GAO recommendations for enhancing the current strategy for managing and overseeing contracts in contingency areas such as Afghanistan.

OSHA is generally responsible for setting and enforcing occupational safety and health standards in the nation's workplaces. OSHA carries out enforcement directly in 34 states and territories, while the remaining 22 have chosen to administer their own enforcement programs (state-run programs) under plans approved by OSHA. GAO was asked to review issues related to state-run programs. This report examines (1) what challenges states face in administering their safety and health programs, and (2) how OSHA responds to state-run programs with performance issues. GAO reviewed relevant federal laws, regulations and OSHA policies; conducted a survey of 22 state-run programs; and interviewed officials in OSHA's national office, all 10 OSHA regions, and from a nongeneralizable sample of 5 state-run programs; and interviewed labor and business associations and safety and health experts. State-run programs face several challenges that primarily relate to staffing, and include having constrained budgets, according to OSHA and state officials. States have difficulty filling vacant inspector positions, obtaining training for inspectors, and retaining qualified inspectors. Recruiting inspectors is difficult due to the shortage of qualified candidates, relatively low state salaries, and hiring freezes. Although OSHA has taken steps to make its courses more accessible to states, obtaining inspector training continues to be difficult. According to an agency official, OSHA's Training Institute faces several challenges in delivering training, including recruiting and retaining instructors, difficulty accommodating the demand for training, and limitations in taking some courses to the field due to the need for special equipment and facilities. These challenges are further exacerbated by states' lack of travel funds, which limit state inspectors' access to OSHA training. Retaining qualified inspectors is another challenge among states. Officials noted that, once state inspectors are trained, they often leave for higher paying positions in the private sector or federal government. GAO's survey of the 22 state-run programs that cover private and public sector workplaces showed that turnover was more prevalent among safety inspectors than health inspectors. Nearly half of these states reported that at least 40 percent of their safety inspectors had fewer than 5 years of service. In contrast, half of the states reported that at least 40 percent of their health inspectors had more than 10 years of service. These staffing challenges have limited the capacity of some state-run programs to meet their inspection goals. OSHA has responded in a variety of ways to state-run programs with performance issues. These include closely monitoring and assisting such states, such as accompanying state staff during inspections and providing additional training on how to document inspections. OSHA has also drawn attention to poor state performance by communicating its concerns to the governor and other high-level state officials. In addition, OSHA has shared enforcement responsibilities with struggling states or, as a last resort, has resumed sole responsibility for federal enforcement when a state has voluntarily withdrawn its program. Although OSHA evaluates state-run programs during its annual reviews, GAO found that OSHA does not hold states accountable for addressing issues in a timely manner or establish time frames for when to resume federal enforcement when necessary. In addition, the current statutory framework may not permit OSHA to quickly resume concurrent enforcement authority with the state when a state is struggling with performance issues. As a result, a state's performance problems can continue for years. OSHA officials acknowledged the need for a mechanism that allows them to intervene more quickly in such circumstances. GAO-13-320

While VA treats the majority of veterans in VA-operated facilities, in some instances it must obtain the services of non-VA providers to ensure that veterans are provided timely and accessible care. These non-VA providers are commonly reimbursed by VA using a fee-for-service arrangement known as fee basis care. VA's fee basis care program has grown rapidly in recent years-rising from about 8 percent of VA's total health care services budget in fiscal year 2005 to about 11 percent in fiscal year 2012. GAO was asked to review fee basis care program spending and utilization and factors that influence VAMC fee basis utilization. This report examines how fee basis care spending and utilization changed from fiscal year 2008 to fiscal year 2012, factors that contribute to the use of fee basis care, and VA's oversight of fee basis care program spending and utilization. GAO reviewed relevant laws and regulations, VA policies, and fee basis spending and utilization data from fiscal year 2008 through fiscal year 2012. In addition, GAO reviewed the fee basis care operations of six selected VAMCs that varied in size, services offered, and geographic location. The Department of Veterans Affairs' (VA) fee basis care spending increased from about $3.04 billion in fiscal year 2008 to about $4.48 billion in fiscal year 2012. The slight decrease in fiscal year 2012 spending from the fiscal