financial health and the maintenance of the world financial 
system are critical to long-term U.S. objectives and cornerstones of 
U.S. foreign policy. Financial crises in Argentina, Mexico, Asia, 
Russia, and elsewhere have raised questions about what can be done to 
prevent, solve, or contain the spread of regional financial crises and 
what can be done to reduce the debt burden on poor countries. 
International financial institutions, such as the International 
Monetary Fund and the World Bank, are at the center of efforts to 
address financial crises. The United States is the major contributor to 
the International Monetary Fund and relies heavily on it and the World 
Bank to promote world economic health. The operations and transparency 
of these institutions have come under increased scrutiny.

Overseeing financial institutions and markets in the 21st century is a 
growing challenge. Trillions of dollars flow through the nation's 
financial institutions and markets, including the investments and 
retirement savings of working households. The globalization of 
financial firms and markets, coupled with continuing advances in 
technology, has created opportunities to improve the speed and 
efficiency of market operations. But these advances also provide new 
opportunities for illegal market activities and may broaden the scope 
of financial crises or cause them to spread more rapidly. The creation 
of new products and the increasing importance of new market 
participants continue to pose challenges to existing regulatory 
frameworks and oversight programs. Innovations such as the increasing 
use of Internet-based financial activities also present new regulatory 
challenges. While these innovations can benefit U.S. markets and 
investors, they also expose individuals to increased risks and 
potential fraud.

To support efforts by the Congress and the federal government to 
address these issues, we will: 

[Begin list]

* analyze how U.S. interests are served through trade agreements and 
U.S. programs,

* improve understanding of the effects of a global industrial base on 
U.S. national security interests,

* assess how the United States can influence improvements in the world 
financial system,

* assess the ability of the financial services industry and its 
regulators to maintain a stable and efficient financial system in the 
face of market change and innovation, and 

* assess the effectiveness of regulatory programs and policies in 
ensuring access to financial services and deterring fraud and abuse in 
financial markets.

[End list]

[End Goal 2's Performance Goals and Targets]

[Begin Goal 3's Performance Goals and Targets]

Goal 3's Performance Goals and Targets: 

The federal government is in a period of profound transition and faces 
an array of challenges and opportunities to enhance performance, ensure 
accountability, and position the nation for the 21st century. Major 
trends--such as diffuse security threats, increasing 
interconnectedness of global markets and economies, and rapid 
technological advances--drive the need for federal agencies to 
transform their cultures and operations. In view of the broad trends 
and growing fiscal pressures, the federal government needs to engage in 
a fundamental reexamination of what government does, how it does 
business, and in some instances who does the government's business.

The federal government will need to work more closely with other 
governments, nongovernmental organizations, and the private sector--
both domestically and internationally--to achieve results. In 
reassessing federal missions and strategies, the federal government 
must examine the entire mix of policy tools available to address 
national objectives. Because the public expects demonstrable results 
from the federal government, government leaders need to increase 
strategic planning, address management challenges and high-risk issues, 
use integrated approaches, enhance their agencies' results orientation, 
and ensure accountability. Examining existing programs and operations 
for potential cost savings can create much needed fiscal flexibility to 
address emerging needs. Moreover, addressing today's priorities must be 
balanced against the long-term fiscal pressures of financing existing 
programs and operations.

This third strategic goal guides us in our efforts to help transform 
the federal government's role and how it does business to meet 21st 
century challenges. The accompanying strategic objectives focus on the 
comprehensive reassessment necessary to position the government to take 
advantage of emerging opportunities and meet strategic challenges. 
Specifically, we focus on the government's role in achieving national 
goals in an increasingly networked environment and its ability to 
deliver, and account for, high performance.

To ensure that we help transform the role of government and how it does 
business to meet the 21st century challenges, we have established 
strategic objectives to: 

[Begin list] 

* reexamine the federal government's role in achieving evolving 
national objectives;

* support the transformation to results-oriented, high-performing 
government;

* support congressional oversight of key management challenges and 
program risks to improve federal operations and ensure accountability; 
and 

* analyze the government's fiscal position and strengthen approaches for 
addressing the current and projected fiscal gap.

[End list]

These objectives are discussed in more detail in the sections that 
follow; the qualitative performance goals for each objective are listed 
as well. The results achieved for strategic goal 3 under our annual 
performance measures during the last 5 fiscal years are shown in table 
7 below, along with the goal's targets for fiscal years 2004 and 2005.

[Begin table]

Table 7: Strategic Goal 3's Annual Performance Results and Targets: 

Performance measure: Financial benefits (dollars in billions); 
1999 Actual: $4.5; 
2000 Actual: $5.1; 
2001 Actual: $7.0; 
2002 Actual: $5.2; 
2003 Actual: $4.7; 
2004 Target[A]: $4.7; 
2005 Target[B]: $8.0.

Performance measure: Other benefits; 
1999 Actual: 414; 
2000 Actual: 503; 
2001 Actual: 401; 
2002 Actual: 462; 
2003 Actual: 553; 
2004 Target[A]: 441; 
2005 Target[B]: 460.

Performance measure: New recommendations made; 
1999 Actual: 335; 
2000 Actual: 413; 
2001 Actual: 549; 
2002 Actual: 808; 
2003 Actual: 772; 
2004 Target[A]: 570; 
2005 Target[B]: 660.

Performance measure: Testimonies; 
1999 Actual: 100; 
2000 Actual: 105; 
2001 Actual: 42; 
2002 Actual: 65; 
2003 Actual: 56; 
2004 Target[A]: 57; 
2005 Target[B]: 56.

Source: GAO.

[A] These targets were revised after we issued our performance plan for 
fiscal year 2004. The target for financial benefits decreased from $8.1 
billion and the target for testimonies decreased from 60. The remaining 
two targets increased from 404 for other benefits and from 366 for new 
recommendations made.

[B] These targets are based on projected work within the goal. In some 
cases, this means that a target for fiscal year 2005 is lower than 
actual performance in prior years.

[End of table]

Reexamine the Federal Government's Role in Achieving Evolving National 
Objectives: 

Evaluating the role of the federal government and the programs it 
delivers is key in determining how to best position the federal 
government for the 21st century. With the government facing an array of 
complex challenges and opportunities, a strategic long-term view is 
critical in considering how best to design programs to meet the 
nation's needs and priorities today and in the future. Policy makers 
will need forward-looking information to set the stage for early 
warnings about emerging threats and make informed choices about 
effective government responses. Developing key national indicators can 
help policy makers assess the nation's overall position and progress in 
key areas and support informed public debate and decisions across 
government and the United States as a whole. Any assessment of federal 
missions and strategies also must look at the tools the government uses 
and the participation of other organizations in achieving national 
objectives. Policy makers need a better understanding of how individual 
policy tools operate, how to measure their performance and 
effectiveness, and what features are necessary to ensure accountability 
and oversight. The effectiveness of federal programs has increasingly 
become dependent on the state and local governments' management and 
resources as well as constructive interactions with private and 
nonprofit entities.

To support the Congress in reexamining the federal government's role in 
achieving evolving national objectives, we have established performance 
goals to: 

[Begin list] 

* examine emerging challenges and opportunities to position the federal 
government for the 21st century,

* develop new resources and approaches that can be used to assess the 
nation's position and progress,

* explore ways to evaluate the effectiveness of the entire set of 
policy tools that the federal government uses to achieve national 
objectives, and, 

* assess how involvement of state and local governments and 
nongovernmental organizations affects federal program implementation 
and achievement of national goals.

[End list]

Support the Transformation to Results-Oriented, High-Performing 
Government: 

To become high-performing organizations, agencies must transform their 
cultures to respond to the transition that is taking place in the 
federal government's role. By building fundamental management capacity, 
the federal government can improve its performance and deliver 
economical, efficient, and effective programs and services that the 
American people need in a cost-effective and fiscally sustainable 
manner. In establishing a results-oriented culture, an organization and 
its leaders need to carefully select the best solutions for the 
organization in terms of structure, systems, and processes.

Today's federal human capital strategies are not suited to meeting 
current and emerging challenges or to driving needed transformation. 
Consequently, we have designated strategic human capital management as 
a governmentwide high-risk area. While significant progress has been 
made in this area in recent years, progress in building organizational 
cultures to create and sustain a focus on results has been uneven, and 
more needs to be done to embed results-oriented practices into 
government operations.

