Search

Smuggling cigarettes from low- to high-tax states, which was prominent in the 1970s, may be a reemerging problem because a number of states have sharply increased cigarette taxes while low-tax states have not. Recent estimates suggest that smuggling has cost states hundreds of millions of dollars in tax revenues each year. In addition, international smuggling has occurred recently between the United States and Canada. According to the Canadian government, sharp increases in Canadian cigarette taxes in the late 1980s and early 1990s led to large-scale smuggling between the United States and Canada, almost all of it conducted by organized crime. Violence increased, merchants suffered, and--in one year alone--Canada and its provinces lost more than $2 billion (in Canadian dollars) in tax revenues. Canada sharply reduced federal and provincial cigarette taxes in 1994 and increased its enforcement efforts. Since then, smuggling has declined considerably. [ABSTRACT FROM AUTHOR]

The Farm Service Agency provides financial assistance to farmers and ranchers who are unable to obtain commercial credit at reasonable rates. This report provides information on the Farm Service Agency's direct farm loan program. Specifically, GAO discusses the levels of outstanding principal on active direct farm loans at the end of fiscal years 1995 through 1997, including the amounts owed by delinquent borrowers and the amount of debt written off by the Farm Service Agency through the debt settlement process in each of these fiscal years. GAO also summarizes information on the Farm Service Agency's use of three statutory provisions enacted in the mid-1990s that authorize the Farm Service Agency to contract with (1) private attorneys for legal assistance in resolving delinquent farm loan accounts, (2) private lenders for assistance in servicing farm loan borrowers' accounts, and (3) private collection agencies for assistance in collecting delinquent farm loans. [ABSTRACT FROM AUTHOR]

The Customs Service does not yet have a complete enterprise information systems architecture to guide and constrain the millions of dollars that it spends each year to develop and acquire new information systems and evolve existing ones. For five of its six business areas--outbound, passenger, finance, human resources, and investigations--Custom's architecture does not (1) describe all of the agency's business functions, (2) define the information needed to perform the functions, or (3) completely identify the users and locations of the functions. The limitations in Customs' architecture are rooted in its decision to focus on defining the technical characteristics of its systems environment, such as hardware, software, telecommunications, and security. Customs' view does not include the logical characteristics of its enterprise system environment, such as business functions and their interrelationships, information needs, and users and work locations, that would allow it to define and implement systems that optimally support the agency's mission needs. Until Customs defines the logical characteristics of its business environment and uses them to establish technical standards and approaches, it lacks assurances that the systems that it plans to build and operate, such as its Automated Commercial Environment--a system with a life cycle cost of about $1 billion--will effectively support the agency's needs. Customs also has not developed and implemented effective procedures to enforce its architecture once it is completed. [ABSTRACT FROM AUTHOR]

In 1997, almost 900,000 children received about $5 billion in Supplemental Security Income (SSI) benefits for disabilities. Welfare reform has made eligibility for childhood SSI benefits more restrictive; generally, regulations now require that a child's impairment must result in marked limitations in two areas of functioning or an extreme limitation in one area. Since these changes, GAO has monitored the Social Security Administration's (SSA) adjudication of cases for 288,000 children whose eligibility was subject to review against the new standard, as well as 370,000 new applicants. SSA has made considerable progress in implementing the welfare reform changes, taking important steps to safeguard fairness by identifying children whose benefits may have been terminated inappropriately and establishing remedial action to rereview their cases. But SSA also needs to update its medical listings to ensure that all children are assessed against a uniform severity standard. [ABSTRACT FROM AUTHOR]

The Forest Service is highly vulnerable to fraud, waste, and abuse because it lacks an effective system of internal controls for its contracting activities. The agency's internal control system is lacking in two key respects. First, the Forest Service is not complying with many critical internal control standards. Second, the Forest Service's primary internal control techniques--the system that sets limits on contracting officers' authority, along with periodic field office reviews--are not effectively implemented. [ABSTRACT FROM AUTHOR]

GAO reported in 1996 that beneficiaries received little or no comparative information on Medicare health maintenance organizations. (See GAO/HEHS-97-23.) GAO recommended that the Health Care Financing Administration (HCFA) produce plan comparison charts; require plans to use standard formats and terminology in key aspects of their marketing materials; and publicize readily available plan performance indicators, such as disenrollment rates. In addition, Medicare+Choice provisions authorize new health plan options for Medicare beneficiaries and require HCFA to provide beneficiaries with comparative information on the Medicare+Choice options. This testimony discusses the extent to which HCFA's Medicare+Choice information development efforts are likely to (1) enable beneficiaries to readily compare benefits and out-of-pocket costs using plan brochures and (2) facilitate the agency's approval of plans' marketing materials and other administrative work required of both HCFA and the health plans. [ABSTRACT FROM AUTHOR]

The Department of Housing and Urban Development (HUD) has been repeatedly criticized for management and oversight weaknesses that have made the agency vulnerable to waste, fraud, abuse, and mismanagement. In 1994, GAO included HUD in its list of high-risk programs because of four long-standing deficiencies: weak internal controls, poor information and financial management systems, an ineffective organizational structure, and an insufficient mix of staff with the proper skills. In June 1997, HUD announced its "HUD 2020 Management Reform Plan," a sweeping set of proposals intended to, among other things, address management weaknesses and downsize the agency. This testimony discusses (1) HUD's progress in addressing management shortcomings and the need for additional improvement, (2) the activities under HUD's 2020 management reform and other efforts to address its deficiencies, (3) issues that GAO believes are key as HUD implements its management reforms, and (4) the relationship between HUD's reform efforts and its Results Act plans. [ABSTRACT FROM AUTHOR]