year 2011 level was due to VA's adoption of Medicare rates as its primary payment method for fee basis providers. VA's fee basis care utilization also increased from about 821,000 veterans in fiscal year 2008 to about 976,000 veterans in fiscal year 2012. GAO found that several factors affect VA medical centers' (VAMC) utilization of fee basis care-including veteran travel distances to VAMCs and goals for the maximum amount of time veterans should wait for VAMC-based appointments. VAMCs that GAO reviewed reported that they often use fee basis care to provide veterans with treatment closer to their homes-particularly for veterans who are not eligible for travel reimbursement. In addition, VAMC officials reported that veterans are often referred to fee basis providers to ensure that VAMC-based clinics that would otherwise treat them can meet established VA wait time goals for how long veterans wait for an appointment. However, GAO found that VA has not established goals for and does not track how long veterans wait to be seen by fee basis providers. VA's monitoring of fee basis care spending is limited because fee basis data do not currently include a claim number or other identifier that allows all charges from a single office visit with a fee basis provider or an inpatient hospital stay to be analyzed together. GAO found that without the ability to analyze spending in this way, VA is limited in its ability to assess the cost of fee basis care and verify that fee basis providers were paid appropriately. GAO-13-441

(GAO-12-73) Wildland fires can result from both natural and human causes. Human-caused wildland fires are of particular concern in Arizona--especially within 100 miles of the U.S.-Mexico border because this is a primary area of entry for illegal border crossers and GAO has previously reported that illegal border crossers have been suspected of igniting wildland fires. Over half of the land in the Arizona border region is managed by the federal government--primarily by the Department of Agriculture's Forest Service and four agencies within the Department of the Interior. These agencies collaborate with state, tribal, and local entities to respond to wildland fires. GAO was asked to examine, for the region, the (1) number, cause, size, and location of wildland fires from 2006 through 2010; (2) economic and environmental effects of human-caused wildland fires burning 10 or more acres; (3) extent to which illegal border crossers were the ignition source of wildland fires on federal lands; and (4) ways in which the presence of illegal border crossers has affected fire suppression activities. GAO reviewed interagency policies and procedures; analyzed wildland fire data; and interviewed federal, tribal, state, and local officials, as well as private citizens.From 2006 through 2010, at least 2,467 wildland fires occurred in the Arizona border region. Of this number, 2,126, or about 86 percent, were caused by human activity. The majority of these fires--1,364--burned less than 1 acre each. About 63 percent or 1,553 of the 2,467 fires were ignited on federally managed land or tribal land. Human-caused wildland fires that burned 10 or more acres had a number of economic and environmental impacts on the Arizona border region, but these impacts cannot be fully quantified because comprehensive data are not available. Specifically, these fires resulted in (1) over $35 million in fire suppression costs by federal and state agencies, (2) destruction of property, (3) impacts on ranching operations, and (4) impacts on tourism. Similarly, these fires had several environmental impacts, such as the expansion of nonnative plant species, degraded endangered species habitat, and soil erosion. However, the full economic and environmental impacts cannot be determined because complete information about these impacts is not available. The total number of fires ignited by illegal border crossers on federal lands in the Arizona border region is not fully known, in part because federal land management agencies have not conducted investigations of all human-caused wildland fires that occurred on these lands, as called for by agency policy, and the agencies do not have a strategy for selecting fires they do investigate. Agency policy notes that identifying trends in fire causes is critical to the success of fire prevention programs, but without better data on the specific ignition sources of human-caused wildland fires in the region, the agencies are hampered in their ability to target their efforts to prevent future wildland fires. The presence of illegal border crossers has complicated fire suppression activities in the Arizona border region. According to agency officials, the presence of illegal border crossers has increased concerns about firefighter safety and, in some instances, has required firefighters to change or limit the tactics they use in suppressing fires. The agencies have taken some steps to mitigate the risks to firefighters by, for example, using law enforcement to provide securityGAO recommends, among other things, that the agencies develop strategies for selecting fires to investigate and establish a risk-based approach for utilizing law enforcement resources. In their comments on a draft of this report, the Forest Service and the Department of the Interior generally agreed with these recommendations.