Information is a vital resource that needs to be properly managed. 
While it is important to enhance the government's use of new 
technologies to improve the collection and dissemination of government 
information, it is also important that this information, especially 
that collected for statistical purposes, meet the current needs of 
federal programs and policy makers. Timely, accurate, and useful 
financial information is essential for making operating decisions day 
to day, supporting results-oriented management approaches, and managing 
the government's operations more efficiently, effectively, and 
economically.

Vital to successful transformation will be building financial, IT, and 
acquisition management capacity to support new ways of doing business. 
However, the federal government's financial management has suffered 
from neglect and financial systems with serious shortcomings. 
Similarly, numerous poorly managed IT systems have produced 
multimillion-dollar cost overruns, schedule slippages, and poor 
results; and poor information security remains a governmentwide high-
risk area. Finally, despite recent reforms to transform the federal 
acquisition process, the government still does not have a world-class 
purchasing system. All too often, many of the products and services the 
government buys cost more than expected, are delivered late, or fail to 
perform as expected.

To assess the government's capacity to better deliver public services, 
we will: 

[Begin list] 

* analyze and support efforts to improve the human capital 
infrastructure key to the successful transformation of the government;

* assess and support efforts to improve results-oriented management 
across the government;

* analyze efforts to build high-performing organizations;

* identify ways to improve the collection, dissemination, and quality 
of federal information;

* identify ways to improve financial management infrastructure 
capacity to provide useful information for managing results and costs 
day to day;

* assess the government's planning, implementation, and use of 
information technology to improve performance and modernize federal 
programs and operations; and 

* identify ways to improve how federal agencies acquire goods and 
services.

[End list]

Support Congressional Oversight of Key Management Challenges and 
Program Risks to Improving Federal Operations and Ensuring 
Accountability: 

Congressional oversight is needed to ensure that agencies continue to 
build their fundamental management capabilities, resolve high-risk 
areas, and address major management challenges to effectively meet the 
nation's most pressing priorities and to take advantage of emerging 
opportunities. Our 2003 Performance and Accountability and High-Risk 
Series reports identified 26 high-risk areas and described over 100 
major management challenges. Continued persistence and perseverance in 
addressing high-risk areas and major management challenges will 
ultimately yield significant benefits.

As part of the drive to improve performance, agencies are increasingly 
being called on to demonstrate results from their research and 
development programs. Congressional oversight is critical in ensuring 
that the substantial federal investment in science and technology is 
allocated effectively and that intellectual property rights are 
protected here and abroad.

The federal government has a stewardship obligation to safeguard the 
use of taxpayer funds; prevent fraud, waste, and abuse; and ensure 
financial accountability. While there has been important progress, 
agencies are still working toward the goals established in financial 
management reform legislation, such as the Chief Financial Officers Act 
of 1990 and the Government Management Reform Act of 1994. Widespread 
financial management system weaknesses, poor record keeping and 
documentation, weak internal controls, and a lack of information have 
prevented the government from having the information needed to 
effectively and efficiently manage operations or accurately report a 
large portion of its assets, liabilities, and costs. Attentive 
oversight is needed to ensure that agencies take steps to continuously 
improve internal controls and underlying financial and management 
information systems to ensure that executive branch managers and 
congressional decision makers have reliable, timely, and useful 
information to ensure accountability; measure, control, and manage 
costs; manage for results; and make timely and fully informed decisions 
about allocating limited resources.

To support congressional oversight of key management challenges and 
program risks to federal operations and accountability and to promote 
needed improvements, we have established performance goals to: 

[Begin list] 

* highlight the federal programs and operations at highest risk and the 
major performance and management challenges confronting agencies,

* assess the management and results of the federal investment in 
science and technology and the effectiveness of efforts to protect 
intellectual property, and 

* identify ways to strengthen accountability for the federal 
government's assets and operations.

[End list]

Analyze the Government's Fiscal Position and Strengthen Approaches for 
Addressing the Current and Projected Fiscal Gap: 

The federal budget is the principal annual vehicle through which the 
Congress and the President balance competing views about the allocation 
of federal resources, accountability for those resources, and the 
allocation of responsibility between the public and private sectors and 
among levels of government. After 4 years of budget surpluses, the 
nation is again facing large and growing budget deficits. Our long-term 
budget model has consistently suggested that without changes to the 
major retirement and health care programs, the nation will ultimately 
have to choose between escalating deficits and debt, significant tax 
increases, or dramatic budget cuts in other areas. It will be difficult 
to address today's urgent needs without unduly exacerbating the 
nation's long-term fiscal challenges.

Making government fit the challenges for the future will require not 
only dealing with the drivers--entitlements for the elderly--but also 
looking at the range of other federal activities. However, budget 
controls instituted to achieve balance in the past have expired, and no 
agreement has been reached on the appropriate structure or process for 
focusing on the fiscal challenges that now move to center stage.

American individuals and businesses annually pay about $2 trillion in 
taxes to fund the federal government. The federal tax system includes 
numerous tax provisions intended to influence taxpayers' behavior 
throughout the economy, but little is known about the effects of many 
of these provisions. Given the size and complexity of the federal tax 
code, the Congress remains interested in tax reform, particularly 
simplification. As the nation's chief tax collector, the Internal 
Revenue Service interacts with more Americans than any other government 
agency, and compliance with tax laws is a significant burden imposed on 
businesses and individuals. The Internal Revenue Service is in the 
midst of implementing major legislatively mandated reforms in how the 
nation's tax system is administered, and congressional interest remains 
focused on the agency's progress.

In light of the long-term fiscal challenges, policy makers need to 
reexamine , reassess, and reprioritize the federal government's 
programs, policies, and activities. One key to making resource 
decisions is having reliable, useful, and timely financial information 
routinely available. Such information is also necessary to ensure 
financial accountability and to improve the economy, efficiency, and 
effectiveness of government actions that have a direct impact on 
achieving a more results-oriented government.

To analyze the government's fiscal position and identify ways to 
strengthen approaches for addressing the fiscal gap, we will: 

[Begin list] 

* analyze the long-term fiscal position of the federal government,

* analyze the structure and information for budgetary choices and 
explore alternatives for improvement,

* contribute to congressional deliberations on tax policy,

* support congressional oversight of federal tax administration, and 

* assess the reliability of financial information on the government's 
fiscal position and financing sources.

[End list]

[End Goal 3's Performance Goals and Targets]

[Begin Goal 4's Performance Goals]

Goal 4's Performance Goals: 

To successfully carry out our responsibilities to the Congress for the 
benefit of the American people, we must be professional, objective, 
fact-based, nonpartisan, nonideological, fair, and balanced. We should 
also lead by example. The focus of goal 4 is to make us a model 
organization--one that is client and customer driven, has strategic 
leadership focused on achieving results, leverages our institutional 
knowledge and experience, continuously enhances the services that 
support our engagements, and is regarded as an employer of choice. In 
this respect, the focus of goal 4 during fiscal years 2004 through 2009 
is largely unchanged from our previous strategic plan. We have, 
however, made some refinements to our strategic objectives and 
supporting performance goals to make them more results-oriented and 
measurable.

During fiscal years 2004 and 2005, we plan to implement two major 
projects that will support our goal of being a model federal agency and 
a world-class professional services organization. First, we continue to 
pursue legislation that would more effectively link our employees' pay 
to performance and would increase our flexibility with regard to 
recruitment and retention. Among other things, this legislation, once 
enacted, would (1) make permanent our 3-year authority to offer early 
retirements and buyouts, (2) allow us to set our own annual pay 
adjustment system separate from the executive branch, (3) provide 
authority to reimburse employees for some relocation expenses when the 
transfer does not meet current legal requirements but would benefit 
GAO, (4) provide 20 days of annual leave for appropriate employees in 
certain positions with less than 3 years of federal service, and (5) 
authorize an executive exchange program with the private sector in 
areas of mutual concern where we have a supply and demand imbalance. 
Second, we are reviewing the classification of and compensation for our 
analyst staff with the intent of implementing revisions that are aimed 
at ensuring that we can continue to attract, retain, and reward a top-
quality workforce. This review is also intended to ensure that (1) our 
classification and compensation systems result in equal pay for work of 
equal value over time; (2) our classification system is reasonable and 
reflective of the roles and responsibilities expected of GAO's staff; 
(3) our classification and compensation systems are reasonable and 
competitive; and (4) our classification and compensation systems are 
both affordable and sustainable based on current and expected resource 
levels.

For this goal, we have established strategic objectives to: 

[Begin list] 

* continuously improve client and customer satisfaction and stakeholder 
relationships,

* lead strategically to achieve enhanced results,

* leverage GAO's institutional knowledge and experience,

* continuously enhance GAO's business and management processes, and 

* become a professional services employer of choice.

