This is the accessible text file for GAO report number GAO-13-394T 
entitled 'U.S. Government Accountability Office: Operations and the 
Potential Impact of Sequestration' which was released on February 26, 
2013. 

This text file was formatted by the U.S. Government Accountability 
Office (GAO) to be accessible to users with visual impairments, as 
part of a longer term project to improve GAO products' accessibility. 
Every attempt has been made to maintain the structural and data 
integrity of the original printed product. Accessibility features, 
such as text descriptions of tables, consecutively numbered footnotes 
placed at the end of the file, and the text of agency comment letters, 
are provided but may not exactly duplicate the presentation or format 
of the printed version. The portable document format (PDF) file is an 
exact electronic replica of the printed version. We welcome your 
feedback. Please E-mail your comments regarding the contents or 
accessibility features of this document to Webmaster@gao.gov. 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately. 

United States Government Accountability Office: 
GAO: 

Testimony: 

Before the Subcommittee on Legislative Branch, Committee on 
Appropriations, U.S. House of Representatives: 

For Release on Delivery: 
Expected at 10:00 a.m. EST: 
Tuesday, February 26, 2013: 

U.S. Government Accountability Office: 

Operations and the Potential Impact of Sequestration: 

Statement of Gene Dodaro: 
Comptroller General of the United States: 

GAO-13-394T: 

GAO Highlights: 

Highlights of GAO-13-394T, a testimony before the Subcommittee on 
Legislative Branch, Committee on Appropriations, U.S. House of 
Representatives. 

Background: 

The Government Accountability Office (GAO) mission is 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. GAO provides nonpartisan, 
objective, and reliable information to the Congress, federal agencies, 
and to the public and recommends improvements, when appropriate, on a 
wide variety of issues. GAO’s work spans the full breadth and scope of 
the federal government’s responsibilities. 

This testimony addresses (1) the GAO’s approach to managing 
Congressional requests in a period of fiscal constraint and (2) the 
potential impact of a sequester on its ability to carry out its 
mission – now and in the future. 

GAO provides products spanning the extensive interests of the 
Congress. In fiscal year 2012, GAO provided reports to 95 percent of 
the standing committees of the Congress and about 60 percent of their 
subcommittees. Additionally, senior GAO officials testified at 159 
hearings on national and international issues. 

GAO’s annualized fiscal year 2013 continuing resolution (CR) funding 
level of $514.4 million reflects a decrease of about $42 million from 
fiscal year 2010 levels. Since fiscal year 2010, GAO’s staffing level 
fell by 10.5 percent—due to extremely limited hiring in the face of 
ongoing attrition—-dropping its full-time equivalent level (FTE) below 
3,000 for the first time since 1935. 

What GAO Found: 

In just this past fiscal year alone, GAO’s work yielded significant 
results across the government, including $55.8 billion in financial 
benefits—-a return of $105 for every dollar invested in GAO and 1,440 
other benefits-—that is, recommendations that helped to change laws, 
improve public services, and promote sound management throughout 
government. Since 2002, GAO’s work has resulted in over ½ trillion 
dollars in financial benefits and over 14 thousand other benefits for 
the American people. 

To manage its workload during a period of declining budgets and staff 
size, GAO gives priority to work that is statutorily mandated by 
Congress and to requests from Congressional Committee leaders which 
allows it to support these committees as they carry out their 
appropriation, authorization, and oversight activities. GAO also 
focuses on areas where there is the greatest potential for results, 
such as recommendations that identify cost savings and improve 
government operations and programs. Strategic planning and continuous 
dialog with Congressional leaders and their staffs also help GAO 
anticipate and respond to Congressional needs. 

In this period of fiscal austerity, GAO has been guided by two core 
principles—maximizing its ability to provide Congress with high-
quality, relevant, and insightful analyses and minimizing the impact 
on GAO’s people. To do so, GAO reduced engagement support costs, such 
as travel, by nearly 36 percent and infrastructure support costs, such 
as information technology, by nearly 21 percent. 

During fiscal year 2012, GAO began prudently planning for the 
possibility of a funding sequester in fiscal year 2013. Given the 
reductions in operational costs made already, a sequester at the 
proposed level of $27.3 million would impact the size of GAO’s 
workforce. It would reduce planned hiring by sixty percent, eroding 
the current staffing level to 2,875 FTE, which represents a 
significant reduction of 472 FTEs, or more than 14 percent over the 
last 3 years. GAO would also reduce employee benefits which will 
negatively impact our ability to recruit and retain highly qualified 
staff and severely jeopardize our ability to build and develop the 
needed workforce for the future. It also would further reduce travel 
and contract resources used to complete Congressional engagements; and 
further reduce planned investments in information technology that have 
the potential to increase GAO’s efficiency and effectiveness and 
reduce costs in the future. The additional staffing reductions would 
also adversely impact GAO’s ability to: 

* identify cost savings and other suggestions to help Congress address 
the government’s serious deficit and debt issues; 

* provide timely and responsive information to support Congressional 
deliberations or reauthorization activities for pending programs; and 

* effectively assist Congress in addressing the broad array of social, 
economic, and security challenges facing the nation. 

It is imperative that GAO rebuild its staff capacity to a level that 
will enable us to optimize the benefits we yield for Congress and the 
nation. Given the size of the federal budget and the multi-year 
actions needed to address the seriousness of the government’s fiscal 
condition, investing resources to restore some of GAO’s staff capacity 
would be a prudent and wise investment that will produce positive 
outcomes for the Congress and our country. 

