TIME TO PUT UP OR SHUT UP

First Name:
Last Name:
Amount:

Click a Topic to Read and Research and then scroll down

Meet Senator Thompson

Saturday, April 21, 2007

Thompson Amendment On Homeland Security

Senate Approves Thompson Amendment to Reduce Government Bureaucracy and Improve Accountability in Homeland Security Efforts
Tuesday, September 17, 2002

Washington , DC - The U.S. Senate today adopted an amendment offered by Senator Fred Thompson (R-TN) to the National Homeland Security and Combating Terrorism Act. The Thompson amendment strikes portions of the legislation which would create a National Office for Combating Terrorism in the White House and the development of a duplicative national homeland security strategy.
The Thompson amendment was agreed to by a voice vote, after two failed attempts by Senators to kill or alter the amendment. A vote to table, or set aside, the Thompson amendment failed by a vote of 41-55 last week, with seven Democrats and one Independent voting with Republicans to keep the amendment pending. An attempt by Senators to offer a scaled back version of the Thompson amendment was eventually withdrawn after it was evident that there was not support to pass it. That cleared the way for the Thompson amendment to be adopted.
"This bill, as it is drafted now, mandates the development of a national strategy," Thompson said. "We have a national strategy, and we have had it since July. I don't know whether the idea is to set the old one aside and come up with a new one or submit the one the President has already put out again. This was a good idea back several months ago, but time has passed and things have changed."
Thompson opposed the creation of a statutory, Senate-confirmed White House position, that would have been created by the bill. He pointed out that the proposed office was redundant and unnecessary, because the White House has already established the Office of Homeland Security, currently headed by Governor Tom Ridge , and an Office of Combating Terrorism, which is part of the National Security Council. Both of these offices currently perform the functions and responsibilities sought for the proposed statutory White House Office. Thompson also opposed the bill's requirement to develop an additional homeland security strategy even though the White House already released one this summer.
While the President has also expressed his desire to have a confidential Homeland Security Advisor to advise him on domestic security issues, the director of the proposed statutory office would have been Senate-confirmed, and therefore required to testify before Congress.
"What concerns me about this bill is that in more than one instance there is an attempt to diminish the President's authority," said Thompson. "What I am suggesting is that the President ought to have a little flexibility in the White House to have a confidential advisor of his choosing to coordinate not only what is going on in the new Department, but the important homeland security entities that are not in the new Department. The Secretary of Homeland Security will be Senate confirmed, the therefore required to testify before Congress. This amendment does not diminish the authority of the Congress."
Thompson also expressed his concern that the budget review and certification authorities given to the new office would have given the director of the new office the ability to decertify - in essence veto - the defense budget, though this official would not have to balance the many competing needs of the Department.
# # #
A copy of the Thompson amendment that was adopted may be obtained at http://thompson.senate.gov
http://hsgac.senate.gov/091702press.htm

Thompson on $80 million wasted tax dollars

JUNE 16, 1999
Education Department Improperly Forgiving LoansNearly $80 Million in Taxpayer Dollars Wasted
Washington, DC – Senate Governmental Affairs Committee Chairman Fred Thompson (R-TN) today called on Education Secretary Richard Riley to adopt recommendations from a Department of Education Inspector General’s (IG) Report detailing the improper discharging of almost $80 million in loans under the Federal Family Education Loan Program (FFELP).
The IG reported that student loans are being discharged or forgiven by the Education Department on the basis of total and permanent disability and death even though the borrowers are apparently neither. The Higher Education Act provides for loan discharges when the borrower either becomes totally and permanently disabled or dies.
"Access to higher education is important to all Americans," said Senator Fred Thompson, Chairman of the Committee on Governmental Affairs, upon learning of mismanagement of the Federal Family Education Loan Program. "Yet millions of dollars appropriated for education are being wasted through mismanagement by the Department of Education. With a little better management, it could prevent the bilking of the student loan program."
According to the Education Department Inspector General, FFELP loans totaling over $292 million were discharged for borrowers claiming total and permanent disability. Over $216 million were discharged for borrowers who died. This occurred from July 1, 1994 through December 31, 1996.
The DOE IG matched all of the borrowers who received these disability and death discharges with the Social Security Administration’s (SSA) master earning records for 1997. The IG identified 9,798 individual borrowers, or 23 percent of the total disabled borrowers, who were earning wages after having over $73 million in loans forgiven. Further, 81 of these individuals earned more than $50,000 in 1997 after receiving a disability discharge.
The DOE IG also found that 708 borrowers who had received discharges totaling over $3.8 million because they claimed to be dead were actually earning wages after the discharge. Additionally, over the period studied by the DOE IG, over 6,800 new loans totaling almost $20 million have been awarded to borrowers who returned to school after previously having loans totaling nearly $11.5 million discharged due to total and permanent disability.
"Perhaps the most troubling fact is that the mismanagement in loan discharges has worsened in recent years," Senator Thompson said. According to the IG, "The amount of new loans awarded to borrowers with previous discharges for disability increased from about $1.9 million to $8.6 million, or 351 percent, from the 1994 to the 1997 award year."
In the report detailing improper loan discharges of almost $80 million in loans under the FFELP, the DOE IG made recommendations for improved management of the program.

http://hsgac.senate.gov/061699_press.htm

*Report On Manangement Challenges facing Federal Government

PREFACE
Waste, fraud, and abuse in the Federal government have become a cliché. The tremendous growth in the amount of money the Federal government wastes each year is too predictable. Stories in the press have numbed the American public to the fact that billions of dollars are squandered as the result of mismanagement or malfeasance.
Last year, I released a report by the General Accounting Office chronicling a disturbing trend in many Federal programs – improper payments. The report tallied improper payments in Federal programs at $19 billion for fiscal year 1998 alone. This year, such overpayments were estimated at almost $21 billion. And because only 14 programs actually estimate the amount of improper payments they make, the number is likely higher – much, much higher. But because there was scarcely a mention of the report in the press, commentator Paul Light mused in Government Executive magazine, "Perhaps Americans simply believe the war on waste cannot be won."
Other problems plaguing government operations are equally systemic. In 1990, the GAO began to compile a "high-risk list" of Federal programs and activities that were most vulnerable to waste, fraud, and abuse. This high-risk list started with 14 problem areas and has been expanded with every update issued by the GAO, listing problems like poor financial management, weak information security, and shoddy oversight of government contractors. The current list, released in 1999, includes 26 Federal agency problem areas. Although new areas are added regularly, few qualify for removal. In fact, only one high-risk area has been removed since 1995. Ten of the 14 original high-risk areas in 1990 remain on the list, despite the pressure to solve the problems.
A similar pattern is found in the reports of agency Inspectors General. In each of the past three years, the IGs of major Federal agencies reported to Congress the most serious performance problems their agencies faced. The problems identified by the IGs--like poor management of personnel, disastrous handling of major information technology projects, and ineffective controls over grant programs--remain much the same year after year.
The effect of this waste and mismanagement year after year is not inconsequential. Opinion polls consistently show low levels of public trust and confidence in the Federal government. These low expectations of Federal performance are the result of the constant barrage of information showing that Washington is wasting a significant proportion of the tax dollars Americans pay each year. In 1998, a survey conducted by the Washington-based Pew Research Center found that 64 percent of Americans view the government--with a burgeoning budget of over $2 trillion--as "inefficient and wasteful."
The key component lacking in Federal government management is accountability. The Federal government is so large and its policies are so cumbersome that no one is held accountable for the ineptitude with which its resources are managed. Until someone is held accountable for the mess the current government is in and until Congress stops throwing good money after bad, the problems will go on.
To its credit, Congress in 1993 enacted a law that attempts to make Federal agencies more accountable to the American people about how their resources are managed. The Government Performance and Results Act – the Results Act – tells agencies to define their mission, set goals, and report on the extent to which they are achieving them. I saw this as a chance to make agencies set goals to solve their major management problems and report on their progress to the Governmental Affairs Committee, which has responsibility for the efficiency of government operations.
In August 1999, I wrote to each major agency head and listed in detail the major management problems that have plagued their department or agency and asked them what they were doing about them. In my letter, I wrote that "it is essential that agency heads and other managers commit themselves to tangible steps that will eventually lead to solutions and that they accept accountability for following through on these commitments." The letter continued, "Without specific and measurable performance goals, it is difficult if not impossible to assess progress in addressing major management problems and to hold agencies accountable." After receiving agency responses, Committee staff met with representatives from each agency, their respective IGs, and GAO. This report recounts the experience of the Committee in gauging the progress of agencies in solving their major management problems.
It is clear to me from this process that there are pockets of progress throughout the Federal government. Generally, where such progress is occurring it is the result of dedicated civil servants and political appointees working diligently to instill performance based management in their agency. That is what it will take to solve many of these problems.
Unfortunately, in many agencies there is insufficient attention to the problems that are stifling effectiveness and draining precious resources. In those cases, agency leaders either don’t realize the severity of the problems or don’t think such "management minutiae" deserves their attention.
This report recounts the process by which we interviewed agency officials and provides some conclusions about the current state of management in the Federal government. Sound management policies are critical to the future success of this government in the new economy. We have a long way to go.

Fred Thompson
Chairman

http://hsgac.senate.gov/102700_preface.htm


EXECUTIVE SUMMARY
Since enactment of the Government Performance and Results Act – also known as "GPRA" or "the Results Act" – several independent assessments have shown that governmentwide implementation of GPRA has been uneven. One area where there have been too few results is addressing major management challenges that seem to persist year after year at many agencies. Senator Fred Thompson, Chairman of the Senate Governmental Affairs Committee, has urged Federal agencies to apply GPRA’s results-oriented principles—goal setting, performance measurement, and reporting—to address these major management problems. Without the consistent development and use of such goals and measures, it is difficult for congressional decision makers to assess agencies’ progress in addressing these problems.
On August 17, 1999, Chairman Thompson wrote individual letters to the heads of the 24 largest Federal agencies to request information on what actions they were taking to address their long-standing management challenges and to determine the extent to which agencies were using GPRA as a means to address these management problems. In these letters to the agencies, Chairman Thompson detailed each agency’s most serious management problems as identified by the General Accounting Office (GAO) and by each agency’s Inspector General (IG). Each letter contained an analysis by Committee staff of how well each of the 24 agencies’ annual Results Act Performance Plans for fiscal year 2000 addressed the agency’s major management challenges and how well the agency was responding to unresolved GAO and IG audit recommendations designed to remedy these major problems. In his letters to the agencies, Chairman Thompson requested that representatives of each agency meet with Committee staff to discuss the agency’s response to the Chairman’s letter and to follow up on the agency’s progress in using performance planning and reporting to address major management challenges and high-risk programs.
From November 1999 through June 2000, Committee staff met with management officials from each of the 24 agencies. The Committee staff’s meetings with agency officials and the reviews of agency documents revealed that agencies have not consistently developed performance goals and associated measures that directly address their respective management challenges and high-risk programs. The Committee staff found that 11 of the 24 agencies reported few, if any, specific and readily identifiable goals and measures that directly address their major management problems. Eight of the 24 agencies reported a moderate level of such goals and measures for these management challenges. Only 5 of the 24 agencies reported more extensive goals and measures that directly address these challenges.
The Committee staff’s review of agencies’ efforts unfortunately shows that the growing attention to management problems has been insufficient to meet the challenges they pose. Poor management of Federal agencies and programs still causes tremendous waste of Federal dollars and, in many cases, prevents the government from achieving its missions. To address continued concerns about agencies’ efforts to address their major management challenges, the Committee staff has identified some recommendations for improvement. These recommended actions include the following:
OMB should clarify and strongly enforce its Results Act guidance requiring agencies to develop and report on performance goals and measures that directly address major management challenges and high-risk programs. Although there has been some progress in this area, there are clearly too few goals and measures to address the many major challenges that exist today. In cases where agencies have valid reasons for not developing such goals and measures, the agency should describe how it is monitoring the progress in resolving these management challenges and how it is being held accountable to address these challenges.
Agencies should ensure that they include in their Performance Reports specific and credible information on how they plan to meet unmet goals in the future. The review of agencies’ Performance Reports clearly showed that some agencies were less than thorough in reporting this information.
OMB should develop and publish goals and measures for the Priority Management Objectives and report on the Federal government’s progress toward meeting these goals. Each year, OMB designates this list of significant management problems but currently monitors progress without the benefit of specific and publicly available measures.
Agencies should incorporate performance measures for major management challenges into the performance agreements of agency leaders and program managers. The success of the Results Act and performance-based management in Federal agencies depends in large part on the extent to which agency officials and employees understand the goals set forth by the agency and are held accountable for achieving them.
The IGs and GAO should take more direct and frequent action to follow up on what the agencies have done to respond to IG and GAO recommendations, particularly on key recommendations addressing critical management problems. The IGs should also provide more information on open recommendations in their semiannual reports, especially as such recommendations relate to the IG top-ten management challenges. Although many agencies are doing a respectable job in responding to GAO and IG recommendations, some agencies will require more active follow-up by the IGs and GAO on outstanding recommendations.
By implementing these recommendations, the Federal government can redouble its efforts to bring about a culture that values a results-oriented approach to managing Federal agencies and programs. Although establishing specific and measurable goals for these major management challenges can be a complex undertaking, the development and reporting of such goals is one of the most effective methods for ensuring accountability for achieving results.