U.S. Customs and Border Protection (CBP) data indicate that arrests of CBP employees for corruption-related activities since fiscal years 2005 account for less than 1 percent of CBP's entire workforce per fiscal year. The majority of arrests of CBP employees were related to misconduct. There were 2,170 reported incidents of arrests for acts of misconduct such as domestic violence or driving under the influence from fiscal year 2005 through fiscal year 2012, and a total of 144 current or former CBP employees were arrested or indicted for corruption-related activities, such as the smuggling of aliens and drugs, of whom 125 have been convicted as of October 2012. Further, the majority of allegations against CBP employees since fiscal year 2006 occurred at locations along the southwest border. CBP officials have stated that they are concerned about the negative impact that these cases have on agency wide integrity. CBP employs screening tools to mitigate the risk of employee corruption and misconduct for both applicants (e.g., background investigations and polygraph examinations) and incumbent CBP officers and Border Patrol agents (e.g., random drug tests and periodic reinvestigations). However, CBP's Office of Internal Affairs (IA) does not have a mechanism to maintain and track data on which of its screening tools (e.g., background investigation or polygraph examination) provided the information used to determine which applicants were not suitable for hire. Maintaining and tracking such data is consistent with internal control standards and could better position CBP IA to gauge the relative effectiveness of its screening tools. CBP IA is also considering requiring periodic polygraphs for incumbent officers and agents; however, it has not yet fully assessed the feasibility of expanding the program. For example, CBP has not yet fully assessed the costs of implementing polygraph examinations on incumbent officers and agents, including costs for additional supervisors and adjudicators, or factors such as the trade-offs associated with testing incumbent officers and agents at various frequencies. A feasibility assessment of program expansion could better position CBP to determine whether and how to best achieve its goal of strengthening integrity-related controls for officers and agents. Further, CBP IA has not consistently conducted monthly quality assurance reviews of its adjudications since 2008, as required by internal policies, to help ensure that adjudicators are following procedures in evaluating the results of the preemployment and periodic background investigations. CBP IA officials stated that they have performed some of the required checks since 2008, but they could not provide data on how many checks were conducted. Without these quality assurance checks, it is difficult for CBP IA to determine the extent to which deficiencies, if any, exist in the adjudication process. CBP does not have an integrity strategy, as called for in its Fiscal Year 2009-2014 Strategic Plan. During the course of our review, CBP IA began drafting a strategy, but CBP IA's Assistant Commissioner stated the agency has not set target timelines for completing and implementing this strategy. Moreover, he stated that there has been significant cultural resistance among some CBP components in acknowledging CBP IA's authority for overseeing all integrity-related activities. Setting target timelines is consistent with program management standards and could help CBP monitor progress made toward the development and implementation of an agency wide strategy.

The IL "track"-one of five tracks within VA's VR&E program-provides a range of benefits to help veterans with service-connected disabilities live independently when employment is not considered feasible at the time they enter the VR&E program. These benefits can include counseling, assistive devices, and other services or equipment. GAO was asked to review issues related to the IL track. This report examines (1) the characteristics of veterans in the IL track, and the types and costs of benefits they were provided; (2) the extent to which their IL plans were completed, and the time it took to complete them; and (3) the extent to which the IL track has been administered appropriately and consistently across regional offices. To conduct this work, GAO analyzed VA administrative data from fiscal years 2008 to 2011, and reviewed a random, generalizable sample of 182 veterans who entered the IL track in fiscal year 2008. In addition, GAO visited five VA regional offices; interviewed agency officials and staff; and reviewed relevant federal laws, regulations, and agency policies and procedures. Of the 9,215 veterans who entered the Department of Veterans Affairs' (VA) Independent Living (IL) track within the Vocational Rehabilitation and Employment (VR&E) program in fiscal years 2008 to 2011, most were male Vietnam era veterans in their 50s or 60s. Almost 60 percent served in the U.S. Army, and fewer than 1 percent served in the National Guard or Reserve. The most prevalent disabilities among these veterans were post-traumatic stress disorder and tinnitus. GAO's review of 182 IL cases from fiscal year 2008 found that VR&E provided a range of IL benefits to veterans. Among these cases, the most common benefits were counseling services and computers. Less common benefits included gym memberships, camping equipment, and a boat. GAO estimated that VR&E spent nearly $14 million on benefits for veterans entering the IL track in fiscal year 2008-an average of almost $6,000 per IL veteran. Most veterans completed their IL plans, which identify their individual goals to live independently and the benefits VR&E will provide. About 89 percent of fiscal year 2008 IL veterans were considered by VR&E to be "rehabilitated," that is, generally, to have completed their IL plans by the end of fiscal year 2011. VR&E discontinued or closed about 5 percent of cases for various reasons, such as the veteran declined benefits. Six percent of cases were open at the end of fiscal year 2011. Because the complexity of IL cases varied depending on veterans' disabilities and needs, some cases were fairly simple for VR&E to close. For example, one IL case only called for the installation of door levers and a bathtub rail. Another more complex case involved the provision of a range of IL benefits, including home modifications. Rehabilitation rates across regions varied from 0 to 100 percent, and regions with larger IL caseloads generally rehabilitated a greater percentage of IL veterans. While IL plans nationwide were completed in 384 days, on average, completion times varied by region, from 150 to 895 days. VR&E exercises limited oversight to ensure appropriate and consistent administration of the IL track across its regions. While the law currently allows 2,700 veterans to enter the IL track annually, data used to monitor the cap are based on the number of IL plans developed, not on the number of individual veterans admitted. Veterans can have more than one plan in a fiscal year, so one veteran could be counted multiple times towards the cap. GAO-13-474