View [hyperlink, http://www.gao.gov/products/GAO-13-394T]. For more 
information, contact Gene L. Dodaro at (202) 512-5500 or 
dodarog@gao.gov. 

[End of section] 

Mr. Chairman, Ranking Member Wasserman Schultz, and Members of the 
Subcommittee: 

I appreciate the opportunity to be here today to discuss the U.S. 
Government Accountability Office’s (GAO) management of Congressional 
requests, actions GAO has taken to reduce operating costs and achieve 
efficiencies, and the potential impact of a sequester on our ability 
to carry out our mission. Before I begin, I want to thank the 
subcommittee for its continued support of GAO. We very much appreciate 
the confidence you have shown in our efforts to help support the 
Congress in carrying out its constitutional responsibilities and to 
help improve government performance and accountability for the benefit 
of the American people. 

Since fiscal year 2010, GAO has dramatically reduced its staffing 
level and operating costs in response to budget constraints. GAO’s 
Executive Committee has been guided by two core principles throughout 
this environment of constrained resources and fiscal austerity. First, 
GAO continues to seek ways to maximize its support to the Congress and 
the nation. Second, we have sought to minimize the impact on GAO’s 
dedicated and talented people. It is through the commitment, hard 
work, and expertise of our staff that GAO is able to provide a 
continuing valuable service to the Congress and the nation. 

During this period, GAO’s staffing level dropped by 350 full-time 
equivalents (FTE) in fiscal year 2012, falling below 3,000 FTE for the 
first time since 1935 due to extremely limited hiring in the face of 
ongoing attrition. This significant reduction in our staffing level 
severely jeopardizes our ability to adequately support the Congress in 
a timely manner, now and into the future. It is imperative that we 
rebuild our staff capacity to a level that will enable us to optimize 
the benefits we yield for the Congress and the nation going forward. 
Given the size of the federal budget and the multiyear actions needed 
to address the seriousness of the government’s fiscal condition, 
investing resources to restore some of our staff capacity would be 
both prudent and wise. 

Managing Workload by Focusing Resources on Congressional Priorities and 
Achieving Results: 

To manage our congressional workload during this period of declining 
budgets and staff resources, we continue to take steps to ensure our 
work supports Congressional legislative and oversight priorities and 
focuses on areas where there is the greatest potential for results in 
producing cost savings and improving government’s performance. 

GAO gives priority to mandates and requests from Congressional 
committee leaders which allows us to support Congressional committees 
as they carry out their appropriation, authorization, and oversight 
activities. GAO also focuses on areas where there is the greatest 
potential for results, such as recommendations that identify cost 
savings, improve government agencies, and provide other benefits, such 
as improving public safety and security. 

High demand coupled with continuing budget constraints and fewer 
resources necessitates that we prioritize requests for our work in 
close consultation with Congressional committee leaders. 

Focusing on Congressional Priorities: 

In fiscal year 2012 demand for our services remained high with 924 
congressional requests and mandates[Footnote 1] as illustrated in 
Figure 1. 

Figure 1: Congressional Requests Received – FY 2003-FY 2012: 

[Refer to PDF for image: multiple line graph] 

Fiscal year: 2003; 
Full Committee Requests: 449; 
Sub-Committee Requests: 390; 
Member Requests: 177; 
Mandates: 95. 

Fiscal year: 2004; 
Full Committee Requests: 451; 
Sub-Committee Requests: 391; 
Member Requests: 166; 
Mandates: 110. 

Fiscal year: 2005; 
Full Committee Requests: 434; 
Sub-Committee Requests: 349; 
Member Requests: 135; 
Mandates: 109. 

Fiscal year: 2006; 
Full Committee Requests: 430; 
Sub-Committee Requests: 413; 
Member Requests: 139; 
Mandates: 82. 

Fiscal year: 2007; 
Full Committee Requests: 608; 
Sub-Committee Requests: 394; 
Member Requests: 134; 
Mandates: 75. 

Fiscal year: 2008; 
Full Committee Requests: 475; 
Sub-Committee Requests: 381; 
Member Requests: 190; 
Mandates: 160. 

Fiscal year: 2009; 
Full Committee Requests: 362; 
Sub-Committee Requests: 316; 
Member Requests: 115; 
Mandates: 131. 

Fiscal year: 2010; 
Full Committee Requests: 376; 
Sub-Committee Requests: 320; 
Member Requests: 105; 
Mandates: 173. 

Fiscal year: 2011; 
Full Committee Requests: 387; 
Sub-Committee Requests: 353; 
Member Requests: 93; 
Mandates: 89. 

Fiscal year: 2012; 
Full Committee Requests: 349; 
Sub-Committee Requests: 300; 
Member Requests: 97; 
Mandates: 195. 

[End of figure] 

While we have worked extremely hard to prioritize our work and produce 
results, GAO is at its lowest staffing level since 1935. As shown in 
Figure 2, our staffing levels have dramatically decreased over the 
last three years – a decline of 350 full time equivalent (FTE) or a 
reduction of 10.5 percent. 

Figure 2: Actual and Estimated Staffing — FY 2010-FY 2013: 

[Refer to PDF for image: vertical bar graph] 

FTEs: 

FY 2010, Actual: 3,347; 
FY 2011, Actual: 3,212; 
FY 2012, Actual: 2,997; 
FY 2013, Estimated without sequester: 2,975; 
FY 2010, Estimated with sequester: 2,875. 

