In fiscal year 2003, GAO served the  Congress and the American people by helping to  identify steps to reduce improper payments and credit card fraud in  government programs; restructure government and improve its processes and systems to  maximize homeland security;   prepare the financial markets to continue operations if terrorism    update and strengthen government auditing standards;  improve the administration of Medicare as it undergoes reform;   encourage and help guide federal agency transformations;    contribute to congressional oversight of the federal income tax system;  identify human capital reforms needed at the Department of Defense,  the Department of Homeland Security, and other federal agencies; raise the visibility of long-term financial commitments and imbalances  in the federal budget; reduce security risks to information systems supporting the nation’s  critical infrastructures;   oversee programs to protect the health and safety of today’s workers;    ensure the accountability of federal agencies through audits and    serve as a model for other federal agencies by modernizing our  approaches to managing and compensating our people. In fiscal year 2003, our work generated $35.4 billion in financial benefits— a $78 return on every dollar appropriated to GAO. The funds made  available in response to our work may be used to reduce government  expenditures or reallocated by the Congress to other priority areas. Many of the benefits that flow to the American people from our work  cannot be measured in dollar terms. This is especially important in light of the nation’s large and growing long- term fiscal imbalance. The following figure highlights, by GAO’s  three external strategic goals for serving the Congress, examples of issues  on which we testified during fiscal year 2003. Maximizing GAO’s Effectiveness, Responsiveness, and Value

The results of our work were possible, in part, because of the changes we  have made to maximize the value of GAO. With the Congress’s support, we  have demonstrated that becoming world class does not require substantial  staffing increases, but rather maximizing the efficient and effective use of  the resources available to us. We are grateful to the Congress  for supporting our efforts through pending legislation that, if passed,  would give us additional human capital flexibilities that will allow us,  among other things, to move to an even more performance-based  compensation system and help to better position GAO for the future. GAO’s Fiscal Year 2005 Request to Support the Congress

GAO is requesting budget authority of $486 million for fiscal year 2005. This fiscal year  2005 budget request represents a modest increase of 4.9 percent over our  fiscal year 2004 projected operating level, primarily to fund mandatory pay  and related costs and estimated inflationary increases. The funding we received in fiscal year 2004 is allowing us to  conduct work that addressed many difficult issues confronting the nation. In keeping with  my strong belief that the federal government needs to exercise fiscal  discipline, our budget request for fiscal year 2005 is modest, but would  maintain our ability to provide first class, effective, and efficient support  to the Congress and the nation to meet 21st century challenges in these  critical times. Enhancing Quality of Care in Nursing Homes.
Why GAO Did This Study

GAO exists to support the Congress in meeting its constitutional responsibilities and to help improve the performance and ensure the accountability of the federal government for the benefit of the American people. In the years ahead, its support to the Congress will likely prove even more critical because of the pressures created by the nation's large and growing long-term fiscal imbalance, which is driven primarily by known demographic and rising health care trends. These pressures will require the Congress to make tough choices regarding what the government does, how it does business, and who will do the government's business in the future. GAO's work covers virtually every area in which the federal government is or may become involved, anywhere in the world. Perhaps just as importantly, GAO's work sometimes leads it to sound the alarm over problems looming just beyond the horizon--such as the nation's enormous long-term fiscal challenges--and help policymakers address these challenges in a timely and informed manner. The Comptroller General presented testimony that focused on GAO's progress during his first five years in office. He highlighted GAO's (1) fiscal year 2003 performance and results; (2) efforts to maximize its effectiveness, responsiveness, and value; and (3) budget request for fiscal year 2005 to support the Congress and serve the American people.

What GAO Found

The funding GAO received in fiscal year 2003 allowed it to conduct work that addressed many of the difficult issues confronting the nation, including diverse and diffuse security threats, selected government transformation challenges, and the nation's long-term fiscal imbalance. Its work was also driven by changing demographic trends, which led it to focus on such areas as the quality of care in the nation's nursing homes and the risks to the government's single-employer pension insurance program. Importantly, in fiscal year 2003, GAO generated a $78 return for each $1 appropriated to the agency. With the Congress's support, GAO demonstrated that becoming world class does not require a substantial increase in the number of staff authorized, but rather maximizing the efficient and effective use of the resources available to it. During tight budget times, human capital flexibilities would allow GAO, among other things, more options to deal with mandatory pay and related costs. In keeping with the Comptroller's belief that the federal government needs to exercise a greater degree of fiscal discipline, GAO has kept its request to $486 million, an increase of only 4.9 percent over fiscal year 2004. In keeping with the Congress's intent, GAO is continuing its efforts to revamp its budget presentation to make the linkages between funding and program areas more clear. Hopefully in the future the Congress will be able to use such performance information to make tough choices on funding, thereby enabling it to avoid across-the-board reductions that penalize agencies that exercise fiscal discipline and generate high returns on investment and real results.