http://hsgac.senate.gov/102700_summary.htm


INTRODUCTION AND BACKGROUND
During the 1990s, Congress enacted a broad statutory framework to improve the management and accountability of Federal agencies. At its centerpiece is the Government Performance and Results Act of 1993 (Public Law 103-62)—also known as "GPRA" or "the Results Act." GPRA is intended to improve the efficiency and effectiveness of Federal programs by establishing a system to set goals for program performance and to measure results. GPRA requires that Federal agencies establish long-term strategic goals, develop annual performance goals, measure their performance against those goals, and report publicly on how well they are doing. Agencies are to meet these requirements through the preparation of multiyear strategic plans, annual Performance Plans, and annual Performance Reports.
Since GPRA’s enactment, several independent assessments have shown that governmentwide implementation of GPRA has been uneven. One area where there have been too few results is addressing major management challenges that seem to persist year after year at many agencies. Committee Chairman Thompson has urged Federal agencies to apply results-oriented principles—goal setting, performance measurement, and reporting—to address these major management problems. Without the consistent development and use of such goals and measures, it is difficult for congressional decision makers to assess agencies’ progress in addressing these problems.
The Federal government’s response to the Year 2000 (Y2K) computer problem is illustrative of how a significant management challenge can be successfully addressed. With heightened public and media interest and a firm deadline of January 1, 2000, Congressional and Executive Branch decision makers were committed to dedicating sufficient resources to address the problem. Federal managers provided strong project leadership and sustained attention. Congressional oversight throughout the remedial phases of the Y2K effort also continued to ensure focus and attention on the issue. Lessons learned from the Y2K computer problem can clearly assist Federal managers in resolving many of these other management challenges and high-risk programs that continue to plague agencies year after year.
On August 17, 1999, Chairman Thompson wrote individual letters to the heads of the 24 largest Federal agencies to request information on what actions they were taking to address their long-standing management challenges and to determine the extent to which agencies were using GPRA as a means to address these management problems. In these letters to the agencies, Chairman Thompson detailed each agency’s most serious management problems as identified by the General Accounting Office (GAO) and by each agency’s Inspector General (IG). Each letter contained an analysis by Committee staff of how well each of the 24 agencies’ annual Results Act Performance Plans for fiscal year 2000 addresses the agency’s major management challenges and how well the agency is responding to unresolved GAO and IG audit recommendations designed to remedy these major problems. In his letters to the agencies, Chairman Thompson requested that representatives of each agency meet with Committee staff to discuss the agency’s response to the Chairman’s letter and to follow up on the agency’s progress in using performance planning and reporting to address major management challenges and high-risk programs.
From November 1999 through June 2000, Committee staff met with management officials from each of the 24 agencies. This report was prepared primarily on the basis of these meetings along with the committee’s examination of agencies’ Performance Plans and reports as well as analyses by GAO, the IGs, and the Congressional Research Service (CRS). Most if not all of the management challenges described in this report have been the subject of recurring reports by GAO, the IGs, and others.
.
http://hsgac.senate.gov/102700_intro.htm


AGENCY ACTIONS AND PLANS TO ADDRESS UNMET GOALS
In the annual Performance Report required under the Results Act, each agency must report the actual level of performance for each performance goal and compare these results to the target level of performance outlined in the agency’s annual Performance Plan. For every performance goal whose target level was not achieved, the agency should describe and explain (1) why the goal was not met, (2) the plans and schedules to meet the unmet goal in the future, and (3) if a performance goal is found to be impractical or infeasible, the reason that the particular goal is not practical or feasible and recommendations for a course of action for the goal. OMB’s guidance on preparing annual Performance Reports states that agencies must provide this explanation "even if the difference between the goal target level and actual performance is slight."
The Committee staff’s review of the fiscal year 1999 Performance Reports of the 24 agencies showed that agencies were not always straightforward in their methods of designating whether they had indeed met the level of targeted performance. For example, Commerce defined a goal as "met" if performance came within 10 percent of the target level and defined a goal as "substantially met" if performance exceeded two-thirds of the target level. NSF limited descriptions of its performance to "successful" or "marginally effective," ignoring "unsuccessful" or "unmet" as options.
A review of the Performance Reports also showed that agencies had mixed results in describing and explaining the reasons and future plans for unmet goals, including those related to major management challenges. The Performance Reports for DOT and USAID are good examples of agencies that seemed to make a concerted effort to address unmet goals. For each of their unmet goals—including management problems and high-risk programs—both DOT and USAID described and explained why the program was unable to achieve the goal and what actions they planned to take to meet the goal in the future. These two agencies demonstrated that a clear and thorough characterization of unmet goals is important to convince congressional decision makers and the public that agency management can adequately and appropriately respond to performance shortfalls.
Other agencies, however, were less than thorough in their Performance Reports in addressing unmet goals. The Justice Department, for example, repeatedly dismissed performance shortfalls in its Performance Report by using boilerplate statements that the deviation from targeted performance was "slight and did not affect overall program performance." FEMA also neglected to provide the reader of its Performance Report with much information about plans to address its unmet goals. The Commerce Department’s report described specific reasons for some unmet goals but provided little information about other unmet goals. For the its goal related to the average processing time for export control license applications, the Commerce Department’s Performance Report provided details about why the average processing time had increased to 40 days in 1999. However, for its goals related to patent and trademark services, Commerce often simply stated that "[m]eeting the target remains a challenge."
http://hsgac.senate.gov/102700_Agency%20Actions.htm

AGENCY EFFORTS TO RESPOND TO GAO AND IG RECOMMENDATIONS RELATED TO MANAGEMENT CHALLENGES
Corrective action taken by agency management on findings and recommendations from GAO and IG audit reports is essential to improving the effectiveness and efficiency of Federal government operations and resolving many long-standing management problems. In its guidance to Federal agencies, OMB states that management officials are responsible for receiving and analyzing GAO and IG audit reports, providing timely responses to the audit organization, and taking corrective action on the recommendations as appropriate. OMB notes that audit followup is an integral part of good management and that each agency should establish systems to assure the prompt and proper resolution and implementation of audit recommendations.
In his August 1999 letters to Federal agencies, Chairman Thompson stressed the need for agencies to resolve and implement audit recommendations related to each agency’s major management problems. He noted that according to information provided to the Committee by the respective IGs and GAO, many agencies continued to have a number of open audit recommendations that addressed these major management problems. In these letters, the Chairman also asked the agencies whether they disagreed with these GAO and IG recommendations and requested that the agencies comment on the specific actions that they were taking to implement those recommendations with which they generally agreed.
On the basis of agency responses to the Chairman’s letters and Committee staff meetings with agency officials, most agencies appear to have made some progress in taking timely and appropriate action to deal with the IG and GAO recommendations on management problems and in regularly tracking these open recommendations. The Interior Department, the Social Security Administration (SSA), and the Internal Revenue Service (IRS) are examples of agencies that have made concerted efforts to implement and clear open audit recommendations. Some agencies have established specific performance goals related to implementing audit recommendations. For example, Interior has set a goal for fiscal year 2001 to complete implementation of 75 percent of IG and GAO audit recommendations within 1 year of referral, and complete 80 percent of corrective action plans for material weaknesses by their original target date.
Some agencies, however, have been less attentive to resolving open recommendations with auditors. For example, the Department of Energy (DOE) demonstrated favorable progress in clearing open recommendations from the DOE IG but was less vigilant in clearing open GAO recommendations. DOE and GAO officials found that DOE had often taken remedial action but had not readily communicated the Department’s efforts to GAO to allow for the timely removal of the issue from GAO’s inventory of open recommendations. In another case, EPA’s IG informed Committee staff that, although EPA is generally receptive to the findings of the IG’s audit reports, the agency does not generally implement these recommendations in a prompt and timely manner.
http://hsgac.senate.gov/102700_Agency-GAO-IG.htm


CONCLUSIONS AND RECOMMENDATIONS
On the basis of meetings with agency officials and reviews of agency documents, the staff of the Senate Governmental Affairs Committee found that the 24 largest Federal agencies have not consistently developed performance goals and associated measures that directly address the agencies’ major management challenges and high-risk programs. The Committee staff’s analysis showed that 11 of the 24 reviewed agencies reported few, if any, specific and readily identifiable goals and measures that directly address their major management problems. Eight of the 24 agencies reported a moderate level of such goals and measures for these management challenges. Only 5 of the 24 agencies reported more extensive goals and measures that directly address these challenges.
Although the move toward performance-based government is positive, the attention to long-standing management problems unfortunately has been insufficient to meet the challenges they pose. Poor management of Federal agencies and programs still causes tremendous waste of Federal dollars and, in many cases, prevents the government from achieving its missions. The Federal government must concentrate its efforts to bring about a culture that values a results-oriented approach to managing Federal agencies and programs – one that emphasizes accountability and rewards results. Recommendations that will help in these efforts include the following.
OMB should clarify and strongly enforce its Results Act guidance requiring agencies to develop and report on performance goals and measures that directly address major management challenges and high-risk programs. Although there has been some progress in this area, there are clearly too few goals and measures to address the many major challenges that exist today. In cases where agencies have valid reasons for not developing such goals and measures, the agency should describe how it is monitoring the progress in resolving these management challenges and how it is being held accountable to address these challenges.
Agencies should ensure that they include in their Performance Reports specific and credible information on how they plan to meet unmet goals in the future. The review of agencies’ Performance Reports clearly showed that some agencies were less than thorough in reporting this information.
OMB should develop and publish goals and measures for the Priority Management Objectives and report on the Federal government’s progress toward meeting these goals. OMB currently monitors progress on the PMOs without the benefit of specific and publicly available measures.
Agencies should incorporate performance measures for major management challenges into the performance agreements of agency leaders and program managers. The success of the Results Act and performance-based management in Federal agencies depends in large part on the extent to which agency officials and employees understand the goals set forth by the agency and are held accountable for achieving them.
The IGs and GAO should take more direct and frequent action to follow up on what the agencies have done to respond to IG and GAO recommendations, particularly on key recommendations addressing critical management problems. The IGs should also provide more information on open recommendations in their semiannual reports, especially as such recommendations relate to the IG top-ten management challenges. Although many agencies are doing a respectable job in responding to GAO and IG recommendations, some agencies will require more active follow-up by the IGs and GAO on outstanding recommendations.

