<DOC> [106th Congress House Hearings] [From the U.S. Government Printing Office via GPO Access] [DOCID: f:73593.wais] THE U.S. GENERAL ACCOUNTING OFFICE ======================================================================= HEARING before the SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY of the COMMITTEE ON GOVERNMENT REFORM HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTH CONGRESS SECOND SESSION __________ JULY 18, 2000 __________ Serial No. 106-243 __________ Printed for the use of the Committee on Government Reform Available via the World Wide Web: http://www.gpo.gov/congress/house http://www.house.gov/reform __________ U.S. GOVERNMENT PRINTING OFFICE 73-593 WASHINGTON : 2001 _______________________________________________________________________ For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: (202) 512-1800 Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001 COMMITTEE ON GOVERNMENT REFORM DAN BURTON, Indiana, Chairman BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California CONSTANCE A. MORELLA, Maryland TOM LANTOS, California CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania JOHN L. MICA, Florida PATSY T. MINK, Hawaii THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington, MARK E. SOUDER, Indiana DC JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio Carolina ROD R. BLAGOJEVICH, Illinois BOB BARR, Georgia DANNY K. DAVIS, Illinois DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts ASA HUTCHINSON, Arkansas JIM TURNER, Texas LEE TERRY, Nebraska THOMAS H. ALLEN, Maine JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois DOUG OSE, California ------ PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont HELEN CHENOWETH-HAGE, Idaho (Independent) DAVID VITTER, Louisiana Kevin Binger, Staff Director Daniel R. Moll, Deputy Staff Director James C. Wilson, Chief Counsel Robert A. Briggs, Clerk Phil Schiliro, Minority Staff Director ------ Subcommittee on Government Management, Information, and Technology STEPHEN HORN, California, Chairman JUDY BIGGERT, Illinois JIM TURNER, Texas THOMAS M. DAVIS, Virginia PAUL E. KANJORSKI, Pennsylvania GREG WALDEN, Oregon MAJOR R. OWENS, New York DOUG OSE, California PATSY T. MINK, Hawaii PAUL RYAN, Wisconsin CAROLYN B. MALONEY, New York Ex Officio DAN BURTON, Indiana HENRY A. WAXMAN, California J. Russell George, Staff Director and Chief Counsel Heather Bailey, Professional Staff Member Bryan Sisk, Clerk Trey Henderson, Minority Counsel C O N T E N T S ---------- Page Hearing held on July 18, 2000.................................... 1 Statement of: Bowsher, Charles, former Comptroller General of the United States (1981-1996)......................................... 65 Ink, Dwight, president emeritus, Institute of Public Administration............................................. 74 Staats, Elmer, former Comptroller General of the United States (1966-1981)......................................... 63 Walker, David, Comptroller General of the United States, General Accounting Office, accompanied by Gene Dodaro, Chief Operating Officer.................................... 6 Letters, statements, etc., submitted for the record by: Bowsher, Charles, former Comptroller General of the United States (1981-1996), prepared statement of.................. 67 Horn, Hon. Stephen, a Representative in Congress from the State of California, prepared statement of................. 3 Ink, Dwight, president emeritus, Institute of Public Administration, prepared statement of...................... 77 Turner, Hon. Jim, a Representative in Congress from the State of Texas, prepared statement of............................ 5 Walker, David, Comptroller General of the United States, General Accounting Office, accompanied by Gene Dodaro, Chief Operating Officer, prepared statement of............. 13 THE U.S. GENERAL ACCOUNTING OFFICE ---------- TUESDAY, JULY 18, 2000 House of Representatives, Subcommittee on Government Management, Information, and Technology, Committee on Government Reform, Washington, DC. The subcommittee met, pursuant to notice, at 10 a.m., in room 2154, Rayburn House Office Building, Hon. Stephen Horn (chairman of the subcommittee) presiding. Present: Representatives Horn, Biggert, Ose, Turner, and Maloney. Staff present: J. Russell George, staff director and chief counsel; Heather Bailey, professional staff member; Bonnie Heald, director of communications; Bryan Sisk, clerk; Elizabeth Seong, staff assistant; Will Ackerly and David Hulfish, interns; Trey Henderson, minority counsel; Mark Stephenson, minority professional staff member; and Jean Gosa, minority assistant clerk. Mr. Horn. The subcommittee will come to order. Today's hearing on the General Accounting Office is especially important because of the agency's vital and unique role in the Nation's legislative process and in Congress's oversight of government operations. Today, the subcommittee will review the GAO's ongoing programs and the agency's vision for the future. Since its establishment in 1921, the role of the General Accounting Office has evolved from one of auditing agency vouchers to its present role of providing in-depth studies upon which Congress bases its legislative and oversight agenda. The GAO is a key investigative resource for the legislative branch of government. The question naturally arises: How has the GAO transitioned from its 20th century functions to those of the 21st century? We are very fortunate to have before us today a number of witnesses who are in a unique position to answer that question. Our first presenter is the current Comptroller General of the United States, David Walker. Since assuming this office in November 1998, the Comptroller General has initiated a number of reforms that we look forward to hearing more about today. His testimony will be followed by a panel of witnesses whose insights are invaluable to the subcommittee as we consider the subject before us. We will hear from the honorable Elmer Staats, who served as Comptroller General from 1966 until 1981. We will also hear from Mr. Staats' successor, former Comptroller General Charles Bowsher, who served from 1981 until 1996. In addition, we are pleased to have before us a familiar voice, that of Dwight Ink, president emeritus of Institute for Public Administration. We welcome all of our witnesses today, and look forward to their testimony. I am now delighted to give time to the ranking member of this subcommittee, the gentleman from Texas, Mr. Turner, who has been a wonderful colleague to have with this group. I know that he shares the respect for the General Accounting Office and the Comptroller Generals that I do. Mr. Turner. [The prepared statement of Hon. Stephen Horn follows:] [GRAPHIC] [TIFF OMITTED] T3593.001 Mr. Turner. Thank you, Mr. Chairman. It is good to have General Walker here this morning and to be able to hear from the General Accounting Office. I think we share respect for the good work that the GAO has done for us throughout the years. GAO I know was founded in 1921. Its mission is to help Congress oversee Federal programs to ensure accountability to the American people. Over the years, Congress has expanded the GAO's statutory authority to reflect the growing complexity of government and of our society. GAO's evaluators, lawyers, economists, public policy analysts, information technology specialists and other multidisciplinary professionals seek to enhance the economy, the efficiency, the effectiveness and the credibility of the Federal Government, both in fact and in the eyes of all American people. The GAO is able to accomplish its mission through a variety of activities, including financial audits, program reviews, investigations, legal support, and policy and program analysis. I am very pleased to note that for fiscal year 1999 the General Accounting Office's work resulted in more than $20 billion in financial benefits to the Federal Government and over 600 actions leading to a more effective government. It is without question that the General Accounting Office has been extremely helpful to our subcommittee, and I again commend General Walker and his staff for the good work that they do on behalf of the Congress. We are here to learn more about the challenges facing the agency and what we in Congress can and should do to ensure that we receive the type of credible, unbiased data that the GAO has constantly provided us in the past. I commend Chairman Horn for calling the hearing, and I welcome each of our witnesses. I want to conclude by saying that the General Accounting Office is an agency which is truly dedicated to good government, and for that I am very appreciative. Thank you, Mr. Chairman. [The prepared statement of Hon. Jim Turner follows:] [GRAPHIC] [TIFF OMITTED] T3593.002 Mr. Horn. I thank the gentleman, and we will now swear in the witnesses. [Witnesses sworn.] Mr. Horn. The clerk will note that the witnesses affirmed the oath. We will start with the Comptroller General of the United States, Mr. Walker, now. And you have a wonderful 40-page, single-spaced document which is already headed for the Government Printing Office; and I know that you have a very good slide presentation. If you can do it in 15 to 20 minutes, we would be appreciative, because we would like to have a dialog. STATEMENT OF DAVID WALKER, COMPTROLLER GENERAL OF THE UNITED STATES, GENERAL ACCOUNTING OFFICE, ACCOMPANIED BY GENE DODARO, CHIEF OPERATING OFFICER Mr. Walker. I will be happy to do that. First, let me say that I am pleased to be here. As you know, Mr. Chairman and Ranking Member Turner, I am now one and a half years into a 15-year term as Comptroller General, 10 percent down, 90 percent to go. I am proud to be the head of GAO. I believe GAO is one of the best agencies in the Federal Government, and one of the best accountability organizations in the world, if not the best. There is a simple reason for that. We are the best because we have the best people. We do, however, have a number of people or human capital challenges that I will mention later in my testimony that need to be addressed with a matter of urgency. As you noted, I have submitted my full statement for the record; and I am going to cover it in a PowerPoint presentation. But, before I do, I would like to note for the record that Gene Dodaro, who is Chief Operating Officer, to my right, has joined me. Bob Murphy, who is our General Counsel, is behind me. Sallyanne Harper, who is our Chief Mission Support Officer, is to my right. The four of us make up the Executive Committee for GAO. In addition to that, I am pleased that we have 10 to 12 members of the Employee Advisory Council in row two. They represent a diverse group of GAO employees. We get together periodically to discuss mutual issues of interest and concern, and I am pleased to say that we have talked about a number of human capital issues together. I look forward to working with them on these and other issues. If I can, the first slide, please. As both of you noted, GAO was formed in 1921 and is headed by the Comptroller General of the United States. I am the seventh Comptroller General in the approximately 80-year history of GAO. Every Comptroller General has made noteworthy contributions to our agency and to the country. I am especially pleased and honored to appear here today with my two immediate predecessors, Elmer Staats and Chuck Bowsher. Both made significant contributions to GAO and our country, and I have noted several of them in my written statement. GAO has changed significantly over the years, both as to size, scope and focus over the years. The agency almost tripled its size in World War II in order to preaudit all government payments. The agency was reduced in size after World War II but broadened in both its range of services and the scope of skills that its staff possessed. The resulting expansion in scope of services since World War II served to reinforce the fact that we are about accountability, not accounting. Most recently, the agency was forced to downsize by approximately 40 percent in the 1990's due to budget cuts; and there are some scars that resulted from that, which I will touch on in a few minutes. Next slide. As you can see, the size of GAO has changed over the years. I have picked three dates for illustrative purposes: 1966, which was the first year that Elmer Staats was Comptroller General; 1981, which was the first year in which Chuck Bowsher was Comptroller General; and 1999, which was the first fiscal year in which I served as Comptroller General. And you can see the size has fluctuated over the years. When Elmer Staats took over GAO, there were just over 4,000 personnel; when Chuck Bowsher took over the agency, it had grown to over 5,000; and when I took over the agency we had an authorized staff of 3,275. Next slide, please. There has been a significant change over the years in the mix of GAO's work. It has changed dramatically over time. When Elmer Staats took office in 1966, 90 percent of GAO's work was research and development or self-initiated work; and there were no congressional mandates. When Chuck Bowsher took over the office, the percentage of research and development or self- initiated work had declined to 65 percent; and mandates were becoming more common but they were still new on the scene, only