I would like to add my thanks, as well, to your remarks about Jim Hinchman. He did an excellent job during the 2-year tenure under very difficult circumstances. The appointment process dragged on for about 16 months after it got started. It went from me being patient to being persistent, to persevering, to pain. But, finally, it got done.

Senator BENNETT. Not to panic, of course. [Laughter.]

Mr. WALKER. No, not to panic. I did not get to that point or else I would not be here. [Laughter.]

Mostly it was every other word beginning with "P" that I can think of, Senator. But, fortunately, it is over and I only have to go through it one time in my life. So I am looking forward to the next 14 years and 8 months.

It is truly an honor and a pleasure to be part of the GAO team. As you have probably heard me say before, I believe the GAO is one of the best, if not the best, agencies in the Federal Government and clearly one of the most important.

As you know, we are a multidisciplinary professional services organization. I have headed several multidisciplinary professional services organizations before in the private and public sectors. I have had two prior presidential appointments before taking this third one. I previously served as a public trustee of Social Security and Medicare and as Assistant Secretary of Labor for ERISA. I also ran the Pension Benefit Guaranty Corporation. I ran Arthur Andersen's Human Capital Services practice globally and now have responsibility for the GAO.

The Congress is our client. We are a service organization. This has to be first and foremost in our mind. We have to be client focused. We have a number of initiatives underway to enhance our client focus and to support the Congress even better than we have in the past.

We are your front line troops. Quite candidly, Mr. Chairman and Senator Feinstein, at a time when there has been significant downsizing and we have experienced a 39 percent head-count reduction from our peak in 1992 and at a time where Congress itself has had a significant downsizing in staff, increased staff turnover, and less average tenure on Congressional staff. GAO is going to be more important in the years ahead in order to put the Congress on a level playing field with the Executive Branch, regardless of who is in charge of the Executive Branch.

We are going to be increasingly important.

Our name is somewhat of a misnomer. We are called the "General Accounting Office," and that is a challenge because when you say "accounting," people tend to stereotype you. But the fact of the matter is less than 25 percent of what we do is about accounting and auditing.

Accountability is what we are all about. We do accounting, we do auditing, we do investigations, we do program reviews, we do policy analysis, we render legal judgments-it is all about accountability. We are committed to three core values-which I think are important to articulate to serve the Congress and the American people. The first is accountability. That is what we do. We help the Congress oversee the Executive Branch. We help make sure that the government works for the benefit of the American people.

The second is integrity. That is how we do what we do professional, objective, fact based, nonpartisan, nonideological, fair and balanced.

Third, reliability, is how we want what we do to be received by the Congress timely, accurate, useful, clear, and candid. It's just the facts. We say what we mean, we mean what we say, and we try to help the Congress do a better job for the American people. Our objectives are generally three. First, I think it is our job to help the Congress continuously improve the economy, efficiency, and effectiveness of the Federal Government for the benefit of the American people.

Second, we want to be a world class organization that leads by example. We are the agency that reviews others. It is imperative, therefore, that we be as good or better than any other agency. Otherwise we would be hypocrites, and I don't like being a hypocrite. I won't be a hypocrite.

Third, working together in a partnership, as we have on Y2K and many other areas, we cannot only make a difference in economy, efficiency, and effectiveness, but, hopefully, we can also help to improve the people's confidence in and respect for their government, which I think we would all hope to achieve.

With regard to our budget request, I am not asking for any FTE increases. I believe it would be premature and inappropriate to do that. I am only 4 months on the job. I have done a lot of due diligence, I have done a lot of work, but I need to do more in order to be able to make a considered judgment on FTE levels.

I am asking for some targeted investments to help us improve our efficiency and effectiveness in order to increase our flexibility such that we can improve our timeliness and better serve the Congress, and to understand how best to prepare ourselves for the 21st Century. I will touch on those in a few minutes.

As far as results, I think it is important to consider the results; 96 percent of our work is Congressionally directed. That is up from about 33 percent, when Elmer Staats left in 1980. About 4 percent is self-initiated now. Our service is both to the Majority and Minority.

SELF-INITIATED WORK

Senator BENNETT. Run through those numbers again. You said 96 percent and that is up from 33 percent.

Mr. WALKER. Right.

Senator BENNETT. Do you mean 33 percent was self-directed and now it is down to 4 percent?

Mr. WALKER. Well, actually, about 66 percent was self-directed when Elmer Staats left in 1980. You are correct and I think it is good to clarify it for the record. About 66 percent was self-directed in 1980, when Elmer Staats left office, and now it is down to 4 percent.

Senator BENNETT. Now it is down to 4 percent. All right.

Mr. WALKER. This is one of the consequences of the downsizing, because our mandates are going up, and our Congressional requests are going up. But obviously we have 39 percent less staff. Something has to give. We have improved productivity, we have improved efficiency, but what gives is self-initiated work.