[End list]

Continuously Improve Client and Customer Satisfaction and Stakeholder 
Relationships: 

We interact and work with a diverse set of external clients and 
internal customers. Our principal client is the Congress, and our work 
is also important to other stakeholders, including federal and 
nonfederal agencies and organizations and international institutions. 
Our internal customers are our staff, most of whom are engaged in 
delivering quality services to our clients. Therefore, being a model 
agency depends on both determining and meeting the requirements of our 
clients and internal customers.

For external clients, we plan to continually update our understanding 
of their needs and expectations through rigorous outreach efforts and 
strategic planning. We also plan to develop and use high-quality 
measurement systems and feedback mechanisms to obtain external clients' 
views on our products and services. In addition, we plan to use 
enhanced technology to provide better access to our information and 
products and improve the quality and timeliness of our products and 
services.

For internal customers, we plan to identify their needs and 
expectations through expanded outreach and planning efforts. We will 
identify and develop high-quality measurements to assess customer 
satisfaction, business processes, and accomplishment of the agency's 
strategic direction. In addition, we will develop policies and 
procedures to guide how our work responds to customer needs. We also 
plan to improve communication with our managers and staff on changes to 
services.

For external stakeholders, we plan several efforts to strengthen 
relationships with major stakeholder groups. We will refine our 
protocols for conducting agency reviews to better manage stakeholder 
expectations. We also plan to develop and implement clear, consistent, 
and transparent protocols to govern interactions with international 
organizations. We will also strengthen our relationship with the press 
and the public by increasing the accessibility of our products.

To support our objective to deliver exceptional service in meeting 
client and customer needs, we will: 

[Begin list] 

* strengthen communication with congressional clients and more broadly 
measure their satisfaction with GAO's work,

* assess internal customer satisfaction with GAO's services and processes 
and implement and measure improvement efforts, and 

* strengthen relationships with GAO's stakeholders and increase the 
accessibility of GAO's products.

[End list]

Lead Strategically to Achieve Enhanced Results: 

We will strengthen our strategic leadership to better integrate the 
agency's financial, human capital, and information resources for 
achieving enhanced results. To accomplish this objective, we will build 
on our established base of strategic planning, performance management, 
sound financial management, IT best practices, and leadership 
initiatives. We will also refine certain functions to ensure their 
strategic alignment, working to better align succession planning, 
workforce planning, staff utilization, and appraisal and compensation 
systems with our strategic objectives.

To support the objective to lead strategically to achieve enhanced 
results, we will: 

[Begin list] 

* integrate planning, budgeting, and performance measurement to achieve 
enhanced results;

* strengthen GAO's strategic human capital management to achieve 
enhanced results;

* ensure exemplary practices and systems in GAO's fiscal operations; 
and 

* strengthen IT governance practices and processes to achieve strategic 
results.

[End list]

Leverage GAO's Institutional Knowledge and Experience: 

We are a knowledge-based professional services organization. As larger 
numbers of our more senior employees reach eligibility for retirement, 
we need to identify and implement strategies for retaining their 
knowledge and expertise and increasing organizational knowledge 
sharing. We plan to develop an integrated approach for identifying, 
managing, and sharing the organization's information and intellectual 
assets, using our electronic and Web-based technologies to support the 
objective. We will also identify ways to enhance knowledge sharing with 
other national and international accountability and professional 
organizations.

To support the objective to leverage our institutional knowledge and 
experience, we will: 

[Begin list] 

* maximize the collection, use, and retention of essential 
organizational knowledge;

* increase GAO's knowledge-sharing capability; and 

* enhance knowledge sharing with other national and international 
accountability and professional organizations.

[End list]

Continuously Enhance GAO's Business and Management Processes: 

As the federal government's accountability organization, we evaluate 
the economy, efficiency, and effectiveness of a wide range of federal 
policies and programs to assist the Congress for the benefit of the 
American people. By continuously assessing and enhancing the processes 
and services that support our own engagements, we can maximize our 
value to the Congress and the public.

To support the objective to continuously enhance our business and 
management processes, we will: 

[Begin list] 

* improve engagement support services and 

* use enabling technology to improve GAO's crosscutting business 
processes.

[End list]

Become a Professional Services Employer of Choice: 

To be a model organization, we must become an employer of choice--one 
that attracts, retains, motivates, and rewards excellent employees and 
is considered one of the best places to work. We intend to build and 
maintain a work environment that is fair, unbiased, and inclusive and 
that offers the opportunity for all employees to realize their full 
potential. To improve employee satisfaction with working at GAO, we are 
committed to providing our employees with the tools, technologies, and 
systems that promote collaboration and productivity and a safe, secure 
workplace; enhancing our offerings of family-friendly and work-life 
programs; and providing superior training for our new hires.

To become a professional services employer of choice, we will: 

[Begin list] 

* promote an environment that is fair and unbiased and that values 
opportunity and inclusiveness;

* provide GAO staff with tools, technology, and a world-class working 
environment;

* provide a safe and secure workplace;

* enhance employee views about GAO; and 

* improve the development and experiences of newly hired staff.

[End list]

[End Goal 4's Performance Goals]

[End Our Planned Performance for Fiscal Year 2005]

[Begin Strategies and Means] 

Strategies and Means: 

[Begin Strategies]

Strategies for Achieving Our Goals and Coordinating with Others: 

As the audit, evaluation, and investigative arm of the Congress, we 
have a unique role to play. Within the legislative branch, we are the 
only agency with staff in the field, conducting performance analyses 
and financial audits along with other congressionally requested 
activities, and reporting our findings not only to our congressional 
clients but also to the American public. While we work with the Office 
of Inspector General (IG) at most of the federal agencies, our 
engagements often differ from theirs in that ours are more strategic 
and longer-range in nature, are governmentwide or multi-agency in 
scope, or are initiated by requests from the Congress.

Our strategies for achieving our strategic goals primarily emphasize 
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. These include: 

[Begin list] 

* evaluating federal policies and the performance of agencies;

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

* investigating whether illegal or improper activities are occurring;

* analyzing the financing for government activities;

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

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

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

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

[End list]

Our strategies also stress the importance of two overarching 
approaches: (1) working with other organizations on crosscutting issues 
and (2) effectively addressing the challenges to achieving our agency's 
goals--that is, those internal and external factors that could impair 
our performance.

The performance goals described by strategic goal under the section of 
this plan called Measuring Our Performance lay out the work we plan to 
complete by the end of fiscal year 2005 using the strategies above. 
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. We also draw extensively 
from the expertise of our own staff in preparing our strategic and 
annual performance plans.

Strategic workforce planning is one of the most important parts of the 
foundation of our effort to become more results-oriented, flexible, and 
responsive organization. Our strategic workforce planning involves a 
series of annual, comprehensive efforts within GAO to ensure that our 
workforce assets are effectively employed to achieve our strategic 
goals. These efforts have helped us to identify the wisest investments 
in recruitment and retention tools, training, and professional 
development that have ultimately resulted in a workforce that is better 
able to support the Congress and to achieve results for the American 
public. For GAO to best assist the Congress with the increasingly 
complex challenges of the 21st century, we must continue to refine and 
strengthen our workforce planning process. Additional workforce 
planning will be required to ensure that we maintain the right mix of 
skills and experience to deliver meaningful contributions toward 
addressing the challenges that lie ahead.

Consulting with External Advisers: 

Through a variety of forums, speakers' series, advisory boards, and 
panels, we gather information and perspectives to inform our strategic 
and annual performance planning efforts and to help us achieve our 
goals. In fiscal year 2004, for example, we convened various experts 
from the public and private sectors in a series of forums intended to 
enhance our understanding of emerging issues and to identify 
opportunities for action. Some of these were the following: 

[Begin list] 

* In January 2004, we convened a health care forum to discuss the 
challenges associated with financing and delivering health care in 
light of the huge and growing long-range fiscal imbalance due primarily 
to known demographic trends and rising health care costs.

* In February 2004, we issued a report that summarized the findings of a 
forum on High Performing Organizations. The report highlights the 
metrics, means, and mechanisms for achieving high performance in the 
21st century public management environment.

* In April 2004, we convened a human capital forum to discuss pending 
human capital reform efforts, recent legislation, and possible future 
legislative and administrative reform efforts. Special attention was 
given to developing an initial set of operating principles for 
determining agency-specific versus governmentwide human capital 
reforms and seeking agreement on a legislative and regulatory template 
for providing agencies with greater human capital authorities.