[End of figure] 

Producing Results: 

GAO’s results include generating recommendations that save resources 
and increase revenue; improve the accountability, operations, and 
services of government agencies; increase the effectiveness of federal 
spending, and provide other benefits. Additional information on GAO’s 
mission and services to support the Congress is included in Appendix I. 

Since fiscal year 2002, GAO’s work has resulted in substantial 
financial and other benefits for the American people, including: 

* over ½ trillion dollars in financial benefits; 

* 14,083 program and operational benefits that helped to change laws, 
improve public services, and promote sound management throughout 
government; and; 

* 12,485 products including 22,548 recommendations. 

Scope of GAO’s Work: 

In fiscal year 2012 alone, GAO provided services that spanned across 
the broad range of federal programs and activities. We provided 
results that supported 95 percent of the standing committees of the 
Congress and about 60 percent of their subcommittees. Senior GAO 
officials testified at 159 hearings on national and international 
issues as shown in Table 1. 

Table 1: Selected Testimony Topics for Fiscal Year 2012 by Strategic 
Goal[Footnote 2]: 

Goal 1: Address Current and Emerging Challenges to the Well-Being and 
Financial Security of the American People: 

* DOD and VA Health Care Integration: 
* Fragmented Economic Development Programs: 
* Medicare Durable Medical Equipment: 
* Mortgage Finance Risk Management: 
* FDA’s Ability to Respond to Drug Shortages: 
* Federal Reserve System’s Emergency Assistance: 
* Oversight of Medicaid Payments: 
* Climate Change Adaptation: 
* Urgent Local Workforce Needs: 
* Unmanned Aircraft Systems: 
* Modernizing SSA’s Disability Programs: 
* Unconventional Oil and Gas Production: 
* Unemployed Older Workers: 
* Commercial Space Transportation: 
* School Bullying: 
* Improving Homelessness Programs: 
* Transportation Issues and Management Challenges: 
* Los Angeles Federal Courthouse Construction: 
* Small Employers Challenges to Pension Plan Sponsorship: 
* Federal Housing Administration’s Mutual Mortgage Insurance Fund: 
* Federal Real Property Management. 

Goal 2: Respond to Changing Security Threats and the Challenges of 
Global Interdependence: 

* National Nuclear Security Administration Management: 
* DOD’s Civilian Workforce: 
* Deepwater Horizon: 
* Personnel Security Clearances: 
* Securing the Modernized Electricity Grid: 
* Military Base Realignments and Closures: 
* Visa Waiver Program: 
* Joint Striker Fighter Restructuring: 
* TSA’s Process for Vetting Foreign Flight Students: 
* DOD Satellite Acquisitions: 
* DHS’s Container Security Programs: 
* DOD’s Acquisition Workforce Capacity: 
* FEMA’s Management of Preparedness Grants: 
* Countering the Use of Improvised Explosive Devices: 
* DHS’s Progress Improving and Integrating Management: 
* Support and Security Capabilities in Iraq. 

Goal 3: Help Transform the Federal Government to Address National 
Challenges: 

* Arlington National Cemetery Contract Management: 
* Information Technology Reform: 
* Coast Guard’s Deepwater Program: 
* Environmental Satellite Program Risks: 
* Suspension and Debarment Oversight: 
* Federal Workforce Challenges: 
* Medicare Part D Fraud and Prescription Drug Abuse: 
* Effective Long-term Disaster Recovery: 
* Reducing Improper Payments: 
* Evaluating Expiring Tax Provisions: 
* Army Financial Audit Readiness: 
* Strategies to Reduce Taxpayer Noncompliance: 
* Improving 2020 Census Cost Effectiveness: 
* IRS’s Opportunities to Improve the Taxpayer Experience: 
* Internet Availability of Counterfeit Military-Grade Electronic Parts: 
* Oversight of Psychotropic Prescription Drugs for Foster Children: 
* Fiscal Year 2011 U. S. Government Financial Statements: 
* Centers for Medicare & Medicaid Fraud Detection Systems: 
* Fraud Prevention in Service-Disabled Veteran-Owned Small Business 
Program: 
* Social Security Administration Technology Modernization. 

[End of table] 

Our work issued in fiscal year 2012 addressed various topics such as 
continued work on duplication, overlap, and fragmentation in the 
federal government; the war in Afghanistan; Postal Service financial 
issues; implementation of Dodd-Frank Wall Street Reform and Consumer 
Protection Act of 2010; and the federal, state, and local government 
fiscal outlook. GAO also reviewed government programs and operations 
that are at high risk for fraud, waste, abuse, and mismanagement, as 
well as reviews of agencies’ budget requests to help support 
congressional decision-making. GAO’s recently released latest High 
Risk list is included in Appendix II. 

GAO remains one of the best investments in the federal government, and 
our dedicated staff continues to deliver high quality results. GAO’s 
findings and recommendations produce measurable financial benefits 
after Congress acts or an agency implements them and the funds are 
made available to reduce government expenditures or are reallocated to 
other areas. 