representing about 2 percent of GAO's work. When I took over the Office of Comptroller General in late 1998 or fiscal year 1999, only 5 percent of our work was R&D or self-initiated and 23 percent related to mandates. Stated differently, 95 percent of the work that GAO did was either based on mandates or specific congressional requests. Next slide, please. The next slide shows the dramatic decline in our field office presence. It has declined dramatically from 46 offices in 1984 to 16 today, and effective November 2000 we will go down to 11 field offices. This decline is due to a variety of reasons, in some cases budget cuts, but also because of economy, efficiency, effectiveness and technology reasons. Next slide, please. As Mr. Turner mentioned, GAO has always provided the Congress and the American people with an outstanding return on their investment. This slide shows the financial benefits that GAO has returned since 1966 on an annual basis as well as the 4-year average. I am pleased to say in fiscal year 1999 we had $20.1 billion in financial benefits. In some cases, that represents costs reduced; in other cases, it is asset recoveries enhanced; spending deferred; or reserves reclaimed. There are a number of different things that come under the definition of financial benefits, and I am happy to answer questions on that if you would like. But the bottom line is this: The Congress and the American people had a return in 1999 of $57 for every dollar invested, probably No. 1 in the world. The next slide, please. GAO has also made a number of contributions over the years in the area of improved government operations. The adoption of GAO recommendations not only serve to accrue financial benefits but also nonfinancial benefits such as improved government operations in the area of computer security, airline safety, sustainable development and national security, etc. A number of examples are included in our 1999 accountability report, which I know has been provided to the committee as well as the Congress at large. The trend in nonfinancial benefits has been up over the last several years, but we did have particularly impressive years in 1998 and 1999 due to the Y2K involvement that we had and the many, many recommendations associated with that effort. The Y2K effort is an example of what government can do if the executive branch and the legislative branch work together in a concerted and constructive fashion to address a known problem with a positive outcome, and hopefully we can learn from that in the future. The next slide, please. One of the basic market tests that we can look to for the value of GAO is how many times the Congress requests GAO representatives to testify on a wide variety of issues. This next chart shows that our numbers have been impressive in that regard, that we have, on average, testified over 200 times a year before the House and the Senate on a wide variety of topics; and I myself typically will testify about 25 times a year. We expect for our fiscal year 2000 numbers to exceed the 1999 level, even though this is an election year and a shortened legislative year. The next slide, please. Timeliness is critical, especially for the Congress. The Congress is our client. We have had a concerted effort since 1996 to significantly enhance the timeliness of the work that we do for the Congress, namely to try to be able to deliver when we promise that we will deliver, and you can see there has been a dramatic improvement in our timeliness. But, importantly, it is not just whether or not we deliver when we promise that we are going to deliver; it is also whether or not we deliver within the timeframes that the Congress needs it in order to be able to make informed decisions. So we are looking to refine these measures and enhance these measures, as we will continue to do in the future. The next slide, please. Both of you mentioned GAO's mission. GAO exists to support the Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the Federal Government for the benefit of the American people. We are truly about good government; and, in fact, I would say our vision is to simply make government work better for all Americans. The next slide, please. In order to do that, we have to do our work in accordance with applicable professional standards as well as a specific set of core values that I worked with our executive team as well as others to come up with shortly after becoming Comptroller General. We have three core values that drive everything that we do, both internally and externally. The first is accountability, the second, integrity; and the third, reliability. With regard to accountability, that word describes what we do. We are called the General Accounting Office, but that is really a misnomer. Only about 25 percent of what we do deals with traditional accounting and financial management; 75 percent deals with program evaluation, policy analysis, legal research, a whole range of activities, investigations, etc. As a result, the common denominator is the word accountability and in some ways you can say we are the government accountability office is more descriptive of what we do. Integrity describes how we must do our work. We must be professional, objective, fact-based, nonpartisan, nonideological, fair and balanced. We must say what we mean, mean what we say, provide the facts and let the elected officials decide what to do once they have the facts. We must provide those facts in advance before issues reach crisis proportions. In fact, I think one of the advantages of having a 15-year term and an agency being headed by a nonpartisan professional is to look longer and broader and to bring matters to the attention of Congress before they represent crises. That is critically important. The third core value is the word reliability which describes how we want our work to be received--timely, accurate, useful, clear, and candid. Now, I would like to be able to add the word concise, Mr. Chairman; and we are working on that. That is why we have a PowerPoint executive summary, rather than the 40-page written testimony. Next slide, please. This represents a summary of our strategic plan. This represents a framework for everything that we do at GAO, both internally and externally. We develop the strategic plan through extensive outreach efforts with the Congress. Yes, this is GAO's strategic plan, but it is our plan to serve our client, the Congress and the American people, and it was put together with extensive consultations with our client. We voluntarily have complied with GPRA. As you know, we are not subject to GPRA, but we believe it makes sound business sense to comply with GPRA for a variety of reasons. In addition, we believe, as the leading accountability organization in the United States, we have a responsibility to lead by example. We should be as good or better than anybody else we evaluate, otherwise we are hypocrites, and we don't ever want to be called a hypocrite. So we have focused on our mission. We have four goals. The first two goals are tied to the Constitution of the United States. We know that there can be a lot of disagreement in Washington nowadays, but we believe that the Constitution has stood the test of time and to build our first two goals on the Constitution is both prudent and appropriate. The third goal is based upon a recognition of a global trend at Federal and State and local levels, and that is to the push for more results-oriented and accountable government. And fourth is for us to seek to lead by example, to be a model organization, to practice what we preach. We have got six themes underneath that that have no boundaries. They have no boundaries globally, domestically, or within the Congress, within the executive branch or within GAO. They deal with issues like changing demographic trends, like increased globalization, different quality of life considerations, emerging security threats, rapidly evolving technology and, again, the move toward a desire for a more results-oriented and accountable government. We have 17 objectives that tie in most cases very closely to the committees and the various departments and agencies. And last but not least, as I mentioned before, the foundation of everything that we do represents our core values. The next slide, please. If I can, Mr. Chairman and Mr. Turner, let me now change to some of the challenges that we face in the human capital area. As I mentioned, people represent our most valuable asset. We are a knowledge business. In fact, I would say, with all due respect, that there is probably a broader range of skills and knowledge in GAO than any organization on Earth, bar none. Let me repeat that. There is probably a broader range of skills and knowledge in GAO than any organization on Earth and a tremendous amount of institutional knowledge that is critically important to the Congress and the Nation. But the fact of the matter is that we have a number of human capital challenges in a post-downsizing era. We are smaller and out of shape, as this chart shows. Only 11 percent of our personnel are at the lower levels, as compared to about 27 percent in 1989. In addition, we are heavy in certain other areas. We need to address these imbalances over time through a variety of management actions and other types of activities. It is important that we get in shape for the future. We are in shape to do our job today, but we are not well positioned to be able to do our job in future years. The next slide, please. This next chart shows our appropriation and FTE level since 1992. We have had a significant decline in our budget. We experienced that in the mid-1990's. This resulted in an approximate 40 percent reduction in the size of GAO. There were a number of RIFs that had to be run. Offices were closed, all or nothing; and whole units were abolished. The fact of the matter is, is that we have not had reasonable resource stability for several years. And while last year was the first year in 10 years that we received a resource allocation in excess of our mandatories, this year again there is a debate as to how much resources GAO will receive. The House has us for a 2 percent cut without considering inflation or other mandatories; the Senate has us for a 2.5 percent increase. We can live with the Senate number, but the House number would force us to run RIFs again or otherwise to freeze hiring, which would be totally unacceptable and would further mortgage our future. We are hopeful that the Senate numbers will prevail in Congress, with all due respect to the House. It is critically important that we have reasonable stability in funding and not have to fight these annual battles over what our budget is going to be, especially given the return on investment that we are bringing to the taxpayers. Having to fight the annual battles and deal with the annual uncertainty over what our budget is going to be has an extremely deleterious affect on morale as well as our ability to attract and retain a qualified work force. We had a virtual 5-year hiring freeze from 1993 to 1997. This served to mortgage our future in certain ways. The average age of GAO has increased 6 years in the last 6 years. The average age of GAO is 48. Mr. Chairman, Mr. Turner, that is my age. We cannot continue to repeat hiring freezes. That would only serve to further mortgage our future. The next slide, please. We have serious succession planning challenges. We must begin to prepare for our future. Thirty-four percent of all of GAO personnel are eligible to retire within 4 years--4 years, 34 percent. Fifty-five percent of our SES members are eligible to retire in 4 years. That is a tremendous amount of institutional knowledge and expertise. We must become more actively involved in succession planning. The combined effect of past hiring freezes, budget cuts and the current RIF rules have put this agency at risk; and we need to address them. The next slide, please. GAO contracting. While our FTE levels have gone down, our contracting has gone up, in part to recognize that there are certain aspects that the private sector can do more effectively and, in addition, there are certain areas where we need assistance or expert assistance or we are not going to have the ability to attract, retain and motivate an adequate number of people. So we are going to have to go to the private sector from time to time to do that, and we will be prudent about how we do that. The next slide, please. A few summary points. What are some of the GAO challenges that we face? First, supply and demand imbalances. We have significantly increased demand from the Congress and significantly reduced supply in the form of human as well as financial resources. We have got to work together to achieve a better balance. Second, we critically need stability in our annual resource levels. Failure to have that undermines our ability to attract and retain a motivated and skilled work force. We need to have flexibility to do some self-initiated R&D work. It is unreasonable to expect that the Congress will identify all of the issues that need to be focused on. And, in fact, it is important that we be able to look at some issues before they reach crisis proportions and to bring those to the attention of the Congress before they are immediate