http://hsgac.senate.gov/102700_Conclusions.htm

Appendix: http://hsgac.senate.gov/102700_Appendix.pdf

the implementation of legislation creating the National Nuclear Security Administration

STATEMENT OF CHAIRMAN FRED THOMPSON
the Senate Energy and Natural Resources Committee on the implementation of legislation creating the National Nuclear Security Administration:

"Earlier this year, the Cox Committee in the House made the startling determination that design information of some of America’s most advanced nuclear weapons had been stolen from our nuclear weapons laboratories. These laboratories are under the control of the Department of Energy. The President’s Foreign Intelligence Advisory Board issued a subsequent report -- on which our Committees had an unprecedented 4-way joint hearing -- which found gross mismanagement within our nuclear weapons complex. Indeed, the entire bureaucratic structure and culture of the weapons complex was found to be inadequate and, therefore, the President’s Foreign Intelligence Advisory Board recommended that a new autonomous, or semi-autonomous, management organization be created.
"Because of the gravity of this situation for America’s national security, Congress acted in rare form. On a quick and overwhelmingly bipartisan vote, we enacted legislation to create a semi-autonomous weapons complex management organization within the Department of Energy. Indeed, each step of this process -- beginning with the issuance of the unanimous Cox Committee report to the enactment of recommended legislation -- has occurred with broad bipartisan Congressional consideration and support. And despite concerns expressed from within the Administration about this plan -- most particularly by Secretary Richardson -- the president signed the new DOE organization legislation into law on October 5, 1999.
"The President could have vetoed the bill, but he chose to sign it which gave it the force of law as soon as he signed it. That meant that the President’s constitutional duty to take care to faithfully execute the law immediately applied to that legislation.
"The legislation created a new Under Secretary of Energy. But under the law, two qualifications had to be met for a person to serve in this capacity. First, the individual could serve as Under Secretary only if he or she had extensive background in national security, organizational management, and appropriate technical fields, and was well qualified to manage the nuclear weapons, nonproliferation and materials disposition programs of the newly created National Nuclear Security Administration. And second, that individual could take office only if the President nominated him or her and the Senate gave its advice and consent to the nomination.
"The Under Secretary was also given authority to establish counterintelligence programs at each national security laboratory and each nuclear weapons production facility. His or her authority also includes establishing procedures for access to information and computers, and to ensure compliance with environmental, health, and safety requirements, as well as with federal acquisition regulations. And the Under Secretary reports to the Secretary of Energy. The bill also provides that each employee of the new NNSA is to be under the control of the Secretary acting through the Under Secretary.
"President Clinton, although required to follow this law, chose a third way of behavior. He signed the bill, but immediately directed Secretary Richardson to perform the duties of the Under Secretary. He has directed that other DOE officials perform duties in NNSA as well. It is as if the President has exercised a line item veto, signing the overall bill but denying effect to these provisions. That approach is unconstitutional.
"Consider all the ways in which the President has acted contrary to the law.
· First, he appointed someone to act as Under Secretary who does not meet the statutory eligibility criteria and who has not received the Senate’s confirmation.
· Second, although the law requires that the Under Secretary be given various types of authority at the labs, the Secretary is now to perform those duties. DOE employees are to perform duties that only NNSA employees by law may undertake.
· Third, the law requires those functions be performed under the direct supervision of the Under Secretary, not the Secretary. But now it is the Secretary who supervises them.
· And finally, the President has violated the Vacancies Act as well. The Vacancies Act provides the exclusive circumstances and procedures under which a President may designate acting officers to serve in lieu of Senate-confirmed officials. Since the circumstances that permit the President that power do not apply here, the President does not have the power to appoint Secretary Richardson or anyone else temporarily to the Under Secretary position.
"The President’s actions violate the Constitution’s separation of powers principle. The Congress denied the President the authority to make the Secretary of Energy responsible for the matters which the Under Secretary is to perform. It did so because the prior arrangement had led to dangerous situations in our nuclear weapons laboratories that demanded a new organizational arrangement. When the President makes the Secretary responsible for those matters, contrary to the directives that Congress made within its sphere of authority, he has violated the separation of powers. He is not faithfully executing the laws. And all this is occurring as he is unfairly and inaccurately criticizing the Senate for supposedly not fulfilling its constitutional duties with regard to appointments and other matters.
"On its surface, then, the question before us today is whether the Administration will implement critical changes to our national security structure. But the issue is really deeper than that. The heart of the matter before us is whether the President will implement the law as enacted by Congress and signed by him. No question is more important to the fundamental fabric of American government.
"The Senate must not let this situation go unaddressed. The suggestion that a law of the United States not be implemented unless some additional action is taken by Congress is to suggest that the law not be followed. That is not the way our system works and it can not be allowed to begin working that way. Most of the operative functions of the law in question take effect on March 1, 2000. This should provide ample time to clarify any chain-of-command issues that might be unclear. I would certainly be anxious and happy to work with the Secretary on clarifications.
"But the intent of Congress is clear: a semi-autonomous agency is to be established with the Department of Energy to manage the nuclear weapons labs. This agency is to be headed by a new Under Secretary for Nuclear Security whose nomination by the President is to be submitted to the Senate for advice and consent. The Secretary’s, and indeed the President’s, views of the merits of this law are not relevant. Once the law is signed, they do not have the choice to implement it, or not, depending upon their personal views
http://hsgac.senate.gov/101999_thompson.htm

Floor Statement 1 China Nonproliferation

FLOOR STATEMENT OF U.S. SENATOR FRED THOMPSONCHINA NONPROLIFERATION ACT
June 22, 2000

Mr. THOMPSON. Mr. President, normally I do not think that matters of trade should be encumbered by other non- trade considerations; however, in the case of China, the situation is different. Not only are we considering trade with someone other than an ally, someone other than a nation that shares our values and outlooks on life, but we are beginning a new relationship with a nation that is actively involved in activities that go against the national security of this nation, and go against the security of the entire world. China still is one of the world's leading proliferators of weapons of mass destruction. We are right now engaged in a debate in this country over a national missile defense, because of the activities of certain rogue nations and the weapons of mass destruction that they are rapidly developing. They're developing those weapons, Mr. President, in large part because of the assistance they're getting from the Chinese.
The Rumsfeld Commission reported in July of 1998 that "China poses a threat as a significant proliferator of ballistic missiles, weapons of mass destruction, and enabling technology. It has carried out extensive transfers to Iran's solid fuel ballistic missile program and has supplied Pakistan with a design for nuclear weapons and additional nuclear weapons assistance. It has even transferred complete ballistic missile systems to Saudi Arabia and Pakistan. China's behavior thus far makes it appear unlikely it will soon effectively reduce its country's sizable transfers of critical technologies, experts, or expertise, to the emerging missile powers."
Mr. President, I speak today not to get into the middle of the PNTR debate, because that is yet to come, but because something has come to my attention that I think deserves comment.
Under issue cover date of June 22 - today - The Far Eastern Economic Review reports this: "Robert Einhorn, the U.S. Assistant Secretary of State for Nonproliferation, left Hong Kong on June 11 with a small delegation bound for Beijing. Neither the American or Chinese side reported this trip. Einhorn is on a delicate mission to get a commitment from Beijing not to export missile technology and components to Iran and Pakistan. China has agreed in principle to resume nonproliferation discussions with the U.S. in July. But Einhorn's trip has an added urgency because recent U.S. intelligence reports suggest that China may have begun building a missile plant in Pakistan. If true, it would be the second Chinese-built plant there. A senior US official declined comment on the report, but said that Washington is concerned that China has resumed work on an M-11 missile plant it started building in Pakistan in 1990. Work stopped in 1996 when Pakistan, facing U.S. sanctions, pledged itself to good behavior."
Mr. President, if this report is true, I must say that it's totally consistent with everything else the Chinese have been doing over the past several years. In summary, they have materially assisted Pakistan's missile program; they have materially assisted North Korea's missile program; they have materially assisted Libya's missile program. They have now been responsible apparently for two missile plants in Pakistan. The India- Pakistan part of the
world is a nuclear tinder box. They are going after one other with tests of missiles with the Indians saying they're responding to the Pakistanis' tests. The Pakistanis in turn are developing capabilities almost solely dependent on the Chinese. All of this activity by China is in clear violation of the Missile Technology Control Regime, which they have agreed to adhere to. In addition, they have assisted in uranium and plutonium production in Pakistan. This is in violation of the Nuclear Nonproliferation Treaty. They have been of major assistance to the Iranian missile program. They have supplied guidance systems to the Iranians. They have helped them test flight their Shahab-3 missile. They have now successfully conducted a test flight of that missile. They have supplied raw materials and equipment for North Korea's missile program. Plus, in addition, they have supplied cruise missiles to Iran, and they have supplied chemicals and equipment and a plant to Iran to help them produce chemical weapons.
Now, all of these have to do with reports, most have to do with intelligence reports, that we have received in open session before Congressional committees year after year after year where the Chinese have promised that they would do better, promised that they would adhere to international regimes and norms of conduct, and they have consistently violated them. We cannot turn a blind eye to these factors as we consider PNTR.
What is to happen to a nation that will not protect itself against obvious threats to its national security? That's why, Mr. President, we have introduced a bill that will establish an annual review mechanism that assesses China's behavior with regard to the proliferation of weapons of mass destruction. And if it is determined that they continue in this conduct, we will have responses. They will be WTO-compliant; for the most part they will not be trade-related. They address things like Chinese access to our capital markets. They now are raising billions of dollars in our capital markets, and there's no transparency. We do not know what the monies are going for. We know precious little about the companies except that they are basically controlled by the Chinese government. Many people feel like the money is going back to enhance their military and other activities such as that. There needs to be transparency. They need to be told that if they continue with this pattern of making the world less safe, creating a situation where we even need to have to worry about a national missile defense system, assisting these rogue nations with the capability of hitting us with nuclear and biological and chemical weapons, that there's going to be a response by this country. It will be measured; it will be calculated; it will be careful; it will be tiered-up in severity based upon the level of their activities. And this is what we're going to be considering in conjunction with the PNTR debate.
I thought is was important that I bring this latest information concerning the Chinese activities in building apparently another missile plant in Pakistan, which is a nuclear tinder box, even at the time - even at the time - that we have under consideration permanent normal trade relations with them. That shows no respect for us; it shows no respect for the international regimes which seek to control such things, and it is time we got their attention. I yield the floor. http://web.archive.org/web/20021113060525/thompson.senate.gov/press/2000/speeches/fs062200.html