* In April 2004, we also convened a forum on workforce challenges and 
opportunities in the 21st century. This forum focused on the future 
demands on the workforce, options for meeting the demands and their 
trade-offs, and the role the government might play in helping to 
address these issues.

* Throughout the year, we continued our speakers' series "Conversations 
on 21st Century Challenges," wherein prominent leaders discussed 
emerging themes and their implications for public policy.

[End list]

Advisory boards and panels also support our strategic and annual work 
planning by alerting us to issues and trends that we should factor into 
our own work. For example, the Comptroller General's Advisory Board, 
which consists of 40 members from the public and private sectors with 
broad expertise in areas related to our strategic objectives, meets 
with our leadership annually to share its views on our strategic 
direction and specific initiatives. In addition, the Comptroller 
General's Educators' Advisory Panel, composed of deans, professors, and 
other academics from prominent universities across the United States, 
meets with us annually to provide advice on recruiting, retaining, and 
developing staff and on strategic planning.

We also work with a number of issue-specific and technical panels to 
help inform our work, including the following: 

[Begin list]

* The Advisory Council on Government Auditing Standards advises the 
Comptroller General throughout the standard-setting process on issues 
related to the auditing standards that we set. The council continues to 
be engaged in issue identification, evaluation, selection, and 
resolution. Through this council, we also closely monitor the actions 
of other standard setting bodies and issue clarifying guidance as 
necessary on the standards set by these bodies. The advice of the 
council is critical in developing this guidance.

* The Accountability Advisory Council, made up of experts in the 
financial management community, advises us on audits of the U.S. 
government's consolidated financial statements and emerging issues 
involving financial management and accountability reporting. In 2004, 
the council also provided insights that were valuable for moving toward 
the transformation of the accountability community and increasing the 
transparency of the government's fiscal position.

* The Executive Council on Information Management and Technology, whose 
21 members are experts from the public and private sectors and 
representatives of related professional organizations, met in May 2004 
to examine the roles, responsibilities and key challenges facing 
federal Chief Information Officers. The results of discussions on these 
topics will be used to support ongoing and planned work, the 
development of criteria for the organization and operation of Chief 
Information Officers, and the identification of strategies for 
addressing the challenges that they face.

[End list]

Through the National Intergovernmental Audit Forum, chaired by the 
Comptroller General, and 10 regional intergovernmental audit forums, we 
consult regularly with federal IGs and state and local auditors. In 
fiscal year 2004, the National Intergovernmental Audit Forum drafted 
its first strategic plan. In addition, through the Domestic Working 
Group, the Comptroller General and the heads of 18 federal, state, and 
local audit organizations exchange information and seek opportunities 
to collaborate.

Internationally, we participate in the International Organization of 
Supreme Audit Institutions (INTOSAI)--the professional organization of 
the national audit offices of 184 countries. During fiscal year 2004, 
we continued to lead a 10-nation task force to develop a 5-year 
strategic plan--the first in INTOSAI's 50-year history. A framework for 
the strategic plan was approved at the October 2003 Governing Board 
meeting. The final plan will be addressed by the Board in June 2004 and 
will be submitted for approval by INTOSAI's membership at the triennial 
conference in October 2004. The Comptroller General also leads the 
Auditor General Global Working Group, in which the heads of our 
counterparts from 15 countries meet annually to discuss mutual 
challenges, share their experiences, and identify opportunities for 
collaboration with one another. The 2004 meeting featured a 
presentation on the results of the first peer review of the Office of 
the Auditor General of Canada, which was conducted under the auspices 
of the Global Working Group. The second review, which covers GAO, began 
in April 2004.

[Begin Management Challenges]

Addressing Management Challenges That Could Affect Our Performance: 

In our fiscal year 2000 performance and accountability report, we 
identified human capital and information technology as our two major 
management challenges. Since then, we have transformed the latter so 
that it covers information security, and we have added a third 
challenge related to the security and safety of our building and our 
people. The Comptroller General and our senior executives define these 
management challenges on an annual basis through our strategic 
planning, management, and budgeting processes. We anticipate that these 
three areas will remain challenging for us the better part of this 
decade because they are evolving and, as such, require us to 
continuously identify ways to adapt and improve. Also, the solutions to 
these challenges often can take months or years to design and 
implement. Nonetheless, we revisit the challenges each year; refine 
them, when appropriate; and describe our planned efforts to address 
them. We monitor and report on our progress in addressing the 
challenges through our annual performance and accountability process. 
The following sections describe our planned efforts through fiscal year 
2005 in each of the three areas.

The Human Capital Challenge: 

Given our role as a key provider of information and analyses to the 
Congress, maintaining the right mix of technical knowledge and 
expertise as well as general analytical skills is vital to achieving 
our mission. We spend about 80 percent of our resources on our people, 
but without excellent human capital management, we could run the risk 
of being unable to meet the expectations of the Congress and the 
nation. However, we are continuing to make significant advances in our 
human capital management. During fiscal year 2003, we made substantial 
progress toward finalizing our strategic plan for human capital, which 
communicates our strategy for becoming a model professional services 
organization. We will finalize our plan in the near future and continue 
to emphasize our workforce planning process in the future, addressing 
the size, deployment, and profile of our staff to ensure we have the 
appropriate resources strategically placed to pursue our goals and 
objectives now and in the future.

We built on our past accomplishments in attracting and retaining a 
diverse workforce with the knowledge, skills, and abilities to meet the 
new century's challenges. To promote the retention of staff with 
critical skills and 1 to 3 years of GAO experience, we continue to 
offer student loan repayments in exchange for commitments to federal 
service. In fiscal year 2004, we are continuing to improve our human 
capital program by instituting a knowledge transfer/retention program 
and by converting our Administrative Professional and Support Staff to 
a broad-banded pay-for-performance system.

During fiscal year 2005, we will continue to face challenges with 
respect to how we attract, retain, motivate, and reward a high-
performing and top-quality workforce. Our most recent human capital 
legislative reform proposal is currently pending before the Congress. 
In an effort to more effectively link pay to performance and to 
increase our flexibility with regard to recruitment and retention, the 
legislation would, among other things, (1) make permanent our 3-year 
authority to offer early retirements and buyouts, (2) allow us to set 
our own annual pay adjustment system separate from the executive 
branch, (3) provide authority to reimburse employees for some 
relocation expenses when the transfer does not meet current legal 
requirements but would benefit GAO, (4) provide 20 days of annual leave 
for appropriate employees in certain positions with less than 3 years 
of federal service, and (5) authorize an executive exchange program 
with the private sector in areas of mutual concern where we have a 
supply and demand imbalance.

The Information Security Challenge: 

Protecting our information assets and ensuring information systems 
security and disaster recovery that allow for continuity of our 
operations are critical requirements. Never has the potential for harm 
and threats to IT systems and information assets been greater. And, 
unfortunately, these threats are not likely to abate in the short term, 
given today's security environment and the rapid advances in 
technology. Because disruption to our normal business processes would 
have a major impact on our ability to respond to the needs of the 
Congress, we have a wide range of initiatives under way or planned to 
strengthen and protect the security of our information and information 
systems and, in the event of a disaster, to ensure response, 
resumption, recovery, and restoration of systems supporting our 
business processes.

We are developing a comprehensive information systems security program 
consistent with the requirements set forth in the Federal Information 
Security Management Act and are updating our security awareness 
training for all of our staff--and in particular, our IT staff. 
Similarly, we are updating our Information Systems Security Policy, as 
well as our network policies. We plan to conduct an independent 
assessment of our security infrastructure and information systems 
security program to supplement our vulnerability assessments of major 
systems and our annual network vulnerability assessment. Our goal is to 
identify all gaps and implement corrective actions swiftly, to ensure 
that we have appropriately hardened our external and internal network 
security and have in place a robust, multilayered security 
architecture. We are also expanding our efforts in intrusion detection 
and prevention to significantly reduce our vulnerability to threats. 
Finally, we will continue to expand and refine our ongoing disaster 
recovery efforts and emergency preparedness plans, with training 
provided to our executives as well as our continuity of operations 
teams; and we are coordinating our IT disaster recovery program with 
other legislative branch entities to ensure continuity of 
communications and operations between selected recovery sites.