GAO’s fiscal year 2012 work yielded significant results across the 
government, including $55.8 billion in financial benefits—-a return of 
$105 for every dollar invested in GAO. Examples of fiscal year 2012 
financial benefits resulting from GAO recommendations implemented by 
Congress or federal agencies include: 

* $12.4 billion from legislated reductions in payments to Medicare 
Advantage plans: GAO analysis found that Medicare Advantage plans 
spent less on medical expenses than projected, thus gaining much 
higher profits than originally estimated; 

* $8.0 billion from cancellation of NASA’s Constellation program: GAO 
questioned the project’s affordability, acquisition strategy, and 
overall business plan; 

* $4.5 billion from elimination of the ethanol excise tax credit for 
corn: GAO found that this tax credit was duplicative of a federal 
renewable fuel standard that requires U.S. transportation fuels to 
contain certain volumes of biofuels, such as ethanol; and; 

* $3.1 billion from cancellation of DOD plans to lengthen South Korea 
tours of duty: After conducting a GAO-recommended analysis of 
benefits, costs, and alternatives to a planned initiative to increase 
lengths of U.S. service members’ tours in South Korea, DOD decided the 
initiative was unaffordable, avoiding $3.1 billion in costs. 

In fiscal year 2012, GAO also contributed to 1,440 program and 
operational benefits that helped to change laws, improve public 
services, and promote sound management throughout government. Thirty 
six percent of these benefits are related to public safety and 
security, 35 percent are related to business process and management, 
and 14 percent are related to program efficiency and effectiveness, 
and included: 

* Public Insurance and Benefits – Improving Social Security 
Administration performance goals and risk assessments in support of 
the disability claims process. 

* Public Safety and Security – Addressing weaknesses in how agencies 
create and use the terrorist watchlist. 

* Acquisition and Contract Management – More robust planning for 
contractor demobilization and personnel accountability by the 
Department of Defense (DOD). 

* Tax Law Administration – Strengthening IRS’ use of existing tax 
collection tools. 

Strategic Plan for Serving Congress: 

To ensure we prioritize our work to align with Congressional 
leadership priorities and potential for results, we consult 
continuously with Congressional committees to ensure that our work is 
focused on their highest priorities. Communicating frequently with 
Congressional clients helps GAO stay abreast of their needs as shifts 
in congressional priorities can change the mix of work we are asked to 
perform. Our outreach includes my meetings with the Chairs and Ranking 
Members of many of the standing committees and their subcommittees. 
These sessions provide me the opportunity to hear first-hand the 
feedback from committee Chairs and Ranking Members on our performance, 
as well as provide an opportunity to highlight the need to prioritize 
requests for GAO’s services to maximize the return on the investment 
in GAO, particularly in this time of financial and budgetary 
uncertainty. Further, when we receive multiple requests for work in 
areas of high priority for the Congress, we also look for 
opportunities, in consultation with Congressional committees and their 
staff, to merge these requests to create one body of work to meet 
multiple needs. In addition, much of our work—up to 45 percent in 2012—
resulted from bipartisan requests or mandates. 

To manage our workload from mandates, we also conduct congressional 
outreach regarding both potential and existing mandates. As bills are 
introduced weekly, we immediately review them to identify potential 
mandates for GAO work. As each potential mandate moves through the 
legislative process, we engage directly with the relevant committee or 
subcommittee to ensure that the mandate reflects a high priority 
requirement, is scoped appropriately for meeting the congressional 
objective, avoids duplication of recently completed or ongoing work, 
and calls for work that is within GAO’s authority. In addition, we 
continue to work with Congressional committees to amend or repeal 
existing statutory mandates for GAO studies that have outlived their 
usefulness or do not represent the best use of GAO’s resources given 
current congressional priorities. 

During the second session of the 112th Congress we collaborated with 
the Congress to revise or repeal 16 of GAO’s mandated reporting 
requirements which had, over time, lost relevance or usefulness, 
including: 

* a triennial review of the costs of the Judicial Survivors’ Annuities 
Fund that had yielded no new findings, repealed by the GAO Mandates 
Revision Act of 2012 – Pub. L. No. 112-234; 

* an annual review of the Earned Import Allowance Program, an inactive 
program, repealed by the GAO Mandates Revision Act of 2012 – Pub. L. 
No. 112-234; and; 

* an annual audit of the American Battle Monuments Commission that 
should be the responsibility of an executive branch, rather than a 
legislative branch agency, repealed by the GAO Mandates Revision Act 
of 2012, Pub. L. No. 112-234. 

GAO is also seeking repeal of a recurring reporting requirement that 
originally appeared in the Legislative Branch Appropriations section 
of the American Recovery and Reinvestment Act. This requirement 
required bimonthly reviews of state and local use of Recovery Act 
funds. As the vast majority of Recovery Act funds have been spent, GAO’
s reviews are providing diminishing returns for the Congress. We will 
propose to sunset this bimonthly requirement by October 2013. 

In February 2012, GAO issued an interim update to its strategic plan 
for serving the Congress for fiscal years 2010 – 2015. Our strategic 
planning efforts also help us anticipate and respond to Congressional 
needs. To be prepared to address timely and relevant issues, we use 
eight broad trends identified in our strategic plan to guide our work 
plans. GAO plans to issue the next full five-year update in 2014. Our 
strategic plan framework is attached as Appendix III. 

Actions Taken to Reduce Operating Costs and Achieve Efficiencies: 

Since fiscal year 2010, GAO has significantly reduced spending, 
reorganized our administrative support structure, improved business 
practices, and leveraged technology to enhance the overall efficiency 
of our operations. From fiscal year 2010 to 2012, GAO’s staffing level 
dropped by 350 full-time equivalent (FTE) staff—a reduction of 10.5 
percent—due to extremely limited hiring in the face of ongoing 
attrition. As a result, our FTE level dropped below 3,000 for the 
first time since 1935. This significant reduction in our staffing 
level threatens our ability to adequately support the Congress in a 
timely manner. 

