	Fiscal Year 2004 Performance and Results

In fiscal year 2004, much of our work examined the effectiveness of the  federal government’s day-to-day operations, such as administering benefits  to the elderly and other needy populations, providing grants and loans to  college students, and collecting taxes from businesses and individuals. For example, we continued to closely monitor  developments affecting the Iraq war, defense transformation, homeland  security, social security, health care, the U.S. See appendix I for our Strategic Plan Framework for serving the Congress  and the nation. Outcomes of Our Work

In fiscal year 2004, our work generated $44 billion in financial benefits,  primarily from recommendations we made to agencies and the Congress  (see fig. 1). Many of the benefits that result from our work cannot be measured in  dollar terms. During fiscal year 2004, we recorded a total of 1,197 other  benefits (see fig. 4). Putting these recommendations into practice is  generating tangible benefits for the American people. Testimonies That Serve the Congress

During fiscal year 2004, experts from our staff testified at 217  congressional hearings (see fig. 9) covering a wide range of complex  issues. Lasting solutions to high-risk problems offer the potential to save billions  of dollars, dramatically improve service to the American public, strengthen  public confidence and trust in the performance and accountability of our  national government, and ensure the ability of government to deliver on its  promises. Streamlining and Management Improvement Efforts

Shortly after I was appointed in November 1998, I determined that GAO  should undertake a major transformation effort to better enable it to “lead  by example” and better support the Congress in the 21st century. This  effort is consistent with the House Report 108-577 on the fiscal year 2005  legislative branch appropriation that focuses on improving the efficiency  and effectiveness of operations at legislative branch agencies. H.Rpt. On the basis of the strategic plan, we streamlined and realigned  the agency to eliminate a management layer, consolidated 35 issue areas  into 13 teams, and reduced our field offices from 16 to 11. This has  resulted in a 14 percent reduction in our support staff since 1998. Currently, as shown in figure 12, over 50 percent of our staff resources in  the support area are contractors, allowing us to devote more of our staff  resources to our mission work. We recently surveyed managers of agency  mission support operations and identified additional activities that  potentially could be filled through alternative sourcing strategies. In fiscal  years 2005 and 2006, we will assess the feasibility of alternative sourcing  for these activities using an acquisition sourcing maturity model and cost- benefit analyses. GAO’s Fiscal Year 2006 Request to Support the Congress

We are requesting budget authority of $493.5 million for fiscal year 2006. This budget request will allow us to continue to maximize productivity,  operate more effectively and efficiently, and maintain the progress we  have made in technology and other areas. However, it does not allow us  sufficient funding to support a staffing level of 3,269—the staffing level  that we requested in previous years. However, with about 80  percent of our budget composed of human capital costs, we needed to  constrain hiring to keep our fiscal year 2006 budget request modest. There are increasingly greater demands on GAO’s resources. In addition, the number of  congressional mandates for GAO studies, such as our reviews of executive  branch and legislative branch operations, has increased more than 15  percent since fiscal year 2000. While we have reduced our planned staffing  level for fiscal years 2005 and 2006, we believe that the staffing level we  requested in previous years is a more optimal staffing level for GAO and  would allow us to successfully meet the future needs of the Congress and  provide the return on investment that the Congress and the American  people expect. We will be seeking your commitment and support to  provide the funding needed to rebuild our staffing levels over the next few  fiscal years, especially as we approach a point where we may be able to  express an opinion on the federal government’s consolidated financial  statements. Given current and projected deficits and the demands  associated with managing a growing national debt, as well as challenges  facing the Congress to restructure federal programs, reevaluate the role of  government, and ensure accountability of federal agencies, a strong GAO  will result in substantially greater benefits to the Congress and the  American people. Table 2 summarizes the changes we are requesting in our fiscal year 2006  budget. We promote a workforce  that continually improves its skills and knowledge. We also will continue to modernize or develop systems focusing on how  analysts do their work. Due to recent budget constraints,  we have curtailed some efforts related to archiving paper records. Concluding Remarks

We appreciate your consideration of our budget request for fiscal year  2006 to support the Congress. GAO is uniquely positioned to help provide  the Congress the timely, objective information it needs to discharge its  constitutional responsibilities, especially in connection with oversight  matters. GAO’s work covers virtually every area in which the federal  government is or may become involved anywhere in the world. In the  years ahead, GAO’s support will prove even more critical because of the  pressures created by our nation’s large and growing long-term fiscal  imbalance.
Why GAO Did This Study