I think, importantly, I would like to provide for the record, if it is all right, Mr. Chairman, three "Top Ten" lists that we have put together to try to help the Congress understand the benefits of GAO.

[The information follows:]

Savings and Loan Crisis

TOP TEN SELF-INITIATED TOPICS

Before the savings and loan situation reached crisis proportions, GAO advised the Congress that the thrift industry's problems were not just related to a then unfavorable interest rate spread, but that a much larger asset quality problem existed. GAO's annual financial statement audits of the deposit insurance funds and additional analyses of industry and regulatory problems showed that serious internal control weaknesses and deficient corporate governance as well as weaknesses in the regulatory structure were major factors contributing to the failure of thrifts and the subsequent cost to the taxpayers. GAO's work contributed to the development of legislation to address these identified weaknesses.

Year 2000 Computing Challenge

In early 1997 GAO alerted the Congress, through its High Risk series, to the government's exposure to Year 2000 risks. Working closely with the Congress, GAO issued over 70 reports detailing specific findings, made over 100 recommendations to agency heads and to the President's Council on Year 2000 Conversion to improve readiness and produced a set of three essential guides to help domestic and international organizations structure programs to confront the problem.

Information Security

During the last 4 years, GAO has played an instrumental role in focusing attention on actions needed to mitigate an alarming and increasing array of information security risks. From national security to personal privacy, GÃO has issued numerous reports identifying weaknesses and recommending corrective actions. GAO's reports have spurred congressional hearings on the topic, which have clarified the issues and set expectations for process and system reforms.

Nuclear Cleanup

In the early 1980's GAO began sounding the alarm about the ineffective safety oversight of the Department of Energy's nuclear facilities as well as the massive problems it faced in attempting to address the legacy of environmental contamination created by decades of nuclear weapons production. GAO also was the first to alert the Congress that the cost of cleanup would be over $100 billion—an estimate that has now grown to $235 billion.

Medicare

GAO reported to the Congress that excess payments were being made to Medicare home health providers and Medicare HMO's. The home health care industry was growing rapidly-from $2.7 billion in 1989 to $17.8 billion in 1997. During this growth, the government's scrutiny of contractors was decreasing. As for the Medicare HMO program, in one state alone, GAO identified over $1 billion in excess payments. The Congress spurred partially by such reports enacted the 1997 Balanced Budget Act provisions to curtail excess payments for such services.

DOD Purchasing and Inventory

Knowing that many of the Department of Defense's purchasing and inventory management goals were not dissimilar from private industry's, GAO devised a methodology to match DOD's practices against the best practices of industry and to demonstrate in its reports and testimonies better ways of doing business. In the inventory area the work has produced budgetary savings, legislative actions and improvements in DOD's operations. With regard to purchasing, top DOD management has incorporated GAO's recommendations into its own "acquisition reform” initiatives.

Food Safety

In 1992, GAO started a series of reviews that have highlighted fundamental weaknesses in government systems to ensure food safety. First, GAO pointed out that the poultry and meat inspection system which had been designed around the turn of the century to protect against health threats from diseased animals was no longer effective, hampered by inflexible legal requirements and outdated, labor in

tensive inspection methods. GAO also reported that testing for chemicals in food products could not detect or prevent contaminated food from entering the food supply. Since then a new approach to food safety regulation has been adopted that requires a scientific monitoring system and microbial testing for overall sanitary conditions.

Reengineering IRS

IRS collects $1.7 trillion a year to fund the federal government and likely has more interactions with the American public than any other government agency. GAO has, over many years, expressed concerns over management weaknesses at IRS and how those weaknesses are manifested in the treatment of taxpayers. In fact, 70 GAO reports were cited in the 1997 Report of the National Commission on Restructuring the IRS that led the way for the Restructuring and Reform Act of 1998 which promises improvements in IRS' internal management and computer modernization as well as the treatment of taxpayers.

Aviation Safety and Security

From air traffic control to aircraft maintenance to airport security, GAO has brought the need for improvements to the Congress' attention. GAO's report and testimony in the wake of the Valujet tragedy contributed to the Federal Aviation Administration's decision to make oversight of new airlines a top priority. GAO's testimony on foreign aircraft repair stations influenced the Congress to retain FAA's ability to certify and oversee these stations. In 1996 GAO recommendations led to legislation that required new security measures and require periodic reports to the Congress from FAA on the progress and efforts to improve aviation security. Children's Healthcare

Beginning in 1994, GAO began assessing the health insurance status of children and state programs aimed at expanding coverage for low-income children. GAO issued numerous reports and testified on the issues that resulted in widely quoted analyses documenting the failure to enroll almost 3.4 million eligible children into Medicaid. Subsequently, the Congress and the Administration enacted the state Children's Health Insurance Program. This is the largest health program implemented since Medicare and Medicaid and is funded at a level to reach about half the nation's estimated 9 to 11.6 million uninsured children.