Also, the number of entry-level staff is not sufficient to provide a 
pipeline of experienced staff in the future. A significant proportion 
of GAO employees will be retirement eligible at the end of fiscal year 
2013, including about 40 percent of our senior executive staff and 
about 26 percent of our supervisory analysts. These factors combine to 
make GAO’s overarching human capital challenge one of ensuring that we 
have the future capability to support the mission of the agency to 
serve the Congress with the right resources, where and when they are 
needed. 

During this same period, GAO also reduced engagement support costs, 
such as travel by nearly 36 percent, and infrastructure support costs, 
such as information technology, building and security services, and 
administrative support services by nearly 21 percent. GAO plans to 
maintain these reduced funding levels in fiscal year 2013. 

In addition, we have implemented and are continuing to aggressively 
explore other opportunities to reduce our infrastructure costs, 
provide staff more flexibility, and increase our effectiveness and 
efficiency. 

* Space Optimization Generates Additional Rental Income: 

In fiscal year 2012, we completed activities to better optimize space 
in the GAO headquarters building and released a significant amount of 
space which we have leased to the Department of Justice (DOJ) under a 
10-year agreement which will provide $2.1 million annually to help 
offset our costs. DOJ began occupying the space in January 2013. 

* Enhanced Telework/Workspace-Sharing Reduces Infrastructure Costs: 

Also, in fiscal year 2013, we expect to reduce our physical presence 
in several field offices resulting in savings of $1.2 million in lease 
costs, with additional savings projected in future years. In fiscal 
year 2012, we implemented an enhanced telework pilot, including 
workspace sharing and hoteling components, to reduce infrastructure 
costs and enhance flexibility for employees by allowing them to spend 
more time working at home or at an alternate worksite. We are 
expanding this capability to additional field offices throughout 
fiscal year 2013. 

Increasing Efficiency of GAO’s Processes is a Top Priority: 

We also plan to implement targeted investments to improve the 
efficiency of our information technology infrastructure and building 
systems. For example, in fiscal year 2013, we will be piloting an 
effort to streamline and virtualize our information technology 
infrastructure that will reduce our maintenance and operating costs, 
improve system performance, increase data security, and increase 
availability of tools for staff—particularly our increasingly mobile 
workforce. In a virtualized environment, all GAO operating systems, 
applications, software, and data would be housed in a secure 
datacenter, rather than on a user’s computer. In addition, we will 
continue progress towards upgrading building infrastructure heating 
and ventilation systems to ensure continued operation and efficiency. 
The funding for these essential investments will come from savings 
within these programs. 

We also have made it our priority to increase the efficiency with 
which we conduct our mission work. This effort focuses on improving 
the way we manage and conduct engagements, use our resources, and 
communicate our message. We made significant progress in fiscal year 
2012 to improve the efficiency of the processes we follow to produce 
GAO products. For example, we completed an end-to-end analysis of our 
engagement process and identified several areas of opportunity for 
improved efficiency, including 31 recommendations for engagement-
management improvements. For example, a number of projects are 
ongoing, including: 

* identifying changes to key steps and decision points in our 
engagement process to ensure resource investments on individual 
engagements are in line with congressional needs and needed scope of 
work; 

* taking steps to more efficiently create content, standardize our 
review and fact-checking procedures within our rigorous quality 
assurance framework, as well as to distribute and publish our reports 
and content in multiple formats; and; 

* pursuing major enhancements to key engagement support and management 
systems to reduce rework and improve systems support and management 
information. 

We also created the new Office of Continuous Process Improvement to 
oversee and implement these and other improvement projects. Under the 
auspices of this new office, 7 projects have been completed; 25 are 
underway; and next steps for fiscal year 2013 have been developed. We 
also created an executive-level governance structure for prioritizing 
and directing process improvement initiatives. 

In fiscal year 2013 we will continue to identify other areas of 
opportunity for improved efficiency, and will continually prioritize 
how to use resources to ensure the most significant efficiency gains. 
In addition, we will develop performance metrics for the process 
improvement program to show the effect improvement initiatives are 
having on our operations. When implemented, these improvements will 
allow us to streamline and standardize our processes to achieve 
greater efficiency in our work without sacrificing quality, to 
increase our responsiveness to the Congress, and to deliver products 
to the Congress and the public more effectively and efficiently. 

Impact of Possible Fiscal Year 2013 Sequester: 

During fiscal year 2012, GAO began prudently planning for the 
possibility of a funding sequester in fiscal year 2013. We have 
updated our planning scenario based on recent guidance from this 
subcommittee to reflect a possible reduction of 5.3 percent or $27.3 
million from the annualized continuing resolution funding level. 

As a knowledge-based organization, about 81 percent of GAO’s resources 
are allocated to its people, with the balance of our resources funding 
critical operating expenses, such as information technology, security 
services, rent for our field office locations, and other critical 
services required for ongoing operations. Since we have made 
significant reductions in funding for engagement support and 
infrastructure programs over the last few years, our ability to absorb 
a reduction of this magnitude without reducing staff is severely 
limited. 