crises. Having some type of reasonable flexibility to do that is essential in order for us to accomplish our mission. We both need to work together, meaning the Congress and GAO, to reinvigorate and to improve congressional oversight. We need to work in a bicameral, nonpartisan manner to form a partnership in order to be able to buildupon the management reforms of the 1990's, the skills and knowledge and institutional expertise of GAO; and we have got some ideas about how to do that that we would like to work with you and others on. We critically need the Congress's help in the area of human capital. We need to enact our human capital legislation. It has been passed in the Senate. It is scheduled to go to conference as part of the appropriations process. Chairman Burton and Ranking Member Waxman support the legislation that is in the budget process. We critically need that legislation to help prepare GAO for the future, but, in addition, we need the Congress to consider other areas that we are happy to work with you on. We need to look at the possibility of debt relief for new hires. We already have a compensation differential between the private sector options and in the government, but, in addition, over half of GAO's employees are Master's and Doctor degree candidates. They often come out of college with significant debt. They face a double whammy. They face less compensation and tremendous debt loads. We need to do something like the military to be able to try to deal with that in a reasonable manner. We need to work to change our pension laws, the government's pension laws, to allow people to retreat into retirement rather than forcing them to go all or nothing. We have a lot of skills and knowledge and expertise. Many people want to start working part time and retreat into retirement, but then they can't access their pension. We need to figure out, just as the private sector is doing, to allow more flexibility to retain that knowledge, given work force imbalances, skill shortages and other factors. We need to move, over time, to a more reasonable compensation approach that is focused more on skills and knowledge and performance; and we need to look at some things that don't sound that significant but they add insult to injury. Things like frequent flyer miles. The private sector has for years allowed individuals who fly on their own time to keep their miles. You know the burdens of flying nowadays--it is not a pleasant experience. In times of budget deficits it is understandable how you might want to recapture those miles, but our people are already underpaid, overtraveled, overworked, and now we have a budget surplus. It almost adds insult to injury to say you need to give those miles back. We need to revisit that policy in order to be more competitive going forward. Last, records access issues. More and more of what government is doing involves a partnership between Federal, State and local levels as well as public private. We are seeing more and more that the issues that we are being asked to address are requiring us to access records outside the Federal Government--at the State and local level, and the private sector. This is going to be an issue that is going to be increasingly important that we need to work with Congress on how best to address with regard to proposed expansion of Federal programs. For example, prescription drugs, where a lot of research and analysis needs to be done, is not in the Federal Government. It is in the private sector, and it is in the State and local government areas. Mr. Chairman, that concludes my summary. I very much appreciate your time, both your time and attention; and I am more than happy to answer any questions that you might have. Thank you. Mr. Horn. Well, we thank you. That is a very fine statement. 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We are now going to have a dialog between we members and you, and it will be 5 minutes between each of us. Let me ask you about the institutional memory situation. I think that is a very crucial matter. What is your intent as to try and get that type of wisdom that people have over time? Is it to have opportunities for a half load and half retirement or fourth load, fourth retirement? Some institutions do that. Are we doing oral histories of a lot of people when they retire? It seems to me that is a--for historians such as White in the 1930's, looking at the administrations from George Washington up, it seems to me that would be a very useful file for GAO, the archives, the Library of Congress, whatever, to have them in the days of disks that you can find any particular thing on a disk. That might be one possibility. I just would be wondering, what are you thinking of? Mr. Walker. We are doing a number of things. First, we have embarked on an aggressive succession planning effort to try to ascertain how many of our people plan to retire and when. I mentioned that 55 percent of our executives are eligible to retire within 4 years. We have met with each of those executives and covered a number of issues. Fortunately, many of those individuals want to work past retirement eligibility, and that is great. We need to do the same thing at other levels, and we need to tap and understand what skills and knowledge that we have. We just rolled out an electronic skills and knowledge form that every GAO employee will fill out. Therefore, we will have electronically what skills and knowledge we have within our building and how we can better deploy those skills and knowledge and capitalize on it. We need to look at mentoring by capturing this institutional knowledge and passing it on to others. In addition, we need to look at what I mentioned about changing the pension laws, about retreating into retirement. We can allow people to work part-time right now, and we do, and we can experiment with certain policies, but there are real economic barriers and disincentives under current law that need to be addressed. They are being addressed in the private sector. In fact, there is legislation pending in Congress now to change the private pension rules. The prospects look good to allow in-service distributions for people that work part time after a certain age. We need to do the same thing in the public sector. So these are just a few of the things that I think we can and should do, and we will do whatever it takes. Mr. Horn. What about the idea of research and development? I would be curious in 1966 what do we mean by that and what do we need now between the two predecessors and Mr. Staats. It went from 90 percent research and development in 1981 to 65 percent and now 5 percent. How is that defined? Mr. Walker. Let me clarify how we define it. You may want to ask Comptroller Generals Staats and Bowsher how they define it. The previous term was self-initiated work. That doesn't engender a positive response on behalf of a number of parties; and, therefore, we recharacterized it as R&D work. Basically, what that says is when Mr. Staats came in as Comptroller General, 90 percent of the work that GAO did was at its own initiative. It determined what functions needed to be looked at and provided to the Congress. That, over the years, has changed dramatically. There are more and more mandates. Sometimes we are consulted on a mandate; sometimes we are not. Sometimes we get the resources we need, and sometimes we don't. Sometimes there are independent issues that don't get adequately considered. What has happened in part is because of increasing congressional requests, which is good. We are a client service organization. On the other hand, the combination of increased requests and the downsizing of the agency has meant that what gives is the self-initiated work or the R&D work. That is what is left over, and some of that can be critically important. Because, quite frankly, many of the challenges that our Nation faces are not immediate. They are challenges at the horizon and beyond because of changing demographics, because of environmental issues and other things that we need to be looking at before they become a crisis. Mr. Horn. In my last 19 seconds here I am going to ask you, on the mandates, were those saved from the appropriators? And that was an annual report that you needed to do time and again. Does anybody ever ask if they read it or need it? Some of these things are stuck automatically in appropriations bills. Mr. Walker. I am going to ask Gene Dodaro to comment. Because, as our Chief Operating Officer, he is into the details on some of these things. Mr. Dodaro. We look every week at potential mandates that are coming to the forefront in legislation, both in appropriations and in the authorizing process. They come in both forms. Within the last 2 years, we went back and looked at all of the preexisting mandates to see if they were still relevant, and consulted with the committees; and, in fact, indeed a lot of them were sunsetted. Very few of them are dated, although some date back, for example, to the 1994 requirement to audit the financial statements of the Federal Government. But we are trying to work early with committees on potential mandates. Most of them fall in areas where we think there are legitimate issues and which correspond to items that are actually in our strategic plan. Others are event driven, like the Los Alamos fires. Mr. Horn. I thank you. Mr. Turner, 5 minutes for questioning the Comptroller General. Mr. Turner. It is amazing, General Walker, to notice the increase in the number or the percentage of requests from Members and from committees. Quantify that for me. How many requests do you get a year from committee chairs? How many requests do you get from rank-and-file Members? Mr. Walker. In a given week, we typically get 40 to 50 requests a week. Most of our requests are either from the chairman or the ranking member of a committee or subcommittee. They receive a priority with regard to resource allocation. The next priority would be Members that are on a relevant committee of jurisdiction, and the last priority would be Members who are not on a relevant committee of jurisdiction. I think unless something gives we are going to have to relook at whether or not we are going to be able to deal with individual Members' requests. The statute only requires us to deal with mandates and committee requests. We have tried to deal with individual Members' requests as we have the resources and will continue to, but the squeeze continues. Mr. Turner. When you get a request just from a Member--I am sure you get all kinds of requests--do you try to work with that Member to narrow that request or make it where it is something that you can have a little more management control over? Mr. Walker. We have instituted a new process where we have an engagement acceptance meeting, and I will ask Gene if he wants to elaborate because he chairs it every week. We look at every request--what is it? What are they asking us to do? Is it within our scope and competency? What kinds of resources and skills will it take? How much risk is associated with the assignment, complexity, degree of difficulty, political contentiousness, if you will; and in some situations they will ask us to do things that we don't think are appropriate. In some cases, they will ask us where the scope is too broad; and we will work to narrow that scope. Yes, we have an ongoing and interactive exchange with both committees and Members in conjunction with requests. Mr. Dodaro. What we try to do, along the lines that Dave is talking about, is that, for many requests that we get from individual Members we may already be doing that scope of work for a committee. So we try to marry up the requests from the Member with the committee. And in some cases they just want some help answering a request from a constituent. We will look into the matter quickly. Also, it might be something that is within the scope of the responsibilities of the Inspector General, say, for example, looking at a particular contract award at DOD. Our goal is to try to help answer a request from every Member in some way, manner, shape or form, even if we can't undertake the assignment ourselves. But we actively manage that process and get back to everybody quickly to try to get a good outcome and try to get the information that people need. Mr. Turner. I was looking at page 13, human capital profile; and it might help if you would explain these bands that are listed here, what category of employee is represented there. I assume the very top category is the executive staff. Where are the researchers? Mr. Walker. This represents pay bands. We went to broad banding, which is a compensation structure, in the 1990's under Comptroller General Bowsher's tenure. Band 3 represents a GS- 15. It is either management personnel or very senior specialist. A band 2 represents 14, 13, 12 level. And a band 1 is below that in a professional category. The other would represent the General Counsel's Office or Office of Special Investigations. And then the mission support would be just that. It would be individuals who contribute to our mission but aren't in a line function. They are more in a staff function. Mr. Dodaro. Just to give you a benchmark, for example, at the SES, a senior executive would be someone like a Joel Willemssen; and he