HUD Reserves

TOP TEN FISCAL YEAR 1998 FINANCIAL ACCOMPLISHMENTS

Based on GAO's testimony, Congress rescinded $3.65 billion from HUD's assisted housing program because the large project reserves for section 8 housing far exceeded needs.

DOE Fund Management

GAO recommended that DOE develop a more effective methodology for analyzing its unneeded funds. As a result, DOE identified about $1.8 billion in excess funds. F-22 Fighter

GAO concluded that DOD planned to begin purchasing F-22 fighters before they had demonstrated that the aircraft would operate successfully. DOD subsequently delayed its plans to begin purchasing thereby eliminating 22 F-22 fighters and reducing the program requests for fiscal years 1998 and 1999 by about $1.6 billion.

Disability Benefits

To ensure that only the truly disabled were receiving benefits, GAO recommended that the Social Security Administration (SSA) increase its reviews of disability cases to identify person who, because of their current health condition or work status, were no longer eligible for benefits. In response, legislation was enacted that increased the number of reviews, and these additional reviews resulted in benefit terminations that saved the government about $1.5 billion over a two-year period. IRS Tax Systems

GAO recommended that IRS should restructure its Tax Systems Modernization program to address management and technical weaknesses and that the Congress limit funding until improvements are implemented. IRS is in the process of restructuring and funding was reduced by about $1.1 billion.

F/A-18 Aircraft

GAO's analysis showed that, for its cost, a new version of the F/A-18 aircraft offered only marginal operational improvement over existing versions. In response,

DOD reduced its plan buy from 1,000 to 548 aircraft, which reduced costs by about $1.02 billion in fiscal years 1998 and 1999.

DOE Budget

GAO suggested, as a result of its budget scrub work, that the Congress reduce portions of the Department of Energy's (DOE) request for its Environmental Management program; Congress reduced DOE's funding by about $773.9 million. Medicaid Drug Costs

GAO recommended to the Health Care Financing Administration that drug costs in the Medicaid program could be reduced if states installed automated systems to identify, prospectively, inappropriate prescriptions as well as those that could have adverse reactions. Estimated cost savings from implementing this suggestion totaled about $668 million fiscal years 1998 and 1999.

Superfund Contract Funds

GAO recognized that the Environmental Protection Agency was not recovering and using funds from Superfund contracts that were no longer needed. In addition, GAO informed the Congress that EPA was not using recent and more conservative data for estimating its budget needs. Congress did not provide the requested $650 million.

Medicare Oxygen Cost

GAO learned that Medicare payments for home oxygen were more generous than home oxygen payments made by the Veterans Administration. As a result, Congress reduced Medicare rates for home oxygen by 25 percent in fiscal year 1998 and an additional 5 percent in fiscal year 1999, reducing costs over a two-year period by about $633 million.

TOP TEN FISCAL YEAR 1998 NON-FINANCIAL ACCOMPLISHMENTS

Surface Transportation Act

The Intermodal Surface Transportation Efficiency Act expired at the end of fiscal year 1997. GAO's analyses and testimony in November of 1997 showed that individual states lacked sufficient funds to continue planned highway projects. Congress acted quickly and subsequently, on December 1, 1997 the President signed the Surface Transportation Act Extension that provided the needed funding.

Competitive Contracting

For several years GAO had reported that despite DOE's policy to use competitive contracting procedures, limited competition actually occurred. In response, Congress as part of the fiscal year 1998 appropriations act for DOE-precluded DOE from using appropriations for contracts that were not competed except in very limited circumstances.

IRS Computer Security

GAO summarized the computer security weaknesses identified at five IRS facilities that put critical federal operations and assets at risk. In response, IRS not only mitigated many of the risks associated with those facilities, but also responded to GAO's recommendations for entity-wide security management. IRS centralized the responsibility for security and privacy issues in an office charged with establishing and enforcing standards and policies for all major security programs including, but not limited to physical, data, and systems security.

Year 2000

To help federal agencies mitigate Year 2000 risks, GAO produced guides on business continuity and contingency planning and on testing. These guides are being used by the executive branch and are the foundation for Year 2000 business continuity and contingency planning and testing, which are critical elements to addressing this urgent computing challenge. These guides are also being widely used in the private sector and by other governments. In addition, GAO's reports and testimonies on Year 2000 readiness have included dozens of recommendations that have been adopted. For example, the President's Council on Year 2000 Conversion, in response to GAO's recommendation, adopted a sector-based focus to increase awareness and has begun developing a national assessment.

Defective Parts

In 1994 and again in 1998, GAO found that DOD was selling excess aircraft parts that were defective and could cause flight safety problems. In response, DOD estab