I think they have done a good job. Comptroller Bowsher has looked at the results of NAPA's study and already is making some of the changes and improvements that have been suggested. They are already underway.

I was glad to hear the Chairman say that he supports GAO's work, that it is vital and that this is an effort to make GAO better, not to slash their budget 50 percent, as some on his side of the aisle have suggested. We even had comments in the paper a short time ago about doing away with GAO. I think that would be a tragedy.

So I wanted to make an opening statement this morning. I think it is appropriate that we go back a little bit and understand what we have been getting for our money so far. I think GAO has basically a very good track record.

The GAO has already downsized over the last 2 years, about 12 or 13 percent, I think. I believe that was the figure that we had a little while ago. They said their objective is to downsize by 25 percent, but they would like to do it over a 2-year period, into 1997, so they can do it in an orderly fashion.

I might note that GAO is operating now with about the same size operation as it had back in 1963 when the budget for the United States was $100 billion. We now have a budget of $1.5 trillion, 15 times as large and far more complex. To think that we can just whack 25 percent off GAO's budget in 1 year, which has been proposed, as I understand it, by the Republican Conference, is something that I don't think we can do.

So let's look back for just a moment. This will be a little longer than my normal opening statements that I try to keep to a couple of minutes. I think it is important that we set the stage here for what we are talking about.

I am sure we can make some internal improvements in the way GAO operates and in the review process that their work has to go through. But let's look at what GAO has produced in savings. In the long term, GAO has already saved more in the 1990's than during all of the 1980's, and it is a very substantial amount. In the 1980's, GAO could look at their record and say that they had saved about $106 billion through that decade, and they can document this. This isn't just something that is ethereal. It is something they can document.

So far in the 1990's, GAO can point to savings of $119 billion and can document those savings. So if we put it on a cost-benefit basis, for every dollar appropriated in 1994, GAO returned $45. I think that is a pretty good investment. And for every staff year spent by GAO in the 1990's, GAO returned $4.8 million.

Moreover, it is up to the Congress and the Executive Branch to implement the recommendations that GAO makes. GAO can't do it. So part of the fault for not having achieved even greater savings, it seems to me, is ours. We need only look in the mirror to identify who may be at fault on that one. If you take GAO's figures of what has been saved over the last 15 years or so here, the total for the 1980's and the 1990's so far comes to some $225 billion, and these savings can be documented.

I think when we are talking about GAO's internal workings over here, whether we can save a little bit on a rug there or a different

size room someplace else, while cutting out one spot in the review process that will save a few hundred thousand dollars, perhaps, we also have to look at the bigger picture.

We want to cut out mismanagement, waste, and abuse. Certainly, we want to do that. And GAO has already downsized, as I said, by some 12 to 13 percent. But we also want to do it in a way that means something and doesn't interfere with the operation of GAO.

Now, let's look at some specific savings, some major savings in 1994 alone, just in 1994. I will run through these rather rapidly. These are all as a result of GAO studies that came back, on which we took action:

Changed corporate tax benefits for investment in Puerto Rico, resulting in new revenues of $1.3 billion;

Required DOE to submit a budget request with an analysis of its uncosted obligations, a savings of $950 million;

Redressed a problem with Medicare overpayments for clinical diagnostic services. With the resulting cost reductions, we now have a savings over 2 years of $840 million;

Implemented a GAO recommendation to Congress provided for mandatory IRS offset to collect non-tax delinquent debts, resulting in savings of over $820 million;

The Air Force, as a result of a GAO report concerning excess onorder stocks, will save almost $600 million;

Veterans' Affairs resolved a problem in estimating housing subsidies, leading to over $450 million subsequently recovered in excess housing payments; and

We also abolished the fabled wool and mohair subsidies.

Now, this subject came up a number of times, but I think I can say that the GAO report that came out was the final nail in the coffin. We will realize about $200 million in savings on that one. Now, let me comment personally. As the former Committee Chairman, I can point to these requests to GAO and what resulted from them when they came back. And let me say there has been some suggestion in the past that whoever was in control, the Majority, had the inside track with GAO. I would note that so far this year in 1995, more than 80 percent of the requests for GAO studies have come from the Republican side. So it is normal that the Majority, in their positions of leadership, whether on the Committee or wherever, are the ones who make the majority of requests. And I was pursuing my job as Chairman and trying to get efficiency in government in making requests, and I made quite a number of them, and some of them have resulted in these savings. These are just major savings that came from major reports that I requested: We had a reduction in the 1991 budget for chemical stockpile disposal program of $108.4 million;

A closeout of the new production nuclear reactor, based on a GAO report, saved a total overall, we can estimate, of about $3.5 billion;

The FTS 2000, the Federal Telecommunications System 2000, recompetition bids cut back government expenditures by $145 million;

By fixing DOD "M" accounts, when we got done with all of the negotiations we saved $471 million. This resulted from GAO studies; and

We also cancelled the problem-plagued IRS taxpayer service integrated system automation project, for savings of $41 million.