The Security and Emergency Preparedness Challenge: 

In the aftermath of the September 11, 2001, terrorist attacks, 
subsequent anthrax incidents, and the Operation Enduring Freedom and 
Afghanistan operations, our ability to provide a safe and secure 
workplace was challenged. Protecting our people and our other assets is 
critical to our ability to carry out our mission. Since officially 
designating the security and safety of those in the workplace as a 
management challenge, we have: 

[Begin list] 

* conducted an assessment of our weaknesses and vulnerabilities and 
worked diligently to correct these weaknesses and minimize the 
vulnerabilities;

* enhanced entry and exit procedures for staff and vehicles and 
increased the number of security guards to provide additional coverage 
at pedestrian and vehicle entrances;

* established new inspection procedures for mail and packages delivered 
to the GAO Building and purchased additional security equipment to x-
ray packages;

* upgraded air handling and air intake systems and improved security 
over hazardous materials and implemented a program to test the air 
quality to detect hazardous substances;

* purchased life-safety equipment for the GAO Building occupants and 
field staff, including gas masks, emergency lights, and biological/
chemical escape hoods and protection suits;

* developed emergency preparedness plans and shelter in place plans for 
headquarters and field offices; and 

* reviewed and commented on the Continuity of Operations Plan that a 
contractor developed for us.

[End list]

By fiscal year 2005, we plan to have completed installing the enhanced 
perimeter security measures, including bollards, plinth walls, 
ballistic-rated guard booths, and other measures designed to increase 
building security. In addition, we will have installed an integrated 
electronic security system in our headquarters building with links to 
field office locations to further enhance the security operation. In 
early 2005, we plan to finalize our Continuity of Operations Plan.

[End Management Challenges]

[Begin Mitigating Factors]

Mitigating External Factors That Could Affect Our Performance: 

Several external factors could affect the achievement of our 
performance goals, including national and international developments 
and the resources we receive. Limitations imposed on our work by other 
organizations or limitations on the ability of other federal agencies 
to make the improvements we recommend are additional factors that could 
affect the achievement of our goals.

As the Congress focuses on unpredictable events--such as the global 
threat posed by sophisticated terrorist networks, international 
financial crises, or natural disasters--the mix of work we are asked to 
undertake in fiscal year 2005 and beyond may change, diverting our 
resources from some of our strategic objectives and performance goals. 
We can and do mitigate the impact of these events on the achievement of 
our goals in the following ways: 

[Begin list] 

* We stay alert to possibilities that could shift the Congress's and, 
therefore, our priorities.

* We continue to identify in our products and meetings with the 
Congress conditions that could trigger new priorities.

* We quickly redirect our resources, when appropriate, so that we can 
deal with major changes that do occur.

* We maintain broad-based staff expertise so that we can readily 
address emerging needs.

* We perform self-initiated research on a limited number of selected 
topics.

[End list]

A growing area of uncertainty involves our work on bid protests. As 
required by law, our General Counsel's office prepares Comptroller 
General procurement law decisions that resolve protests filed by 
disappointed bidders. These bidders challenge the way individual 
federal procurements are being conducted or how the contracts were 
awarded. In recent years, we have experienced an increase in the number 
of bid protests that have been filed. A further increase in our 
workload is likely if federal employees or their representatives are 
granted the right to appeal outsourcing decisions. We will continue to 
monitor our workload in this area to ensure that we meet our statutory 
responsibilities with minimal negative impact on our other work.

Another external factor is the extent to which we can obtain access to 
certain types of information. With concerns about operational security 
being unusually high at home and abroad, we may have more difficulty 
obtaining information and reporting on sensitive issues. Historically, 
our auditing and information gathering has been limited whenever the 
intelligence community is involved, nor have we had the authority to 
gain access to or inspect records or other materials held by other 
countries or, generally, by the multinational institutions that the 
United States works with to protect its interests. Consequently, our 
ability to fully assess the progress being made in addressing national 
and homeland security issues may be hampered, and because some of our 
reports may be subjected to more stringent classification reviews than 
in the past, their public dissemination may be limited. We will work 
with the Congress to identify both legislative and nonlegislative 
opportunities for strengthening our access authority as necessary and 
appropriate.

We are experiencing a backlog of requests from the Congress for work in 
a number of subject areas, especially in the health care area. Our 
ability to effectively manage this backlog could have an impact on our 
ability to meet our performance targets. We will continue to manage 
these requests in order to minimize any negative impact they may have 
on our ability to meet the needs of the Congress and the American 
people.

Given large current federal budget deficits and the nation's long-range 
fiscal imbalance, the Congress is likely to place increasing emphasis 
on fiscal constraint beginning in fiscal year 2005. While it is unclear 
as to how GAO will ultimately be affected, it is reasonable to assume 
that any attempt to exercise additional budgetary discipline in the 
legislative branch will not exclude our agency. As a result, while we 
believe that we submit reasonable and responsible budget requests and 
we know that the return on investment that we generate is unparalleled, 
we must plan and prepare for the possibility of significant and 
recurring constraints on the resources made available to the agency. In 
addition, since over 80 percent of our budget is composed of people-
related costs, any serious budget situation will have an impact on our 
human capital policies and practices. This, in turn, will have an 
impact on our ability to serve the Congress and meet our performance 
targets. While, as noted above, the nature and extent of any such 
budget constraints cannot be determined at the present time, GAO's 
executive team is engaged in a range of related planning activities. It 
is both appropriate and prudent for us to engage in such planning. At 
the same time, we are hopeful that the Congress will recognize that 
performance based budgeting concepts would support providing additional 
resources to entities with prudent budget requests and proven 
performance results. If the Congress employs such an approach, GAO 
should be in a good position.

[End Mitigating Factors] 

[Begin Selected Initiatives]

Selected Initiatives Planned for Fiscal Year 2005: 

Peer Review: 

A team of auditors from the supreme audit institutions of several 
countries will perform a peer review of our performance audit work 
issued in calendar year 2004. Auditors from Canada's Office of the 
Auditor General will lead the team. In addition, a professional 
services firm will review our financial statement audit practice. The 
two review teams will coordinate their reviews. The peer review will 
evaluate whether our internal quality control system for calendar year 
2004 is suitably designed and operating effectively to provide the 
organization with reasonable assurance that established policies and 
procedures and applicable standards are being followed in accordance 
with government auditing standards. The peer review includes a review 
of audit documentation, lists of functional areas, and staff 
interviews. The review team will provide our management suggestions to 
improve our quality control systems and procedures.

New Financial Audit Responsibility: 

Pursuant to the Accountability of Tax Dollars Act of 2002, the 
Securities and Exchange Commission (SEC) is required to prepare and 
submit to Congress and the Office of Management and Budget audited 
financial statements for each year beginning in 2003. Under this act, 
the Office of Management and Budget has the option of waiving this 
requirement for fiscal year 2003, which it has done for the SEC. We 
have agreed to be the SEC's auditor.

Financial Management System: 

For the past 14 years we have used a mainframe federal financial system 
for our financial management needs. We rely on the system to process 
financial transactions and to maintain data needed to provide auditable 
financial statements. Our costs to maintain this system are beginning 
to escalate because we need to use contractors to assist us in 
resolving operational issues and to ensure proper system maintenance. 
For fiscal year 2005, we have requested funds to complete efforts to 
update our requirements and concept of operations for a new financial 
management system, and assess the option of using an existing Library 
of Congress contract to obtain a replacement financial management 
system. We would require a significant financial investment in fiscal 
year 2006 in order to procure a system and begin installation, testing, 
and training related to that system. We anticipate system 
implementation late in fiscal year 2006 or early fiscal year 2007.

Closure of Our Internal Printing Operations: 

In July 2003, the Subcommittee on the Legislative Branch, Senate 
Appropriations Committee, directed us to evaluate our internal print 
facility and alternative means to meet our printing, copying, and 
publishing needs. The committee further requested that the fiscal year 
2005 budget clearly identify savings associated with closing the 
facility. The evaluation was conducted by internal GAO staff and 
reported to our appropriations and oversight committees and the Joint 
Committee on Printing in November 2003. We recommended phasing out our 
internal printing capability, including equipment, facilities, and 
staff; and, in January 2004, the Joint Committee on Printing approved 
the closure of our internal printing operations.

We anticipate that cost savings from this effort will be realized 
beginning in fiscal year 2005. The first step of phasing out the 
printing operations, beginning in fiscal year 2004, includes downsizing 
the internal print plant, reducing the workforce, and surplusing the 
largest printing press. To minimize the impact on affected employees, 
we are providing dedicated outplacement assistance, including career 
counseling and help for developing résumés and identifying job 
opportunities for our print plant staff. Additional workforce 
reductions and equipment surplus actions will be phased out throughout 
fiscal year 2005 and the first quarter of fiscal year 2006. All 
internal print plant operations are scheduled to cease no later than 
January 2006.