leads a whole body of work. And then the researchers at the band 2 and band 3 level and band 1 actually conduct the audits and the investigations. So the people who really do the work and go out and interview people and go through the files and records are at the 2 and 1 level. And the band 3s are issue area experts. We will have an expert in housing, transportation, etc. So we try to maintain expertise at the senior level; and the researchers, auditors, and investigators are at the band 2 and band 1 level. That is why band 1 is so important, because that is where we begin to develop good institutional knowledge in the long run. We are trying to do a lot of things to retain senior executives, to hang on to institutional memory, but there is no substitute for having a good pipeline of people coming through the organization that are going to be here beyond Dave's tenure and mine. Mr. Turner. So the chart is designed to show that you would prefer to have a profile that looks like the 1989 profile as opposed to what you have today? Mr. Walker. I think the actual profile is between 1989 and 1999, but closer to 1989 than 1999; and we need to do that over time. We are taking management action, but we need to continue to hire and recruit, we need to do succession planning, and we also need the human capital legislation. Mr. Turner. Thank you. Thank you, Mr. Chairman. Mr. Horn. I thank the gentleman. And now 5 minutes for my colleague from California, Mr. Ose. Mr. Ose. Thank you, Mr. Chairman. My question really boils down to one that I have asked previously and that is, at least from my experience, there are just two irreplaceable assets I have access to, one is GAO and the other is CRS. Great resources. In both cases, I am concerned about retaining personnel who have been trained, level 1, level 2, what have you. Tell us about the challenges you face there as it relates to retention of people who have started---- Mr. Walker. Well, we face serious challenges. One of the ways that we face a serious challenge is because we don't have stability in our budget. Every year there is debate about what we are going to get for a budget and whether or not we are going to get inflation. That creates instability and uncertainty on behalf of our current people regarding RIFs. Mr. Ose. Let me take you a slightly different direction. In terms of the people who work at GAO, obviously they have options from an employment standpoint. Your options might be Arthur Andersen, it might be some consulting firm, what have you. What kind of competitive environment are you having to confront in terms of retaining those people? Mr. Walker. An increasingly competitive environment with regard to new hires. For example, many of the major public policy schools--the Kennedy School at Harvard, the Maxwell School at Syracuse, Berkeley, etc.--a significant percentage of their graduates who they thought were going to go into public service end up going into the private sector, and that is an increasing challenge. I think we have to recognize that the government will never be competitive from the standpoint of compensation. Stated differently, you are always going to be able to make more money in the private sector if that is what you want to do. However, the government does offer some things that the private sector can't offer as much of--the challenge, the diversity, the ability to make a difference for the country. Therefore, what we have to do is identify top-flight people who are motivated toward those types of things and to make sure that we have the tools available to attract them and to retain them. It is also critically important that we get resource stability because when we go out to hire a new person, if they know that they are the first person that is going to get let go, that is a real disincentive for them to come with us. Mr. Ose. Do you see a difference--obviously, you are the legislative branch people, but do you see a difference in terms of our ability to retain people on the legislative side as opposed to the executive side? Mr. Walker. I think the GAO has a greater ability to retain people; and, in fact, statistics show that. We have very low turnover. After 3 years, our turnover is about 4 percent a year, and that also counts retirements. But for the newer people, the first 3 years, the turnover is much higher. It is double digit--around 15 to 18 percent a year. The new generation, the graduates of today, are more mobile than they have been in the past. We have to recognize that and do what we can to minimize turnover, but we are going to have more turnover. I have a 26-year-old and a 23-year-old, and I can assure you that there is going to be more mobility among their age group. One of the things that GAO has to offer is that you can have lifelong learning at GAO. We deal with everything that the Federal Government does anywhere in the world and so you can move into different areas, different specialties, different issues, different geographic areas without having to change employers and still be challenged. That is an advantage that many government agencies don't have. Mr. Dodaro. One of the most critical things for retention, particularly of highly skilled people, is additional training. They really want to keep their skills current, and we are trying to find more money available to provide training to them. And that, coupled with the diversity of the work and the interesting nature, of assignments really is the key to holding people, because they want to be known in the professional communities in which they have studied and do the work. Mr. Ose. Mr. Chairman, are we going to have a second round? Mr. Horn. We are. Mr. Ose. Thank you. Mr. Horn. Let me ask about the SES staff. I notice on your chart, page 13, it represents roughly 2.8 percent and 3.7 percent of all employees through fiscal year 1989 through fiscal year 2000. I wonder to what degree can SES be rotated within the executive branch and do you have any difficulties in getting them for a year or 2 years or 3 years when you see something coming up that they might have the expertise to do. Have we had any examples like that? Mr. Walker. We have not had that happen with great frequency in the past. We have had people come from the executive branch to GAO. In particular, when we had our first SES candidate development class, we had a number of applicants from the executive branch apply because they view GAO as a very good place to work. One of the things that we need to look at with increasing frequency is, not only with regard to the government but also the private sector, the opportunity to do rotations and fellowships and that type of activity. Obviously, we are going to have to be careful, because there are potential conflict issues which we need to carefully monitor in that regard. We need to look at that more. Mr. Horn. Also, on the education aspects, the military does a wonderful job in this town of keeping their people moving and letting them go off for masters degrees or doctorates. Are you thinking of doing that essentially at GAO? Mr. Walker. Most of our people already have a masters or doctorate, but I think, because of the competitive pressures in the marketplace, we may end up having to hire more people with a bachelor's degree who may want to obtain a masters. That is something I would like to be able to consider as well as the personal debt relief, etc. Part of the difficulty is not just whether or not we have the authority but whether or not we have the resources to do that. Mr. Horn. What other things do you think are worthwhile that are not always seen when you recruit somebody? It is a good environment, you meet a lot of interesting people and so forth. Where is the weak spot, if any? Mr. Walker. Where is the weak spot? Well, part of the weak spot is that a lot of people that come into government come into government to make a difference, to learn, lifelong learning and for a better quality of life and for better job security. The last two have been significantly eroded in the last 10 years. We are asking our people to do more and more with less and less. In many cases, they are working as many or more hours than the private sector dues--and I was a global partner with Arthur Andersen for 10 years--with much less compensation. The increased uncertainty about what our resources are going to be has a deleterious effect. So I would say those last two factors, work/family and job security considerations that are beyond our control, have declined significantly. Something needs to be done about that. Mr. Horn. We had, as you know, in the Supreme Court case about 20 years ago a sweeping away of about 200 laws that permitted the Congress to get into the hair of the executive department is I guess putting it bluntly. To what degree do you feel that GAO might well be utilized in some type of arrangement where the Congress, the executive branch, might find that useful? Are there any situations like that that you are thinking about? Mr. Walker. In what regard, Mr. Chairman? Mr. Horn. Advisory board or something like that? Mr. Walker. There is an increasing range of activities that the Congress is asking either GAO as an institution or the Comptroller General as a position to get involved with. For example, we have been asked in the past to do--the Comptroller General has been asked to chair a panel on the Cost Accounting Standards Board. There is now pending legislation to ask the Comptroller General to chair a commission on A-76. In addition, there are requests from time to time to expand our responsibilities to get into regulatory reviews and other types of activities. I think there is a lot of things that we can do. I think the real key is, A, do we have the resources to do it; B, to be able to consider what, if any, independence implications there are before Congress acts so that there are not any surprises in that regard. Mr. Horn. I thank the gentleman. We now have the vice chair with us, Mrs. Biggert, the gentlewoman from Illinois; 5 minutes for questioning. Mrs. Biggert. Thank you. Since the time I have been here I certainly appreciate all that GAO has done; and I think particularly for this committee and walking into something like Y2K and all of the things that we had to deal with in that, we certainly got to know Mr. Willemssen very well; and he did a great job. Mr. Walker. Mr. Willemssen won the gold medal last year on congressional hearings, and I had to take the silver because he was so popular last year. Mrs. Biggert. Mr. Walker, when you get something to do for either a Member of Congress or however it comes about, do you have any peer review of your work? When you do the oversight for some many other---- Mr. Walker. We have internal quality reviews, and we have peer reviews. With regard to all of the work that we have, we are moving toward what I would call a second partner review where we will have at least one other SES person involved as a second set of eyes to take a look at the work. We have extensive quality assurance mechanisms with regard to all of our work. In addition, in connection with certain types of engagements where they are highly technical and complex and where we may not have adequate expertise internally, we have and will continue from time to time to have expert panels, groups of people from the outside who are expert. It has to be balanced, and we have to be concerned with any potential conflicts. We also have a formal peer review in financial auditing. KPMG Peat Marwick does that, and we are also looking at working with other colleagues, other auditor generals around the world to do peer review of our evaluation work. I have met with a number of my colleagues within the last 6 months, and we are going to try to do a peer review of each other's institutions. Mrs. Biggert. Where do the outside experts come from, the private sector or other agencies? Mr. Walker. It could be a combination. It could be the not- for-profit sector, it could be the private sector, or other agencies. When we do that, we need to be careful that we know about whether or not there are any potential conflicts, that we have balance from the standpoint of the issue. But sometimes, as you can imagine when you are dealing with experts, just like when you are dealing with advisory councils, sometimes you will get people who are integrally involved with an industry and get comfortable with the conflicts and disclose them. Mrs. Biggert. Do you tend to go back to the same people when you establish a relationship with the expert? Mr. Walker. This is one of the things that we are looking at right now, and one of the things that I have been pursuing since I became Comptroller General. In the past, each unit did what they were comfortable with, and one of the things that we are doing is looking at these issues. What type of criteria are we using as to when we use expert panels? What type of procedures do we have in place in order to ensure balance and be aware of any potential conflicts? Undoubtedly, in the past, there have been situations where individual units might get comfortable with certain persons, but we are going to start looking at this on an agency-wide basis because I think we need to look at GAO as a whole rather than individual units. Mrs. Biggert. Do you have to pay a