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Senator GLENN. We are expending $430 million a year and we are getting back about $15 billion a year, on an average-and that is up and down, I know. You can't count on that being constant. I just think that I agree you can be improved; I think you have gone a long ways toward improving GAO since you have been there. We have worked very closely with you on some of these things. But my view is that GAO is one of the success stories in government. You have taken the lead in total quality management. You are setting an example over there by how you are handling your own people and performance, which is what the GPRA, that the Chairman put in for all of government, is supposed to be doing. You are a model of how that can be done, or may be a pilot case of how that can be done.

I know everything isn't perfect at GAO, but I think to cut a fourth of your resources, cut a fourth off your budget, when we know that would wreck your plans over there and cut back on what studies you could do for us that contribute to this $15 billion a year, I think would be the height of folly.

I just wanted to finish with that remark. We have lots of other questions. I presume we will have questions for the record, Mr. Chairman, and we will submit some for the record, also.

[The addition question from Senator Glenn follows:]

ADDITIONAL QUESTION FOR THE RECORD FROM SENATOR GLENN Question. I am quite curious as to what your reaction has been to how your report has been received-and perceived-to date. On the other hand, it does raise some serious matters which GAO must, and should, address. On the other hand, I feel that some may have tried to put their own "spin" on it, using it for maximum advantage to make their case that GAO should be abolished or drastically cut.

What is your reaction to this? Have there been some accounts which have distorted the panel's findings and recommendations? Please explain.

Answer. The report of the National Academy of Public Administration (NAPA) panel does not suggest or recommend abolishing or drastically cutting GAO. On the contrary, the panel reasserted that GAO is an important and valuable part of government, "providing auditing, research, and evaluation to government in general and to Congress in particular, which could not be easily or readily replaced." The report also does not suggest or recommend that GAO's mission or capacity should be legislatively altered or reduced. In particular, the panel did not suggest that GAO exclude policy relevant research or program evaluation from its work. The panel recognized that it is not possible to draw a clear line between policy analysis, evaluation of government performance, and audit. The panel's key conclusion was that GAO work should be both policy relevant and rigorously fact-based; while GAO should continue to make recommendations based on its research and analysis, it should avoid policy advocacy.

The panel concluded that GAO's effectiveness depends on bipartisan and public trust to maintain its special status as objective and impartial central audit agency. To protect and strengthen this status, the report suggests two major approaches:

1. Restraint on the part of GAO and congressional requesters of its work, to avoid reports that do not have a firm factual base within GAO's competence; and 2. Continuing congressional oversight based upon sharing of information on GAO strategic plans, lists of jobs started, terms of reference for individual studies, periodic external peer review of work completed, and improved GAO performance indicators, as well as agency comments routinely and consistently obtained on individual GAO reports.

The report calls for increasing GAO capacities in the areas of financial management systems and program cost analysis. The panel also recommends some changes in review processes and other internal operations, which could lead to improved efficiencies and more importantly to improved quality of GAO work.

Senator GLENN. It has been a long hearing, and I just want to compliment you on what you are doing. I hope you can cooperate with the NAPA people in working out some of these things to a better, more extensive degree than we have up to now.

There is one other thing I just wanted to mention. There is a lot going on over at Defense. We have worked very closely with the new comptroller, John Hamre, over there. I am sorry Senator Grassley isn't still here. I told him when he was leaving that I wanted to get together. We have done some things at Defense, and it has been hard. We did the "M" accounts-you remember that— and the DBOF, Defense Business Operating Funds, and we are beginning to work some of the problems out in those areas. Then there is DFAS, the Defense Finance Accounting Service, and the personnel side of DFAS; I went to one of their centers. It is absolutely a model, an example of how you would like to see these things work. It is just beautiful. We spent about half a day there. Now, the other side of DFAS is contract payment, where they still have people running down the aisles and taking manila folders and bringing them back to a desk and scattering 20 pieces of paper around. They are trying to handle a center that is paying, so I was told, $35 million an hour and doing it by running manila folders back and forth down a warehouse-like place, because we didn't give them their computer money soon enough.

So it is our fault, again, at least some of this. And have they been slow in getting this together? Yes, but it is a big problem, as you know. The Defense Department alone has 160 different accounting systems over there, and there are 200 government-wide; there are 43 different accounting systems just in the Army. These are things that Senator Grassley is working on, I know, and I want to work with him on those things. I think his idea of maybe getting a little group together here is a very good idea, and we will work together with you on that.