[End Selected Initiatives]

[End Strategies]

[Begin Resources]

Resources Needed for Fiscal Year 2005 to Achieve the Goals: 

We have requested budget authority of $486.7 million to achieve our 
fiscal year 2005 performance goals to support the Congress as outlined 
in our strategic plan for fiscal years 2004 through 2009. The requested 
funding level will allow us to remain at our authorized level of 3,269 
full-time equivalent staff, maintain operational support at fiscal year 
2004 levels, add 4 full-time equivalent positions to establish a 
baseline technology assessment capability to conduct one technology 
assessment annually without an adverse impact on other high-priority 
congressional work, and continue efforts to enhance our business 
processes and systems. Our budget request represents a modest 4.9 
percent increase over our estimated fiscal year 2004 operating level, 
primarily to fund mandatory pay and related costs and estimated 
inflationary increases.

Table 8 summarizes our operating requirements for fiscal year 2003 and 
estimated operating requirements for fiscal years 2004 and 2005 by 
funding source.

[Begin table]

Table 8: Resources by Funding Source: 

Dollars in thousands: 

Funding source: Budget authority for GAO operations[A]; 
Fiscal year 2003 actual: $454,051; 
Fiscal year 2004 revised: $463,577; 
Fiscal year 2005 estimate: $486,654; 
Change from fiscal year 2004 to 2005: $22,532. 

Funding source: Less: Estimated revenue (offsetting collections); 
Fiscal year 2003 actual: $(2,469); 
Fiscal year 2004 revised: $(5,971); 
Fiscal year 2005 estimate: $(6,119); 
Change from fiscal year 2004 to 2005: $(148).

Funding source: Direct appropriation; 
Fiscal year 2003 actual: $451,582; 
Fiscal year 2004 revised: $457,606; 
Fiscal year 2005 estimate: $480,535; 
Change from fiscal year 2004 to 2005: $22,384.

Source: GAO.

[A] Budget authority for fiscal year 2003 reflects a rescission of 
$2,932,000, and for fiscal year 2004 reflects a rescission of 
$2,751,000.

[End of table]

About 80 percent of our requested fiscal year 2005 budget funds human 
capital costs for staff in accordance with our workforce plan, 
including direct salaries and benefits, miscellaneous compensation and 
support, training and development, and rewards and recognition. The 
next largest component of our fiscal year 2005 budget--about $45 
million--is for information services and for maintenance and operation 
of technology software, hardware, and systems. In fiscal year 2005, 
about $24 million will be spent on administrative service, including 
maintenance and operation for the GAO headquarters building, rent and 
operating costs for field office locations, safety and security 
services, and property management services. About $11 million will be 
spent on travel and transportation, critical components to 
accomplishing our mission to follow the federal dollar across the 
country and throughout the world and ensure the quality of our work. 
Knowledge services, estimated at about $7.5 million for fiscal year 
2005, will provide funds for assets and services, electronic media, 
publications and dissemination, and mail and messenger services. The 
remaining funds will be used to obtain contract support for financial 
and program audits and evaluation and for other miscellaneous support 
services.

Table 9 provides our requested fiscal year 2005 human capital resource 
allocations and budgetary resources for each of our four strategic 
goals. We provide resource information by strategic goal because we 
have found that it is more meaningful to us to manage our resources at 
that level than at the performance goal level.

[Begin table]

Table 9: Fiscal Year 2005 Estimated Resources by Strategic Goal: 

Strategic goal: 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; 
Full-time equivalent positions: 1,069; 
Requested amount (in thousands): $163.0.

Strategic goal: Goal 2: Provide timely, quality service to the Congress 
and the federal government to respond to changing threats and the 
challenges of global interdependence; 
Full-time equivalent positions: 798; 
Requested amount (in thousands): $122.4.

Strategic goal: Goal 3: Help transform the federal government's role 
and how it does business to meet 21st century challenges; 
Full-time equivalent positions: 844; 
Requested amount (in thousands): $130.1.

Strategic goal: Goal 4: Maximize the value of GAO by being a model 
federal agency and a world-class professional services organization; 
Full-time equivalent positions: 562; 
Requested amount (in thousands): $71.2.

Total; 
Full-time equivalent positions: 3,273[A]; 
Requested amount (in thousands): $486.7.

Source: GAO.

[A] This estimate includes four additional full-time equivalent 
positions needed to establish a baseline technology assessment 
capability.

[End of table]

During fiscal year 2005, we plan to sustain our investments in 
maximizing the productivity of our workforce by continuing to address 
key management challenges related to human capital, security and 
emergency preparedness, and information security. We will continue to 
take steps to "lead by example" within the federal government in 
connection with these and other critical management areas. On the human 
capital front, to ensure our ability to attract, retain, and reward 
high-quality staff, we plan to devote additional resources to our 
employee training and development program. We will target resources to 
continue initiatives to address skill gaps, maximize staff 
productivity, and increase staff effectiveness by updating our training 
curriculum to address organizational and technical needs and training 
new staff. Also, to enhance our recruitment and retention of staff, we 
will continue to offer a student loan repayment program and transit 
subsidy benefit established in fiscal year 2002. In addition, we will 
continue to focus our hiring efforts in fiscal year 2005 on recruiting 
talented entry-level staff.

We are continuing to make the investments necessary to enhance the 
safety and security of our people, facilities, and other assets for the 
mutual benefit of the Congress and us. In fiscal year 2005, we plan to 
complete installation of our building access control and intrusion 
detection system and supporting infrastructure, obtain an offsite 
facility for use by essential personnel in emergency situations, and 
provide life-safety devices.

On the information security front, in fiscal year 2005, we plan to 
implement tools that will ensure a secure environment, detect intruders 
in our systems, identify appropriate users, and recover in the event of 
a disaster. We plan to apply additional intrusion detection software to 
our internal servers and complete our disaster recovery plan. In 
addition, we plan to continue initiatives designed to further increase 
employees' productivity, facilitate knowledge sharing, maximize the use 
of technology, and enhance employee tools available at the desktop. We 
also will continue to devote resources to reengineer the IT systems 
that support business processes, such as our engagement tracking 
system, and our human capital operations.

[End Resources]

[End Strategies and Means] 

[Begin Verification and Validation of Performance Data]

Verification and Validation of Performance Data: 

Each year, we measure our performance by (1) assessing our progress in 
performing work related to the qualitative performance goals and (2) 
evaluating our annual performance on measures that cover some of the 
outcomes and outputs related to our work results, client service, and 
management of our people. To assess our performance in fiscal year 
2005, we plan to use performance data that are complete and actual 
(rather than projected) for all of our performance measures. We expect 
the data to be reliable because we will follow the verification and 
validation procedures described here to ensure the data's quality.

The specific sources of the data for our qualitative performance goals, 
procedures for independently verifying and validating these data, and 
the limitations of these data are described in table 10.

[Begin table]

Table 10: How We Ensure Data Quality for the Qualitative Performance 
Goals: 

Qualitative performance goals: 

Definition and background: We consult with our congressional clients 
and other outside experts in setting our qualitative performance goals. 
Thus, assessing the extent to which we achieve our performance goals 
helps focus our efforts on issues of critical importance and provides a 
tool for holding ourselves accountable for the resources the Congress 
provides. They measure the extent to which we did the work we had 
planned to do to support the Congress over a period of time. In this 
case, they cover fiscal year 2004 to fiscal year 2005; 

For each performance goal, we identify the key efforts needed to 
achieve it. To determine whether a performance goal has been met, we 
assess the work completed under the goal's key efforts. In making this 
assessment, the responsible senior executives for strategic goals 1 
through 3--our external goals--consider the number of reports issued 
and recommendations made for each key effort as well as any other 
assistance provided the Congress related to these efforts. Senior 
executives then judge whether the work completed collectively for all 
key efforts actually achieved the performance goal. For strategic goal 
4--our internal goal--senior executives also judge whether the 
performance goals have been met based on the work done on the goal's 
key efforts.

Data sources: The data supporting this measure are from our senior 
executives' assessments, which are supported by documentation, of work 
completed under performance goals' key efforts. The supporting 
documentation comes from our automated Mission and Assignment Tracking 
System and document database for strategic goals 1 through 3 and from 
reports produced by the managers responsible for each key effort for 
strategic goal 4.