consulting fee to these experts? Mr. Walker. It varies. Some do it for their country. The consulting fee, as you know, is not very high. When I was a trustee of Social Security and Medicare, I got paid $300 a day which I gave to my firm. Some are pro bono, and some we will pay up to around $300 a day. Mrs. Biggert. Would there be an impact then of the proposed 25 percent reduction in appropriations? Would this make any change in that? Mr. Walker. Right now the only thing that is on the table is the Senate has us for a 2.5 percent increase, the House has us for a 2 percent cut. We are hopeful that we are going to get the Senate number, for obvious reasons. We had a significant cut--the 5 percent you are talking about was a 25 percent cut that occurred in the 1990's. Obviously, with dramatic reductions in resources like that, not only do you have RIFs but you have less ability for contracting. Mrs. Biggert. What was the impact of that? Mr. Walker. It was drastic. It was a tremendous loss of institutional knowledge. It was putting us in a position where we can get our job done today, but we are at risk of not being able to get it done in the future. And cutting back on training and enabling technology, things that you will pay a price for in the future if you don't reverse it. Mrs. Biggert. Thank you. Mr. Horn. Mr. Ose, the Member from California, for pursuing the questioning. Mr. Ose. Thank you, Mr. Chairman. I want to go back to the issue on the retention of people as it relates to your proposals. Have you had any reaction from the executive branch or elsewhere on the hill? Mr. Walker. With regard to our legislative proposal? Mr. Ose. Yes. Mr. Walker. First, OPM is not taking a position on our legislation because we are a legislative branch agency, there is a separation of powers, plus we are not proposing any changes in the Civil Service rules. Mr. Ose. OPM did not take a position on their proposal because they are a legislative branch. Mr. Chairman, I wonder if we can get them to not take a position on anything you and I put up because we are legislative, too. Mr. Walker. An innovative thought. But they see us as the legislative branch. We are not proposing to change the Civil Service rules, etc. With regard to the Hill, the situation is as follows: We have strong bipartisan and bicameral support. We have support from the Government Reform Committee, the chair and ranking member. We have support from the Governmental Affairs Committee, the chair and ranking member. We have support, strong bipartisan support, in the Senate Appropriations Committees, because the bill is on the Senate bill that passed. And we have support in the House as well, and we are very hopeful that it will be enacted soon. We do have some concerns that have been expressed by certain members of the local delegation. That is understandable. They have many Federal Government employees as their constituents. Some of their concern is because of misperceptions. At first, they thought we were talking about changing the Civil Service rules. We are not. There is some question about veterans preference. We are maintaining that. So we are hopeful that we will be able to get everybody on board, but we critically need this legislation. Mr. Ose. If I understand correctly--and I want to examine a couple of these employees' protections. Could you just go through some of the protections that are built into your proposal that would help the employees or satisfy the employees? Mr. Walker. I appreciate you asking that question. I think it is critically important that management have reasonable flexibility, but you also have to have protections to safeguard employees. We have several internal appeal processes that individuals can go through. I have proposed and I have stated publically, since we have to propose regulations, that I would add an additional appeal as part of that regulatory process where individuals would have an expedited appeal directly to me in addition to what their current rights are. In addition, we have an independent Personnel Appeals Board comprised of three independent attorneys paid for by GAO but with no relationships to GAO that individuals can appeal to even after the internal appeal process. In addition, for certain types of actions, they can go to Federal court. By the way, we pay for the Personnel Appeals Board. So there are a number of substantive protections. Unlike executive branch agencies which are headed by political appointees of a particular party, the Comptroller General has a 15-year term. He is a nonpartisan professional and therefore must suffer the consequences of whatever he does. And therefore, given that we are in the people and knowledge business, I can assure you that my successors would be prudent, because we would pay the price if we weren't. Plus congressional oversight obviously serves to keep us in check. Mr. Ose. My final question, Mr. Chairman, before I offer one observation at the end of the response, would be that a lot of what happens up here is either legislative or regulatory. Does GAO have any authority right now to issue regulations from a regulatory standpoint to handle this rather than pursuing it on a legislative basis? Mr. Walker. We have the authority to do regulations. However, we are talking about adding some criteria, namely, skills, knowledge, and increasing the weight of performance that could be contested if we tried to do it through the regulatory route. Arguably, we could go that route, but there are significant litigation risks, my general counsel has told me, if we go that route. We believe that we prepared a sound business case, that we have got adequate protections, and we would respectfully request the support. Mr. Ose. The reservation that I mentioned moments ago had to do with following up on comments from my good friend from Illinois, and that is that Mr. Willemssen has been a star and a source of great information for me, at least as a Member, and I want to commend his efforts from you. Mr. Walker. He received the Comptroller General's Award last year, which is the highest award we can give, as well as Helen Hsing, who is head of Congressional Affairs. He is an outstanding individual. Mr. Horn. One of the key things in the results-oriented program that we are pushing and that this has been done on a bipartisan way 10 years ago, we are trying to make it happen; and if it is going to happen, we really need a cadre, and maybe you already have it, that can experiment with different approaches to how do we measure the effectiveness of Federal programs. And I just wonder what your thinking is along that line. Mr. Walker. It is part of the recent reorganization that I announced at GAO. One of the things that I am creating is the Strategic Studies Group; and they have the expertise to do some of the type of work that you are talking about, Mr. Chairman. If I can, I would like to mention one other thing before we wrap up. That is we have not had a Deputy Comptroller General in GAO for over 20 years. The current statutory framework for appointing the Deputy Comptroller General has never worked. It is broken. It needs to be fixed. We need to work together. We need a Deputy Comptroller General. Gene Dodaro would make an outstanding Deputy Comptroller General. Mr. Horn. I think we can all testify to that. He has been an outstanding witness in the 8 years I have been involved with this committee. Well, we thank you, and we hope that you will stay with us as we get your two predecessors. We would like at this time to have Comptroller General Staats and Comptroller General Bowsher and Mr. Ink, President Emeritus, Institute of Public Administration. Mr. Walker, you can remain at the table, by the way. We are delighted to have with us today Elmer Staats, who has a great reputation in this city, over 40 to 50 years. He became a member at the Bureau of the Budget in the 1930's, in 1939, and was Assistant to the Director and Assistant Director of Legislative Reference. I think you followed Roger Jones, I believe. Or did you precede him? He has been Executive Assistant to the Director of the Bureau of the Budget in the late 1940's and Deputy Director in the 1950's and in the 1960's. Then he was in private industry for awhile and then he was nominated to be Comptroller General of the United States and served from 1966 to 1981. We would appreciate any comments that you might have. You have watched the agency more than any of us. Anything that you would like to stay, we would be glad to listen to it. STATEMENT OF ELMER STAATS, FORMER COMPTROLLER GENERAL OF THE UNITED STATES (1966-1981) Mr. Staats. Thank you, Mr. Chairman. I do not have any prepared testimony. I came mostly to answer your questions. Two things I would like to say: The bottom line for GAO is its credibility and that has a lot of implications for the length of term of the Comptroller General and the bipartisanship. I think that is something that we have to keep in mind. The other thing I want to say concerns program results and program evaluation. President Johnson, when he appointed me, thought the job of the Comptroller General to involve those activities--and he had been in the House a long time and in the Senate a long time. He thought for a moment; and he said, when Congress passes a bill and I sign it, it is your job to tell both of us whether that law is being carried out as we intended it to be carried out. And that is a pretty good definition of the job of GAO. GAO has changed a lot since the time I joined it in 1966. I don't think Comptrollers General could have done all they did if they didn't have a 15-year term. It takes a long time to make some of these changes, but it has changed a lot. When I joined the GAO, the personnel was entirely lawyers and accountants, so I had a job of convincing people that we could use other disciplines and other backgrounds. That was a real problem in recruiting because you have accounting in the name of your organization and you have to tell them, no, we are an accountability organization. We even thought some about changing the name of GAO. If you look at the rest of the world, most of the people in comparable jobs are called Comptrollers General or auditors general, and so we decided to stick with the title General Accounting Office. A couple of comments. I think Congress is making a big mistake in cutting back on the staff of GAO--an organization that is putting more money in instead of taking it out. If you look at the cost and benefits of what comes out of GAO--I think Congress tends to look at GAO as they would any operating agency in the executive branch. There are obvious ways to save money. Here you are dealing with an organization whose sole job is to try to make government more efficient; and to save money and to cut GAO--I think it is a little like a penny-wise/pound- foolish approach, to be very blunt about it. On the whole, I had pretty good success in persuading Congress. We were not always happy, but most of the times we were. I think Congress tends to look at the GAO from the standpoint of an operating agency, like the Pentagon or something else, but what can Congress get from the GAO that is going to help them do their job, and that is what GAO is about. I am little concerned about the fact that GAO has no--has less freedom to initiate work of their own. When I was at GAO, less than 10 percent of our work was requested by Congress; and the answer that I got from Members of Congress was we know that GAO is a good organization but not really relevant for what we need. From the time I left in 1966 we were up to a little over 40 percent. Now you can look at that both ways. If the GAO keeps in touch with the Congress as to its work plans, a lot of its work plans will be accommodated to the committees of Congress. So part of our objective was we worked to contact all of the committees and Members and to see what they thought about, so a lot of our priorities were established by consultation, and that tended to relieve some of the congressional requests. There is always the question, how does GAO decide what it is going to work on? I don't think that it is right for Congress to deny GAO to initiate its own work. GAO is intended to be an independent auditor of the Federal Government. If you are an independent auditor, you have to make your judgment as to whether or not what you are going to do is going to be the correct thing to do. Independence is kind of the keystone of what we are talking about. This 15-year term, the fact that GAO is given a lot of freedom to initiate work, these are all parts of it. I think the GAO is always going to be in a position of trying to anticipate, I call it early warning, where we can look down the road and see what is going to be important before it reaches the stage of having legislation or a hearing and so on. I think we can--GAO can do a lot of that. But they don't do that unless they have a little freedom to do it. When I went to GAO, I found that Congress had not mandated any work for IRS. We didn't have any authority. We didn't have any authority to do anything with respect to the Federal Reserve Board. The international lending agencies, those were out of our providence. So we had the job of trying to persuade Congress that they overlooked something. Generally, we