The military services have a degree of discretion regarding whether and how to apply Department of Defense (DOD) acquisition guidance for their uniform development and they varied in their usage of that guidance. As a result, the services had fragmented procedures for managing their uniform development programs, and did not consistently develop effective camouflage uniforms. GAO identified two key elements that are essential for producing successful outcomes in acquisitions: 1) using clear policies and procedures that are implemented consistently, and 2) obtaining effective information to make decisions, such as credible, reliable, and timely data. The Marine Corps followed these two key elements to produce a successful outcome, and developed a uniform that met its requirements. By contrast, two other services, the Army and Air Force, did not follow the two key elements; both services developed uniforms that did not meet mission requirements and had to replace them. Without additional guidance from DOD on the use of clear policies and procedures and a knowledge-based approach, the services may lack assurance that they have a disciplined approach to set requirements and develop new uniforms that meet operational needs. The military services' fragmented approach for acquiring uniforms has not ensured the development of joint criteria for new uniforms or achieved cost efficiency. DOD has not met a statutory requirement to establish joint criteria for future uniforms or taken steps to ensure that uniforms provide equivalent levels of performance and protection for service members, and the services have not pursued opportunities to seek to reduce clothing costs, such as by collaborating on uniform inventory costs. The National Defense Authorization Act for Fiscal Year 2010 required the military departments to establish joint criteria for future ground combat uniforms. The departments asked the Joint Clothing and Textiles Governance Board to develop the joint criteria, but the task is incomplete. If the services do not use joint criteria to guide their activities, one or more service may develop uniforms without certainty that the uniforms include the newest technology, advanced materials or designs, and meet an acceptable level of performance. Further, DOD does not have a means to ensure that the services meet statutory policy permitting the development of service-unique uniforms as long as the uniforms, to the maximum extent practicable, provide service members the equivalent levels of performance and protection and minimize the risk to individuals operating in the joint battle space. Without a policy to ensure that services develop and field uniforms with equivalent performance and protection, the services could fall short of protecting all service members equally, potentially exposing a number to unnecessary risks. Finally, the services may have opportunities for partnerships to reduce inventory costs for new uniforms. The Army may be able to save about $82 million if it can partner with another service. Under DOD guidance, the services are encouraged to actively seek to reduce costs. The Air Force has shown interest in the Army's current uniform development, but none of the services has agreed to partner with the Army on a new uniform. In the absence of a DOD requirement that the services collaborate to standardize the development and introduction of camouflage uniforms, the services may forego millions of dollars in potential cost savings. GAO recommends that DOD take four actions to improve the development of camouflage uniforms and enhance collaboration among the services: ensure that the services have and use clear policies and procedures and a knowledge-based approach, establish joint criteria, develop policy to ensure equivalent protection levels, and pursue partnerships where applicable to help reduce costs. DOD concurred with GAO's recommendations and identified planned actions.

According to 2010 data from the Department of Health and Human Services' Office of the Inspector General (HHS-OIG) and the Department of Justice (DOJ), 10,187 subjects--individuals and entities involved in fraud cases--were investigated for health care fraud, including fraud in Medicare, Medicaid, and the Children's Health Insurance Program (CHIP). These subjects included different types of providers and suppliers--such as physicians, hospitals, durable medical equipment suppliers, home health agencies, and pharmacies--that serve Medicare, Medicaid, and CHIP beneficiaries. For criminal cases in 2010, medical facilities--including medical centers, clinics, or practices--and durable medical equipment suppliers were the most-frequent subjects investigated. Hospitals and medical facilities were the most-frequent subjects investigated in civil fraud cases, including cases that resulted in judgments or settlements. Subjects of criminal cases: Many of the 7,848 criminal subjects in 2010 were medical facilities or durable medical equipment suppliers, representing about 40 percent of subjects of criminal cases. Similarly, in 2005, medical facilities and durable medical equipment suppliers accounted for 41 percent of criminal case subjects. Data from 2010 show that most of the subjects were in cases that were not referred by HHS-OIG to DOJ for prosecution (85 percent). Of the subjects whose cases were pursued, most were found guilty or pled guilty or no contest. Subjects of civil cases: Over one-third of the 2,339 subjects of civil cases in 2010 were hospitals and medical facilities. In 2010, about 35 percent more subjects were investigated in civil fraud cases than in 2005. Nearly half of the subjects of 2010 cases were pursued. Among the subjects whose cases were pursued, 55 percent resulted in judgments or settlements. Additionally, data from HHS-OIG show that nearly 2,200 individuals and entities were excluded from program participation for health care fraud convictions and other reasons, including license revocation and program-related convictions. About 60 percent of those individuals and entities excluded were in the nursing profession. Pharmacies or individuals affiliated with pharmacies were the next-largest provider type excluded, representing about 7 percent of those excluded. According to data GAO collected from 10 state Medicaid Fraud Control Units (MFCU), over 40 percent of the 2,742 subjects investigated for health care fraud in Medicaid and CHIP in 2010 were home health care providers and health care practitioners. Of the criminal cases pursued by these MFCUs, home health care providers comprised nearly 40 percent of criminal convictions and 45 percent of subjects sentenced in 2010. Civil health care fraud cases pursued by these MFCUs in 2010 resulted in judgments and settlements totaling nearly $829 million. Pharmaceutical manufacturers were to pay more than 60 percent ($509 million) of the total amount of civil judgments and settlements. GAO provided a draft of the report to DOJ and HHS. DOJ provided technical comments, which have been incorporated as appropriate.