Floor Statement on China Nonproliferation Act

FLOOR STATEMENT OF U.S. SENATOR FRED THOMPSONCHINA NONPROLIFERATION ACT
July 10, 2000
Mr. THOMPSON. Madam President, I rose on the floor on June 22 to address a matter of great concern to everyone, the issue of proliferation of weapons of mass destruction.
A couple of years ago, I was watching late night television and ran across a seminar being conducted by former Senator Sam Nunn. Someone asked him during a question and answer period what he considered to be the greatest threat to the United States of America. He mentioned terrorism and the new emerging threat of weapons of mass destruction.
A short time after that, I was watching the Charlie Rose Show late one night with former Secretary of State Warren Christopher. When asked the same question, he gave the same answer: that post-Cold War, we have not concerned ourselves perhaps very much with some of these issues but that we should, and there are emerging threats out there.
I think the Senator from West Virginia is contemplating a proposal that deals with this very issue. I have been specifically concerned with that issue with regard to China for a couple of reasons: One, they continue to lead the nations of the world in the proliferation of weapons of mass destruction, according to our intelligence community; two, because we are now getting ready to embark on the issue of Permanent Normal Trade Relations with China.
Many of us are free traders; many of us believe in open markets; many of us want to support that. I think the majority of the Senate certainly does. Is there not any better time, and is it not incumbent upon us in the same general time-frame and the same general debate, that we couldn't, shouldn't, consider something so vitally important to this country as the issue of our nuclear trading partner, that we are being asked to embrace in a new world regime, that sits with us on the Security Council of the United Nations? Is it too much to ask of them to cease this dangerous proliferation of weapons of mass destruction and the supplying of these rogue nations with weapons of mass destruction--be they chemical, biological, or nuclear--which pose a threat to us?
We are considering now the issue of the national missile defense system. Many people in this Nation, I think a majority of people in this Congress, are very concerned that we have no defense against such a terrorist attack, an accidental attack, an attack by a rogue nation with weapons of mass destruction, and that we need such a missile defense.
One of the primary reasons we need a national missile defense system has to do with the activities of the Chinese and their supplying of rogue nations with these materials, expertise, capabilities, military parts that have nuclear capabilities which we are so concerned that, by the year of 2005, could be turned against us. Must we not consider this as we consider permanent normal trade relations? As important as trade is, is it more important than our national security? I think that question answers itself.
I pointed out on June 22 that the Rumsfeld Commission reported in July of 1998 that: China poses a threat as a significant proliferator of ballistic missiles, weapons of mass destruction, and enabling technology. The commission went on to say China's behavior thus far makes it appear unlikely that it will soon effectively reduce its country's sizable transfer of critical technologies, experts, or expertise to the emerging missile powers.
A little later, on June 22 of this year, the Far Eastern Economic Review reported that Robert Einhorn, the U.S. Assistant Secretary of State for Nonproliferation, left Hong Kong on June 11 with a small delegation bound for Beijing. The article said, ?Neither the American nor Chinese side reported this trip. Einhorn is on a delicate mission to get a commitment from Beijing not to export missile technology and components to Iran and Pakistan.' It went on to say, ?U.S. intelligence reports suggest that China may have begun building a missile plant in Pakistan. If true, it would be the second Chinese-built plant there.'
If that article is indeed true, it would certainly be consistent with what we know about other Chinese activities. There is a recent report that there is growing Chinese support for Libya and their missile program. We know they have supported the Iranian missile program. We know they have supported the North Korean missile program. So those are some of the things we discussed back on June 22.
Let's bring ourselves up to date now. Just this last Sunday, July 2, the New York Times reported, ?American intelligence agencies have told the Clinton administration and Congress that China has continued to aid Pakistan's effort to building long-range missiles that could carry nuclear weapons, according to several officials with access to intelligence reports.' The story goes on to say, ?China stepped up the shipment of specialty steels, guidance systems, and technical expertise to Pakistan . . . since 1998.'
That is very recent activity. Shipments to Pakistan have been continued over the past 8 to 18 months, according to this story. This, of course, would be in violation of the Missile Technology Control Regime to which the Chinese Government agreed to adhere. Strangely enough, weeks ago, our Secretary of State praised the Chinese for complying with the MTCR. It is pretty obvious now they are not complying. Some answers need to be forthcoming from the Secretary of State with regard to that.
But things are more serious than that because we now know, because of these recent developments and, perhaps, because of some of the issues we are considering in this Senate, the administration sent another envoy to the Chinese for 2 days of talks concerning some of these proliferation problems. On July 9, we got a report back from that latest trip, where our people went over there to plead with the Chinese to change their behavior at a time when we are about to consider permanent normal trade relations. We have gotten the results back. According to the New York Times on July 9, this visiting American official, who is Mr. J.D. Holum, adviser to the Secretary of State on arms control, said, ?After 2 days of talks, the Chinese would not allay concerns about recent Chinese help for Pakistan's ballistic missile program.' He is quoted here as saying, ?We raised our concern that China has provided aid to Pakistan and other countries.' That is according to Mr. Holum.
The article goes on to say, ?Some Chinese arms experts say that China is unlikely to promise to end exports of missile technology anytime soon because such trade, or the threat of it, gives China a bargaining chip over the scale of American weapons sold to Taiwan.'
Apparently, what the Chinese Government is saying is that as long as we assist Taiwan--which we are determined to do--for defensive purposes against the aggression of the Chinese Government, they are going to continue to assist these outlaw nations in their offensive designs that might be targeted toward the United States. That bears some serious consideration. The Chinese Government is saying if you continue to be friendly with Taiwan and assist them in defending themselves against us, we are going to continue to make the world more dangerous for you and the rest of the world by continuing to assist these nations of great concern. We have to ask ourselves: Are we willing to acquiesce to that kind of blackmail? We have a policy with regard to Taiwan. It is well stated. Are we going to withdraw our support for Taiwan, which might assist in doing something about this proliferation? I don't think so. I would certainly oppose it. I think most every Member of this body would oppose that. So you can take that option off the table.
What are we going to do? The other option would be to continue to sit pat, continue our policy, and see the continued proliferation of weapons of mass destruction. We will try to build a missile defense system that will catch them. While they are building up over there, we will build up over here.
There is a third option, of course. That is to tell the Chinese Government that, yes, we will trade with you; yes, we want to engage with you; yes, we will help you see progress in human rights and other issues; yes, we acknowledge you have taken a lot of people out of poverty and opened up your markets somewhat; yes, we will do all those things, but if you continue to do things that pose a mortal threat to the United States of America, we will respond to that in an economic way. There will be consequences to you.
It does not have to be directly related to trade. We can do some other things that would not hurt our people. For example, the Chinese have access to our capital markets. They raise billions of dollars in our capital markets. It is free and open to them. It is not transparent at all. We don't know what they do with that money. Some people think they use it to build up their army. But Chinese interests raise billions of dollars in our capital markets. Should we allow them to continue to doing that when they are supplying these rogue nations with weapons that are a threat to us? It makes no sense at all. Must we read in the paper someday that the North Koreans or the Iranians, sure enough, have a missile and have the nuclear capability of send a nuclear missile to the United States of America?
People say: They know they would be wiped off the face of the Earth. We could retaliate and they would never do something like that. Number one, we made a lot of mistakes in this country by assuming other people think the same way we do. Number two, I am not sure we are always going to be able to detect the source of a missile such as that. The United States would not likely, as some people say--having it trip off their tongue so easily--wipe a nation off the face of the Earth unless we were absolutely sure. So there is no need to go down that road. We must do something on the front end that will ameliorate the possibility of our ever getting into that situation and that condition. That is why 17 of my colleagues and I have proposed a bill called the China Nonproliferation Act, which basically calls for an annual assessment of the activities of the Chinese Government and Chinese Government-controlled entities within China, to see how they are doing on a yearly basis in terms of their proliferation activity. Then, if there is a finding that they continue their proliferation activity, the President has the authority to take action.
I believe that is the least we can do under the circumstances. Our bill has become quite controversial because many people think it complicates the issue of permanent normal trade relations with China. They do not want to do anything; they say--to hurt our exporters. We have made changes. No one can arguably say our bill hurts U.S. exporters now. We don't want to hurt our agricultural industry. We have made changes to accommodate that concern. We are not designing this in order to hurt our agricultural industry, so that is not an issue anymore.
When you get right down to it, the opponents of this bill are primarily concerned about doing anything to agitate the Chinese at a time in which we are trying to get permanent normal trade relations passed. I don't think we ought to gratuitously aggravate them. But if we are not prepared to risk the displeasure of a nation that is doing things that pose a mortal threat to our national security, what are we prepared to do?
What is more important than that? I am not saying let's cut off trade with them. I am not saying let's take action against them for precipitous reasons or reasons that are not well thought out. I am saying we must respond to these continued reports from the Rumsfeld Commission, from the Cox Commission, from our biennial intelligence assessments, from these reports from our own envoys coming back saying the Chinese are basically telling us to get lost. We know what they are doing, and they are apparently not even denying it anymore. And we are going to approve PNTR without even taking up this issue?
We are trying to get a vote on this bill. So far we have been unable to do so. I ask my colleagues to seriously consider what kind of signal we are going to be sending. We talk a lot about signals around here. I ask what kind of signal we are going to be sending to the Chinese Government, to our allies, to the rest of the world, if we are not willing to take steps to defend ourselves? A great country that is unwilling to defend itself will not be a great country forever.
I yield the floor.http://web.archive.org/web/20021113061015/thompson.senate.gov/press/2000/speeches/fs071000.html

Oak Ridge Nuclear Plant Protection

Thompson Praises $25 Million in Security Funding for Y-12 in Terrorism Supplemental

WASHINGTON ? U.S. Senator Fred Thompson (R-TN) today praised the inclusion of $25.1 million for security improvements at the Y-12 plant in Oak Ridge in the Fiscal Year 2002 terrorism supplemental conference report.
"Strengthening security at our nuclear weapons facilities is a critical element of our homeland security," Senator Thompson said. "These sites are well protected, but we must be sure that they are fully equipped to deal with all of the threats we face."
The funding approved by the conference committee can be used for security upgrades such as additional physical barriers, increased force protection, and the consolidation of nuclear materials, among other things.
"This additional funding will cover the improvements that Y-12 has already made in the wake of the September 11 attacks, and will enable them to continue working to make the plant more secure," Thompson continued. "I applaud the appropriators for responding to our request."
The conference report was approved by the conference committee today, and is expected to be considered by the full House and Senate in the near future.

http://web.archive.org/web/20021027032635/thompson.senate.gov/press/2002/releases/pr071802.html

Senator Thompson helped define the new Homeland Security Department

Senate Homeland Security Bill Includes Thompson Lanuage on National Labs

WASHINGTON ? U.S. Senator Fred Thompson (R-TN) today announced that the Senate Homeland Security bill includes language crafted by Senators Pete Domenici (R-NM) and Thompson to allow the new Department of Homeland Security to benefit from the capabilities of the Department of Energy national laboratories, including the Oak Ridge National Laboratory in Tennessee.
"The national laboratories are one of our most valuable assets," Senator Thompson said. "They have much to contribute to the goal of homeland security, and the new Department will benefit greatly from the capabilities and expertise that they possess.
The language proposed will allow the Department of Homeland Security to enter into joint sponsorship arrangements with the national laboratories in order to support homeland security research and development. Under these joint sponsorship arrangements, the Secretary of Homeland Security will be able to directly fund and manage work performed by the labs on behalf of the new Department.
"This will help to ensure that we are applying the best minds we have to the problem that we face: how best to protect our country and provide for the security of our people," Thompson said.
The language proposed by Senators Thompson and Domenici would:
establish within the new Department an Office for National Laboratories, which will be responsible for the coordination and utilization of the Department of Energy national laboratories in a manner to create a networked laboratory system in support of the Department's missions;
allow the Department of Homeland Security to enter into joint sponsorship arrangements with one or more national laboratories in order to support homeland security research and development; and
permit the Department of Homeland Security to directly fund and manage work carried out on its behalf by a national laboratory under a joint sponsorship arrangement.
"This language will give the new Department access to all of the national laboratories on an equal basis," Thompson said. "It does not set up a ?lead laboratory' but instead creates a level playing field for all the labs."
The Senate Governmental Affairs Committee, on which Thompson serves as the Ranking Republican, will mark up the Homeland Security measure today. It will then be considered on the Senate floor as a Committee amendment to S. 2452, legislation which was previously reported by the Governmental Affairs Committee and is now pending on the Senate calendar. It is expected to be considered by the full Senate next week.