Now, those are some fairly big-ticket items. Along with them come a lot of smaller ones:

Reducing the backlog in the RTC suspense accounts, $4.8 million; Improvements in Department of Agriculture's IRM activities, $4.4 million;

Asset forfeiture improvements, $1.2 million;

Termination of unauthorized vehicles at Lawrence Livermore National Laboratory, $546,000;

Lower software and copier prices, $6 million; and

Recovery of Army payroll overpayments by DFAS, $1.7 million. Now, when you look at these reports that we have used as a basis for taking legislative action, literally saving money, big-time money-we are talking billions of dollars here they came from an organization that is operating basically at the same size it was back in 1963 and is still doing this kind of work for us. Mind you, I want to improve all of GAO's internal procedures. I don't want anyone to think that I am overboard on GAO. But some of the reports GAO produces may not have an obvious money value associated with them. Some of them involve other things.

How about GAO's look at the stability of the U.S. chemical weapons stockpile, so we don't wind up in trouble there? These types of reports don't necessarily involve cost savings, but they are certainly protecting health and safety of the public.

Patient survival on mastectomies versus breast conservation was another study that GAO did that is a new sort of guide on the subject.

Risks of financial derivatives-GAO was one of the first to point out dangers with derivatives-where Orange County got into deep and serious trouble, and where we have to watch out.

States using illusory approaches to shift costs to the Federal Government on Medicaid was another study.

Future-year DOD programs. This report was requested by Senator Roth, our Chairman. The subtitle is: Optimistic estimates lead to billions in over-programming.

How to make Soviet-designed reactors more safe?

"C-17 Settlement: Not a Good Deal" was the title of another GAO report. We are using that to look into the C-17 matter.

Exposure of children in public housing to lead-based paint poisoning risks is another subject.

We could go on and on with many more examples, which I won't do this morning. We would take up all of our time with just our recitation of past reports. But I think it is very, very important.

At a time when congressional staffs have been cut and IG offices are downsizing somewhat, I think we have to be very careful about further limiting our investigative and auditing capacity that we have here in the Congress.

These benefits are not always reflected in dollar figures, as I just indicated. This Committee has put on the books the Chief Financial Officers Act, which was termed in one of our hearings as "the best

step forward in 40 years in financial management." GAO performs a vital function under the Act, doing the auditing, and they don't have nearly enough people to do that. We had to make three basic pilot projects just to get started because GAO didn't have enough people to go government-wide on it as soon as we would like to have seen. So there will be a rotating check each year of different organizations in government, and that is to follow-that is something that will go on day after day, year after year, as part of the CFO Act-in addition to what we did with the IGs in those same

areas.

This is not a small matter. We have some 200 different accounting systems in government. We have 160 different accounting systems in the Department of Defense alone-43 different accounting systems in the Army by itself.

These are areas that GAO has looked into and has pointed out the problems. GAO is trying to straighten these things out, and doing a great job over in the Department of Defense because we followed that one in particular, in trying to improve financial management in DOD. The Government Performance and Results Act, which was our Chairman's piece of legislation, mandates GAO to be intricately involved in that process, particularly in auditing of agency financial statements.

On the floor just a couple of days ago, Senator Domenici also called upon GAO to examine whether proper procedures were followed by agencies in proposing significant new regulations. Regulatory reform is something that will be on the floor in just a few weeks. We have already passed it out of this Committee. These are things that concern me when we say we are going to cut GAO back by 25 percent.

I think NAPA has done a good job in setting out some guidance for internal improvements and how we might handle things in making GAO a paragon of efficiency. And there can be improvements at GAO, and the Comptroller is taking action to do some of the things NAPA recommended. I don't know whether we have to prod him into going farther than he would like to go or not. I certainly don't know that we need to at this time. I think he has been doing a pretty good job in seeking improvement.