had pretty good cooperation from Congress on that. I came to Congress to get GAO its own personnel system. It didn't make any sense for GAO to be under the rules of the executive branch in that respect. I had some opposition to that in the executive branch, but it has worked out all right. GAO needs that kind of flexibility to write its own rules as far as its own work force is concerned. There are two or three things that I want to say and then maybe answer your questions. Mr. Horn. I would like you to confirm or deny the following statement. As I remember the LaFollette-Monroney Act that created the CRS, the research service for Congress, there was also a hope of professionalism on the part of the staffs. Before that, they had a clerk that was sort of keeping the show running, but they didn't have a professional staff until the LaFollette-Monroney Act was recognized in both the office and the committee. As I remember, there was a role for GAO, and that was to get into the programmatic review. And yet your predecessors could not implement that because Mr. Rayburn did not think it was a good idea; and neither did Clarence Cannon, the chairman of the Appropriations Committee. Both of them, I believe, were dead before you got there; and I think, under your leadership, the GAO moved into programmatic analysis. And I think that is exactly what they ought to be doing, along with the fiscal debt, and they don't that much. You contract a lot of it out. I just wondered, am I correct on that bit of history or am I wrong? Mr. Staats. The first Comptroller General was under President Roosevelt, and he decided a lot of things that Roosevelt was doing was illegal. Mr. Horn. Wasn't that Mr. McCarl? Mr. Staats. Yes. So that the relationship between the executive branch and GAO at that time couldn't be worse. But he stuck it out for 15 years. He never was convinced that the Roosevelt program was the right thing to do. He tried to find some way to make it illegal. The GAO does have some authority to pass on the legality of funds, there is no question about that, but I think he overdid it. I think the--in general, the Congress has been very supportive of the GAO. I say that as a general statement. I had a problem with the budget and their approach to it. GAO is different from CRS and the CBO. Their whole job is to help Congress. GAO has also the role of being an independent auditor. That means you seek out things that need to be done and look at it and report to Congress on it. So it is a very different relationship. There has to be some coordination obviously. In general, I would like to say if Congress looks at the GAO in the same way it looks at CRS and CBO, I think they overlook something. Mr. Horn. To what degree do you believe the existence of inspectors general that Congress put in everywhere 20 years ago, did that, in essence, do some of the work that ordinarily the General Accounting Office would take care of? Mr. Staats. I was concerned about that when the law was passed, but it didn't turn out to be a matter of concern. For one thing, the inspectors general are dealing with a lot more internal problems than we are. Very rarely do they deal with problems of interagency concern or governmentwide concern. They were looking primarily at issues pertaining to that agency. It didn't turn out to be a real problem. I think, on the whole, it has been a good development. Mr. Horn. Well, let's call on Mr. Bowsher; and then we will have questions from all members of the panel. Mr. Bowsher, it is a pleasure to see you. You were also a complete 15 years. So it must be a healthy job. It is like being President. STATEMENT OF CHARLES BOWSHER, FORMER COMPTROLLER GENERAL OF THE UNITED STATES (1981-1996) Mr. Bowsher. It is a very healthy job. My predecessors all lived to be into their 80's, and so I have confidence that this has been a good job for my health. Let me just say that I think the Comptroller General job is really one of the great jobs in government. I have been working recently with Dave Ruder, who was chairman of the SEC for a period of time and was a dean at Northwestern Law School; and he always introduces me as having one of the best jobs in Washington and the GAO as one of the great agencies in the government. I think the mission that the GAO has, which is we have to look at all of the various programs of the Federal Government is something that attracts the outstanding talent that does come to GAO; and I know Dave is right at this moment in time, because of the competitiveness, the strong economy, the big salaries that the private sector is offering that it is harder to get talent. But I am sure that GAO will be able to attract really talented people and keep them over the years because of the mission and the work that they get to do at the GAO. I would strongly urge that the Congress give the Comptroller General and the GAO budget stability. I had it for 10 years. The first 10 years I was in office, Vic Fazio was the chairman of my subcommittee in the House Appropriations; and Jerry Lewis was the ranking person; and they gave me budget stability. And I always remember saying to them, if you can do that for me I will run a great GAO; and we made a lot of progress at the GAO in those 10 years. When the budget deficits got so large and we had to take a cut, I remember saying to Connie Mack, if you let us do it the right way, we will be able to bring the organization down in the right way, and that was a big help. I will always be very grateful to Senator Connie Mack. And Bill Clinger, too, was very helpful at that point. But Dave is right. I think today there has to be some rebalancing at the GAO for the 21st century, and I would hope that the Congress could give them that kind of support. The GAO is an agency that is like very few others. It is a much smaller agency today than it was years ago, and yet it produces so much more, so many more reports and testimony, so many more dollars saved. It is a real tribute to this agency that they can compare themselves to the best in the private sector. I remember working with Booz Allen at the end of my 15-year term on a management review of another agency, and the managing partner at Booz Allen said I never saw an agency in the government and very few in the private sector that have a better work ethic than the GAO. The people worked hard and did it on a timely basis. And one time I had Dr. Demming at the GAO on a Saturday. He said he would come for nothing if we would meet on Saturday or he would charge me $10,000 if it was on a weekday. I said, I'll take the Saturday option. John Sawhill came, a former partner of McKinsey; and he was amazed what a breadth of testimonies and reports that our SES members had to handle. He compared it to the partners at McKinsey. I was a former partner at Arthur Andersen. I too, knew that the leadership of GAO carries a very big load and does it extremely well. So I think if the Congress can support the current Comptroller General and the GAO, I tell you, you are going to get a good payoff. I will conclude on that note. [The prepared statement of Mr. Bowsher follows:] [GRAPHIC] [TIFF OMITTED] T3593.043 [GRAPHIC] [TIFF OMITTED] T3593.044 [GRAPHIC] [TIFF OMITTED] T3593.045 [GRAPHIC] [TIFF OMITTED] T3593.046 [GRAPHIC] [TIFF OMITTED] T3593.047 [GRAPHIC] [TIFF OMITTED] T3593.048 [GRAPHIC] [TIFF OMITTED] T3593.049 Mr. Horn. Let's turn to Dwight Ink, who has been a regular helper on this subcommittee, president emeritus of the Institute of Public Administration and formally in all types of roles under numerous presidents. STATEMENT OF DWIGHT INK, PRESIDENT EMERITUS, INSTITUTE OF PUBLIC ADMINISTRATION Mr. Ink. Thank you, Mr. Chairman. I did not serve in the GAO, which I guess is why I am not listed as honorable on the witness list here, but I did serve in the Executive Office of the President and a number of other agencies. My perspective is from that type of service. I certainly think highly of the General Accounting Office. It has an extremely important role to play, and it has provided strong leadership under both Mr. Staats and Mr. Bowsher in improving management. But Congress needs to take great care to make sure that its own actions support a highly skilled agency that can function effectively in a rapidly changing environment, and that is important. I have found the GAO staff to be competent, dedicated; and there have been occasions when I thought that the GAO was really about the only ally I had in addressing management problems and mismanagement in particular. Over the years, the General Accounting Office has made a particularly enormous contribution in financial management. Great as those contributions are, I have on occasion felt that they could make an even greater contribution if Congress let them be more selective in its work regarding departmental management and focus more heavily on basic issues and the root causes of these problems. I give some examples in my written testimony, in one of which Mr. Bowsher believes I have overlooked some early reports by the GAO on the S&L problem. I will go back and look at that, Chuck. But I have found as I picked up responsibility for various agencies and bureaus, very useful GAO reports about their accounting systems. But it has been very difficult for the GAO to have the resources, particularly now, to devote to the more basic problems and issues. I mention the Community Service Administration, for example, where it was clear that there were financial problems, clear that financial management was not good. But the IG reports and GAO reports didn't really get to the depth of the problems, such as the fact that no program manager was permitted to know his or her unobligated balance, which is pretty fundamental. No career person was permitted to make recommendations with respect to major contracts or grants in order to ease the rewarding of political friends. Those are basic building blocks for corruption, and it is important that GAO be given the kind of flexibility and the ability to initiate its own work, so that it can choose these kinds of targets early on and devote whatever resources are necessary to deal with them. With respect to cross-cutting issues among government agencies, GAO has not been able to devote the kinds of resources I think it needs to address directly issues such as the difficulties in the executive branch in implementing effectively the Civil Service Reform Act of 1978. Yet that legal framework, and the concepts behind the legal provisions, are extremely important for effective execution of the laws passed by Congress. Neither has the GAO been able to look in depth at the management performance of the Office of Management and Budget. You may recall when this committee asked the GAO to review the management impact of the most recent OMB reorganization, the GAO declined and opted instead to look just at its effect on the budget operations. I would like to see the General Accounting Office be in a position to address these very broad cross-cutting issues that have such a tremendous impact on government operation as a whole. I opposed the GAO having to follow the executive branch reinventing government policy of reducing staff levels simply on the ideological notion that government is too big and the best way to reduce it is to make staff cuts without first looking at what can be done differently and where such cuts might best be applied. Thanks to Mr. Bowsher, there was some attention in this instance given to at least alleviating the worse impact of these cuts, something which did not occur in the executive branch agencies. I want to stress the support that I have for the move by Mr. Walker to increase training and development within GAO as a part of his very welcome emphasis on human capital management. Again, this is an area which in the executive branch, outside of the military, has declined when it should be increasing. With the different roles of the employees and their different focus and their different culture, you need greater emphasis, not less emphasis, on employee development and training. Mr. Chairman, it seems like I am always commending you and this committee on holding hearings; and I do it again today. The interest that this committee shows in the General Accounting Office it is very important, because the interest in Congress as a whole is often very much focused on an individual problem or individual issue, so that Congress really doesn't deal with the health of the General Accounting Office as a whole and its overall ability to help and respond to Congress. Congress has a responsibility to discipline itself in what it asks GAO to do. The large volume of individual and committee requests that we have heard this morning has reduced the capacity of the General Accounting Office to pursue important avenues that it believes needs attention. Its capacity to pursue the basic problems and root causes of systemic shortcomings such as I have mentioned has been sharply limited by a combination of these many congressional requests and the ill-advised reduction in staff of several years ago. Congress must address both of these issues. I suggest this committee work with GAO in exploring ways in which individual congressional requests might be better screened or required to meet certain