Now, to this panel, I have just a few questions. I am interested in knowing how we can reduce the costs of the GAO jobs. That lefthand pie chart over there shows, I guess, an average or a typical cost of a GAO work product of $396,000. It may be a certain type of work product. I am not sure. But I want to look at just that lefthand pie chart.

The Academy has made certain recommendations to us about improving the job design up front. On page 31 of your report, you have recommended that to improve the quality of its work, the GAO should, first and foremost, develop thorough terms of reference for each job. And you have spent quite a bit of time on that. This is before the job is approved and before the work begins. And you go through quite a lengthy list of things they should do in their job preparation and job design.

Now, that could have the effect of increasing those up-front costs; is that correct?

Mr. CAMPBELL. Quite right. We would assume that by that kind of careful preparation, it could reduce the amount of resources used in doing the study itself.

Senator LEVIN. Right. But

Mr. CAMPBELL. I don't have a precise calculation.

Senator LEVIN. All right. That looks like a lot of money to design a job, and I know that

Mr. CAMPBELL. Those numbers are new to us.

Senator LEVIN. All right. Have you looked at how much money they spend in designing a job, typically? Have you looked at that? Mr. CAMPBELL. No. We did not look at it that way. We looked at average costs of jobs in total, but not breaking it down by design and then the carrying out of the project and then the review.

We do spend a good deal of time talking about changing the review process.

Senator LEVIN. They are looking at streamlining that job design process themselves, but in order to get to my point, your recommendations, which I think make a lot of sense, actually could increase those up-front costs.

Mr. CAMPBELL. Could increase the up-front costs?

Senator LEVIN. And have you identified specific up-front costs which could be eliminated from their current system or changed or streamlined or modified? Have you identified savings in those job design costs?

Mr. CAMPBELL. No is the answer. Let me, if I could, just expand on that.

I think the judgment of our panel is that the need is more in the area of the review side of their activities than it is in the design side.

Senator LEVIN. All right. Because I believe that a major part of the Majority staff suggestion that we can reduce the average costs of the job from $396,000 to $194,000 comes from an estimate—I am not sure based on what-that the job design could be dramatically reduced in cost. So you are indicating that is not where you see the savings. Indeed, you may increase it by your recommendations, but as I understand the Majority staff statement, you could cut that $396,000 to $194,000. The majority of their reduction comes from reducing that job design from $138,000 to about $20,000.

Those are the only questions that I have of this panel, Mr. Chairman. Thank you.

Mr. CAMPBELL. One comment, if I might, sir, in relation to your opening comments, Senator Levin, in terms of GAO's responsiveness. GAO has been very responsive to our study. We have spent time with them since completion of the study working with them on how they might usefully respond to it, and they have been most cooperative in their efforts to be responsive to what we have recommended.

Senator LEVIN. Thank you. I just want to say one other thing, because Senator Grassley made reference to this Majority staff recommendation. I asked to try to get a breakdown of it because it is a very significant recommendation. But I think we have to now analyze that recommendation, and I don't know whether you folks feel that you have gone way beyond the call of duty already. You probably have. But I think it is important that that recommendation be reviewed because there would be significant savings. If you can cut the $138,000 down to $20,000, let me tell you, that is a pretty significant recommendation.

I don't know. It is up to the Chairman, obviously, but in any event, I will be asking the Majority staff to meet with us and to share with us the factual data that leads them to conclude that we can reduce that job design so significantly. Again, it is a huge reduction in a major cost, and I don't know what the basis for it is. I am sure the Majority staff would be happy to share with us what the basis for their conclusion is.

The reason I raise this is because Senator Grassley had placed such emphasis on that conclusion of the Majority staff that the $396,000 could be cut to $194,000.

Thank you, Mr. Chairman.

Chairman ROTH. Thank you.

Senator Nunn.

Senator NUNN. Mr. Chairman, I just have one question, and I want to just take a couple of minutes and give a couple of observations.

The question is: Did you all look at the requests initiated from individuals as opposed to from committees? Did you look at the question of whether we ought to continue the practice of having both individual as well as Committee and Subcommittee requests? Mr. CAMPBELL. Annmarie, do you want to comment on the individual requests as a part of the total and then the question of whether there can be some cutback there?

Ms. WALSH. We sampled both kinds of requests, and we basically found some important requests from individual members as well as some trivial requests from individual members. We found some trivial requests from committees as well as important requests from committees. So we did not come out with a simple conclusion that Member requests were trivial. Some of them were very important. Some of them were bipartisan. Take the example of the agricultural commodity studies. Individual member requests from a Republican and a Democrat over the years supported that stream of research.