GAO identified 15 key aerostat and airship efforts that were underway or had been initiated since 2007, and the Department of Defense (DOD) had or has primary responsibility for all of these efforts. None of the civil agency efforts met GAO's criteria for a key effort. Most of the aerostat and airship efforts have been fielded or completed, and are intended to provide intelligence, surveillance, and reconnaissance (ISR) support. The estimated total funding of these efforts was almost $7 billion from fiscal years 2007 through 2012. However, funding estimates beyond fiscal year 2012 decline precipitously for aerostat and airship efforts under development, although there is an expectation that investment in the area will continue. Three of the four aerostat and airship efforts under development, plus another airship development effort that was terminated in June 2012, have suffered from high acquisition risks because of significant technical challenges, such as overweight components, and difficulties with integration and software development, which, in turn, have driven up costs and delayed schedules. DOD has provided limited oversight to ensure coordination of its aerostat and airship development and acquisition efforts. Consequently, these efforts have not been effectively integrated into strategic frameworks, such as investment plans and roadmaps. At the time of GAO's review, DOD did not have comprehensive information on all its efforts nor its entire investment in aerostats and airships. Additionally, DOD's coordination efforts have been limited to specific technical activities, as opposed to having a higher level authority to ensure coordination is effective. DOD has recently taken steps to bolster oversight, including the appointment of a senior official responsible for the oversight and coordination of airship-related programs. However, as of August 2012, DOD has not defined the details relating to the authority, scope, and responsibilities of this new position. Whether these steps are sufficient largely depends on the direction DOD intends to take with aerostat and airship programs. If it decides to continue investing in efforts, more steps may be needed to shape these investments.

The VA operates one of the nation's largest health care delivery systems. Charged with addressing the issues of increasing medical demands and aging medical facilities, VA currently manages the construction of 50 major medical-facility projects, each costing at least $10 million, some in the hundreds of millions of dollars. As requested, GAO examined VA's management of such projects. GAO reviewed (1) changes to costs, schedule, and scope for selected new medical-facility construction projects and (2) actions VA has taken to improve management and any opportunities that exist for VA to improve its management of costs, schedule, and scope of these construction projects. GAO analyzed documents, VA data as of November 2012 on selected major construction projects, and interviewed VA officials, architecture and engineering, and construction firms. Costs substantially increased and schedules were delayed for Department of Veterans Affairs' (VA) largest medical-center construction projects in Denver, Colorado; Las Vegas, Nevada; New Orleans, Louisiana; and Orlando, Florida. As of November 2012, the cost increases for these projects ranged from 59 percent to 144 percent, with a total cost increase of nearly $1.5 billion and an average increase of approximately $366 million. The delays for these projects range from 14 to 74 months, resulting in an average delay of 35 months per project. In commenting on a draft of this report, VA contends that using the initial completion date from the construction contract would be more accurate than using the initial completion date provided to Congress; however, using this date would not account for how VA managed these projects prior to the award of the construction contract. Several factors, including changes to veterans' health care needs and site-acquisition issues contributed to increased costs and schedule delays at these sites. Although VA has taken some actions to address problems managing major construction projects, the agency has opportunities for further improvement. Construction management challenges remain, and opportunities exist for VA to avoid further cost increases and schedule delays. Given the complexity and speed of medical advances, many health care organizations have enlisted the services of experts in planning the procurement and installation of medical equipment for new medical centers. VA has used these planners at various phases for some projects and is reviewing its overall procurement of medical equipment. However, VA has not taken full advantage of medical equipment planners on all projects, in part because there is no guidance for doing so. Not using a medical equipment planner can lead to increased design