Our fiscal year 2013 operating plan, assuming funding of at least the 
annualized continuing resolution level of $514.4 million, included the 
capacity to hire 200 interns, 200 entry-level people into our 
Professional Development Program (PDP), and 100 critical hires in our 
more senior and specialized areas to help address succession planning 
needs and critical skill gaps. A sequester at the proposed level would 
require that we reduce planned hiring by approximately sixty percent, 
further eroding our staffing level to a nearly historic low of 2,875 
FTE, a reduction of 472 FTE, or more than 14 percent over the last 3 
years. 

Table 2: FTE Staffing Profile – FY 2010-2013 

FTEs: 

FY 2010, Actual: 3,347; 
FY 2011, Actual: 3,212; 
FY 2012, Actual: 2,997; 
FY 2013, Estimated without sequester: 2,975; 
FY 2010, Estimated with sequester: 2,875. 

[End of table] 

Beyond the cuts to our hiring plan, GAO would also take the following 
actions in the event of sequestration: 

* reduce employee benefits, such as student loan repayments and 
performance-based compensation which will negatively impact our 
ability to recruit and retain highly qualified staff; 

* further reduce travel and contract resources for specialized data 
and expertise used to complete congressional engagements; and; 

* further reduce planned investments in information technology that 
have the potential to increase GAO’s efficiency and effectiveness and 
reduce support costs in the future. 

This third consecutive year of dramatic staffing reductions would 
diminish our ability to find cost savings in the federal government at 
a time when Congress needs us most given the federal government’s 
fiscal position. For example, GAO’s reduced staffing levels would 
adversely impact GAO’s ability to: 

* identify cost savings and improvements in government operations, 
improve services to the public, conserve federal financial resources, 
and initiate government-wide reforms; 

* effectively assist the Congress in addressing the broad array of 
social, economic, and security challenges facing the nation; 

* provide timely and responsive information to support congressional 
deliberations or reauthorization activities for pending programs; and; 

* staff requested engagements, resulting in delays in starting 
congressional requests. 

Concluding Remarks: 

Fiscal year 2013 brings more challenges with responsibilities to 
further assess and report on government programs and financial 
regulatory reform efforts, among many other pressing issues. However, 
the impending sequestration would further erode GAO’s staffing level 
and severely limit GAO’s ability to conduct its mission in an 
efficient and effective manner now and into the future. We have been 
and will continue to reach out to our congressional clients to ensure 
they recognize our financial situation, to help focus our work on the 
highest-priority areas, and help prioritize our work to obtain the 
maximum benefit in this resource-constrained environment. We remain 
committed to providing accurate, objective, nonpartisan, and 
constructive information to the Congress to help it conduct effective 
oversight and fulfill its constitutional responsibilities. 

As the Congress and the administration debate ways to improve the 
federal government’s long-term fiscal outlook, GAO’s mission becomes 
ever more critical to help identify billions of dollars in cost-saving 
opportunities to tighten federal budgets in a thoughtful, targeted way 
and identify revenue-enhancement opportunities in a prudent manner. 

Mr. Chairman, Ranking Member Wasserman Schultz, and Members of the 
Subcommittee, this concludes my prepared statement. I appreciate, as 
always, your careful consideration of our circumstances and budgetary 
needs and look forward to discussing the matter with you. 

[End of section] 

Appendix I: GAO’s Mission and Services in Support of Congressional
Decision-Making: 

GAO Supports Congressional Decision-making, Saves Resources, and Helps 
Improve Government: 

The Government Accountability Office is an independent, nonpartisan 
professional services agency in the legislative branch of the federal 
government. Commonly known as the audit and investigative arm of the 
Congress or the “congressional watchdog,” GAO examines how taxpayer 
dollars are spent and advises lawmakers and agency heads on ways to 
make government work better. Our mission is to support the Congress in 
meeting its constitutional responsibilities and to help improve the 
performance and ensure the accountability of the federal government 
for the benefit of the American people. We accomplish our mission by 
providing objective, fact-based, and reliable information and informed 
analysis to the Congress, federal agencies, and the public, and we 
recommend improvements, where appropriate, on a wide variety of issues. 

GAO is unique in our audit and evaluation capacity to support the 
Congress by performing original research, providing technical 
assistance, and conducting analyses to help the Congress make informed 
decisions across all segments of the federal budget resulting in 
tangible benefits and enhanced oversight. GAO provides services that 
span the vast interests of the Congress and the Nation. 

In February 2012, GAO issued an interim update to its strategic plan 
for fiscal years 2010 through 2015. Our strategic plan framework is 
attached as Appendix III.[Footnote 3] GAO’s strategic goals and 
objectives reflect the wide array of national and international issues 
that GAO covers in its mission to support the Congress, such as: 

* addressing current and emerging challenges to the well-being and 
financial security of the American people; 

* responding to changing security threats and the challenges of global 
interdependence; 

* helping transform the federal government to address national 
challenges; and; 

* maximizing the value of GAO by enabling quality, timely service to 
the Congress and being a leading practices federal agency. 

To implement the performance goals and key efforts related to our 
three external goals, we develop and present information in a number 
of ways, including: 

* evaluations of federal policies, programs, and the performance of 
agencies; 

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

* investigations to assess whether illegal or improper activities are 
occurring; 

* analyses of the financing for government activities; 

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

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

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

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

In addition to studies in response to congressional requests, GAO 
issues products that provide agencies with guidance and best 
practices, or otherwise support greater accountability and oversight 
in government. 