http://web.archive.org/web/20021027034417/thompson.senate.gov/press/2002/releases/pr072402b.html

Senator Thompson's Amendment on Aviation Security Press Release

November 16, 2001
House/Senate Conferees Adopt Thompson Amendment Requiring Strict Performance Standards for Aviation Security

Measure Provides Accountability to Aviation Security Bill
WASHINGTON - The House/Senate Conference on the Aviation Security Bill today adopted an amendment by Senate Governmental Affairs Committee Ranking Member Fred Thompson (R-TN) to the Aviation Security Act requiring the federal government to enforce strict standards for airport security personnel. The Thompson measure requires that those responsible for airport security be held accountable for meeting measurable performance goals, particularly involving the detection of dangerous objects.
"We're changing the basic mindset with regard to measuring airport security performance," Thompson said, noting that in the past government performance standards have focused on measuring things such as time spent training and hours worked between breaks.
"The primary concern of the American people is the bottom line - whether or not dangerous objects are getting past screeners and whether or not unauthorized individuals are gaining access to secure areas in our airports. That's what people care about, that's what we're going to measure from now on, and that's how employee performance will be judged," Thompson said. "This is the kind of thing that will restore confidence in air travel."
At a Wednesday, November 14 Governmental Affairs Committee hearing on aviation security, Department of Transportation Inspector General Kenneth Mead testified that in order to improve aviation security, we must "require passenger and baggage screeners to have uniform, more rigorous . . . performance standards nationwide." He applauded the Thompson amendment to the Aviation Security Act, calling the requirement to set measurable goals and objectives for aviation security "particularly noteworthy. It is important that performance standards be established for screeners, whether they are federal or contract employees," Mead stated.
Thompson's amendment requires the new head of aviation security to implement results-based management in airport security operations by establishing an annual staff performance management system that includes requiring managers and employees to meet individual, group, and organizational performance goals consistent with an annual performance plan.
The Thompson amendment also requires the new head of aviation security to establish specific performance standards and establish a long-term process for reporting performance results to Congress annually.

http://web.archive.org/web/20021104010224/thompson.senate.gov/press/2001/releases/pr111601.htm

Vote Comparisons

A vote by vote comparison of Senators Fred Thompson, John McCain, Sam Brownback, and Chuck Hagel can be found here:
http://www.cqpolitics.com/pdfs/2007_3_27thompson-keyvotes.pdf

Senator Thompson: Balancing Trade & Security in the 21st Century

The following is a speech given by Senator Thompson called "Balancing Trade and Security in the 21st Century." Thompson, who is an expert in foriegn policy, spoke to the Heritage Foundation on March 3, 2001.


Balancing Trade and Security in the 21st Century
Statement of the Honorable Fred Thompson (R-TN)
Chairman, Senate Committee on Governmental Affairs P
resented at The Heritage Foundation
March 3, 2000 Washington, DC

Good afternoon. I want to talk to you for a few minutes about the convergence and the upcoming clash between two areas of vital concern to the United States: trade and national security. With regard to national security, the central fact is this: because of the proliferation of weapons of mass destruction, the world is a more dangerous place in many respects than ever before. I remember a couple of years ago tuning into C-Span late one Saturday evening. Former Senator Sam Nunn was speaking to the University of Houston. He spoke of what he considered to be the most dangerous threats to our country. First on his list was the proliferation of weapons of mass destruction. Several evenings later, I tuned into the Charlie Rose show. His guest was former Secretary of State Warren Christopher. He listed his threats to the future security of the United States. Number one on his list was the proliferation of weapons of mass destruction. They had seen the problem from the inside. Since then, there has been a steady drum beat of warnings. Congress received the Rumsfeld Report, published in July 1998, which stated: "Ballistic missiles armed with WMD payloads pose a strategic threat to the United States. This is not a distant threat. A new strategic environment now gives emerging ballistic missile powers the capacity, through a combination of domestic development and foreign assistance, to acquire the means to strike the U.S. within about five years of a decision to acquire such a capability." Since it is almost certain that rogue states made such a decision years ago, the conclusion is that states like Iran and North Korea may be able to strike United States' territory in under five years, if they cannot already do so. Certainly they, along with Iraq, Syria, Libya, and others today can strike our allies and our troops stationed abroad. Shortly after that, North Korea surprised our intelligence agencies by successfully launching a three-stage rocket over Japan, essentially confirming the Rumsfeld conclusions. In July, 1999 the Deutch Commission concluded that "weapons of mass destruction pose a grave threat to U. S. citizens and military forces, to our allies and to our vital interest in many regions of the world." Last September the Intelligence Community released a new national intelligence estimate of the ballistic missile threat. This report asserted that, "during the next 15 years, the United States most likely will face ICBM threats from Russia, China and North Korea, probably from Iran and possibly from Iraq." The report concluded that North Korea could deliver a light payload - sufficient for a biological or chemical weapon - to the United States, now. It also said that some rogue states may have ICBMs much sooner than previously thought and those missiles will be more sophisticated and dangerous than previously estimated. The September 1999 estimate also concluded that there is now a greater risk of WMD attack upon the United States or US forces or interests than "during most of the Cold War." The classified briefings are even more disconcerting. So we have been told in numerous ways on numerous days of this threat facing our country. And, although it has amazingly received little attention in the media and has been met with little action by our nation's leadership, this direct and growing threat to our national security has to be at the very top of our priority list. The writers of the Constitution understood that protecting national security is our first priority. The second point I would like to make is that this threat to our national security is being fueled in no small measure by the Peoples Republic of China. The Director of the CIA has stated that China is perhaps the most significant supplier of weapons of mass destruction and missile technology to the world. Countries around the world from Asia to Africa to the Middle East are rapidly building up their nuclear and missile capabilities and are being supplied all or in part by China. The Rumsfeld Commission reported that: "China also poses a threat to the U.S. as a significant proliferator of ballistic missiles, weapons of mass destruction and enabling technologies. It has carried out extensive transfers to Iran's solid-fueled ballistic missile program. It has supplied Pakistan with a design for a nuclear weapon and additional nuclear weapons assistance." The CIA report provided to Congress in late January said that as late as June of last year, "firms in China provided missile-related items, raw materials and/or assistance to several countries of proliferation concern" including Iran, North Korea and Pakistan. And that's just the stuff we know about. Because of China's help, some of these rogue nations are now developing their own manufacturing facilities and have started to trade among themselves. What has been the Administration's response to this unbroken pattern of reckless activity producing a real and imminent danger to the United States? They have responded with an incredible amount of negligence and naivete. With an attitude of engagement at all cost, they have rarely missed an opportunity to excuse or overlook China's behavior. They refuse to sanction the PRC even though the law requires it and our intelligence community produces clear and unambiguous evidence of their proliferation activities. When the Chinese break a promise, the Administration's remedy is to get a new promise. We catch the PRC selling M-ll ballistic missiles to Pakistan, but we are told that we only have proof that they transferred missile transport canisters. We couldn't prove, the Administration said, that there were actually missiles inside the canisters. When sales of missiles or nuclear-related equipment or technology have been discovered, the Administration has raised the standard of proof required by our intelligence community to almost unreachable heights. As the President himself has said, in order to achieve the Administration's policy goals they have to "fudge" the facts sometimes so that a conclusion of no violation can be the result. The Chinese sell ring magnets to a Pakistani nuclear facility in violation of the Nuclear Non-Proliferation Treaty but the Administration says we can't prove that China's senior-most leaders approved the sale. The list goes on and on. There has been, in short, a complete disconnect between U.S. policy, China's behavior, and our response. Not content to turn a blind eye toward China's proliferation activities, the Administration has actively contributed to the problem by weakening export controls. First, the Administration helped dissolve COCOM in 1994-and fashion a feckless substitute---so that there was no longer any international regime with any real teeth to control the sale of dual-use technologies. Then they proceeded to weaken our system for the benefit of Ron Brown, the Commerce Department and political contributors. In the six years since the Export Administration Act expired in 1994, the Administration: -- Approved export licenses over the objections of the Departments of State or Defense; -- Gave the Secretary of Commerce greater authority and discretion to manage the export licensing program; -- Reduced the amount of time available for agencies to conduct application reviews by 25%; -- Oversaw a Post Shipment Verification process that has dismally low inspection rates. For example, out of the 191 high performance computers shipped to China in 1998, only one post shipment verification occurred; -- According to testimony before our Governmental Affairs Committee, Clinton Administration officials - even within the Pentagon - have ignored, hassled and pressured technical experts who had the temerity to raise questions about proposed export licenses. The Defense Technology Security Agency, or DTSA, was even marginalized physically, its office having been literally moved out of the Pentagon. Lest we forget, this is the same Administration that transferred all commercial satellites from the U.S. Munitions List to the Commerce Control List so that if the Administration were ever forced to impose missile proliferation sanctions on China, at least we would still be free to do satellite deals with them. And, of course, we know at least some in the Pentagon believe that satellite technology transfers have already damaged our national security, since the same technology necessary to place a satellite in orbit also place ICBMs into space. It must amuse and baffle the Chinese that we are so casual with regard to our sensitive military-related technology in dealing with them, at the same time they are supplying terrorist nations with the ability to reach the United States with weapons of mass destruction. In August 1998, after many of the Administration's various export control problems had come to light, I wrote to the Inspector Generals at six federal agencies: Commerce, Defense, State, Treasury, Energy, and the CIA. I asked them to undertake a comprehensive review of US export control practices, and then report their findings back to the Governmental Affairs Committee -- which I chair. Their reports and testimony revealed a system full of holes -- one clearly favoring trade over national security. For example: -- Although the law requires it, not one of the six agencies has a formal program for training licensing officers; -- Commerce does not properly check to see if the conditions imposed upon export licenses are complied with, so they don't know if product diversion is taking place; -- Pre-license checks and post shipment verifications are often canceled by Commerce without notice to other agencies; -- There are no effective procedures in place to control or monitor sensitive dual-use technology information shared with foreign nationals who visit the US, despite the fact that export licenses are required for these information transfers; -- Finally, even though the law requires it, our government has no overall system for analyzing the cumulative effect of our exports to other countries. The net effect of all these changes, poor administration, and general lack of concern for security, has been the loosening of important export control restrictions, and the markedly increased availability of important technologies. This has damaged America's national security by allowing potential adversaries to advance their WMD and missile programs, as well as close the technological gap when it comes to military hardware, precision munitions, advanced communications, overhead surveillance, and so on. Therefore, we have the following situation: 1) We clearly face a dangerous and increasing threat to our national security; 2) China is making significant contributions to that threat; and 3) The United States is acting as if the threat doesn't exist. By turning a blind eye to China's proliferation, dismantling the international export control regime, and emasculating our own export controls, we are jeopardizing our national security in many ways -- most importantly our plans for a national missile defense system. I recently returned with a Congressional delegation from Munich where we met with our European allies. The question of whether there is really a rogue nation threat to the U.S. was clearly an important issue to them in determining if they were going to support our national missile defense plans. The Administration's actions, however, would indicate that we have very little concern about WMD threats. This mismatch between rhetoric and action regarding the threat and export controls sends a mixed message to our allies, and frustrates our attempts to build support for our strategic goals. This is the background from which we will soon be dealing with the WTO matter and the Senate consideration of permanent normal trade relations with China. I believe that this debate must bring these national security issues into play. In light of what we have just recounted, how can we consider this as simply a trade issue? If, in fact, China is contributing to a threat to this country's national security, and if, in fact, up until now we have misguidedly sent signals to them and the rest of the world that we do not take the matter seriously, then we must take steps to: 1) avail ourselves of any opportunity to encourage a change of attitude by PRC, and 2) demonstrate emphatically to China, our allies, and the rest of the world, that, this Administration's actions notwithstanding, the United States takes the matter of proliferation very seriously. I believe that the WTO debate gives us that opportunity. It can raise these national security issues to the level of public attention and Congressional consideration which they have long deserved. We should not complicate an opportunity to expand trade, however, without good reason. Trade liberalization has been of great benefit to the United States. Generally speaking, I believe we should do everything that we can to help open up markets. Expanding trade makes for market economies, which the world is now enjoying in record numbers. Market economies lead to greater economic freedom, which may lead to political reform. But arguments for free trade alone don't resolve the tensions between trade and security. It is time that the Administration and other supporters consider the fact that permanent NTR may not pass unless, in conjunction with its passage, certain other things happen that will help change the PRC's behavior regarding proliferation. Of course, we could just vote down PNTR to China. This would certainly make a statement to the world that we are serious. It would undoubtedly shock the Chinese who must think they have a locked deal since they show no hesitancy in threatening to invade Taiwan, embarrassing our high-level diplomatic delegation and reminding us of their ability to lob an ICBM onto one of our cities -- all practically on the eve of PNTR consideration. We would still have trade with China, since it would be to their benefit as well as ours, though not under the more preferable conditions agreed to in the bilateral. But would denial of PNTR benefit US national security? There is little doubt in my mind that after an initial cooling off period, China would have a powerful incentive to alter its behavior in order to obtain PNTR. However, denial of PNTR would probably be a one time lever. We could probably make gains with a denial, but if we then granted it later, as we probably would, all of our leverage would be gone. What we really are seeking instead is a sustained ability to influence Chinese behavior. Other down sides are obvious -- both to our commercial interest and the risk of seriously unraveling a relationship between the two countries that is not doing too well as it is. Chinese reformers have put their reputations and credibility on the line. So should we then grant PNTR -- straight out? There is little question that the bilateral that has been negotiated is favorable to us in many respects. As I've suggested, there are many potential benefits from expanded trade. However, I am convinced that continuing to ignore China's consistent pattern of conduct, which is inimical to our national security would be a mistake in the long run. It is often said that the Chinese think in much longer time frames than we do. It would be folly to be so concerned with economic benefits and our immediate relationship with the current leaders of China that we do nothing to minimize the long-term dangers we face. A third option would be to pass PNTR with amendments that would enhance our anti- proliferation efforts. We can't amend the bilateral treaty with China, but we can amend the permanent NTR legislation in ways that have nothing to do with trade. I think there may be many good ways to do this. -- First, we can begin by establishing an annual review mechanism that assesses China's behavior. -- Next, we need strong principled leadership from the President and Congress on these national security matters. We can start by passing an Export Administration Act that balances trade with national security-as opposed to the current proposed legislation that would further loosen export controls. -- Third, the United States should work with the other industrialized countries, beginning with our Allies, to establish a new multilateral export control regime. This will not come easily or quickly, but given time, effort and the right initiatives, I am confident that we can achieve this end. -- Fourth, we should look at adding or incorporating parts of the Taiwan Security Enhancement Act into such an amendment. Perhaps conditioning or triggering parts of that Act on China's behavior. Finally, another intriguing ideas was implicit in some of the findings of the Cox Committee and the Deutch Commission. The Cox Committee reported that "the (PRC) is using capital markets as a source of central government funding for military and commercial development." Let me expand on this. According to recent estimates, the PRC is presently involved in U.S. bond markets to the tune of approximately $14.5 billion. I believe that this may be an economic lever that could be used. We already know that we are financing some bad actors, including a notorious PRC arms dealer. In fact, the PRC, itself, is the largest Chinese borrower of dollars in the United States -- some $3.2 billion in sovereign bond offerings. We have no idea what these funds were used for. That is why we should also pass legislation which brings greater transparency to all foreign companies that use our markets. The SEC provides little information on these companies now, many of whom, in the case of China, are front companies. We need to require more detailed information in prospectuses regarding the specific identity and activities of foreign government related firms applying for entry into our capital markets. This would give pension fund managers something to look at in order for them to develop their own national security criteria for investments. This would also give Congress, as part of an annual review, a mechanism whereby companies, or even countries, who engage in proliferation activities are denied access to our debt and equity markets. This is leverage. Perhaps enough to cause China to reconsider some of those missile sales. The threat of denying MFN each year was empty and the Chinese knew it. However, these statutory provisions, perhaps along with others, would be a card we could actively play without damaging ourselves. In conclusion, it goes without saying that we do not want a shaky relationship with a country as important as China to degenerate further for any appreciable period of time. It is equally obvious that a policy of all carrots and no sticks, has not improved our relationship with China; we must demonstrate strength as well as restraint to them and the rest of the world. I believe that involves engaging and trading and hoping for the best while at the same time establishing a frame work in which the Chinese can be penalized for bad behavior. I do not believe we should take the one approach without the other. Not when our national security is involved. Thank you (end text)