So I want to thank NAPA. This Committee had the GAO oversight hearing scheduled last fall, at the request of the then-minority. Most of the Members on that side, however, then requested that the hearing that we had scheduled to release the report be put off until this year. I honored that request, and that is why the hearing was put off from the time the report first became available last fall.

I look forward to working with the Minority Members on the Committee on improving GAO's functions and how they do their job over there. I think we can make an excellent case for, instead of cutting GAO 25 percent, increasing GAO 25 percent and get back even more of the money that I was talking about here just a few moments ago. I am not proposing that this morning. I know that might fall on deaf ears. We do appreciate very much the work that NAPA has done in this area, and I thank them for their work.

I would like to submit a full statement for the record in addition to this statement, which has gone on for a little while, I know.

[The prepared statement of Senator Glenn follows:]

PREPARED STATEMENT OF SENATOR GLENN

I want to thank Chairman Roth for holding this hearing today, and welcome our witnesses.

I have a lot to say and will try and make it succinct.

First, let me stress that this hearing, I think, is not about abolishing GAO. The Chairman, unlike some others in his party, has indicated that he believes GAO has an important mission and is an invaluable tool for both Congress and the Executive Branch. I am glad to hear that reemphasized today.

I intend to support efforts aimed at reducing costs. If there are gains we can achieve by eliminating duplication, streamlining the process, and lowering administrative and other overhead expenses, we should take full advantage.

I will, however, vociferously oppose such actions if they go too far and will impede GAO's ability to carry out its basic responsibilities. We are told that the Republican Conference has agreed upon a 25 percent reduction in GAO's budget for fiscal year 1996. But I am not a party to that "agreement", nor have I been privy to any of those discussions.

Yes, I will admit to being just a little biased.

We have spent a great deal of time hammering out-with leadership by the Chairman-a new regulatory reform process which emphasizes cost-benefit analysis. While the purpose of this hearing is to see where-and whether-GAO can cut its costs, we also must determine how that might affect what benefits GAO produces. That is also part of the equation.

For example, I'd like to recite a few GAO investigations done at my request which have ultimately resulted in savings to the government, but more importantly, the taxpayer:

• Reduction of the fiscal year 1991 Budget for the Chemical Stockpile Disposal Program. $108.4 million.

• Closeout of New Production Reactor. $3.5 billion.

• FTS 2000 Recompetition Bids. $145 million.

• DOD "M" Accounts. $471 million total.

• Cancellation of the problem-plagued IRS Taxpayer Service Integrated System Automation Project. $41 million.

These are just the "big-ticket" items. It doesn't include millions of dollars saved through other investigations done at my request. Things like: Reducing the Backlog in RTC Suspense Accounts ($4.8 million); Improvements in USDA's IRM Activities ($4.4 million); Asset Forfeiture Improvements ($1.2 million); Termination of costly and unauthorized vehicles by Lawrence Livermore National Laboratory ($546,000); Lower Software and Copier Prices (nearly $6 million), and; Recovery of Army Payroll Overpayments by DFAS ($1.7 million so).

At a time when Congressional staffs have been cut and IG offices are about to downsize themselves, we must be very careful about further eroding our investigative and auditing capacity.

Moreover, GAO's value is not always apparent in dollar figures. This Committee has taken major strides towards finally putting the government's books in order, through the enactment of the Chief Financial Officers (CFO) Act, and determining the effectiveness of government programs, with the Government Performance and Results Act (GPRA). We have asked-in some cases, mandated-GAO to be intricately involved in this process, particularly in the auditing of agency financial statements.

In fact, I note just the other day-on the floor of the U.S. Senate-an amendment was offered by Senator Domenici which calls upon GAO to examine whether proper procedures were followed by agencies in proposing significant new regulations. And just yesterday, our distinguished Chairman introduced a new DOD procurement bill which, among other things, requires GAO to review DOD's contract payment procedures and develop standards accordingly.

I'm not sure whether it's possible to measure in dollars the results of GAO contributions in exposing the dangers at our deteriorating nuclear weapons plants, identifying weaknesses in the regulation and management of derivatives, or disclosing serious problems in FDA's oversight of medical device manufacturers. Much of the work done by GAO may simply just result in making government work better, whether it's protecting American lives or their hard-earned money.

Sure, GAO is not always perfect. They, like any large organization, make mis

takes.