I just hope we can avoid this one-fourth cut in your budget this year. I know everybody wants to cut the budget, but there are some areas of the budget that should be increased, not decreased, and we will save more money by doing it that way. This is one of them, as I see it. Thank you, Mr. Chairman.

Chairman ROTH. Thank you, Senator Glenn.

Well, it has been a long morning. I just want to say once more that, as in the private sector, there are many excellent companies that have re-engineered their processes and made major improvements and major savings. And that is the whole purpose of these proceedings today. As a matter of fact, we are following through on the recommendations of NAPA of having oversight, and we expect that we will make that a practice on occasion in the future, although we won't do it so often that it interrupts your main task. We do appreciate your being here, and we look forward to working with you to make a great organization even better.

Mr. BOWSHER. Thank you very much, Mr. Chairman. Could I just make a couple of comments? I look forward to working with you and Senator Glenn and all the Members of this Committee to try to improve. We do have certain areas that we can improve on at GAO. We want to improve. We think we have made a lot of progress here in the last decade or so, and we want to continue to

make more progress. I come out of one of the big accounting and auditing firms in the private sector. I know how they have improved, and I have tried very hard to make GAO one of the premier organizations in government. And I want to continue to do that in my last 18 months in office and work with you.

Chairman ROTH. A worthy ambition.

Mr. BOWSHER. Thank you.

Chairman ROTH. Thank you, Mr. Bowsher.

[Whereupon, at 1:41 p.m., the Committee was adjourned.]

APPENDIX

PREPARED STATEMENT OF R. SCOTT FOSLER

I am Scott Fosler, president of the National Academy of Public Administration. The Academy is a non-profit, non-partisan organization chartered by Congress to identify emerging issues in governance and public management and provide advice to Congress and other decisionmakers on how to improve the effectiveness and efficiency of government. The Academy's membership consists of more than 400 individuals elected by their peers for their distinguished contribution to public service, including current and former Members of Congress, cabinet officers, governors, mayors, jurists, public managers at all levels, business executives, and scholars.

We were asked by this Committee in 1993 to conduct a study of the roles, mission, and operation of the U.S. General Accounting Office (GAO). The Academy panel assembled for this study completed its report in August 1994 and the report was released as a Committee Print (S. Prt. 103-87) in October 1994.

I would like to introduce Dr. Alan K. Campbell, a Fellow of the Academy who was the chair of the panel, and Dr. Annmarie Walsh, also an Academy Fellow, who was the project director for the study. We have included information on Dr. Campbell and Dr. Walsh and the other members of the panel as an attachment to this testimony.

Dr. Campbell will present the panel's findings and then he, Dr. Walsh, and I will be happy to answer the Committee's questions.

PREPARED STATEMENT OF ALAN K. CAMPBELL

Mr. Chairman and Members of the Committee: I am Alan K. Campbell. I served as chair of the National Academy of Public Administration's panel that conducted a study of the U.S. General Accounting Office at the direction of this Committee. Our report was issued as a Committee Print in October 1994. I am pleased to have this opportunity to summarize the findings and recommendations of that panel.

In preparing the report for the Committee, the Academy panel conducted a yearlong examination of the roles, mission, and operations of GÃO. On the basis of that examination, the panel, despite its diversity, unanimously agreed to a set of findings and recommendations. I acknowledge the extraordinary contributions of all members of that panel, as well as those of the Academy and panel staff who contributed to the work. I request that, with your permission, the executive summary of that report and the list of panel members be included in the written record of this hearing.

The project director, Annmarie Walsh, of the Institute of Public Administration and an Academy Fellow, is here with me this morning to help answer questions. The full report of the panel was issued as a publication of this Committee in October 1994.

I would like to emphasize four points, on the basis of the panel's work.

1. GAO performs functions that are valuable to Congress, to government in general and to the American public-functions that are growing in importance. Čost analysis, economy and efficiency auditing, contributions to improving financial management and information systems, performance auditing and selective program evaluation are crucial functions, particularly in an era of stringent budgeting, changing programs and reengineering of processes.

The point to be emphasized is that when major changes are occurring-particularly when operational decisionmaking is decentralized-auditing, research, and evaluation become enormously important. Congressional staff and executive agency resources for these activities are declining, and apparently will continue to decline. The panel found that GAO at its best is a vital resource to Congress, to government, (69)

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