As part of fulfilling our commitments under the Presidential 
Transition Act, as amended, GAO serves as a key resource for the 
Congress and the Administration on major challenges needing the 
attention of the 28 largest departments and agencies across 
government, as well as issues facing our nation that require urgent 
attention and continuing oversight. 

GAO seeks both to help position the government to better manage risks 
that could compromise the nation’s security, health, and solvency, and 
to identify opportunities for managing government resources wisely for 
a more sustainable future. GAO is a valuable tool for helping the 
Congress review, reprioritize, and revise existing mandatory and 
discretionary spending programs and tax policies. Our dedicated and 
multidisciplinary staff have substantive agency and program expertise, 
as well as expertise in conducting financial and performance audits, 
program evaluations, policy analyses, and technology assessments. 
Additionally, through its involvement domestically with the federal, 
state, and local audit community and internationally with its national 
audit office counterparts, GAO has played an important role in helping 
ensure the financial integrity of U.S. funds expended at home and 
abroad. 

Assisting the Congress and the Nation During Challenging Times: 

Annually we issue hundreds of reports based on our work. In fiscal 
year 2012, GAO’s work covered a broad range of issues relevant to all 
Americans, including: 

* retirement security; 
* transportation safety; 
* foreclosure mitigation; 
* counterterrorism; 
* national security; 
* cybersecurity; 
* health care; 
* the debt limit. 

During fiscal year 2012 we also issued our second report identifying 
duplication, overlap, cost-saving opportunities, and revenue 
enhancements. This report identified 51 additional areas where 
programs may be able to achieve greater efficiencies or become more 
effective, including: 

* agriculture; 
* health; 
* defense; 
* homeland security; 
* economic development; 
* international affairs; 
* education; 
* science and the environment; 
* energy; 
* social services; 
* general government. 

We also issued a companion publication describing the extent to which 
progress was made in addressing the 81 areas identified in our 2011 
report and launched a new content area on our website titled “
Improving Efficiency and Effectiveness” to make this work more easily 
accessible to the public. We issued 11 products in response to the 
Dodd-Frank Wall Street Reform and Consumer Protection Act on financial 
institutions and securities markets and several reports on insurance 
markets and publicly financed health insurance programs related to the 
Patient Protection and Affordable Care Act. In addition, we continued 
to regularly report the results of our work on the Troubled Asset 
Relief Program and the American Recovery and Reinvestment Act. 

Every two years, GAO provides Congress with an update on its High Risk 
Series which highlights major programs that are at high risk due to 
their greater vulnerabilities to waste, fraud, abuse, and 
mismanagement or the need for transformation to address economy, 
efficiency, or effectiveness challenges. In fiscal year 2012, we 
issued 188 reports, delivered 55 testimonies to the Congress, and 
prepared several other products, such as briefings and presentations 
related to our High Risk work. These products spanned the following 
broad categories: 

* Strengthening the Foundation for Efficiency and Effectiveness; 

* Transforming DOD Program Management; 

* Ensuring Public Safety and Security; 

* Managing Federal Contracting More Effectively; 

* Assessing the Efficiency and Effectiveness of Tax Law Administration; 

* Modernizing and Safeguarding Insurance and Benefit Programs. 

Financial benefits resulting from this work totaled $28.4 billion in 
fiscal year 2012. Solutions to high risk problems offer the potential 
to save billions of dollars, improve services to the public, and 
strengthen the performance and accountability of the U. S. government. 
Earlier this month we issued the biennial update and report on 
progress made and what remains to be done to address each of the high 
risk areas. Our High Risk List identifies 30 troubled areas across 
government and is included as Appendix II. 

[End of section] 

Appendix II: GAO’s 2013 High-Risk List: 

Strengthening the Foundation for Efficiency and Effectiveness: 

* Limiting the Federal Government’s Fiscal Exposure by Better Managing 
Climate Change Risks (new). 

* Management of Federal Oil and Gas Resources. 

* Modernizing the U.S. Financial Regulatory System and Federal Role in 
Housing Finance. 

* Restructuring the U.S. Postal Service to Achieve Sustainable 
Financial Viability. 

* Funding the Nation’s Surface Transportation System. 

* Strategic Human Capital Management. 

* Managing Federal Real Property. 

Transforming DOD Program Management: 

* DOD Approach to Business Transformation. 

* DOD Business Systems Modernization. 

* DOD Support Infrastructure Management. 

* DOD Financial Management. 

* DOD Supply Chain Management. 

* DOD Weapon Systems Acquisition. 

Ensuring Public Safety and Security: 

* Mitigating Gaps in Weather Satellite Data (new). 

* Strengthening Department of Homeland Security Management Functions. 

* Establishing Effective Mechanisms for Sharing and Managing Terrorism-
Related Information to Protect the Homeland. 

* Protecting the Federal Government’s Information Systems and the 
Nation’s Cyber Critical Infrastructures. 

* Ensuring the Effective Protection of Technologies Critical to U.S. 
National Security Interests. 

* Revamping Federal Oversight of Food Safety. 

* Protecting Public Health through Enhanced Oversight of Medical 
Products. 

* Transforming EPA’s Processes for Assessing and Controlling Toxic 
Chemicals. 

Managing Federal Contracting More Effectively: 

* DOD Contract Management. 

* DOE’s Contract Management for the National Nuclear Security 
Administration & Office of Environmental Management. 

