March 1994 68 Reports to Congress 31 Testimonies WEATHER FORECASTING: SYSTEMS The National Oceanic and Atmospheric Administration lacks an overall blueprint to guide the design, the development, and the evolution of the many subsystems comprising its $4 billion modernization of the National Weather Service's systems for weather observing, information processing, and communications. This situation has arisen primarily because the multiple subsystems have not been managed as interrelated parts of a single system. (AIMD-94-28) MONEY LAUNDERING: U.S. EFFORTS TO FIGHT IT ARE THREATENED BY CURRENCY SMUGGLING People disguising illicit income are avoiding U.S. reporting rules for currency transactions exceeding $10,000 by smuggling cash out of the country. Funds deposited in a foreign institution are much harder to trace and can be spent or transferred back to the United States with less risk of exposure. The Department of the Treasury and the Customs Service have no way to estimate the amount of currency being smuggled, although agency officials believe the amount is substantial, potentially billions of dollars each year. (GGD-94-73) ་ ་ BANK INSIDER ACTIVITIES: INSIDER PROBLEMS In 26 percent of the nearly 300 bank failures in 1990 and 1991, insider problems were cited as one of the major causes. The federal bank examiners cited the banks for 561 insider violations. GAO also found similar violations in 13 open banks. In both the failed and open banks, GAO found a strong relationship between insider violations and poor bank management. Bank examiners often failed to adequately communicate to bank boards of directors and management the potential seriousness of problems and violations, allowing the problems to go uncorrected and become more serious. (GGD-94-88) At least 154 programs run by 14 federal agencies provide about $25 billion in employment training assistance to out-of-school youth and adults to enhance their skills or employment opportunities. Although well-intended, when taken collectively these programs confuse and frustrate clients and administrators, hamper delivery of services to those in need, and create the potential for duplicate efforts and unnecessary costs. Consolidation of the programs is necessary and should be guided by four principles: simplicity, tailored services, administrative efficiency, and accountability. (T-HEHS-94-109) Failure of the Small Business Administration (SBA) to recognize signs that Capital Management Services, Inc., a specialized small business investment company (SSBIC) in Little Rock, Arkansas, had been operated improperly led to an SBA loss of over $3 million. David Hale ran the company improperly by making loans to business associates and for real estate purchases, both of which violated SBA regulations. He also took advantage of flexible SBA guidelines for determining socially or economically disadvantaged persons and provided loans to individuals whose eligibility for the program was questionable. (OSI-94-23) ADDRESSING THE DEFICIT: BUDGETARY Persistently high deficit levels and growing debt constrain the government's ability to meet pressing national needs and to finance investment that is critical to long-term economic growth. Moreover, unmet needs and new spending claims will continue to strain the federal budget. GAO identified options for spending reductions and revenue increases, ranging from the dairy price support system to burden sharing in the Republic of Korea to the collection of gasoline excise taxes. (OCG-94-3) |