conditions. I also urge this committee to provide support to the General Accounting Office in giving greater priority to those issues which the General Accounting Office leadership regards as the most serious problems facing the departments and their root causes. In other words, permit the General Accounting Office to do more self-initiated work as it did through much of its earlier history. In conclusion, let me reiterate the high regard in which I hold the General Accounting Office, its leadership and its staff; and I wish Mr. Walker well as he moves ahead with a new vision for GAO. Thank you. Mr. Horn. Well, we thank you. You've always been a very sound voice before the committee. [The prepared statement of Mr. Ink follows:] [GRAPHIC] [TIFF OMITTED] T3593.050 [GRAPHIC] [TIFF OMITTED] T3593.051 [GRAPHIC] [TIFF OMITTED] T3593.052 [GRAPHIC] [TIFF OMITTED] T3593.053 [GRAPHIC] [TIFF OMITTED] T3593.054 [GRAPHIC] [TIFF OMITTED] T3593.055 [GRAPHIC] [TIFF OMITTED] T3593.056 [GRAPHIC] [TIFF OMITTED] T3593.057 [GRAPHIC] [TIFF OMITTED] T3593.058 Mr. Horn. I would like to call on my colleague, Mrs. Biggert, the vice chair of the subcommittee and the gentlewoman from Illinois. Mrs. Biggert. Thank you, Mr. Chairman. Mr. Walker had a chart that I believe he went over a little bit, but I would like to ask Mr. Bowsher and Mr. Staats about it. It looks like in 1966, when Mr. Staats had this office, that 90 percent of the work conducted for Congress was research and development and then 10 percent was committee and Member requests. By 1981, when Mr. Bowsher took over, 65 percent research and development, 33 percent committee and Member requests, and then a small little portion came in there of 2 percent of mandates, and then now it is 72 percent committee/Member requests and a small portion of research and development and 23 percent for mandates. I guess I am wondering how research and development really differed from committee or Member requests and why there was such a dramatic change in these charts since the period of time that you started, Mr. Staats, and then pretty much of a change in 1981 until today when we have 72 percent for committee and Member requests? Or what is the difference I guess between research and development and committee and Member requests? Mr. Staats. I have a little trouble with the research and development term as such because the General Accounting Office is supposed to take the initiative on anything that it sees that needs to be looked at. Research and development, I would prefer to call research and development in the training of the staff. GAO has done a very limited job in terms of training. When I was there, very little was done. We didn't have the staff to do the training. So I looked to the consulting firms and the public accounting firms. They are spending a lot of money, in some cases as much as 25 percent of their total budget, on training. That is what I call capital investment. That is kind of the key to the diversification that you need for the GAO's work. I had actuaries, I had all kinds of disciplines, but you have to do a lot of training to accomplish that. Mrs. Biggert. Mr. Bowsher. Mr. Bowsher. When Elmer Staats first came into office, the Congress was saying that the GAO is a good organization, but it doesn't work on the issues that we find important. He got it going in the right direction. When I came into office, GAO was working more and more on the important issues in the eyes of the Congress, and that trend continued during my tenure. Also, a lot of the self-initiated work that had previously been done with very little communication with Congress really became, lots of times, congressional requests. In other words, when we would do our planning in the housing or in the agriculture area, then we would come over and show it to the committees. They would say, that is good, let me send you a request. So I guess I never worried about it getting too high a percent as long as I always said to my SES leaders, is there any important work that we are not doing right now because we have too many congressional requests? And there were a couple of times when we had to come to the chairmen of the committees and ask them to be more of a referee as to some of the requests coming over. But, on balance, in my 15 years I thought we were able to do the important work. Most of it ended up being congressional requests. I think Dwight Ink is right. It is one of the things that you have to be concerned about. Because if you are getting congressional requests but not doing the important work, that is not good. The S&L crisis, we did not expect to spend as much time on the S&L area as we did for 5 years, so we had to move our talent over into that area. And I think we did tremendous work in the S&L area. I think the Japanese have found out by not addressing the issue directly it has caused a tremendous drag on their economy. So those are the problems that you face as the Comptroller General working I think with the leadership of the Congress, but I think it can be worked out. I really do. Mrs. Biggert. Then maybe you could just comment on mandates. How does that differ from the other work that is done? Or what do you do with mandates? Mr. Bowsher. Mandates are a little tougher because that gets into legislation. If I understand the Comptroller General here and his deputy, Mr. Dodaro, they are going to work on that to make sure that doesn't get too large and doesn't get too repetitive. We did review the mandates every so many years and say are there things that were needed at one time and maybe we can go back to the committee and not have to provide that on a contention basis. So I think mandates to me is more of a concern than the other issue. Mrs. Biggert. Thank you. Thank you, Mr. Chairman. Mr. Horn. We are now delighted to have the ranking member, who has been with this committee over the years; and we are delighted that she can be here today, the gentlewoman from New York, Mrs. Maloney. Mrs. Maloney. I made a special point of being here when I heard that the Honorable Elmer Staats, who came here during the New Deal and watched us progress--it is a great honor to welcome you and Mr. Bowsher, with whom I worked when I first came to Congress, and now Mr. Walker and Mr. Ink. Page 14 shows the number of your staff falling. I am all for reinventing government and being more productive, but you have to have enough people to get the job done. The last hearing I had in this committee, we had one from the McIntosh subcommittee which would have GAO doing a cost-benefit analysis on the private sector for any changes in bills or regulations. That is going to cause your workload to go much higher, and so my question really is a budgetary one. I would like to know how much is in your budget--and it hasn't gone through the appropriations process yet. What is the funding in the Senate? What is the funding in the House? Why is your personnel dropping? With the new demands--I know that I put a lot of them on you, Mr. Dan Miller and myself from the Census Committee, we have been asking for all kinds of things. Do you have enough people to get the job done? I would like to understand your staffing. I don't know if you have had a chance to review the McIntosh bill, and it appears to me that is going to require even a greater professional attention from your group. I just want to use my 1 second here to congratulate the General Accounting Office. I think you do a fantastic job. You provide a service to the American people and to both sides of the aisle, an impartial, professional analysis so our decisionmaking is better. I think you are great. But I would like you to comment on your own paperwork here and let us know where you are in the budget process. Why is your personnel falling? Mr. Walker. Mrs. Maloney, thank you for your kind comments. The Senate bill has us for a 2 percent increase over our current year appropriation level. Mrs. Maloney. How much is that? Mr. Walker. It is about $380 million. The House bill has us for a 2.5 percent decrease over this year's budget. We are hopeful, with all due respect to the House, that the Senate number will prevail. We think that is critical in order for us---- Mrs. Maloney. What is the dollar amount in the House? Mr. Walker. It is about 4.5 percent. It is about $15 million less, something like that. Mrs. Maloney. OK. Mr. Walker. I will be happy to provide those numbers for you. I think it may go to conference as quickly as this week. With regard to staffing, the primary reason we have had a significant reduction in staffing is because of budget cuts over the 1990's. Eighty-four percent of our budget is for people. We don't have a whole lot of flexibility for that other 16 percent. There are certain things that you just have to pay for. It is critically important that we obtain budget stability. With regard to the McIntosh proposal, clearly we are capable of doing that work, but one of the issues that we have raised is resources. Mrs. Maloney. Do you need more resources to do that work? Mr. Walker. Yes. The comparable bill in the Senate provides for supplemental resources for us to be able to do that work. We think that is important. Mrs. Maloney. How much more do you need to do that work? Mr. Walker. The Senate has provided $5 million for the amount of work that they are requesting that we do. The scope and timing are different, and obviously they have provided for a resource allocation, so resource only represents one difference regarding the specific numbers, the House mark is $379 million and the Senate mark is $387 million, for a difference of $16 million. Mrs. Maloney. Now, is that sufficient to do your work? Is that what you requested? Is that what was in the President's budget? Mr. Walker. No, that is not what we requested. We are in the legislative branch, and we requested $399 point something million. That is what we felt we needed. The Senate bill, obviously, is below that; and it is vastly superior to the House proposal. The House proposal notes if we impose another hiring freeze we could avoid another reduction in force. We had a virtual 5-year freeze in the 1990's. That served to mortgage the future. We cannot return to those ways. Mrs. Maloney. How is your turnover? Do you keep a professional staff? How is your staffing in terms of---- Mr. Walker. It splits by level of experience. For individuals with 3 or more years of experience, we have very low turnover. It is about 4 percent a year. That includes retirement. But we have a big retirement bulge coming up. Younger, it is 15 to 18 percent; and obviously there are reasons for that. That is one of the reasons that we are trying to focus on human capital. Mrs. Maloney. Are you backlogged in your requests for analysis? Mr. Walker. Constantly--in some areas more than others. Health care, we are way oversubscribed in health care. Other areas, we don't have as large a backlog, and we are constantly trying to set priorities. Mr. Horn. We now call on Mr. Ose, the gentleman from California, for 5 minutes. Mr. Ose. Thank you, Mr. Chairman. Mr. Walker, I am confused about something. You testified in your verbal testimony about access or problems accessing State and local records, and I went through your testimony trying to find the written reference, and I couldn't. I am trying to make sure that I understand your point there. Could you elaborate on that, please? Mr. Walker. Basically more and more of the work that we are being asked to do involves multiple government agencies, multiple levels of government and, as Mr. Staats mentioned, sometimes multiple national governments. In addition, more and more work is involving both the public and private sector. For example, in the health care area, much of health care is provided by private sector parties, whereas HCFA is a financing mechanism. They don't provide the benefits. My only point is that---- Mr. Ose. They don't provide the service? Mr. Walker. That is correct. They have a regulatory---- Mr. Ose. They pay for the benefits? Mr. Walker. Right, but they don't provide the service, etc. My point is, if you look at our strategic plan going forward, we are going to be asked to do more things, not only with regard to existing government programs but proposed government programs, for example, prescription drugs for Medicare, that are going to involve us having to obtain access to records that we currently don't have the statutory authority to obtain. That is something that we need to work on. We don't have express statutory authority. Therefore, we have to rely upon cooperation. On page 38 of the testimony--and I agree, I didn't elaborate significantly in the testimony--but the second from the last full paragraph provides just a few--a couple of examples that might be helpful. Mr. Ose. I knew Mr. Dodaro would find it. Mr. Walker. That is why I did an executive summary. Mr. Ose. Is it your concern that, in terms of GAO performing its statutory duty, when the delivery of the benefit is, if you will, block granted out, or whatever the appropriate phrase is, when that burden is placed on the local or State agency, the only way for GAO to make sure that those agencies at the State or local level are complying with Federal intent is to have access to the records? Mr. Walker. Well, I think in certain