The most critical issue facing the Internal Revenues Service (IRS) this year and in 1999 is the need to make its computer systems Year 2000 compliant. Completing this complex task involves correcting million of lines of computer code and thousands of commercial hardware and software products that IRS relies on to carry out its mission. If these efforts are not completed, IRS' tax processing and collection systems may fail to operate or may generate millions of erroneous tax notices, refunds, interest calculations, and account adjustments. The agency has less than nine months to complete the work that it believes is necessary to reach its goal of having all of its systems Year 2000 compliant by January 31, 1999. This testimony discusses the results of GAO's work to date on IRS' efforts to have its information systems function correctly when processing dates beyond December 31, 1999. [ABSTRACT FROM AUTHOR]

As the world's most advanced and most dependent user of information technology, the United States possesses close to half of all computer capacity and 60 percent of Internet assets. As a result, the coming century change presents a particularly sweeping and urgent challenge for this country. Much more action is needed to ensure that federal agencies address the Year 2000 problem and avoid debilitating consequences. Other vital sectors of the nation also remain vulnerable, including state and local governments; telecommunications; banking and finance; health, safety, and emergency services; transportation; utilities; and manufacturing and small business. This testimony discusses (1) the additional steps that must be taken to reduce the nation's Year 2000 risks and (2) what GAO's inquiries into Year 2000 readiness discovered at the Social Security Administration, the Health Care Financing Administration and Medicare, and at the Treasury Department. [ABSTRACT FROM AUTHOR]

This report provides information on the use of partnering arrangements between the Defense Department and private-sector contractors to use excess capacity at military service repair depots. GAO discusses (1) the legal framework under which partnering can occur and (2) the types of current partnering arrangements and the views of the military services and industry on such arrangements. GAO focuses on Army and Air Force depots. [ABSTRACT FROM AUTHOR]

The Bayh-Dole Act requires GAO to review periodically chapter 18 of title 35 of the U.S. Code, which promotes the use of federally funded inventions by small businesses and nonprofit groups. The act allows nonprofit groups, such as universities, to retain title to and market the inventions they created using federal research funds. The act also allows federal agencies to grant exclusive licenses for federally owned inventions to provide more incentive to businesses. This report provides information on (1) the administration of the Bayh-Dole Act by the eight largest federal agencies that fund research and development, (2) the administration of the Bayh-Dole Act by 10 of the largest U.S. research universities, and (3) the impact of the Bayh-Dole Act, largely on the basis of annual surveys of research universities conducted by the Association of University Technology Managers. [ABSTRACT FROM AUTHOR]

In recent years, the Federal Aviation Administration's (FAA) oversight of repair stations has become a matter of concern, in part because the work done by repair stations has been cited as a factor in several aircraft accidents. For example, the National Transportation Safety Board found that a fatigue fracture from corrosion pits that were not discovered or properly fixed by a repair station was the probable cause of a propeller loss on an Atlantic Southeast Airlines Emraer-120 in August 1995. The plane crashed during an emergency landing, killing eight and injuring 21 others on board. Last year, GAO reported on FAA's oversight of repair stations. (See GAO/RCED-98-21, Oct. 1997.) This testimony, which draws on the findings of that report, discusses (1) the practice of using individual inspectors in repair station inspections, (2) the condition of inspection documentation, and (3) current FAA actions to improve the inspection process. [ABSTRACT FROM AUTHOR]

Plans by the securities industry to convert computer systems to allow trading in decimals rather than fractions are generally on hold. The industry's resources are being devoted first to dealing with the Year 2000 problem, and industry officials believe that carrying out both the Year 2000 and decimalization efforts at the same time would jeopardize both. The securities markets have established a working group to expand on earlier industry discussions about decimal trading, develop decimal conversion standards, and set time frames for converting to decimals. GAO found that making Year 2000 changes continues to require significant resources from the securities industry and will demand much of the limited time remaining for testing the changes. Ensuring the success of these changes is too important for the industry to risk failure by attempting to implement decimal trading before the Year 2000 changes are made. However, GAO identifies several key elements that could help ensure that the change to decimal trading is made as soon as possible after January 1, 2000. [ABSTRACT FROM AUTHOR]

The overall impact of the Mammography Quality Standards Act on mammography services has been positive, increasing the adherence of mammography facilities to accepted quality assurance standards and improving the quality of X-ray images. The impact on early detection of breast cancer is less clear. Improving the quality of mammography images should lead to more accurate interpretation by doctors and, therefore, to more early detection of breast cancer. However, neither data nor research methodologies are now in place to clearly establish these links. Progress is being made to address these problems so that improvements in cancer outcomes can be measured. Regarding concerns that the additional burden of the act's quality assurance standards could lead facilities to close rather than to upgrade, GAO found no indication that the act has caused access problems. [ABSTRACT FROM AUTHOR]

In a February 1996 report (GAO/NSIAD-96-60), GAO found that customers using defense transportation services provided through the U.S. Transportation Command and two of its component commands paid relatively high overhead costs. GAO noted that fragmented traffic management processes, a modally oriented organizational structure, and mobilization costs are major factors driving higher transportation costs. GAO recommended that the military ensure that the efforts to reengineer defense transportation address both process and organizational structure improvements. In response, the Defense Department indicated that the U.S. Transportation Command would undertake an array of organizational and process-related improvements to reduce overhead and improve efficiency. In a December 1996 report to Congress, the U.S. Transportation Command identified more than $500 million in savings that it attributed to such improvements. In March 1997, the U.S. Transportation Command announced that savings had increased to nearly $780 million and that the savings through fiscal year 1999 will be passed on to peacetime customers in the form of incremental rate reductions. This report reviews the extent to which savings are or are projected to be reflected in the form of lower charges to defense customers. GAO focuses on (1) the extent to which the U.S. Transportation Command expects to achieve long-term savings in its operating and infrastructure costs and (2) charges regarding transportation rates and customer charges. [ABSTRACT FROM AUTHOR]