* NASA Acquisition Management. 

Assessing the Efficiency and Effectiveness of Tax Law Administration: 

* Enforcement of Tax Laws. 

Modernizing and Safeguarding Insurance and Benefit Programs: 

* Improving and Modernizing Federal Disability Programs. 

* Pension Benefit Guaranty Corporation Insurance Programs. 

* Medicare Program. 

* Medicaid Program. 

* National Flood Insurance Program. 

[End of section] 

Appendix III: GAO’s Strategic Plan Framework: 

Figure: GAO's Strategic Plan Framework: 

[Refer to PDF for image: illustration] 

Serving the Congress and the Nation: 

GAO's Strategic Plan Framework: 

Mission: 

GAO exists to support the Congress in meeting its constitutional 
responsibilities and to help improve the performance and ensure the 
accountability of the federal government for the benefit of the 
American people. 

Trends: 

* National Security Threats; 

* Fiscal Sustainability Challenges; 

* Economic Recovery and Growth; 

* Global Interdependency; 

* Science and Technology; 

* Networks and Virtualization; 

* Shifting Roles of Government; 

* Demographic and Societal Change. 

Goals & Objectives: 

Provide Timely, Quality Service to the Congress and the Federal 
Government to: 

1) Address Current and Emerging Challenges to the Well-being and 
Financial Security of the American People related to: 

* Health care needs; 

* Lifelong learning; 

* Benefits and protections for workers, families, and children; 

* Financial security; 

* Effective system of justice; 

* Viable communities; 

* Stable financial system and consumer protection; 

* Stewardship of natural resources and the environment; 

* Infrastructure; 

2) Respond to Changing Security Threats and the Challenges of Global 
Interdependence involving: 

* Homeland security; 

* Military capabilities and readiness; 

* U.S. foreign policy interests; 

* Global market forces. 

Help Transform the Federal Government to Address National Challenges 
by assessing: 

* Government’s fiscal position and options for closing gap; 

* Fraud, waste, and abuse; 

* Major management challenges and program risks. 

Maximize the Value of GAO by Enabling Quality, Timely Service to the 
Congress and Being a Leading Practices Federal Agency in the areas of: 

* Efficiency, effectiveness, and quality; 

* Diverse and inclusive work environment; 

* Professional networks and collaboration; 

* Institutional stewardship and resource management. 

Core Values: 

* Accountability; 

* Integrity; 

* Reliability. 

Source: GAO. 

[End of figure] 

[End of section] 

Footnotes: 

[1] Congress may enact legislation that includes a requirement for GAO 
to conduct a particular study; we refer to these types of statutorily 
mandated work as “mandates.” Repeal or modification of a statutory 
mandate that has not already been fulfilled requires a statutory 
change. Committee and Conference Reports may also include requests 
that GAO study a particular problem or issue. At GAO, we also refer to 
these report requests as "mandates," even though the requested work is 
not required by law and does not require a statutory change to modify 
it. 

[2] Our complete set of strategic planning and performance and 
accountability reports are available on our website at [hyperlink, 
http://www.gao.gov/sp.html]. 

[3] A complete set of GAO’s strategic planning and performance and 
accountability reports are available on our website at [hyperlink, 
http://www.gao.gov/sp.html]. The annual performance and accountability 
report informs the Congress and the American people about what we have 
achieved on their behalf with the funds entrusted to us. 

[End of section] 

GAO’s Mission: 

The Government Accountability Office, the audit, evaluation, and 
investigative arm of Congress, exists to support Congress in meeting 
its constitutional responsibilities and to help improve the 
performance and accountability of the federal government for the 
American people. GAO examines the use of public funds; evaluates 
federal programs and policies; and provides analyses, recommendations, 
and other assistance to help Congress make informed oversight, policy, 
and funding decisions. GAO’s commitment to good government is 
reflected in its core values of accountability, integrity, and 
reliability. 

Obtaining Copies of GAO Reports and Testimony: 

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through GAO’s website [hyperlink, http://www.gao.gov]. Each 
weekday afternoon, GAO posts on its website newly released reports, 
testimony, and correspondence. To have GAO e-mail you a list of newly 
posted products, go to [hyperlink, http://www.gao.gov] and select 
“E-mail Updates.” 

Order by Phone: 

The price of each GAO publication reflects GAO’s actual cost of 
production and distribution and depends on the number of pages in the 
publication and whether the publication is printed in color or black 
and white. Pricing and ordering information is posted on GAO’s 
website, [hyperlink, http://www.gao.gov/ordering.htm]. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 
TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 
MasterCard, Visa, check, or money order. Call for additional 
information. 

Connect with GAO: 

Connect with GAO on facebook, flickr, twitter, and YouTube.
Subscribe to our RSS Feeds or E mail Updates. Listen to our Podcasts.
Visit GAO on the web at [hyperlink, http://www.gao.gov]. 

To Report Fraud, Waste, and Abuse in Federal Programs: 

Contact: 
Website: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]; 
E-mail: fraudnet@gao.gov; 
Automated answering system: (800) 424-5454 or (202) 512-7470. 

Congressional Relations: 

Katherine Siggerud, Managing Director, siggerudk@gao.gov: 
(202) 512-4400: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7125: 
Washington, DC 20548. 

Public Affairs: 
Chuck Young, Managing Director, youngc1@gao.gov: 
(202) 512-4800: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7149: 
Washington, DC 20548. 

[End of document]