Senator NUNN. Does GAO give priority to Committee and Subcommittee requests over individual requests? Did you get into that?

Ms. WALSH. I think you should ask them that. We saw them trying to respond to everything that came in insofar as they could. They certainly did give priority to committee chairman and ranking member requests. But they were trying to respond to all of it.

Senator NUNN. So you didn't make any policy recommendations along that line, committee versus individual?

Ms. WALSH. No, we did not, because we didn't find work to be clearly weak on one side or the other.

OPENING STATEMENT OF SENATOR NUNN

Senator NUNN. Mr. Chairman, I want to thank the panel for an excellent job. I think it has been a very big help to us, and I think it helps put the whole matter in perspective. I appreciate very much your work. It has been very valuable. I would like to submit a statement for the record in addition to my comments.

Mr. Chairman, just a very brief statement at this time. I know that some people have called for very drastic cuts in the budget and staffing of GAO, I am told on the order of 25 percent, some say 50 percent. I don't think there is any doubt that any organization can improve. I don't think there is any doubt that any organization can stand some outside scrutiny, and without it, sometimes it does not have the incentive to take on its own reform. And I don't have any doubt GAO can improve and, under Chuck Bowsher, will make changes and is making changes.

I do believe, though, that we need to put it in perspective because the complaints on one side, even if taken totally to be legitimate and I don't. But if they were all taken to be legitimate, on the other side all the things that have been done beneficial to the taxpayers by the GAO far outweigh the complaints, even if every complaint were legitimate. And I do not believe they have been, and I think the panel here has indicated they did not find any partisanship in terms of the GAO approach.

Just from the Subcommittee I chaired on this Committee, the Permanent Subcommittee on Investigations, we have had hearings and the result of GAO work that just in the last few years we believe has saved the Federal Government, in a way we can document, over $300 million. Just one Subcommittee. For example, $250 million of it is in reduced prison construction costs from recommendations on double bunking and revised square footage standards by the Federal Bureau of Prisons. Another $62 million we can document in recommended changes in wage garnishment for defaulted student loans. So that is just one Subcommittee on Capitol Hill, and that would be, what, two-thirds of the total budget in 1 year for GAO.

In addition to that, where we do not try to quantify the dollars but the dollars could be many, many times what I just identified, we have had GAO's substantial help in highlighting the shortcoming of State insurance regulation of Blue Cross and Blue Shield plans that exposed literally thousands of subscribers to loss of health care benefits through insurer default. And the work, Mr. Chairman, you and I and others on this Subcommittee have done on that and Senators Glenn and Levin are part of it—has basically, I think, had the effect of having a reform of Blue Cross/Blue

Shield throughout the Nation. It hasn't solved all the problems, but we couldn't have done that without GAO.

Another area is the highlighted shortcomings in State insurance regulation that permitted fraudulent insurers to operate with impunity, a very big area that involves literally billions and billions of dollars.

Another area, just for instance, is highlighting the loopholes in current Federal and State money-laundering statutes-Mr. Chairman, you have taken a real lead on that-that really permit billions of dollars of drug and criminal proceeds to escape taxation, forfeiture, and seizure.

So just in the work of that Permanent Subcommittee on Investigations alone I think GAO has earned their keep many times over. Now, that does not mean that they should not make improvements. I think that there is room for improvement. I think sometimes I have chaired and am now Ranking Member on the Armed Services Committee. They have done enormous work for us there. Overall, it has been very beneficial.

There are times when GAO takes on, for instance, a detailed examination of a weapons system, and frankly, I think they get in over their heads sometimes because it is very difficult. You don't have expertise in that area to analyze all that is going on in weapons system procurement. They can look at the accounting part of it, but it is very hard for them to always get the evaluation part of it properly. Sometimes I think they don't listen quite enough to the experts in that regard, but even when I don't agree with the report, I find the questions raised by them to be useful in getting the managers over there in the Department of Defense to come up with the answers to those matters.

All in all, I am a strong supporter of GAO, and I hope whatever we do here in reforming GAO will be constructive and will not leave us crippled in terms of basically dealing with waste, fraud, and abuse in the government. And we know there is plenty of it going around.

We all also know that the way people run campaigns out there get out there as if there is a line item in the budget called "Waste, Fraud, and Abuse" and we can simply put an amendment on the floor saying, "Thou shalt not waste any more money or abuse any more money," and it doesn't work that way. You have got to get out there and dig it out. And you have got to have good people digging it out, and they have got to be professional people, and they have got to be able to do the job.