Because of the large number of infants enrolled in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), WIC purchases of infant formula, according to industry estimates, account for more than half of this product's sales in the United States. During the 1980s, as WIC participation grew and the price of infant formula rose, infant formula became a large and growing portion of WIC costs. In 1989, the states were required by law to take steps to contain the cost of infant formula. These measures have primarily taken the form of state programs that award a contract to a manufacturer for the exclusive right to sell its infant formula to WIC participants. The manufacturer that wins the contract is billed by state WIC agencies for rebates on all infant formula purchased by WIC participants with vouchers at authorized retail outlets. The competitive bidding process has resulted in significant rebates to state WIC agencies for infant formula, dramatically reducing their costs. This report discusses (1) how prices in the infant formula market changed for non-WIC purchasers and WIC agencies after the introduction of sole-source rebates, (2) how key characteristics of the infant formula market may contribute to the size of the rebates offered by manufacturers, (3) whether evidence exists that non-WIC purchasers of infant formula subsidized WIC purchases through the prices they paid, and (4) whether the significant cost savings that WIC agencies have realized by using sole-source rebates for infant formula have implications for the use of rebates for other WIC products. [ABSTRACT FROM AUTHOR]

GAO was asked to review available data on the tax compliance of U.S. citizens living abroad. GAO found the Internal Revenue Service (IRS) has not estimated the overall prevalence of nonfiling abroad or the resulting loss of tax revenue, and the data GAO identified in its review were inadequate to support reliable quantified estimates. Data on the number of U.S. taxpayers residing abroad and the number of returns they file are of uncertain reliability, and the amount of taxes that nonfilers would owe if they were to file is unknown. One recent IRS initiative, however, focused on certain Mideast countries and identified enough nonfilers and additional tax revenue that IRS believes there may be benefit to looking for concentrations of nonfilers in other foreign countries. [ABSTRACT FROM AUTHOR]

The Energy Department (DOE) is working to change how it stores spent, or irradiated, nuclear fuel from its nuclear reactors at the Hanford, Washington, site. The fuel is now stored in water basins, but the deteriorating condition of the fuel and its storage facility have raised health and safety concerns. Most of the spent fuel at Hanford presents a risk of releasing nuclear materials into the environment, potentially endangering both workers and the public. The fuel now sits in two water basins that are well beyond their design life and are located just 1,400 feet from the Columbia River. Never designed for long-term storage in water, some of the spent fuel has corroded, creating a radioactive sludge that has accumulated in the storage basins. It is likely that radioactive materials carried in water leaking from one of the basins have reached the river at least twice already. The project now under way calls for building a facility to dry the spent fuel, placing the fuel in canisters, and moving it to a new interim storage facility. Recently, the project has fallen substantially behind schedule, and estimates of the project's cost have significantly increased. This testimony discusses (1) the risks posed by the current storage of the spent nuclear fuel; (2) the project's current status; (3) the major reasons for delays in cost increases; and (4) the measures being taken to address these delays and cost increases, together with an assessment of the likelihood that the latest cost and schedule targets will be met. [ABSTRACT FROM AUTHOR]

Presents the testimony of J. Christopher Mihm, associate director of the United States Federal Management and Workforce Issues General Government Division and Paul Posner, Director, Budget Issues Accounting and Information Management Division before the Subcommittee on Government Management, Information and Technology Committee on Government Reform and Oversight House of Representatives, on the management leadership efforts of the Office of Management and Budget's (OMB) management leadership efforts. Management responsibilities of OMB; Questions about whether to integrate or separate management and budget functions.

Pursuant to a congressional request, GAO provided information on recent trends in information technology (IT) employment and starting salaries for IT jobs, focusing on the: (1) unemployment rates for workers in IT occupations; (2) number of workers employed in IT industries and occupations; (3) number of degrees awarded in IT fields of study; and (4) starting salaries offered bachelor's degree candidates in IT jobs. GAO noted that: (1) unemployment rates for workers in IT occupations are well below those for all workers; (2) at 1.3 percent in 1997, the rate was less than one-third the rate for all workers; (3) employment in IT industries has grown steadily, as has employment of workers in IT occupations, which has nearly doubled in the last decade to about 1.9 million in 1997; (4) despite employment increases averaging 90,000 jobs a year in IT occupations, the number of degrees awarded in IT fields of study has remained fairly constant throughout the 1990s at about 48,000 annually--of which about 27,000 were bachelor's degrees; and (5) salary offers for bachelor's degree candidates in IT fields averaged about $37,500 in 1997--slightly higher than the salaries offered in 1989, after adjusting for inflation, and above the salaries offered in the early 1990s when starting salaries dipped to under $35,000. [ABSTRACT FROM AUTHOR]