and construction changes resulting in cost increases and schedule delays. VA has not yet clearly defined roles and responsibilities of VA construction management staff, even though the agency previously identified the need to do so. GAO found that conflicting direction from VA to contractors can cause some confusion and lead to cost increases and construction delays. For example, contractor officials at one site said that VA's project manager directed them to defer the design of specific rooms until medical equipment was selected for the facility; however, VA's central office then directed the contractor to proceed with designing the rooms. This conflicting direction from VA will require the contractor to redesign the space, further expending project resources. The federal government's regulations and VA's policy specify that changes to construction contracts, known as change orders, should be issued in a timely manner; however, VA's change-order approval process requires time-consuming reviews at multiple organizational levels that have resulted in extensive delays and increased costs for some projects. VA is reviewing options to shorten the decision cycle for approval of construction contract modifications but has not yet streamlined the process. GAO-13-302

The Postal Service Retiree Health Benefits Fund (PSRHBF) covered about 49 percent of the U.S. Postal Service's (USPS) $94 billion retiree health benefit liability at fiscal year-end 2012. USPS's deteriorating financial outlook, however, will make it difficult to continue the current prefunding schedule in the short term, and possibly to fully fund the remaining $48 billion unfunded liability over the remaining 44 years of the schedule on which the 2006 Postal Accountability and Enhancement Act (PAEA) was based. The liability covers the projected benefits for about 471,000 current postal retirees and a portion of the projected benefits for about 528,000 current employees; it does not cover employees not yet hired. Under PAEA, USPS is responsible for contributing an additional $33.9 billion to the PSRHBF by fiscal year 2017, including the $11.1 billion USPS has defaulted on over the past 2 years. PAEA also requires the Office of Personnel Management (OPM) to calculate the remaining unfunded liability in 2017 and develop an initial 40-year amortization payment schedule. USPS, however, projects further declines in mail volume and revenues that may continue to limit its ability to prefund the remaining retiree health benefit liability. GAO's analysis of maintaining current law requirements compared to five alternative approaches showed differing impacts on USPS's future annual payments and unfunded liabilities. For example, three of the approaches--1) the Administration's Approach, 2) Senate Bill (S. 1789) and 3) "Pay-as-You-Go" (no prefunding)--would reduce USPS's annual payments in the short term, thereby easing its immediate cash flow problems and financial losses. However, these approaches would increase USPS's unfunded liability, sometimes substantially, and require larger payments later. Deferring funding could increase costs for future ratepayers and increase the possibility that USPS may not be able to pay for some or all of its liability. Conversely, a fourth approach--the House Bill (H.R. 2309)--and the current law requirement would reduce USPS's unfunded liabilities more aggressively but may result in significantly higher USPS financial losses in the near future. If USPS stopped prefunding and let the existing fund grow with interest, the unfunded liability is projected to significantly increase. Under a fifth approach, if USPS stopped prefunding and used the existing fund to pay current and future premiums, the fund is projected to be exhausted by 2026. Private sector, state, local, and other federal entities are not required to prefund these benefits, though some do so to a limited extent, and most are required to recognize the future costs in their financial reporting. GAO identified several key considerations including: (1) the rationale and consequences of prefunding such benefits; (2) trade-offs affecting USPS's financial condition, such as sizes of the annual payments and unfunded liability; (3) fixed versus actuarially determined payments; (4) targeted funding levels; and (5) assumption criteria. USPS is intended to be a self-sustaining entity funded almost entirely by postal ratepayers, but its financial losses are challenging its sustainability. GAO has testified that USPS should prefund its retiree health benefit liabilities to the maximum extent that its finances permit, but none of the funding approaches may be viable unless USPS has the ability to make the payments. USPS's default on its last two required PSRHBF payments and its inability to borrow further make the need for a comprehensive package of actions to achieve sustainable financial viability even more urgent.