(Distributed by the Office of International Information Programs, U.S. Department of State - http://www.usinfo.state.gov/)

*Part I: Financial Management Issues

Senator Fred Thompson
On Management Challenges
Facing the Bush Administration
2000

After George W. Bush was elected President, Senator Thompson (then Chairman of the Committee On Governmental Affairs in the U. S. Senate), presented a report called “Management Challenges Facing The New Administration.” This report contains recommendations and advice to the President-Elect on how to deal with financial management issues, federal workforce challenges, and results-oriented government. This is relevant because it gives insight into how a Thompson administration would deal with these national issues, and also, it allows readers to see the vast amount of knowledge Senator Thompson has on government management.

Part I:

FINANCIAL MANAGEMENT ISSUES: This report Senator Thompson gave describes the core capacity problems facing the Federal Government in the year 2000, giving its root causes, and ways of fixing them.


PART 1: FINANCIAL MANAGEMENT ISSUES
INTRODUCTION
On the eve of the upcoming elections and transition to a new Administration and a new Congress, attention centers on policy agendas. However, for our new leaders to succeed with their agendas, they also will need to focus on how the Federal Government executes policy. The work of the Governmental Affairs Committee in recent years points to a series of core capacity problems that pervade the Federal Government and severely limit its ability to implement policies and accomplish its missions. The problems, which are interrelated, include Federal financial management issues, Federal workforce (or ‘‘human capital’’) challenges, and the need for results-oriented governance in the Federal sector.
Capacity problems of the magnitude that face the Federal Government would trigger the immediate and urgent attention of any rational private sector executive. Unfortunately, these problems have festered for years under the radar screens of Federal policymakers.
Continued inattention to these problems will threaten the ability of our new leaders to implement their policy agendas and to provide our citizens the essential services they need and deserve.
As one writer pointedly observed:
[L]ike any good chief executive officer, the President can ill afford to ignore some of the less sexy—but no less important—issues that plague the Federal Government. Tackling problems with the employee merit system, improving agency performance and implementing information technology management reforms won’t get George W. Bush or Al Gore on the front pages of The New York Times or The Washington Post. But ignoring them could.1 The extent of the capacity problems facing the Federal Government is not open to serious question. These problems have been documented repeatedly by the General Accounting Office (GAO), agency Inspectors General (IGs), and other objective sources. The problems are not ideological or partisan. They pose the same obstacles to achieving policy objectives of the left or the right, of Republicans or Democrats. Therefore, resolving them should be a priority for the next Administration and Congress regardless of their political makeup.
Daunting as many of the problems may be, they are solvable. In most cases, it is clear what needs to be done. The main challenge is mustering the will to resolve them and the commitment to follow through until the job is done. The solutions usually center on sustained attention and cooperation by both the Executive Branch and Congress. While some additional legislation may be necessary, our statute books already contain the basic tools to do the job. Targeted funding often will be needed. However, the necessary investments, even when substantial, pale in comparison to the waste that can be eliminated and the performance improvements that can be obtained. Senator Fred Thompson, Chairman of the Governmental Affairs Committee, issues this series of transition reports to focus on the three core capacity problems that will face the incoming Administration and Congress: Financial Management Issues (Part 1), Federal Workforce Challenges (Part 2), and Results-Oriented Governance (Part 3). These transition reports describe the three problems, discuss their nature and root causes, and propose ways of solving them. The reports are intended to stimulate action on the part of our incoming leaders and provide them a useful framework for this important task.

OVERVIEW AND SUMMARY
This is one in a series of transition reports that describe core capacity problems facing the Federal Government, discuss their nature and root causes, and propose ways of solving them. The reports are intended to stimulate action on the part of the incoming Administration and Congress, and to provide them a framework for this important task. This report deals with the need for results oriented governance at the Federal level. Other reports address Federal workforce challenges and the need for results-oriented governance at the Federal level.
The vast majority of Federal agencies lack financial systems that can provide reliable information on a real-time basis to support policy-making and day-to-day management of Federal operations. Federal financial management problems are deep-seated and challenging. IGs have listed financial management as one of the ‘‘top 10’’ most serious problems facing 21 of the 24 major Federal agencies. Financial management is the direct subject of five of the 26 current GAO ‘‘high-risk’’ problem areas. It is a major contributing factor to many more GAO high-risk and IG top 10 problems. Financial management problems have persisted for years and won’t be solved overnight. The most disturbing aspect of these problems, however, is that we seem to be making little demonstrable progress to resolve them.
More agencies are getting ‘‘unqualified’’ (‘‘clean’’) opinions on their annual financial statements. However, some agencies with huge budgets, are not. Consequently, the Federal Government as a whole is not close to being able to balance its books. Furthermore, according to GAO, the vast majority of Federal agencies lack financial systems that comply with basic statutory requirements or provide reliable information that can be used for day-to-day management.
Indeed, many agencies get clean opinions despite, rather than because of, their financial systems. Getting a clean opinion can mask deficiencies in an agency’s underlying financial systems and divert resources from fixing them. The consequences of these shortcomings go far beyond technical compliance concerns. They result in incalculable taxpayer losses to fraud, waste, and error. They divert Federal benefits and services away from those who legitimately depend upon them. They deprive decision makers of the ability to make informed policy decisions, oversee programs, hold agencies and programs accountable for their performance, and get results for the American people.

For example:
· No one knows how many tax dollars are lost to outright fraud, waste, and other improper payments since the government does not systematically track such losses. However, from the few available sources that do exist, the Committee has documented almost $230 billion in waste. This includes overpayment exceeding $20 billion in just a handful of programs.

· Financial management weaknesses impede the delivery of benefits and services to our citizens. Agencies have trouble getting the right benefits to the right people on a timely basis, or even responding to their inquiries promptly and accurately. The Internal
Revenue Service (IRS) provides billions in tax credits to the wrong taxpayers, while qualifying taxpayers fail to get billions in tax credits to which they are entitled. After taxpayers have settled their cases, IRS often fails to release liens against their property within the deadline prescribed by law.