In 1996, Medicare part B (which generally covers non-hospital-based care) paid $4.6 billion for medical equipment, supplies, prosthetics, and orthotics--in other words, durable medical equipment (DME). Congress included provisions in the Balanced Budget Act of 1997 authorizing the Health Care Financing Administration (HCFA) to more quickly adjust Medicare's fee schedule allowances by up to 15 percent per year. This report reviews two problems that HCFA must overcome to use its new authority effectively. First, HCFA must better identify products billed to Medicare. The only product identifiers on the claims are HCFA billing codes that cover broad ranges of products, quality, and prices. For example, a single billing code is used for more than 200 different urological catheters, whose prices range from $1 to $18 each. The claim allowance is set at $11 for all catheters in this group; without better product identification, HCFA cannot know what it is paying for. The second problem with Medicare's DME payment system is that the fee schedule allowances are often out of line with current market prices. HCFA's new price-adjusting authority should help, but HCFA and its contractors do not have sufficient current product and price information for the thousands of DMEs covered. Another issue is that the fee schedule applies to individuals and to large institutional claimants, even though large institutions buy at significant discounts. [ABSTRACT FROM AUTHOR]

With the growth of managed care, health plans have increased controls on patients' access to and use of costly services. Although these controls have helped to curb the growth in health care spending, they have also added to consumers' confusion and dissatisfaction. A health plan's complaint and appeals system provides a way for enrollees to signal their dissatisfaction and challenge denials of coverage. GAO surveyed 38 health maintenance organizations (HMO) in five states and found that their complaint and appeals systems included 9 of 11 key elements identified by regulatory, consumer, and industry groups as important for complaint systems to have. This report discusses these key elements and identifies ways in which systems can be improved and ways in which data about complaints and appeals can be used to enhance oversight, accountability, and market competition. GAO summarized this report in testimony before Congress; see: HMO Complaints and Appeals: Plans' Systems Have Most Key Elements, but Consumer Concerns Remain, by Bernice Steinhardt, Director of Health Services Quality and Public Health Issues, before the Senate Committee on Labor and Human Resources. GAO/T-HEHS-98-173, May 19 (nine pages). [ABSTRACT FROM AUTHOR]

In recent years, GAO and others have reported on vulnerabilities plaguing the nation's aviation system, the availability and limitations of explosives detection technologies used at airports, and efforts under way to improve aviation security. Terrorism was initially considered a possible cause of the 1996 crash of TWA Flight 800 and helped focus national attention on the system's vulnerabilities. The President formed the White House Commission on Aviation Safety and Security following the crash, and later congressional hearings highlighted continuing weaknesses in the U.S. aviation security system. Although terrorism has been since ruled out as a factor in the crash of TWA Flight 800, ensuing studies found that weaknesses persist. The Federal Aviation Administration (FAA), other government agencies, and the aviation industry are now implementing 31 of the Commission's recommendations on aviation security. Some of these recommendations are similar to legislative mandates that Congress enacted under the Federal Aviation Reauthorization Act of 1996. This report provides information on (1) the tracking, monitoring, and coordinating activities undertaken by the agencies responsible for implementing the Commission's recommendations and (2) FAA's progress in implementing eight of these recommendations, five of which are similar to mandates contained in the Reauthorization Act of 1996. [ABSTRACT FROM AUTHOR]

Federal agencies cannot ensure that the growing volume of imported foods is safe for consumers. The Food Safety and Inspection Service, which has jurisdiction over meat, poultry, and some egg products, places the burden for safety on the exporting countries by allowing imports only from those countries with food safety systems that it deems to be equivalent to the U.S. system. In contrast, the Food and Drug Administration (FDA), which regulates all other foods, lacks such legal authority. As a result, it allows food imports from almost any country and takes on the burden of ensuring the safety of imported foods as they arrive at U.S. ports of entry. Port-of-entry inspections are ineffective, however, because (1) this approach does not guarantee that foods are produced under adequately controlled conditions; (2) FDA currently inspects less than two percent of all foreign shipments; and (3) inspections will not detect some organisms, such as cyclospora. In addition, GAO questions whether the Food Safety and Inspection Service and FDA are targeting their inspection resources at those imported foods posing the greatest safety risks. Moreover, FDA's procedures for ensuring that unsafe imported foods do not reach U.S. consumers are vulnerable to abuse by unscrupulous importers. [ABSTRACT FROM AUTHOR]

The Agriculture Department's (USDA) progress so far suggests that the agency will have a great deal of difficulty in correcting, testing, and implementing its automated information systems so that it can become Year 2000 compliant in time. This could have serious implications for the many vital public health and safety and economic activities that USDA's systems support. Constituencies nationwide, from farmers to schools, could be affected. This testimony briefly outlines the additional steps that must be taken to reduce the nation's Year 2000 vulnerability overall and then assesses USDA's Year 2000 program. GAO provides (1) an overview of the potential impact of the century change on USDA's mission, (2) information on how the agency is structured to address the crisis, (3) information on how much work remains to be completed, and (4) information on the current efforts of 10 USDA components and the agency as a whole. GAO also discusses the status of Year 2000 compliance at the Farm Credit Administration and the Commodity Futures Trading Commission. [ABSTRACT FROM AUTHOR]

The Air Force lacked a well-supported rational for combining, under a single contract, the diverse workloads at the closing San Antonio air logistics center. This requirement may unduly restrict competition by eliminating potential bidders who are capable of performing some, but not all, of the individual workloads. For the San Antonio contract, the Air Force included three dissimilar engine workloads as a single requirement. The law requires that a workload competition be reasonably required to satisfy the agency's needs, and not simply an outgrowth of the agency's desire for administrative convenience or an unsupported claim that economies will be achieved. GAO found that the Air Force's supporting rational does not justify the workload combination. However, the rationale for the combination includes some elements, such as readiness concerns and potential competition enhancements, that, if supported, could establish the reasonableness of the combination under the acquisition laws. [ABSTRACT FROM AUTHOR]

