December 1993 59 Reports to Congress 4 Testimonies FINANCIAL MANAGEMENT: STRONG LEADERSHIP NEEDED TO IMPROVE ARMY'S FINANCIAL ACCOUNTABILITY The Army's financial accountability for billions of dollars in resources is seriously undercut by weaknesses in its disbursement systems, inadequate controls over computer processing of financial and logistics information, and limited progress in the Department of Defense's efforts to improve financial management. Overall, the lack of sustained Department leadership has impaired the Army's ability to strengthen financial accountability. (AIMD-94-12) REGULATORY BURDEN: RECENT STUDIES, Regulatory burden studies released in 1992 and 1993 highlighted major banking industry concerns about the cumulative burden from safety and soundness regulations, consumer protection requirements, and reporting requirements. Although these studies did not produce reliable estimates of the aggregate cost of banking industry regulation, they underscored concerns about the effect of the cumulative burden on the industry's competitiveness and ability to provide credit. Federal regulatory agencies initiated actions to reduce unnecessary regulations and streamline numerous supervisory processes. (GGD-94-28) FEDERAL HOME LOAN BANK SYSTEM: Congress overhauled regulation of the Federal Home Loan Bank System in 1989. In GAO's view, however, additional reforms are necessary, including (1) changing the way the System repays its share of the cost of the savings and loan bailout; (2) developing appropriate risk-based capital standards for System banks; (3) making membership in the System voluntary for all eligible financial institutions; and (4) merging the System's regulator with the Office of Federal Housing Enterprise Oversight, thereby creating a single safety and soundness regulator for all three housing-related government-sponsored enterprises. (GGD-94-38) HEALTH INSURANCE REGULATION: WIDE State insurance departments' authority for overseeing health insurers and protecting consumers extends over only part of the market and varies widely among states. About 24 percent of health care is paid for by private health insurance regulated by state insurance departments. As Congress reviews various proposals for health care reform, it needs to consider what role these state insurance departments will play in enforcing requirements that may be imposed on health insurers. (HRD-94-26) VA HEALTH CARE: VA MEDICAL CENTERS NEED TO IMPROVE MONITORING OF HIGH-RISK PATIENTS In a recent 2-year period, about 7,000 searches were conducted throughout the Department of Veterans Affairs (VA) system for high-risk patients—those unable to care for themselves-who had wandered away from their treatment settings. Although VA is working to develop procedures to search for such patients, it should also concentrate on reducing the need for searches by closely monitoring high-risk patients to prevent them from wandering away. (HRD-94-27) U.N. PEACEKEEPING: LESSONS LEARNED IN The capability of the United Nations to implement peacekeeping missions is limited, as evidenced by its operations in Cambodia and Somalia: (1) operational plans for the Cambodia mission were not fully prepared before deployment, (2) supplies and equipment for the Cambodia mission arrived long after deployment, and (3) military and civilian peacekeepers were deployed late for both missions. The two missions also illustrated the importance of clear mandates and a solid political framework for peace. (NSIAD-94-9) DAIRY INDUSTRY: POTENTIAL FOR AND BARRIERS TO MARKET DEVELOPMENT Since 1981, Congress has sought to reduce the U.S. dairy industry's dependence on federal financial support. As a result, the government's costs under the U.S. dairy program shrank from $2.7 billion in fiscal year 1983 to $395 million in fiscal year 1992. In addition, recent international trade agreements may promote freer trade, causing the U.S. dairy industry to be more responsive to market forces. (RCED-94-19) MANAGEMENT REFORM: GAO'S COMMENTS GAO generally agrees with the National Performance Review (NPR) report recommendations, which emphasize many basic themes stressed previously by GAO. The ultimate success of the NPR, however, will depend on the strategies and the action plans developed to implement the recommendations. Priority attention must be given to improving agencies' management capacities so they can assume additional authority and responsibility contemplated by the NPR and be held accountable for results. (OCG-94-1) January 1994 55 Reports to Congress 2 Testimonies STUDENT LOANS: MILLIONS LOANED The Department of Education is required to ensure that foreign medical schools are comparable to U.S. schools before allowing them to participate in the student loan program. However, the Department does not have adequate standards to ensure that the schools are comparable or enforce the few standards that exist nor do its procedures preclude students attending unapproved schools from receiving loans. As a result, the Department made $118 million in questionable loans between 1986 and 1991 to students attending foreign medical schools. (HEHS-94-28) PRESCRIPTION DRUGS: COMPANIES TYPICALLY On the basis of May 1992 price information, drug manufacturers charged 60 percent more for 77 commonly prescribed brand-name drugs in the United States than in the United Kingdom. The price differences were due mainly to the lack of regulatory constraints in the United States, not differences in manufacturers' costs. In the United Kingdom, the government health system, which is virtually the sole payer for prescription drugs, has an agreement with manufacturers that limits profits that they may earn on sales. (HEHS-94-29) |