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GAO Says Its Recommendations Yielded $44B

Congress’ Investigative Arm Sought Many Changes to Federal Laws and Regulations

Congress’ chief investigative arm reported Friday that its recommendations yielded $44 billion in government savings and other benefits during the last fiscal year.

The Government Accountability Office said the amount — its highest-ever total in adjusted dollars — represented a savings of about $95 for each $1 the agency spent.

Of the total windfall, roughly 61 percent — or $27 billion — came from agency-inspired changes to federal laws or regulations.

The information comes from GAO’s highlights of its annual performance review. The original fiscal 2004 report, which laid out the same information in far greater detail, was released in November.

“It’s giving [lawmakers] an idea of what they’re getting for the appropriations they are giving us,” said Laura Kopelson, a GAO spokeswoman.

Overall, the report found that the GAO had met or surpassed six of the seven performance targets the agency set for itself. The sole area where GAO’s results lagged was timeliness, where the agency missed its on-time goal of 98 percent by 1 percentage point.

The agency put the net cost of its operations for the period at just over $490 million — up from roughly $471 million the previous year.

Kopelson cited the financial benefits outlined in the report as the most significant finding. But she also noted that the analysis revealed a number of additional benefits whose financial impact could not be quantified.

In addition to financial benefits, non-financial benefits and timeliness, the remaining performance measures used by GAO included the percentage of past recommendations that had been implemented; the number of new recommendations made; the percentage of new products with recommendations; and the number of testimonies provided to Congress.

Among these non-financial benefits were steps taken to “centralize” oversight of major contracts at the Pentagon. The agency said it also showed the Internal Revenue Service the “need for more specific criteria” in selecting which tax returns to audit from large corporations.

Among the financial benefits reported by GAO, the largest — totaling more than $10 billion — came from eliminating the “upper payment limit loophole” in Medicaid. That kept the federal government from having to make matching payments to states above those intended by the program.

Steps taken to update the Consumer Price Index also brought about significant financial benefits. The changes led to reduced expenditures for federal programs that use the CPI to determine benefits. They also raised revenues to the federal government by limiting the growth of personal exemptions in the income tax.

All told, the CPI changes created a windfall of roughly $5 billion.

Another $4.6 billion in benefits came from reductions in federal spending on home health care under Medicare. The agency had reported in 2002 that payments for those services “were, on average, about 35 percent higher than the estimated costs of home health care provided in the first six months of 2001,” according to the performance analysis.

GAO’s performance review is not mandated by Congress. Kopelson said the agency looks at it as a “report card” that identifies areas where there have been successes as well as those that need improvement.

“The goals change each year,” Kopelson said. “In some cases, it’s sort of a moving target.”

In setting a new mark for financial benefits, GAO surpassed its $35 billion target by $9 billion. The agency has set a goal of $37.5 billion in financial benefits for the current fiscal year.

Meanwhile, the agency surpassed its target number of new recommendations — 1,500 —by 76 percent. The performance review chalks up this surfeit to several reports it issued that covered the entire federal government and contained “numerous recommendations.”

The performance review describes a rigorous series of analyses that are done to determine the amount of financial benefit that results from agency work.

Every “accomplishment report” turned in by a GAO analyst is reviewed by a colleague who is not involved in the work and by a senior executive who oversees it. Moreover, claims of financial benefits of more than $100 million are each examined by GAO’s Quality and Continuous Improvement office; the agency’s Inspector General reviews all reports that claim more than $500 million in benefits.

About 95 percent of the financial benefits cited by GAO employees in fiscal 2004 exceeded $100 million.

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