This testimony is in support of the fiscal year 2006 budget request for the U.S. Government Accountability Office (GAO). This request is necessary to help us continue 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. We are grateful to the Congress for providing us with the support and resources that have helped us in our quest to be a world-class professional services organization. We believe that investing in GAO produces a sound return and results in substantial benefits to the Congress and the American people. In the years ahead, our support to the Congress will likely prove even more critical because of the pressures created by our nation's current and projected budget deficit and long-term fiscal imbalance. These fiscal pressures will require the Congress to make tough choices regarding what the government should do, how it will do its work, who will help carry out its work in the future, and how government will be financed in the future. We summarized the larger challenges facing the federal government in our recently issued 21st Century Challenges report. In this report, we emphasize the critical need to bring the federal government's programs and policies into line with 21st century realities. Continuing on our current unsustainable fiscal path will gradually erode, if not suddenly damage, our economy, our standard of living, and ultimately our national security. We, therefore, must fundamentally reexamine major spending and tax policies and priorities in an effort to recapture our fiscal flexibility and ensure that our programs and priorities respond to emerging security, social, economic, and environmental changes and challenges in the years ahead. This testimony focuses on GAO's (1) performance and results with the funding Congress provided in fiscal year 2004, (2) streamlining and management improvement efforts under way, and (3) budget request for fiscal year 2006 to support the Congress and serve the American people.

What GAO Found

In summary, the funding we received in fiscal year 2004 allowed us to audit and evaluate a number of major topics of concern to the nation and, in some cases, the world. We also continued to raise concerns about the nation's long-term fiscal imbalance, summarized key health care statistics and published a proposed framework for related reforms, and provided staff support for the 9/11 Commission. In fiscal year 2004, we exceeded or equaled our all-time record for six of our seven key performance indicators while continuing to improve our client and employee feedback results. We documented $44 billion in financial benefits--a return of $95 for every dollar spent, or $13.7 million per employee. In fiscal year 2004, we also recorded 1,197 other benefits that could not be measured in dollar terms including benefits that helped to change laws, to improve services to the public and to promote sound agency and governmentwide management. Also, experts from our staff testified at 217 congressional hearings covering a wide range of important public policy issues during fiscal year 2004. Shortly after the Comptroller General was appointed, he determined that our agency would undertake a transformation effort. This effort is consistent with the elements of House Report (H.Rpt.) 108-577 that focus on improving the efficiency and effectiveness of operations at legislative branch agencies. Our transformation effort has enabled us to eliminate a management layer, streamline our organization, reduce our overall footprint, and centralize many of our support functions. Currently, over 50 percent of our support staff are contractors, allowing us to devote more of our staff resources to our mission work. We recently surveyed managers of agency support operations and identified additional activities that potentially could be filled through alternative sourcing strategies. In fiscal years 2005 and 2006, we will further assess the feasibility of using alternative sourcing for these activities. In developing our fiscal year 2006 budget, we have taken into consideration the overall federal budget constraints and the committee's desire to lead by example. Accordingly, we are requesting $493.5 million which represents a modest increase of 4 percent over fiscal year 2005. This increase is primarily for mandatory pay costs and price level changes. This budget request will allow us to continue to maximize productivity, operate more effectively and efficiently, and maintain the progress we have made in technology and other areas, but it does not allow us sufficient funding to support a staffing level of 3,269--the staffing level that we requested in previous years. Even as we are tempering our budget request, it needs to be acknowledged that there are increasing demands on GAO's resources. For example, the number of congressional mandates for GAO studies, such as GAO reviews of executive branch and legislative branch operations, has increased more than 15 percent since fiscal year 2000. While we have reduced our planned staffing level for fiscal years 2005 and 2006 in order to keep our request modest, we believe that the staffing level we requested in previous years is a more optimal staffing level for GAO and would allow us to better meet the needs of the Congress and provide the return on investment that both the Congress and the American people expect. We will be seeking Congressional commitment and support to provide the funding needed to rebuild our staffing levels over the next few fiscal years, especially as we approach a point where we may be able to express an opinion on the federal government's consolidated financial statements.