The National Park Service's most recent estimate of its maintenance backlog does not accurately reflect the scope of the maintenance needs of the park system. The Park Service estimated, as of January 1997, that its maintenance backlog was about $6.1 billion. Most of this amount--about $5.6 billion, or about 92 percent--was for construction projects which, for the most part, were designed to correct maintenance problems at existing facilities. However, more than 21 percent of the $5.6 billion in construction projects, or $1.2 billion, was for the construction of new facilities. GAO does not question the need for these facilities, but it believes that it is inappropriate to include new construction projects or projects that expand or upgrade park facilities in an estimate of the maintenance backlog. [ABSTRACT FROM AUTHOR]

Amtrak spends almost $2 for every dollar of revenue that it earns providing intercity passenger service. GAO's review of the financial performance of Amtrak's current routes found that only high-speed service on the Metroliner between New York City and Washington, D.C., is profitable. All of Amtrak's other 39 routes operate at a loss. Any decisions about restructuring Amtrak's route system need to consider whether and how Amtrak will continue to provide national passenger service. An analysis also needs to assess each route's customer demand and financial performance, the willingness of state and local governments to subsidize service, and the route's broader benefits. Amtrak is in a very precarious financial position and remains heavily dependent on federal funding to pay for its operating and capital expenses. The reforms included in the Amtrak Reform and Accountability Act of 1997 will have little, if any, immediate effect on Amtrak's financial performance, according to Amtrak and Federal Railroad Administration officials. The officials also said that the longer-term benefits of these reforms are unclear. [ABSTRACT FROM AUTHOR]

The Congressional Award Foundation, formed in 1979, is a private, nonprofit, tax-exempt organization that promotes excellence among youth in public service, personal development, and physical fitness. GAO audited the Foundation's 1997 and 1996 financial statements and found that (1) they were reliable in all material respects; (2) the Foundation's management fairly stated that internal controls effectively safeguarded assets from material loss, ensured compliance with laws and regulations, and ensured that no material misstatements appeared in the financial statements; and (3) there was no reportable noncompliance with laws and regulations. [ABSTRACT FROM AUTHOR]

During the past decade, Indian gaming has grown into a multibillion-dollar business. At the end of fiscal year 1997, 275 Indian gaming operations were being run in 28 states. These operations ranged from multimillion-dollar casinos to facilities with a few slot machines. Proposals have been put forth in Congress to expand the responsibilities and resources of the National Indian Gaming Commission. These proposals included reconfiguring the Commission to promulgate minimum federal standards for Indian casino gambling, including background checks, licensing, surveillance, and monitoring. This report provides (1) information on the Commission's organization, staffing, funding, and responsibilities from 1991 through 1997; (2) similar information on state gaming agencies in Arizona, Michigan, Nevada, New Jersey, and Washington, as it relates to casino gaming; and (3) for those states, the views of the heads of the gaming agencies on the elements critical to regulating gaming. [ABSTRACT FROM AUTHOR]

This report discusses the Bureau of Land Management's (BLM) efforts to complete the Automated Land and Mineral Record System/Modernization, a project intended to improve BLM's ability to record, maintain, and retrieve land description, ownership, and use information. At an estimated cost of $594 million, it is the largest system development project that BLM has ever undertaken. In a March 1997 report (GAO/AIMD-97-42), GAO found that BLM had encountered problems that increased the risk of degraded system performance and capability. GAO also reported significant management and technical risks and made recommendations to BLM to reduce them and strengthen project management. This report assesses BLM's actions to address the recommendations in GAO's March 1997 report and identifies the status of BLM's efforts to test, deploy, and implement the Automated Land and Mineral Record System's initial operating capability. [ABSTRACT FROM AUTHOR]

With malicious attacks on computer systems on the rise, GAO assessments have found that computer systems at the State Department are vulnerable to hackers, terrorists, and others seeking to damage the Department's operations or reap financial gains. For example, by accessing State's systems, someone could obtain sensitive information on diplomatic negotiations and agreements. Although State has some projects under way to improve the security of its information systems and help protect sensitive information, it lacks a security program that allows State officials to comprehensively manage the risks associated with the Department's operations. Clearly, State needs to speed its efforts to address these serious information security shortcomings. So far, however, its top managers have not shown a commitment to doing so. Internet security was the only area in which GAO found that State's controls were adequate. Plans to expand Internet use, however, will create new security risks. If State increases its use of the Internet before instituting a comprehensive security program and addressing the additional vulnerabilities unique to the Internet, it will unnecessarily increase the risk of unauthorized access to its systems and information. [ABSTRACT FROM AUTHOR]

Congress has had long-standing concerns about the accuracy and the reliability of the costs reported by the Pentagon for consulting services, also known as advisory and assistance services. In a June 1997 report (GAO/NSIAD-97-166R), GAO noted that although the President's budget had reported Defense Department (DOD) expenditures of $3 billion for these services, GAO had identified $12 billion of DOD expenditures that could be advisory and assistance services. This report provides additional information on DOD's underreporting of advisory and assistance service costs and whether costs for these services may be included in a miscellaneous budget category. GAO also summarizes earlier audit reports and studies on DOD's reporting of these costs. [ABSTRACT FROM AUTHOR]