So I hope we will put this in its proper balance as we move forward. I look forward to hearing from Chuck Bowsher and other witnesses.

PREPARED STATEMENT OF SENATOR NUNN

Today, our Committee reviews the work of the National Academy of Public Administration (NAPA) that studied the operations and management of the General Accounting Office. Their study was initiated by our former chairman, Senator Glenn, and our current chairman, Senator Roth, in response to concerns expressed by some about the operations and objectivity of the GAO. Some are calling for drastic cuts in the budget and staffing of the GAO on the order of 25 percent in 1 year alone.

While I have an open mind to any recommendations to improve the GAO and it's operation and look forward to today's testimony, I do not believe cuts in the order

of 25 percent are warranted. The General Accounting Office can proudly point to its record of having saved billions of dollars in its 74-year history. As Members of the Governmental Affairs Committee, we have initiated much of the good work that the General Accounting Office had done over the years. Under my direction as Chairman of the Permanent Subcommittee on Investigations, the General Accounting Office has reviewed dozens of government programs, identifying innumerable areas for improvement In the last few years alone, their work for the Subcommittee has resulted in documented savings to the federal government of over $300 million: $250 million in reduced prison construction costs from recommendations on double bunking and revised square footage standards for the Federal Bureau of Prisons; and $62 million in recommended changes in wage garnishment for defaulted Guaranteed Student Loans.

Beyond these cost savings, the General Accounting Office's work for the Subcommittee has resulted in benefits that are less quantifiable in dollar savings although just as significant. Their work has repeatedly alerted Congress and the Executive Branch to emerging problem areas in the regulatory and law enforcement arenas. Some examples from our own Subcommittee's work include:

• Identifying problems with judicial security that exposed our federal courts and their personnel to terrorist and criminal assault;

• Highlighting the shortcomings of State insurance regulation of the Blue Cross and Blue Shield plans that exposed thousands of subscribers to loss of health care benefits through insurer default;

• Highlighting shortcomings in State insurance regulation that permitted fraudulent insurers to operate with impunity; and

Highlighting the loopholes in current federal and State moneylaundering statutes that permit billions of dollars of drug and criminal proceeds to escape taxation, forfeiture and seizure.

These are but a few of the many accomplishments of the General Accounting Office. I am sure that we will hear more examples when Comptroller General Bowsher testifies today.

As you know Mr. Chairman, in addition to my duties on this Committee, I have served as the Chairman of the Armed Services Committee and I am now the Ranking Minority Member of that Committee. In these capacities I have had many occasions to call upon the GAO for help in establishing the facts and in understanding defense issues. GAO reports and reviews are an essential element of many of the decisions we make. My experience has shown me that when it comes to accounting issues or issues where facts need to be gathered, analyzed and presented in a logical way, the GAO is superb. The analytical work that the GAO did for the Armed Services Committee on the Service Academies, and on the investigation into the causes of the IOWA explosion come to my mind as excellent examples of helpful and accurate work.

There are areas, however, where the GAO work on defense can be improved. When the GAO ventures into the world of defense policy, for example, one has to wonder why the judgments of the GAO would or should supersede the judgments of experts in the government or on our committees for that matter.

I have also occasionally found that the reports published by the GAO do not give government officials enough credit for correcting problems or enough credit to rebuttals from government officials.

So as I have said, I approach this hearing with an open mind. We need to be mindful of both the strengths and the weaknesses of the GAO as we proceed. I do not believe we should "throw out the baby with the bath water" in an attempt to improve GAO. Now, more than ever, as the need for a more efficient government is apparent, we will need the continued assistance of the General Accounting Office to help Congress ferret out waste, fraud and abuse. With a general decline in the oversight budgets of most of the Congressional committees as well as many Inspectors General, it seems to me that we should examine this issue closely before we make drastic cuts in the budget of the General Accounting Office.

I look forward to hearing from the members of the panel of experts from the National Academy of Public Administration (NAPA) who were tasked to conduct this study on the roles, mission and operation of GAO. I congratulate not only this panel for its excellent work but also Senator Glenn who, as the then-Chairman of the Governmental Affairs Committee, had the foresight to call for such a review. I also wish to commend Senator Roth, our current Chairman, and his staff, for their tireless work in improving not only the GAO, but other government agencies.

Chairman ROTH. Thank you, Senator Nunn. Let me thank each member of the panel. We appreciate your being here today. Your