· Enormous amounts of financial, medical, and other sensitive personal information provided by our citizens are at risk of inappropriate disclosure and use due to massive information security weaknesses and ineffective controls in most financial management systems.
In order to solve these problems, it is essential that the incoming Administration bring a sense of commitment and urgency to the task and that the incoming Congress provide vigorous oversight and support. Our success in resolving the Year 2000 (Y2K) Computer Problem provides a model for addressing other problems. It featured aggressive Congressional oversight, strong and centralized Executive Branch leadership, persistent follow-up with specific performance goals and benchmarks, and support through necessary funding and other resources. We need to bring the same sense of urgency and commitment to resolving financial management and other problems.
An essential first step is that agencies candidly acknowledge the extent and seriousness of the problems. This does not always happen today. Second, neither the Administration nor Congress can be content with the minimal pace of current progress, which tends to feature expressions of good intentions rather than demonstrable results. We need to develop firm commitments for concrete improvements and follow through on them. Third, the new Administration needs to ensure that the Office of Management and Budget (OMB) carries out its central leadership role and statutory responsibilities for improving financial management across the government. OMB has failed to do so in recent years.
Within this overall framework, there are a number of specific actions that can make real improvements in financial management.
As detailed in this report, they include:
· Using the Government Performance and Results Act (‘‘Results Act’’) to establish specific and measurable goals for financial management improvement and to report progress on meeting these goals.
· Systematically disclosing and quantifying major overpayment problems in annual agency financial statements and coupling this disclosure with specific error-reduction targets.
· Enhancing data sharing and verification in order to improve the accuracy of eligibility determinations under Federal programs.
· Systematically addressing and tracking progress to implement GAO and IG recommendations for financial management improvements.
· Adopting financial management ‘‘best practices’’ from leading private sector and government organizations.
· Providing necessary resources and incentives to improve financial management, and imposing real sanctions where remedial action is not forthcoming.
· Using recovery auditing to recoup overpayments and to invest a portion of the proceeds to make improvements that will avoid future overpayments.

STATUS OF FEDERAL FINANCIAL STATEMENTS AND
SYSTEMS
Expectations for sound financial management. Most major Federal agencies have difficulty meeting the minimum expectations of laws designed to ensure sound financial management in the Federal Government. These laws include the Chief Financial Officers
(CFO) Act of 1990, which requires annual financial statement audits, and the Federal Financial Management Improvement Act of 1996 (FFMIA), which calls for agencies to comply with basic accounting and financial management standards. In testifying about the government’s many challenges in meeting these requirements,

a GAO official observed:
[F]rom the outset today, I want to dispel the notion that
this is merely a compliance issue. The expectations in the
CFO Act and the FFMIA are integral to producing the
data needed to efficiently and effectively manage the dayto-
day operations of the Federal Government and provide
accountability to the taxpayers. When Federal agencies
can meet these expectations, they will have achieved what
the Comptroller General has referred to as the ‘‘end
game’’—systems and processes that routinely generate reli-
able, useful, and timely information the government needs
to assure accountability to taxpayers, manage for results,
and help decisionmakers make timely, well-informed judgments.
1

Financial statement results. Unfortunately, we are nowhere close to achieving this ‘‘end game.’’ The Federal Government as a whole cannot pass the annual financial audit required by the CFO Act.
Such an audit is the staple of any private sector business. For the last 3 fiscal years, GAO has issued a ‘‘disclaimer’’ opinion on the consolidated financial statements of the U.S. Government. That means that the government’s financial statements do not provide reliable information for decisionmakers or the public. GAO identified ‘‘over $350 billion of adjustments and reclassifications’’ that had to be made in order to reconcile information used to prepare the government’s fiscal year (FY) 1999 financial statements. Even with these adjustments, the books were still out of balance by $24 billion. 2 Some individual agencies likewise cannot pass their own annual financial audits. Fifteen of the 24 major agencies received ‘‘unqualified’’ audit opinions for FY 1999. Four agencies—Education, Justice, Treasury, and the Environmental Protection Agency (EPA)—received ‘‘qualified’’ opinions. Five agencies—Agriculture, Defense, Housing and Urban Development (HUD), the Office of Personnel Management, and the U.S. Agency for International Development—received ‘‘disclaimer’’ opinions. While these results are a net improvement over FY 1998, they fell well short of OMB’s goal. Furthermore, two agencies (EPA and HUD) regressed from their FY 1998 opinions.
Clean audit opinions are only the start. While getting a ‘‘clean’’ audit opinion is important, this alone does not evidence sound financial management. A clean opinion simply means that an agency’s financial information is accurate as of one day of the year—the last day of the fiscal year. It provides no assurance that the agency can actually produce and use reliable financial data on a real-time basis. In fact, it normally takes Federal agencies 6 months after the close of the fiscal year to establish the accuracy of their balance sheets as of the last day of the prior year. Some agencies cannot even meet this 6-month statutory deadline. Furthermore, the Comptroller General testified that some agencies were able to get clean opinions only through what he described as ‘‘heroic efforts.’’ These efforts entail painstakingly reconstructing basic information about agency spending on programs and activities. Their financial systems could not routinely provide this information. Indeed, he went on to say, ‘‘Agency financial systems overall are in poor condition and cannot provide reliable financial information for managing day-to-day government operations and holding managers accountable.’’ 3
A clean opinion actually can be misleading by masking deficiencies in an agency’s underlying financial systems. For example, GAO notes that the Transportation Department’s core accounting system was not the primary source for the financial data that lead to its clean opinion. Because its core system was so unreliable, the
Department had to make about 800 adjusting entries totaling $36 billion to get its ‘‘clean’’ opinion. 4 Furthermore, time-consuming and ad hoc efforts to get clean opinions can be counter-productive since they divert agency financial managers from fixing the underlying problems. GAO states:
The extraordinary efforts that many agencies go through
to produce auditable financial statements are not sustainable
in the long term. These efforts use significant resources
that could and should be used for other important
financial-related work. 5
The Department of Health and Human Services (HHS) and the IRS were other agencies that got clean opinions only through time-consuming, manually-intensive, and error-prone processes that involved billions of dollars of adjustments. The Education Department is still another example of an agency whose ostensible progress for FY 1999 was generally the result of time-consuming and ad hoc efforts rather than genuine improvements in its financial systems. Education received a ‘‘qualified’’ opinion on its financial statements for FY 1999, which is better than the ‘‘disclaimer’’ opinion it got for FY 1998. However, the Department’s internal control problems actually worsened in FY 1999. For example, Education misreported $7.5 billion in its FY 1999 accounts; failed to remit to the Treasury $2.7 billion in collections from its Federal Family Education Loan Program (FFELP) as required by law; and had a discrepancy of $700 million in its FFELP account balance. Also, continued weaknesses in security controls exposed Education’s sensitive grant and loan data to deliberate or inadvertent, misuse, destruction, or improper disclosure. 6
The true test of financial management fitness. Annual compliance audits under FFMIA provide the best indication of whether agencies can produce the data needed to manage their day-to-day operations efficiently and effectively. However, 21 of the 24 major agencies failed to substantially comply with FFMIA standards for FY 1999. 7 The FY 1999 FFMIA results represent no improvement whatsoever over FY 1998, when the same 21 agencies failed their FFMIA audits. They represent a step backward from FY 1997, when 20 agencies failed. In summary, the GAO report on FFMIA results for FY 1999 observes that, for 3 straight years now, ‘‘the vast majority of agencies’ financial management systems fall short of the CFO Act and FFMIA goal to provide reliable, useful, and timely information on an ongoing basis for day-to-day management
and decision making.’’ 8
An important feature of FFMIA is the requirement that non-compliant agencies develop ‘‘remediation plans’’ to describe what actions they will take to fix their problems and come into compliance. However, GAO found that the majority of agency remediation plans were inadequate and had improved only slightly over FY 1998. According to GAO, ‘‘many plans still lacked detailed steps, target dates, and descriptions of the resources needed for executing the corrective actions.’’ Two of the 21 agencies found to be non-compliant (the Federal Emergency Management Agency and the Social Security Administration) did not submit remediation plans at all because they disagreed with the finding of non-compliance. 9
GAO also reported that OMB failed to meet its statutory obligations under FFMIA. When an agency determines, contrary to an audit finding, that it does comply with FFMIA, the law requires OMB to review the agency’s determination and report on the findings to appropriate Congressional committees. GAO states that ‘‘OMB is not reviewing and has not reviewed such determinations in order to report to the Congress.’’ 10


EXTENT AND CONSEQUENCES OF FINANCIAL
MANAGEMENT PROBLEMS
Scope of the problems. GAO has designated financial management as a high-risk problem at the Defense Department, the Forest Service, the Federal Aviation Administration, and the IRS. IG’s have designated financial management a top 10 management problem at all 24 major agencies except the Energy Department, the
General Services Administration, and the Social Security Administration.
The following examples illustrate the impact of these problems
at two agencies.
IRS. Financial management problems at IRS contribute to four separate GAO high-risk areas. Clearly, IRS auditors would come down hard on any business or individual taxpayer who kept their books and records as poorly as IRS does. A recent GAO audit identified IRS accounting errors that, if uncorrected, would have caused a misstatement of over $100 million in the agency’s financial statements for FY 1999. GAO’s audit also revealed serious internal control problems, such as the following:

· Delays of over 10 years in posting payments made by taxpayers to their accounts.
· Failure to offset refunds to taxpayers against their outstanding tax liabilities. In one case, IRS paid a refund of $15,000 to a taxpayer who owed almost $350,000 in back taxes.
· Delays in correcting erroneous tax assessments resulting from data input mistakes. In one case, it took IRS 18 months to correct an input error that resulted in an assessment of over $160,000 against a taxpayer who was actually due a refund. IRS apparently knew the assessment was erroneous 10 months before it was corrected.
· Delays in releasing property liens against taxpayers. In 25 percent of cases examined by GAO, IRS failed to release its liens against taxpayers who had settled their tax liability within the statutory deadline. In one case, IRS had not released its lien 14 months after settlement with the taxpayer. 11