regards we will try to partner with the State auditors who clearly do have access, and we are trying to do that more and more, but there could be circumstances when we are not able to do that in that regard. I think we need to talk in more detail about what the nature and extent of our challenges are. But I see this as an emerging issue. I don't think it is critical right now but in the years ahead could become so. Mr. Ose. I don't like chasing my tail, so my next question is, are you suggesting that we need to consider legislation now in anticipation of this challenge? Mr. Walker. I am suggesting that what we ought to do is have the staff for the committee, for the subcommittee, get together with our staff to explore this issue further to make sure that there is an understanding of the nature and extent and timing of the challenge, and while we may not need it today we may well need it in the not-too-distant future. Mr. Ose. And you are saying current statutory authority does not give you the ability to obtain this information? Mr. Walker. That's correct. We can request it, and in many cases we are successful, but not in all. Another example is, to the extent that you are talking about prescription drugs and to the extent that we are trying to analyze the cost of prescription drugs, the cost of prescription drugs through VA versus DOD versus Medicaid versus the Federal health plan versus other nonFederal payers, and trying to understand whether or not the Federal Government is getting the best price which it is supposed to get under certain contracts, it is tough to do that if you don't have access to records that are nonFederal payers. Mr. Ose. Does GAO have the ability to subpoena such information? Mr. Walker. No, we do not. We do not at the present point in time. Mr. Ose. Thank you, Mr. Chairman. Mr. Horn. That is a very good question that you just asked, and that is one I was going to use. To what sense do you feel, now that you are in there a couple of years, that GAO sometimes does not really want to press the executive agency, feeling that they might not be given information, than other times? What can we do about that? Mr. Walker. One of the things that we are doing at GAO is we are looking at records access under current law. We do have certain statutory authorities right now. For example, I can issue as Comptroller General a demand letter which is very similar to a subpoena in its effect. I have found over the years that many times we have had difficulties obtaining records from existing executive branch agencies where we do have the authority to obtain it and there is resistance to try to push them. We have implemented a process where that gets surfaced a lot quicker, and we make conscious decisions whether we are going to escalate it to higher levels within the respective department and agency and under what circumstances we would issue a demand letter. I have already had personal conversations with either the secretary or deputy secretary of three Cabinet departments that were reluctant to provide us information and provided it within a short timeframe after I got on the phone with them. I don't like issuing demand letters. I think it should be a last resort. But we need to have mechanisms in place where we can get it within a reasonable period of time so we can meet our client's needs. Mr. Horn. Looking at the Inspectors General and their role, do you feel they get the information when they do internal studies? Some of them are very critical, and I just wondered, do you feel that you are both being treated the same way or does the inspector general have an edge on GAO? Mr. Walker. Candidly, Mr. Chairman, I am not in a great position to answer that. I would need to outreach more on that specific area. I will tell you that we are taking a number of steps to increase our coordination and cooperation with the inspector general community and the State and local audit community. Because, to me, where we can have the most value is cross governmental and intergovernmental areas as well as longer- range issues, and that requires more coordination, and so I will followup on that. Mr. Ink. Mr. Chairman, I think you will find that this varies considerably from agency to agency, in part because of different types of leadership. Some agencies have a better understanding of the role and the importance of providing this kind of information to GAO and inspectors general. Also, there is considerable difference among the inspectors general and how they use that information. Some of them use it more responsibly than others. I think the General Accounting Office is a much more stable organization, and resulting in more consistency in the way in which the agencies deal with the GAO. Mr. Walker. Mr. Chairman, I would agree. It is clear, based on my experience to date, that there is a significant difference between different offices of Inspector General and how they approach their work and whether or not they are likely to have problems. I would like to add for the record, as you know, we have recently published some congressional protocols which are now in the trial stage where we set our priorities and note what our obligations are with regard to our client. We plan to do the same thing with regard to departments and agencies, and records access will be part of that as to what our policies will be with regard to that. Mr. Staats. I would like to comment on the access to records, Mr. Chairman. It is true that agencies, unless they cooperate, can almost turn off your water. I think they have to have a feeling that you are dealing with them fairly and openly and giving them access to your draft reports and have an opportunity to present their own views alongside the GAO. If you do that, I don't think that you are going to have problems. But, legally, GAO can still take agencies into court to get access to records if they need them. Mr. Horn. I am glad to hear that, because I think that is what they ought to do. The gentleman from California, do you have any more questions? Mr. Ose. Thank you, Mr. Chairman. I do have one on the issue. As I move from being a young man to a confused middle-aged man, I have often wondered where is my path going to take me as I move into more senior years. If I look beyond my longer term in office, I am curious what the panel's perspective might be what GAO might evolve into? Let me just construct a particular situation or scenario. With the advancement in information technology, there are people in my office who may very well have access to records they have never had access to before, and they may come to my office with training of a nature that might otherwise have previously qualified them to only work at GAO, in other words, a very refined set of qualifications. Twenty-five or 50 years from now, I would appreciate your perspective on what your view on what GAO might be--their role or status or construction, what have you? Mr. Walker. Let me take a shot, and I am sure my colleagues would like to add to that. I think our role should be the same, but how we do our role will evolve. We are about maximizing government performance and accountability. I think we will do work on two sides, what government does and how government does business. I think technology clearly will play a major role. But let me articulate why I think GAO is going to be more important in the years ahead. Right now, there is an absolute information overload. You can obtain information that would absolutely drown you. There are unlimited assertions on the Internet, and that is exactly what they are. They are assertions--unvalidated assertions. There is an infinite amount of information on the Internet. On the other hand, what GAO does in a vast array of areas is to convert assertions and information into facts and knowledge such that Congress can make informed judgments about what government should do, what is working, what isn't and how it should be changed and how government should do business. I believe today we are a multidisciplinary professional services organization. We are a wholly owned subsidiary of the Congress. We will have to do business differently, but I think we are going to be more important, and that is because more and more issues we have to address involve multiple skills and multiple governmental entities, multiple perspectives, and we can pull it all together. Mr. Ose. Mr. Bowsher. Mr. Bowsher. I also believe that one of the great problems in government and has been for a number of years is the budget process. The budget systems are very antiquated and people hold back information thinking that it gives them power. In other words, I won't show you my numbers until later on and things like that. And that works all of the way. I served as Assistant Secretary of the Navy for 4 years, I was the Chief Financial Officer of the Navy, and one of the problems was getting the information up through the system. I remember working with John Chafee and John Warner. They were the Secretary and Under Secretary. They couldn't believe how that information would get buried and then all of a sudden popped up, and the same in relation to the Congress. I have always felt in this modern day and age of computers and communications that one of the things that government has to do is to modernize the budget and accounting system to the point that everybody can have the information on their PC and therefore get away from all of the waste of time that there is meetings, debating the numbers and also the waste of time for the auditors to sort it all out. So, in addition to what Dave is saying, which I think is right on the mark for GAO, I think one of the great things for government in total is this modernization of the Government and Accounting Act so the Federal Government looks like a modern corporation. They just don't spend that kind of time massaging all of the numbers that the government does. Mr. Walker. One quick point on that. One of the biggest challenges we face in the Nation is the fact that today--and CBO just came out at 9 this morning with a revised budget forecast which shows higher estimated surpluses for a longer period of time. But our budget simulations show that, because of known demographic trends, the fact that we have gone from 16 workers paying into Social Security to 1 in 1950 to 3.3 to 1 today, and we are going down to 2 to 1 by 2025, we are going to have renewed budget deficits as sure as the sun rises in the morning, especially if we end up spending the on-budget surplus, and it looks like that is going to happen sooner or later, a variety of different ways. We need to look at our budgeting system so people can make more informed judgments about not just whether or not we can afford things today but can we afford it tomorrow because we have mortgaged the future. If we are not careful, we will reload the debt. Mr. Staats. One thing which would be helpful is getting the committees to more clearly articulate what they want in legislation. We would have to go back in committee reports and see what Congress intended to do. Sometimes the House had one idea and the Senate had a different idea. It is hard to evaluate a program unless you know what Congress intended. Mr. Ose. Mr. Staats, the Senate is wrong in those situations. Mr. Staats. I remember in one case the committee said, if we had any idea what we were doing, we wouldn't have done it. Mr. Ose. Mr. Ink. Mr. Ink. Being a non-GAO person, I won't try to predict where it will be 50 years from now. Another handicap which has not been mentioned, however. GAO would be well served if it had a much stronger partner in OMB possessing more effective managerial component. A great deal of information can be shared back and forth, which is available now on only a very limited basis because the OMB has such a very limited management capacity to address broad problems. When Mr. Staats was Comptroller General, we in Bureau of the Budger had conversations with him going on all the time. We had meetings going on all of the time. Remember, Elmer, we met with Senator Proxmire; and that is what led to the productivity program getting going. The real initiative came from Mr. Staats, the Comptroller General. I, representing the President, took the leadership in moving forward with implementing it. That degree of cooperation is very difficult today. The initiative of Mr. Horn for an office of management would be very helpful in that respect. Mr. Ose. Thank you. Thank you, Mr. Chairman. Mr. Horn. We thank you. Let me thank the staff that have put this fine hearing together. On my left, your right, J. Russell George, the staff director and chief counsel of the subcommittee. In back of him is Heather Bailey, professional staff member; Bonnie Heald, director of communications; Bryan Sisk, our clerk; Elizabeth Seong, staff assistant; Will Ackerly, a faithful intern; and Davidson Hulfish, a faithful intern. This is the summer, when we get free labor and bright people. For minority staff, we have Trey Henderson, counsel, and Jean Gosa, minority clerk. And Doreen Dotzler, the court reporter, who is getting an education in government sitting with this committee. We thank you all, and we thank you all for coming. We are adjourned. [Whereupon, at 12:03 p.m., the subcommittee was adjourned.] <all>