From 2004 through 2010, the number of self-referred and non-self-referred advanced imaging services--magnetic resonance imaging (MRI) and computed tomography (CT) services--both increased, with the larger increase among self-referred services. For example, the number of self-referred MRI services increased over this period by more than 80 percent, compared with an increase of 12 percent for non-self-referred MRI services. Likewise, the growth rate of expenditures for self-referred MRI and CT services was also higher than for non-self-referred MRI and CT services. GAO's analysis showed that providers' referrals of MRI and CT services substantially increased the year after they began to self-refer--that is, they purchased or leased imaging equipment, or joined a group practice that already self-referred. Providers that began self-referring in 2009--referred to as switchers--increased MRI and CT referrals on average by about 67 percent in 2010 compared to 2008. In the case of MRIs, the average number of referrals switchers made increased from 25.1 in 2008 to 42.0 in 2010. In contrast, the average number of referrals made by providers who remained self-referrers or non-self-referrers declined during this period. This comparison suggests that the increase in the average number of referrals for switchers was not due to a general increase in the use of imaging services among all providers. GAO's examination of all providers that referred an MRI or CT service in 2010 showed that self-referring providers referred about two times as many of these services as providers who did not self-refer. Differences persisted after accounting for practice size, specialty, geography, or patient characteristics. These two analyses suggest that financial incentives for self-referring providers were likely a major factor driving the increase in referrals. GAO estimates that in 2010, providers who self-referred likely made 400,000 more referrals for advanced imaging services than they would have if they were not self-referring. These additional referrals cost Medicare about $109 million. To the extent that these additional referrals were unnecessary, they pose unacceptable risks for beneficiaries, particularly in the case of CT services, which involve the use of ionizing radiation that has been linked to an increased risk of developing cancer.

GAO-12-86. On April 20, 2010, an explosion of the Deepwater Horizon oil rig leased by BP America Production Company (BP) resulted in a significant oil spill. GAO was requested to (1) identify the financial risks to the federal government resulting from oil spills, particularly Deepwater Horizon, (2) assess the Coast Guard's internal controls for ensuring that processes and payments for spill-related cost reimbursements and claims related to the spill are appropriate, and (3) describe the extent to which the federal government oversees the BP and Gulf Coast Claims Facility cost reimbursement and claims processes. We issued status reports in November 2010 and April 2011. This is the third and final report related to these objectives. We obtained and analyzed data on costs incurred from April 2010 through May 2011 and claims submitted and processed from September 2010 through May 2011. We reviewed relevant policies and procedures, interviewed officials and staff at key federal departments and agencies, and tested a sample of claims processed and cost reimbursements paid for compliance with internal controls. Both the individual circumstances of the Deepwater Horizon incident, as well as the overall framework for how the federal government responds to oil spills, present a mix of evolving, but as yet uncertain, financial risks to the federal government and its Oil Spill Liability Trust Fund (Fund). The extent of financial risks to the federal government from the Deepwater Horizon is closely tied to BP and the other responsible parties. BP established a $20 billion Trust to pay for individual and business claims and other expenses. As of May 31, 2011, BP has paid over $700 million of federal and state government costs for oil spill cleanup. Federal agency cleanup and restoration activities are under way and agencies continue to incur costs and submit them for reimbursement. However, the full extent of these costs, particularly those related to environmental cleanup, may not be fully realized for some time. As cleanup costs continue to mount, it is possible that expenditures from the Fund will reach the $1 billion total expenditure per incident cap. Expenditures were over $626 million on May 31, 2011. If these amounts reach the total expenditure cap of $1 billion, the Fund can no longer be used to make payments to reimburse agencies' costs (or to pay valid individual or business claims if not paid by the responsible parties). At that point, government agencies would no longer be able to obtain reimbursement for their costs. In November 2010, GAO suggested that Congress may want to consider setting a Fund per incident cap based on net expenditures (expenditures less reimbursement), rather than total expenditures. Finally, GAO found the federal government's longer-term ability to provide financial support in response to future oil spills is also at risk because the Fund's primary source of revenue, a tax on petroleum products, is scheduled to expire in 2017. GAO's testing of the Coast Guard's internal controls over Deepwater Horizon claims processed and cost reimbursements processed and paid showed that adjudicated claims processed and costs reimbursed were appropriate and properly documented. In November 2010, GAO made four recommendations regarding establishing and maintaining effective cost reimbursement policies and procedures for the Fund.