Verification and validation: The assessment of each performance goal 
under strategic goals 1 through 3 is supported by documentation 
showing, by key effort, the number of reports issued and 
recommendations made during the assessment period. The assessment of 
the performance goals under strategic goal 4 is supported by 
documentation showing the work completed under each key effort and 
signed by a Managing Director; 

The Quality and Continuous Improvement (QCI) office provides this 
information to our managers several times a year so that they can check 
its accuracy. QCI also reviews the assessments and supporting 
documentation for all performance goals to ensure that criteria are 
consistently applied and that requirements are met. On a periodic 
basis, our IG independently tests our process for determining whether 
performance goals are met. For example, in fiscal year 2003, the IG 
tested our process and found it to be reasonable. The IG also suggested 
actions to strengthen documentation of these qualitative performance 
goals and we have implemented those actions.

Data limitations: The assessment data represent opinions in the form of 
qualitative, professional judgments of the work performed under each 
performance goal. We feel that the verification and validation steps 
that we take minimize any adverse impact from this limitation.

Source: GAO.

[End of table]

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 11.

[Begin table]

Table 11: How We Ensure Data Quality for the Annual Performance 
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, such as decreased annual operating 
costs, reduced costs of multiyear projects and entitlements, or 
monetary resources that are made available for other purposes. These 
financial benefits result from work that we completed over the past 
several years. The funds made available in response to our work may be 
used to reduce government expenditures or may be reallocated to other 
areas; 

Financial benefits are linked to specific recommendations or other 
work. To claim that financial benefits have been achieved, our staff 
must document the cause-and-effect relationship between the benefits 
reported and work performed. To be included in our performance results, 
this documentation must take place within 2 years after the actions 
that resulted in the benefit and must be based on estimates obtained 
from independent third parties on the benefits' monetary value. Prior 
to fiscal year 2002, we limited the period over which the benefits from 
an accomplishment could be accrued to no more than 2 years. Beginning 
in fiscal year 2002, we extended the period to 5 years for types of 
accomplishments known to have multiyear effects: those associated with 
longer-term changes embodied in law, program terminations, or sales of 
government assets yielding multiyear financial benefits. We retained 
the 2-year maximum for all other accomplishments. Also, in fiscal year 
2002, we began requiring all financial benefits to be calculated in net 
present value terms; 

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.

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 compiled by QCI, which 
annually tabulates total benefits agencywide and by goal. All financial 
benefits are calculated in net present value.

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 teams identify when a 
financial benefit has occurred as a result of our work. Teams develop 
estimates based on independent sources such as the agency that acted on 
our work, a congressional committee, or the Congressional Budget Office 
and file accomplishment reports based on those estimates. The estimates 
are reduced by any identifiable offsetting costs. Teams develop work 
papers to support accomplishments with evidence that meets our evidence 
standard; supervisors review the work papers; an independent person 
within GAO reviews the accomplishment report; and the team's Managing 
Director or Director approves the accomplishment report; 

The team forwards the report to QCI and QCI provides summary data on 
approved financial benefits to unit managers, who check the data on a 
regular basis to make sure that approved accomplishments submitted by 
their staff have been accurately recorded. QCI reviews all 
accomplishment reports and approves accomplishment reports claiming 
benefits of $100 million or more. In fiscal year 2003, QCI approved 
accomplishment reports covering 95 percent of the dollar value of 
financial benefits we reported; 

Every year, our IG reviews accomplishment reports that claim benefits 
of $500 million or more. In addition, on a periodic basis, the IG 
independently tests compliance with our process for claiming financial 
benefits of less than $500 million. For example, for benefits 
documented during fiscal year 2003, the IG tested compliance with our 
process for claiming financial benefits of less than $100 million and 
determined that we have a reasonable basis for claiming these financial 
benefits. And for fiscal year 2004, the IG plans to test compliance 
with our process for claiming financial benefits of more than $100 
million but less than $500 million.

Data limitations: Estimates are from independent third parties 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.

Other benefits: 

Definition and background: The other benefits that we report, which 
result from work that we completed over several years, are those that 
cannot be estimated in dollar terms. These benefits reflect instances 
in which (1) information we provided to the Congress resulted in 
statutory or regulatory changes, (2) agencies took actions in response 
to our findings and recommendations to improve government services and 
operations, (3) our work led to improvements in agencies' core business 
processes or to the advancement of governmentwide management reforms, 
or (4) state or local governments took action in response to our work. 
To claim that these benefits have occurred, the teams must file 
accomplishment reports that document the actions that have been taken 
and the cause-and-effect relationship between the actions and our work. 
To claim that other benefits have been achieved, our staff must 
document the cause-and-effect relationship between the benefits 
reported and work performed. To be included in our performance results, 
this documentation must take place within 2 years after the actions 
that resulted in the benefit.

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 compiled by QCI, which 
annually tabulates total benefits agencywide and by goal.

Verification and validation: Our policies and procedures require us to 
use the Accomplishment Reporting System to record the other benefits 
that result from our findings and recommendations. Staff in the teams 
file accomplishment reports to claim that benefits have resulted from 
their work. Teams develop work papers to support accomplishments with 
evidence that meets our evidence standard; supervisors review the work 
papers; an independent person within GAO reviews the accomplishment 
report; and the team's Managing Director or Director approves the 
accomplishment report to ensure the appropriateness of the claimed 
accomplishment, including attribution to our work; 

The team forwards the report to QCI, where it is reviewed for 
appropriateness. QCI provides summary data on other benefits to unit 
managers, who check the data on a regular basis to make sure that 
approved accomplishments from their staffs have been accurately 
recorded. Additionally, on a periodic basis, the IG independently tests 
compliance with our process for claiming other benefits. For example, 
the IG performed these tests during fiscal year 2003 and found them to 
be reasonable. The IG also suggested actions to strengthen 
documentation of other benefits that we have implemented.

Data limitations: The data may be underreported because we cannot 
always document a direct cause-and-effect relationship between our work 
and benefits it produced. However, we feel that this is not a 
significant limitation on the data because the data represent a 
conservative measure of our overall contribution toward improving 
government.

Recommendations made and percentage of products with recommendations: 

Definition and background: These measures count the number of 
recommendations made in products issued within the fiscal year and the 
percentage of the written products 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 for recommendations that are directed at resolving 
the cause of identified problems; that are addressed to parties who 
have the authority to act; and that are specific, feasible, and cost- 
effective. Some products we issue contain no recommendations and are 
strictly informational in nature; 

We track the number of nonredundant recommendations made in products 
that are issued during the fiscal year. For example, if a report and a 
testimony on the same topic include the same recommendation, we count 
it once. We also track the percentage of our written products that are 
issued during the fiscal year and contain recommendations. The latter 
indicator recognizes that the number of recommendations alone is not 
necessarily a predictor of effect and allows us to respond to requests 
for informational products. For example, a product with a single 
recommendation can help bring about significant financial or other 
benefits. Together, these two measures provide a picture of the extent 
to which we are providing decision makers with information that will 
help improve government; 

These measures are 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.

Data sources: Our document database records recommendations as they are 
issued. The database is updated daily. As our staff monitor 
implementation of recommendations, they submit updated information to 
the database.

Verification and validation: Through a formal process, each team 
identifies the number of recommendations included in each product and 
an external contractor enters them into a database. Our managers are 
provided 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. Additionally, 
on a periodic basis, the IG independently tests the teams' compliance 
with our policies and procedures. For example, during fiscal year 2003, 
the IG performed these tests and determined that the number of 
recommendations and the percentage of written products with 
recommendations were reasonable.

Data limitations: None.

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 other benefits, the Congress or other 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 2003 
implementation rate is the percentage of recommendations made in fiscal 
year 1999 products that were implemented by the end of fiscal year 
2003). Experience has shown that if a recommendation has not been 
implemented within 4 years, it is not likely to be implemented; 

This measure assesses action on recommendations made 4 years 
previously, rather than the results of our activities during the fiscal 
year in which the data are reported. For example, the cumulative 
percentage of recommendations made in fiscal year 1999 that were 
implemented in the ensuing years is as follows: 40 percent by the end 
of the first year (fiscal year 2000); 44 percent by the end of the 
second year; 56 percent by the end of the third year; and 82 percent by 
end of the fourth year.

Data sources: Our document database records recommendations as they are 
issued. The database is updated daily. As our staff monitor 
implementation of recommendations, they submit updated information to 
the database.