The Health Care Financing Administration (HCFA) has reduced payments to some providers who perform electrocardiogram (EKG) and ultrasound examinations in nursing homes and in beneficiaries' residences. In the past, Medicare had allowed these providers of portable diagnostic tests to receive, in addition to the fee for doing the test, a separate payment for transporting the necessary equipment. Effective January 1, 1996, HCFA eliminated separate transportation payments for ultrasound services. HCFA also eliminated separate payments for EKG services, but these payments were temporarily restored by the Balanced Budget Act of 1997. Some claim that eliminating separate transportation payments could ultimately increase Medicare outlays and adversely affect beneficiaries. They argue that providers will be less willing to provide EKG and ultrasound services without a separate transportation payment, forcing Medicare to pay for ambulances to transport homebound patients or nursing home residents to hospitals for these diagnostic tests. This report studies how changes to HCFA's payment policies would affect Medicare beneficiaries. GAO identifies and analyzes (1) the Medicare recipients, places of service, and providers who might be affected the most; (2) the numbers of services that would be affected by the change in policy; and (3) the effect on Medicare's program costs. [ABSTRACT FROM AUTHOR]

The Federal Aviation Administration (FAA) was ineffective in all critical areas included in GAO's computer security review--facilities physical security, operational systems information security, future systems modernization security, and management structure and policy implementation. Because physical security is the agency's first line of defense against criminal and terrorist attack, the failure to beef up physical security at air traffic control towers, terminal radar approach control facilities, and en route centers places property and the safety of the flying public at risk. Information security safeguards cannot be fully effective as long as FAA continues to operate with significant physical security vulnerabilities. Also, because FAA has not assessed physical security controls at all its facilities since 1993, it does not know how vulnerable they are. Similarly, FAA does not know how vulnerable its operational air traffic control systems are and cannot adequately protect them until it performs the appropriate system risk assessments and certifies and accredits air traffic control systems. Moreover, FAA is not effectively incorporating security controls into new air traffic control systems. Until FAA carries out its computer security responsibilities, sensitive information is at risk of being compromised and flight services interrupted. GAO summarized this study, along with the preceding report (GAO/AIMD-98-145), in testimony before Congress; see: Information Security: Serious Weaknesses Put State Department and FAA Operations at Risk, by Gene L. Dodaro, Assistant Comptroller General for Accounting and Information Management Issues, before the Senate Committee on Governmental Affairs. GAO/T-AIMD-98-170, May 19 (14 pages). [ABSTRACT FROM AUTHOR]

H.R. 3865, the American Community Renewal Act of 1998, allows for the designation of 100 areas as "renewal" communities. These communities would receive incentives to increase jobs, form and expand small businesses, and increase educational opportunities and homeownership. To be eligible for designation as a renewal community, the community must meet economic distress criteria of at least 150 percent of the national unemployment rate; at least 20 percent poverty; and, in urban areas, at least 70 percent of the community's households must have incomes of less than 80 percent of the area median household income. Empowerment Zones and Enterprise Communities seek to revitalize economically distressed areas. This testimony discusses the targeting of community development benefits included in H.R. 3865 and shares lessons learned from the early implementation of another community development program that created Empowerment Zones and Enterprise Communities. [ABSTRACT FROM AUTHOR]

With the growth of managed care, health plans have increased controls on patients' access to and use of costly services. Although these controls have helped to curb the growth in health care spending, they have also added to consumers' confusion and dissatisfaction. A health plan's complaint and appeals system provides a way for enrollees to signal their dissatisfaction and challenge denials of coverage. GAO surveyed 38 health maintenance organizations (HMO) in five states and found that their complaint and appeals systems included 9 of 11 key elements identified by regulatory, consumer, and industry groups as important for complaint systems to have. This report discusses these key elements and identifies ways in which systems can be improved and ways in which data about complaints and appeals can be used to enhance oversight, accountability, and market competition. [ABSTRACT FROM AUTHOR]

More than three years after GAO recommended that Medicare acquire commercial software to detect inappropriate billings--which could save hundreds of millions of dollars each year--the Health Care Financing Administration (HCFA) has tested the software and plans to install it. Incorrect billings, fraudulent and otherwise, cost Medicare about $1.7 billion in improper payments in 1997. This report analyzes HCFA's progress in testing and acquiring a commercial system for identifying inappropriate Medicare bills, the consequences of HCFA's initial management decisions, and its current plans for immediate implementation. [ABSTRACT FROM AUTHOR]

The Federal Aviation Administration (FAA) was ineffective in all critical areas included in GAO's computer security review--facilities physical security, operational systems information security, future systems modernization security, and management structure and policy implementation. Because physical security is the agency's first line of defense against criminal and terrorist attack, the failure to beef up physical security at air traffic control towers, terminal radar approach control facilities, and en route centers places property and the safety of the flying public at risk. Information security safeguards cannot be fully effective as long as FAA continues to operate with significant physical security vulnerabilities. Also, because FAA has not assessed physical security controls at all its facilities since 1993, it does not know how vulnerable they are. Similarly, FAA does not know how vulnerable its operational air traffic control systems are and cannot adequately protect them until it performs the appropriate system risk assessments and certifies and accredits air traffic control systems. Moreover, FAA is not effectively incorporating security controls into new air traffic control systems. Until FAA carries out its computer security responsibilities, sensitive information is at risk of being compromised and flight services interrupted. [ABSTRACT FROM AUTHOR]