GAO - 12-151, Dodd-Frank Act Regulations, addresses The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) which requires or authorizes various federal financial regulators to issue hundreds of rules to implement reforms intended to strengthen the financial services industry. GAO is required to annually study financial services regulations. This report examines (1) the regulatory analyses, including cost-benefit analyses, financial regulators have performed to assess the impact of selected final rules issued pursuant to the Dodd-Frank Act; (2) how financial regulators consulted with each other in implementing the selected final rules to avoid duplication or conflicts; and (3) what is known about the impact of the final rules. GAO examined the 32 final Dodd-Frank Act rules in effect as of July 21, 2011; the regulatory analyses conducted for 10 of the 32 rules that allowed for some level of agency discretion; statutes and executive orders requiring agencies to perform regulatory analysis; and studies on the impact of the Dodd-Frank Act. GAO also interviewed regulators, academics, and industry representatives. Federal financial regulators are required to conduct a variety of regulatory analyses, but the requirements vary and none of the regulators are required to conduct benefit-cost analysis. All financial regulators must analyze the paperwork burden imposed by their rules and consider the impact of their rules on small entities as part of their rulemaking process. The Commodity Futures Trading Commission and the Securities and Exchange Commission are also required under their authorizing statutes to consider certain benefits and costs of their rules. As independent regulatory agencies, the federal financial regulators are not subject to executive orders requiring federal agencies to conduct detailed benefit-cost analysis in accordance with a guidance issued by the Office of Management and Budget (OMB). Financial regulators are not required to follow OMB's guidance, but most told GAO that they attempt to follow the guidance in principle or spirit. GAO's review of regulators' rulemaking policies and 10 final rules found inconsistencies in the extent to which OMB's guidance was reflected. GAO recommends that to the extent the regulators strive to follow OMB's guidance, they should take steps to more fully incorporate the guidance into their rulemaking policies and ensure that it is consistently followed. Although federal financial regulators have coordinated their rulemaking, they generally lacked formal policies to guide these efforts. The Dodd-Frank Act establishes interagency coordination requirements for certain agencies and for specific rules or subject matters. However, for other rules, the regulators have discretion as to whether interagency coordination should occur. The Financial Stability Oversight Council (FSOC) is tasked with facilitating coordination among member agencies but, to date, has played a limited role in doing so beyond its own rulemakings as it continues to define its role. Several regulators voluntarily coordinated with each other on some of the rules GAO reviewed. However, most of the regulators, including the Bureau of Consumer Financial Protection, lacked written protocols for interagency coordination, a leading practice that GAO has previously identified for interagency coordination. GAO recommends that FSOC work with the financial regulators to develop such protocols for Dodd-Frank Act rulemaking.

GAO-12-8. Threats to federal information technology (IT) infrastructure and systems continue to grow in number and sophistication. The ability to make federal IT infrastructure and systems secure depends on the knowledge, skills, and abilities of the federal and contractor workforce that implements and maintains these systems. In light of the importance of recruiting and retaining cybersecurity personnel, GAO was asked to assess (1) the extent to which federal agencies have implemented and established workforce planning practices for cybersecurity personnel and (2) the status of and plans for governmentwide cybersecurity workforce initiatives. GAO evaluated eight federal agencies with the highest IT budgets to determine their use of workforce planning practices for cybersecurity staff by analyzing plans, performance measures, and other information. GAO also reviewed plans and programs at agencies with responsibility for governmentwide cybersecurity workforce initiatives. Federal agencies have taken varied steps to implement workforce planning practices for cybersecurity personnel. Five of eight agencies, including the largest, the Department of Defense, have established cybersecurity workforce plans or other agencywide activities addressing cybersecurity workforce planning. However, all of the agencies GAO reviewed faced challenges determining the size of their cybersecurity workforce because of variations in how work is defined and the lack of an occupational series specific to cybersecurity. With respect to other workforce planning practices, all agencies had defined roles and responsibilities for their cybersecurity workforce, but these roles did not always align with guidelines issued by the federal Chief Information Officers Council and National Institute of Standards and Technology (NIST). Agencies reported challenges in filling highly technical positions, challenges due to the length and complexity of the federal hiring process, and discrepancies in compensation across agencies. Although most agencies used some form of incentives to support their cybersecurity workforce, none of the eight agencies had metrics to measure the effectiveness of these incentives. Finally, the robustness and availability of cybersecurity training and development programs varied significantly among the agencies. For example, the Departments of Commerce and Defense required cybersecurity personnel to obtain certifications and fulfill continuing education requirements. Other agencies used an informal or ad hoc approach to identifying required training. The federal government has begun several governmentwide initiatives to enhance the federal cybersecurity workforce. The National Initiative for Cybersecurity Education, coordinated by NIST, includes activities to examine and more clearly define the federal cybersecurity workforce structure and roles and responsibilities, and to improve cybersecurity workforce training. However, the initiative lacks plans defining tasks and milestones to achieve its objectives, a clear list of agency activities that are part of the initiative, and a means to measure the progress of each activity. The Chief Information Officers Council, NIST, Office of Personnel Management, and the Department of Homeland Security (DHS) have also taken steps to define skills, competencies, roles, and responsibilities for the federal cybersecurity workforce. However, these efforts overlap and are potentially duplicative, although officials from these agencies reported beginning to take steps to coordinate activities. Furthermore, there is no plan to promote use of the outcomes of these efforts by individual agencies.