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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. Cost 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,

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and to the American public for auditing, research, and evaluation. Within the context of changes currently being made and contemplated, the importance of these activities will increase.

Our panel did conclude that GAO “gotcha” reports—that is, narrow findings suitable for headlines that a public agency is doing something wrong, or could do something better--are often not useful. Historically, they do not lead to management improvement. In most cases they do not provide specific practical agendas for institutional change or clear estimates of the costs of recommended changes. Requests for GAO work for the purpose of creating scenarios for committee hearings critical of agencies, without comprehensive review of comparative costs and benefits of alternatives, often do not contribute to constructive improvements in government processes or outcomes.

2. Objectivity on the part of GAO and broad perception of its ability to carry out competent, fair and independent analysis are its most important assets. The panel recognized that in recent years, there has been considerable criticism about GAO's work, including concerns about its objectivity and impartiality. The panel found no evidence of deliberate partisan bias in GAO's work. The panel made several recommendations aimed at assuring the continuing objectivity and independence of GAO's work.

Congress should not lose sight of the fact that GAO is the American government's central auditing agency. All democratic industrialized nations have central auditing agencies which share professional values. Through foreign aid programs the United States is urging developing countries and the countries emerging from communism to create such agencies.

GAO's status as the government's central audit agency for audit and evaluation requires bipartisan trust. The panel's recommendations for serving that objective include sharing GAO's strategic planning and priority setting with its congressional oversight committees and others; its adherence to professional audit standards-including obtaining comments from audited agencies on all its reports; its adherence to professional program evaluation methods for studies in that category; and restraint on the part of congressional committee leadership and individual members in requesting GAO to undertake studies that will draw GAO into partisan issues that lack a solid factual base for empirical judgment.

Like most private sector businesses engaged in reorganization and reengineering, GAO should define and focus resources on its core activities, on those activities not provided by other sources and to which its legislated mission gives priority. If it is to maintain its objectivity and serve its core mission, GAO should not be expected to take positions on broad policy issues subject to political debate. Should taxes be cut? Should taxes be raised? Should government grow? Should government shrink? Should the federal government's responsibilities shrink and State and local govern. ment grow? These are not issues that belong on the agenda of the central audit agency. But GAO should build the capacity to assess how agencies are performing their identified public missions and how they are dealing with changes emerging from policy decisions, and also to assess the impacts of changes on both program costs and results.

3. The panel did not address the question which I understand is now a central concern of this Committee, namely the impact on GAO of a very substantial additional cut in its budget. The panel did note, however, that GAO was in the midst of a major downsizing at the time of our study. The size of GAO's staff had been relatively stable at about 5,100 from fiscal year 1979 through fiscal year 1992. GAO has downsized from 5,062 staff-years in fiscal year 1992 to 4,900 in fiscal year 1993 to 4,500 in fiscal year 1994. Consequently, immediate and significant additional reduction in GAO resources could adversely impact the organization's ability to carry out its statutory mission and respond to congressional requests for GAO services.

The panel found that Congress-through its committees and individual members—has requested from GAð a level of work that has severely taxed the agency's resources. GAO has tried to respond to every request from congressional committees and Members of Congress that falls within its general issue areas and does not unduly duplicate other work—often including requests generated by congressional staff of which the members themselves may not be fully aware. In addition, a considerable number of projects emerge from issues identified in prior GAO studies and from the internal GÃO strategic planning process which are usually supported by a congressional request letter. (For that reason, the panel noted that the percentage figures on the share of congressionally requested versus self-initiated work is of uncertain meaning.)

Although not designed to reduce costs or to downsize GAO, a number of the panel's recommendations could improve GAO's efficiency and effectiveness, because of their emphasis on preserving and improving quality and cost-effectiveness by mak

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