Pursuant to a congressional request, GAO reviewed the National Science Foundation's (NSF) annual performance plan for fiscal year (FY) 1999, focusing on the: (1) extent to which the plan provides a clear picture of intended performance across the agency; (2) strategies and the resources NSF will use to achieve its performance goals; and (3) extent to which the plan provides confidence that NSF's performance information will be credible. GAO noted that: (1) NSF's performance plan for FY 1999: (a) partially addresses annual performance issues across the agency; (b) partially discusses how the agency's strategies and resources will help it achieve its goals; and (c) partially provides confidence that its performance information is credible; (2) the strengths of the plan are that it does a good job of describing performance expectations for the agency's scientific research and education programs, discussing how the agency's strategies and resources will help achieve scientific research and education goals, and providing some confidence that the agency's performance information for these programs will be credible; (3) however, the plan contains several weaknesses; (4) these weaknesses are related to areas that needed further attention in NSF's first strategic plan prepared under the Government Performance and Results Act; and (5) in addition, the plan does not present sufficient information on strategies, nonfinancial resources needed to achieve annual goals, and data verification and validation for management and other important activities that support NSF's programs--to explain the agency's expectations and needs in these areas. [ABSTRACT FROM AUTHOR]

Infectious diseases place an enormous burden on the developing world, killing more than 17 million people a year and afflicting hundreds of millions of others. If polio, measles, and other infectious diseases were eliminated, the United States could save hundreds of millions of dollars, primarily because it would no longer need to vaccinate U.S. schoolchildren against polio and measles. Although the cost estimates and time frames developed by the World Health Organization (WHO) for eradicating some infectious diseases are based on firm information, others are more speculative because complete data are unavailable on target populations, disease prevalence, and other factors. Other diseases also pose health threats to the United States and could be potential candidates for eradication. Four diseases were frequently mentioned in the literature and by experts whom GAO interviewed: rubella, mumps, hepatitis B, and Hemophilus influenzae type b. WHO officials said that although it is technically possible to eliminate these diseases with existing vaccines, it is unlikely that other diseases will be considered for eradication before success is achieved with currently targeted diseases. GAO estimates that the United States has saved nearly $17 billion so far from the eradication of smallpox in 1977. Experts agree that several lessons can be learned from the smallpox effort, but the main lesson is that a disease can actually be eradicated. However, they caution that smallpox has limitations as a model for other diseases because it has characteristics that are uniquely amenable to eradication. [ABSTRACT FROM AUTHOR]

Greater concentration of larger railroads, as well as service problems in the western half of the United States, have heightened concern about the safety of freight railroads. GAO reported in July 1997 (GAO/RCED-97-142) on operational and safety trends in the rail industry during the past 20 years and how the Federal Railroad Administration has revised its rail safety program to address these trends. This testimony discusses rail safety in the context of the ongoing congressional debate over the reauthorization of rail safety programs. [ABSTRACT FROM AUTHOR]

With few exceptions, independent contractors do not inspect or license the Energy Department's (DOE) vast complex of research and nuclear facilities. Instead, DOE relies on its own staff to ensure the safety of these facilities. GAO has long criticized DOE for weaknesses in self-regulation. DOE's position on the external regulation of safety is unclear. Five years ago, DOE's leadership made a commitment to the external regulation of worker safety. DOE announced that it would phase out self regulation over a 10-year period, starting with legislation by 1998 to authorize external regulation. In late 1997, however, DOE launched a two-year pilot program to simulate regulation by the Nuclear Regulatory Commission (NRC) at six to 10 of DOE's nuclear sites. At the end of this pilot, DOE and NRC will jointly decide if external regulation is warranted. DOE's decision to conduct pilots represents a shift from its earlier strong endorsement of external regulation of all its facilities. DOE's uncertain position has both NRC and the Occupational Safety and Health Administration concerned about the agency's commitment to external regulation. Although DOE's pilot will provide useful insights, the information collected will not reflect the size and complexity of DOE's vast nuclear complex and thus will not yield the data needed to address many critical issues on external regulation. [ABSTRACT FROM AUTHOR]

With few exceptions, independent contractors do not inspect or license the Energy Department's (DOE) vast complex of research and nuclear facilities. Instead, DOE relies on its own staff to ensure the safety of these facilities. GAO has long criticized DOE for weaknesses in self-regulation. DOE's position on the external regulation of safety is unclear. Five years ago, DOE's leadership made a commitment to the external regulation of worker safety. DOE announced that it would phase out self regulation over a 10-year period, starting with legislation by 1998 to authorize external regulation. In late 1997, however, DOE launched a two-year pilot program to simulate regulation by the Nuclear Regulatory Commission (NRC) at six to 10 of DOE's nuclear sites. At the end of this pilot, DOE and NRC will jointly decide if external regulation is warranted. DOE's decision to conduct pilots represents a shift from its earlier strong endorsement of external regulation of all its facilities. DOE's uncertain position has both NRC and the Occupational Safety and Health Administration concerned about the agency's commitment to external regulation. Although DOE's pilot will provide useful insights, the information collected will not reflect the size and complexity of DOE's vast nuclear complex and thus will not yield the data needed to address many critical issues on external regulation. GAO summarized this report in testimony before Congress; see: Department of Energy: Clear Strategy on External Regulation Needed for Worker and Nuclear Facility Safety, by Victor S. Rezendes, Director of Energy, Resources, and Science Issues, before the Subcommittee on Basic Research and the Subcommittee on Energy and Environment, House Committee on Science. GAO/T-RCED-98-205, May 21 (eight pages). [ABSTRACT FROM AUTHOR]