Verification and validation: Through a formal process, each team 
identifies the number of recommendations included in each product and 
an external contractor enters them into a database; 

Policies and procedures specify that our staff must verify, with 
sufficient supporting documentation, 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 the senior executive 
in charge of the unit and by QCI; 

Summary data are provided to the units that issued the recommendations. 
The units check the data regularly to make sure the recommendations 
they have reported as implemented have been accurately recorded. We 
also report annually to the Congress on the status of recommendations 
that have not been implemented, and we maintain a publicly available 
database of open recommendations that is updated daily; 

Additionally, on a periodic basis, the IG independently tests our 
process for calculating the percentage of recommendations implemented 
for a given fiscal year. For example, the IG determined that our 
process was reasonable for calculating the percentage of 
recommendations that had been made in our fiscal year 1999 products and 
implemented by the end of fiscal year 2003.

Data limitations: The data may be underreported because sometimes a 
recommendation may require more than 4 years to implement. We also do 
not count cases in which a recommendation is partially implemented. 
However, we feel that this is not a significant limitation on the data 
because the data represent a conservative measure of our overall 
contribution toward improving government.

Testimonies: 

Definition and background: The Congress may ask us to testify or 
provide statements for the record at hearings on various issues. 
Participation in hearings is one of our most important forms of 
communication with the Congress, and the number of hearings at which we 
testify or provide statements for the record reflects the importance 
and value of our institutional knowledge in assisting congressional 
decision making. In cases where multiple GAO witnesses with separate 
testimonies appear at a single hearing, we count the case as a single 
testimony.

Data sources: The data on hearings at which we testify are compiled in 
our congressional hearing system.

Verification and validation: The units responding to requests for 
testimony are responsible for entering data in the congressional 
hearing system. After a GAO witness has testified at a hearing, our 
Congressional Relations office 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 the data are complete and accurate. 
Additionally, on a periodic basis, the IG independently examine s the 
process for recording the number of hearings where we testified. For 
example, the IG determined that our process for recording hearings 
during fiscal year 2003 was reasonable.

Data limitations: The 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 
workload 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 measure the proportion of our products that are 
issued by the dates agreed to with our clients or, for our research and 
development work, by the dates agreed to internally.

Data sources: The data supporting this measure are from our Mission and 
Assignment Tracking System, which is used to monitor our progress on 
assignments.

Verification and validation: Our staff enter the data supporting this 
measure into our Mission and Assignment Tracking System. QCI monitors 
the data in this system, and aggregate and assignment-specific 
timeliness data are given to units monthly, allowing them to raise and 
seek resolution of any anomalies. When an assignment is completed, data 
on its target and completion dates are reported to the project manager,
who reviews and signs the report to confirm its accuracy. Additionally, 
on a periodic basis, the IG independently examines our process for 
calculating product timeliness. For example, the IG found that our 
process for calculating timeliness for products issued during fiscal 
year 2003 was reasonable.

Data limitations: We measure the timeliness of most external products. 
A small percentage of our products--staff studies and guidance, for 
example--that are not part of our main product lines are excluded. We 
feel that this limitation does not require remedial action because the 
number of products excluded from the measure is small.

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 projected workload 
changes, as well as other changes such as retirements, other attrition, 
promotions, and skill gaps. The workforce plan for the upcoming year 
specifies the number of planned hires and, for each hire, specifies the 
skill type and the level. The plan is conveyed to each of our units to 
guide hiring throughout the year. Progress toward achieving the 
workforce plan is monitored continuously by the Chief Administrative 
Officer. Adjustments to the workforce plan are made throughout the 
year, if necessary, to reflect changing needs and conditions.

Data sources: The workforce plan is developed and maintained by the 
Chief Administrative Officer. Data on accessions-- that is, new hires 
coming on board--is taken from the Department of Agriculture's National 
Finance Center database, which handles payroll and personnel data for 
GAO and other agencies.

Verification and validation: The Human Capital Office continuously 
monitors and reviews accessions and attritions against the contents of 
the National Finance Center database. The office follows up on any 
discrepancies. In addition, on a periodic basis, the IG independently 
examines our process for calculating the new hire rate. For example, 
the IG plans to examine this process during fiscal year 2004.

Data limitations: There is a lag of one to two pay periods (up to 4 
weeks) before the National Finance Center database reflects actual 
data. We generally allow sufficient time before requesting data for 
this measure to ensure that we get accurate results.

Acceptance rate: 

Definition and background: This measure is the ratio of the number of 
applicants accepting offers to the number of offers made. Acceptance 
rate is a proxy for GAO's attractiveness as an employer and an 
indicator of our competitiveness in bringing in new talent.

Data sources: The information required is the number of formal, written 
job offers made (excluding interns), the number of offers declined, and 
the number of individuals who come on board. Our Chief Administrative 
Officer's staff maintains a database that contains the job offers made 
and accepted or declined. The Department of Agriculture's National 
Finance Center maintains the database containing the data on the number 
of individuals who come on board.

Verification and validation: Human Capital Managers and the Human 
Capital Office work with the Chief Administrative Officer to ensure 
that each formal, written job offer made and its outcome (declination 
or acceptance) is noted in the database that is maintained by the Chief 
Administrative Officer's staff; periodic checking is performed to 
review the accuracy of the database. In addition, on a periodic basis, 
the IG independently examines our process for calculating the 
acceptance rate. For example, the IG plans to examine this process 
during fiscal year 2004.

Data limitations: None.

Retention rate: 

Definition and background: This measure is the ratio of the number of 
people who did not leave GAO during the fiscal year to the average 
number of people on board during the year Once we have made an 
investment in hiring and training people, we would like to retain them. 
We continuously strive to make GAO a place where people want to work. 
This measure is one indicator that we are attaining that objective.

Data sources: Data on retention--that is, people who are on board at 
the beginning of the fiscal year and are still here at the end of the 
fiscal year as well as the average number of people on board during the 
year--are taken from the Department of Agriculture's National Finance 
Center database, which handles payroll and personnel data for GAO and 
other agencies.

Verification and validation: The Human Capital Office continuously 
monitors and reviews accessions and attritions against the contents of 
the National Finance Center database and follows up on any 
discrepancies. In addition, on a periodic basis, the IG independently 
examines our process for calculating the retention rate. For example, 
the IG plans to examine this process during fiscal year 2004.

Data limitations: There is a lag of one to two pay periods (up to 4 
weeks) before the National Finance Center database reflects actual 
data. We generally allow sufficient time before requesting data for 
this measure to ensure that we get accurate results. Also, this measure 
does not differentiate among people who leave for diverse reasons--
including retirements, resignations, and dismissals--that are 
influenced by different factors. We will monitor this measure to 
determine whether it would be meaningful to show retention rates for 
different segments of our workforce, such as people who have been 
recently hired or people who are eligible for retirement.

Staff development, staff utilization, leadership, and organizational 
climate: 

Definition and background: From the annual employee survey, we compute 
these measures by looking at the percentage of people responding 
favorably to a series of related questions. We strive to continuously 
improve our organization and our people in order to ensure that we 
remain a world-class professional services organization. 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, 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 
statements to which staff are asked to indicate a response on a 5-point 
scale. Several questions address issues relating to staff development, 
staff utilization, leadership, and organizational climate.

Data sources: These data come from our staff's responses to an annual 
Web-based survey. The survey includes 21 questions that are rolled up 
into the measures of staff development (3 questions), staff utilization 
(3 questions), leadership (10 questions), and organizational climate (5 
questions). From the staff who expressed an opinion, we calculate the 
percentage of staff selecting the two categories that indicate 
satisfaction with or a favorable response to the statement. For 
example, to measure organizational climate we looked at the responses 
to five statements: I am treated fairly and with respect in my work 
unit; overall, I am satisfied with my job at GAO; sufficient effort is 
made in my work unit to get the opinions and thinking of people who 
work here; a spirit of cooperation and teamwork exists in my work unit; 
and my morale is good. For each question, we calculated the percentage 
of respondents that indicated they generally agreed or strongly agreed 
with the statement. We then averaged the five percentages to obtain the 
composite percentage by which we measure satisfaction with our 
organizational climate.

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. We have historically achieved a high response 
rate (over 85 percent) to the survey, 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; 

In addition, on a periodic basis, the IG independently examines our 
process for calculating the percentages for staff development, staff 
utilization, leadership, and organizational climate. For example, the 
IG plans to examine this process during fiscal year 2004.

Data limitations: The information contained in the survey is self-
contained. Therefore, there is no information to validate the views 
expressed by staff. 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. 

Source: GAO.

[End of table]

[End of Verification and Validation of Performance Data]

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[End of Fiscal Year 2005 Performance Plan]