Mandating Social Security coverage for all newly hired state and local government employees would reduce Social Security's long-term financial shortfall by about 10 percent, boost participation in an important national program, and simplify the program's administration. The impact on public employers, employees, and pension plans would depend on how state and localities with noncovered employees would react to these new coverage provisions. One often-discussed option would be for public employers to modify their pension plans in response to mandatory Social Security coverage. For example, many public pension plans now offer a lower retirement age and higher retirement income benefits than Social Security does. Social Security, on the other hand, offers complete inflation protection, full benefit portability, and benefits for dependents, which are not available in many public pension plans. Costs would likely increase for states and localities that wanted to keep their enhanced benefits for newly hired employees. Alternatively, states and localities that wanted to maintain level spending for retirement would likely need to reduce some pension benefits. Regardless, mandating coverage for public employees would present legal and administrative issues that would need to be resolved. For example, states and localities could require up to four years to design, legislate, and implement changes to current pension plans. [ABSTRACT FROM AUTHOR]

NATO does not routinely evaluate members' cost shares for any of its three commonly funded budgets. Rather, NATO has adjusted the shares on the basis of comprehensive reviews occurring at no specific time intervals or in response to discrete events, such as the entry of a new member. Cost shares for the NATO Security Investment Program (NSIP) budget, which primarily funds infrastructure improvements, were most recently reviewed in 1990. They have been subject to comprehensive reviews more often than the civil budget or the military budget. NATO has adjusted cost share because of discrete events infrequently--in 1966, when France withdrew from NATO's military structure; in 1982, when Spain joined NATO; and in 1994, when Canada sought to decrease its NSIP share. NATO has used various methods to adjust cost shares. For example, in 1955, NATO used expenditures to comprehensively review and adjust shares for its civil and military budgets. In contrast, changes to NSIP cost shares in 1990 were based on negotiations among members that considered such factors as each nation's capacity to pay and the expected benefits from NSIP projects. NATO has also relied on negotiations to adjust cost shares in response to discrete events. In 1997, the United States' actual cost-share across all the common budgets was 28.45 percent. [ABSTRACT FROM AUTHOR]

The life-cycle cost is the sum of direct, indirect, recurring, and nonrecurring costs of a system during its entire life through disposal. Overall, the estimated cost to develop, assemble, and operate the space station has reached about $96 billion, an increase of almost $2 billion over GAO's last estimate made in 1995. Development costs represent the largest increase--more than 20 percent. This increase is attributable to schedule slippages, prime contract growth, additional crew return vehicle costs, and the effects of delays in the delivery of the Russian-made Service Module. Overall, the costs would have been significantly higher had there not been an offsetting reduction in shuttle support costs. The reduced shuttle costs have resulted from NASA's estimates that the average cost per flight throughout the station's era will be dramatically lower than had been estimated in 1995. GAO summarized this report in testimony before Congress; see: Space Station: U.S. Life-Cycle Funding Requirements, by Allen Li, Associate Director for Defense Acquisitions Issues, before the House Committee on Science. GAO/T-NSIAD-98-212, June 24 (nine pages). [ABSTRACT FROM AUTHOR]

Since 1996, the Occupational Safety and Health Administration (OSHA) has been collecting data to identify establishments with the highest injury and illness rates and better target its inspections and other interventions to these firms. Some employers and business associations, however, have raised concerns about how OSHA planned and implemented its data collection initiative. This report answers the following questions: What industries and establishments did OSHA include in its 1996, 1997, and 1998 data collection efforts, and how did it select them? What changes does OSHA plan to make for subsequent data collection efforts? What data did OSHA collect from establishments in the selected industries? How did OSHA intend to use the data it collected, and how has it actually used the data? What specific assurance, if any, did OSHA give about confidentiality and privacy rights associated with the data collected? What is OSHA's current policy on access to the data it collected from these establishments? [ABSTRACT FROM AUTHOR]

The last 20 years have seen enormous growth in the number and scope of federal regulations. According to the Office of Management and Budget (OMB), although these regulations have improved public health and safety and environmental quality, their costs have been high. In 1996, OMB estimated the cost of federal regulations at $200 billion annually and the benefits at $300 billion. To control the costs of regulation, Congress and the administration have required federal agencies to prepare and use economic analyses--also known as regulatory impact analyses--to assess the benefits and costs of proposed actions before promulgating regulations. These analyses are intended to inform and improve the regulatory process by identifying the likely costs and benefits of feasible alternatives. An interagency group convened by OMB has developed guidance that sets forth best practices for preparing economic analyses. This report describes (1) the extent to which federal agencies' economic analyses incorporate the best practices set forth in OMB's guidance and (2) the agencies' use of these analyses in regulatory decision-making. [ABSTRACT FROM AUTHOR]

The military selected men and women for promotion at similar rates more than 80 percent of the time and for professional education and key assignments about half of the time. However, an analysis of the data revealed a number of cases in which one gender was favored over the other for promotions, education, and assignments depending on the military service involved. The military, as a whole, selected men and women for promotion to the top three non-flag officer and enlisted grades at similar rates in about 82 percent of the promotion boards or examinations reviewed. Only the Army had more significant differences in favor of men. When the data for the four services were combined, the military selected men and women for professional military education opportunities at basically similar rates in about 46 percent of the board or decentralization selections; the remaining 54 percent of the selections slightly favored women. However, when the data were analyzed service by service, the Army and the Navy had more significant differences in favor of men, while the Marine Corps and the Air Force had higher numbers of significant differences in favor of women. For key assignment selections, the military as a whole selected men and women at similar rates in about 53 percent of the board or decentralized selections. For the remaining selections where significant differences existed in selection rates, 32 percent were in favor of men and 15 percent were in favor of women. The Air Force and the Navy had higher instances of significant differences in favor of men, while the Army had slightly more significant differences in favor of women. [ABSTRACT FROM AUTHOR]