The Defense Department (DOD). DOD is the most deficient of all agencies in failing to provide basic financial accountability. Financial management at DOD as a whole has been a GAO high-risk problem area since 1995. GAO recently testified:
Material financial management deficiencies identified at DOD, taken together, continue to represent the single largest obstacle that must be effectively addressed to achieve an unqualified opinion on the U.S. Government’s consolidated financial statements. DOD’s vast operations—with an estimated $1 trillion in assets, nearly $1 trillion in reported liabilities and a reported net cost of operations of $378 billion in fiscal year 1999—have a tremendous impact on the government’s consolidated financial reporting.
To date, no major part of DOD has yet to pass the test of an independent audit; auditors consistently have issued disclaimers of opinion because of pervasive weaknesses in DOD’s financial management systems, operations, and controls. 12
One major source of these problems is the cacophony of non-integrated systems that DOD tries to operate—168 separate systems in all.
It is virtually impossible to operate rationally in such a morass. Indeed, during FY 1999, DOD spent almost one-third of all its contract payments to make adjustments to previous contract payments.
Overall, the IG found that DOD had to make $7.6 trillion in accounting adjustments in order to prepare its financial statements. Countless items fall through the many cracks in these systems. In 1999, GAO reported that the Navy wrote off more than $3 billion in inventory as ‘‘lost in transit.’’ When the Army took an inventory of its assets in 1999, it found 56 airplanes, 32 tanks, and 36 Javelin command launch units for which it had no records. A visit to one Army ammunition depot found 835 ‘‘quantity and location discrepancies’’ for over 3,000 ready-to-fire, hand-held rockets and rocket launchers obviously, very sensitive items requiring strict controls. DOD data shows that over half the in-hand inventory items it can find, valued at about $37 billion, exceed its current requirements.
Improper payments. One direct consequence of poor financial management is the exposure of taxpayer dollars to massive fraud, waste, and abuse. The work of the Governmental Affairs Committee, based on GAO and IG reports, documents huge losses to our citizens from fraudulent and other erroneous payments of taxpayer funds. Based on a review of improper payments that agencies disclosed in their own financial statements for FY 1998, GAO identified $19.1 billion in improper payments for that year alone.
This report covered only the nine agencies that voluntarily disclosed improper payments for 17 major programs. GAO noted that,while the full extent of improper payments was unknown, ‘‘[i]mproper payments are much greater than have been disclosed thus far in agency financial statement reports, as shown by our prior audits and those of agency Inspectors General.’’ 14
The Committee confirmed that the $19.1 billion figure was only the tip of the iceberg. Adding up wasted taxpayer dollars that had been documented and quantified in various GAO and IG reports, the Committee came up with a cumulative figure of $220 billion in waste, fraud, and abuse. This figure included $35 billion in overpayments.15 The problem of erroneous payments appears to be getting worse. When GAO updated for FY 1999 improper payments disclosed in agency financial statements, the total had grown to $20.7 billion. 16 When the Committee recently updated its analysis of waste documented in GAO and IG reports, the total had grown to almost $230 billion. This included improper payments of over $47 billion. (See the Appendix to this report.) Several programs consistently make billions of dollars in improper payments that represent significant portions of their entire budgets. Examples are Medicare, Supplemental Security Income, and food stamps. Another example is the Earned Income Tax Credit
(EITC). Erroneous EITC payments have been estimated at as much as $9.3 billion annually. This is over 30 percent of all EITC claims, which total about $30 billion annually. At the same time, it has been estimated that as few as 65 percent of eligible taxpayers receive the EITC credit. 17 Given these problems, Congress authorized IRS to spend a total of $716 million over 5 years to improve EITC administration. However, IRS has not established Results Act performance goals to address the EITC problems. It also has failed to provide meaningful outcome data on the impact of the funds provided by Congress to improve EITC administration. 18
Ineffective information security. Weak security controls over sensitive information are a major factor underlying financial management problems. Information security weaknesses affect almost all agencies and constitute a GAO-designated government wide high-risk problem. They place enormous amounts of Federal assets at risk of inadvertent or deliberate misuse, financial information at risk of unauthorized modification or destruction, sensitive information at risk of inappropriate disclosure, and critical operations at risk of disruption. Of the 21 agencies that failed to comply with FFMIA, all had serious weaknesses in the area of information security.
Agencies in denial. We will never generate demonstrable improvements in financial management until agencies forthrightly acknowledge the seriousness of their problems. As the following examples indicate, some agencies are still in denial.
In a recent ‘‘Progress Review and Accomplishment Report’’ by HUD on its ‘‘2020 Management Reforms’’ stated: ‘‘HUD’s once vulnerable financial management system is now reliable, accurate and timely.’’ However, the HUD IG reported that the serious weaknesses in HUD’s financial systems persist today and led to a disclaimer
of opinion on the agency’s financial statements for FY
1999. 19
An Education Department spokesperson recently stated:‘‘ Our position is that we have adequate financial controls in place to provide for the smooth operation of our financial systems here at the Education Department.’’ 20 That position is not shared by the agency’s IG or GAO. The IG listed ‘‘long-standing problems with financial management’’ as the number one management challenge facing the Department. 21 Likewise, GAO recently testified that Education ‘‘has experienced persistent financial management weaknesses’’ for years and that these ‘‘serious internal control and financial management systems weaknesses continued to plague the agency’’ during
FY 1999. 22
Student financial aid programs have been included on GAO’s high-risk list since its inception in 1990. However, Education’s commitment to resolving these problems appears questionable. GAO expressed concern that the Education Department’s Office of Student Financial Assistance, which was recently reconstituted as a so-called ‘‘performance-based organization,’’ has not established any performance goals to resolve the problems that make its programs high-risk. 23 In 1998, Congress enacted a law designed to enable Education to verify income information with IRS as a means of enhancing student assistance eligibility determinations. 24 This law remains unimplemented nearly 2 years after its enactment, while Education, Treasury, and OMB engage in seemingly intractable discussions over what to do.
OMB is in the forefront of agencies in denial. OMB’s own performance report for FY 1999 seriously overstated the number of agencies that got clean audit opinions. It criticized GAO’s report on massive FFMIA non-compliance, discussed previously, as being too negative and failing to ‘‘acknowledge that the agencies are moving steadily in the right direction.’’

GETTING TO SOLUTIONS: AN OVERALL FRAMEWORK
Solving financial management problems starts with an overall framework that applies equally to most of the Federal Government’s other core capacity problems. The model for this framework can be found in the successful resolution of the Y2K computer conversion—probably the single most far-reaching and important management challenge of recent years. A host of GAO and IG reports laid out the extent of the Y2K problem and its root causes. The Executive Branch, particularly OMB, initially downplayed the problem. However, intense Congressional oversight ignited public concern and forced the Executive Branch to take the problem more seriously. Once that happened, the Executive Branch and Congress worked hand-in-hand to solve it. Action plans were developed, performance goals were set, and accountability was maintained through regular progress reports.
Management and oversight responsibility over the agencies was centralized in a special unit of the Executive Office of the President under the outstanding leadership of John Koskinen. Congress conducted systematic oversight and provided the funding and other legislative support needed to carry through on solutions.
While it would be hard to replicate the degree of public awareness and the sense of urgency that accompanied Y2K, the steps used to resolve it can readily be transferred to other problems like financial management. In essence, these steps require the Federal
Government to:
· Acknowledge fully and candidly the nature of the problem as well as its dimensions and consequences. This can be politically difficult, but it is absolutely essential.
· Identify the root causes of the problem and existing recommendations to address it. Most major problems, including financial management, are the subject of a host of GAO and IG reports and ‘‘open’’ (unresolved) recommendations. Often the same recommendations are reiterated year after year. Thus, a road map to solutions usually exists.
· Muster the will and ongoing commitment to solve the problem. To be effective, this must come from the highest leadership levels of the Administration and the agencies. As GAO observed: ‘‘We learned from the Year 2000 experience that proactive leadership at the highest levels of government is one of the most important factors in prompting attention and action on a widespread problem.’’ 25
· Establish specific and measurable performance goals to embody the commitments and systematically track them in order to assess progress and ensure follow through and accountability. As discussed below, the Results Act provides an excellent tool for setting goals and measuring success.
· Provide necessary support and incentives—both positive and negative—to implement solutions. This includes funding and other resources. It should also include rewards for progress and remedial actions (along with real consequences, as appropriate) for lack of progress.

RESTORING THE ‘‘M’’ IN OMB
One of the prerequisites to converting the above framework into concrete actions is strong central leadership, support, and oversight within the Executive Branch. This was a key element in resolving Y2K and is equally important for other systemic, crosscutting management challenges such as financial management. Unfortunately, the agency charged by law with this responsibility—OMB—has not been up to the task in recent years.
The former Bureau of the Budget was reconstituted as OMB by a Reorganization Plan during the Nixon Administration. 26 President Nixon’s message to Congress transmitting the Reorganization Plan stated that OMB would be ‘‘the President’s principal arm for the exercise of his managerial functions.’’ He added that ‘‘creation of the Office of Management and Budget represents far more than a mere change of name for the Bureau of the Budget. It represents a basic change in concept and emphasis, reflecting the broader management needs of the Office of the President.’’
Congress subsequently reaffirmed and expanded OMB’s management responsibilities on several occasions. Most notably, the CFO Act of 1990 established the Deputy Director for Management position at OMB as ‘‘the chief official responsible for financial management in the U.S. Government.’’ 27 During Senate consideration of this legislation, former Governmental Affairs Committee Chairman Glenn said of the new Deputy OMB Director for Management: ‘‘This high level official, appointed by the President, with the advice and consent of the Senate, will be responsible for the ‘M’ in OMB and for integrating and coordinating important financial management functions with other management and budget functions at OMB.’’ Senator Glenn stressed the importance of improving Federal financial management: Currently, there are hundreds of different accounting systems in the government, and few comply with generally accepted government accounting standards. These current practices do not show the actual costs of running the Federal Government. . . . There is no way that we in the Senate can fully determine the programmatic impacts of the legislative decisions we make on the basis of information reported. To make matters worse, often the information is reported in such an untimely manner that the decisions must be and are regularly made with dated, inaccurate information.
It is time that the Federal Government had a position, a Deputy Director for Management at OMB, that could be held accountable for these shortcomings. Someone who would be responsible for supplying the Executive Branch and the Congress with reliable, consistent, timely, and complete financial information, while focusing attention to the management of government, which is often lost in our battles over the budget. 28 The foregoing objectives have yet to be realized. Sadly, Senator Glenn’s summary of the government’s financial management problems in 1990 still holds true today. In numerous contexts, including addressing financial management problems, OMB has failed to fulfill its leadership role. According to many observers, the ‘‘M’’ has virtually disappeared from OMB. A 1994 reorganization of OMB, known as ‘‘OMB 2000,’’ shifted most of the agency’s resources to the budget side and greatly diminished its capacity to carry out its management functions. It is clear from OMB’s own Results Act plans and reports that the agency has little regard for its management responsibilities, including those specifically grounded in statute. Indeed, OMB’s most recent draft strategic plan contains nothing of substance addressing any of its management responsibilities. OMB’s failure to meet its management responsibilities has prompted calls for an entirely separate ‘‘office of management’’ in the Executive Office of the President. This is one way to achieve the central leadership on management that is so sorely needed. However, there is obvious power to linking management and budget decisions, as the expansion of OMB was intended to accomplish. OMB views its fundamental role as being ‘‘staff to the President.’’ 29
Therefore, in the final analysis, OMB’s enthusiasm for its management responsibilities is directly proportional to the President’s level of interest in management issues. If the incoming President gives sufficient priority to management improvements, OMB will surely follow suit.


SPECIFIC ACTIONS TO IMPROVE FINANCIAL MANAGEMENT
Within the above overall framework, there are many specific actions that can and should be taken to address financial management problems.
Establishment of specific performance goals and measures to resolve financial management problems. The Results Act provides an excellent mechanism for (1) establishing firm commitments to resolve financial management problems, through performance goals and (2) tracking progress against those goals through annual performance reports. Also, the annual government-wide performance plan required by the Results Act is well suited to establishing government-wide financial management improvement goals and re-enforcing the most important agency-specific goals. To their credit, a number of agencies have established some performance goals dealing with financial management. The most common goal is to get a clean opinion on the agency’s annual financial statements. It is also noteworthy that financial management is addressed in the ‘‘Priority Management Objectives’’ (so-called ‘‘PMOs’’) that appear in the President’s Annual Budget. The FY 2001 PMO on ‘‘improving financial management information’’ includes a performance goal that 22 of the 24 CFO Act agencies obtain clean opinions. 30 These specific performance goals are commendable. However, agencies and OMB should also establish Results Act performance goals to get at the underlying weaknesses that prevent them from using their financial systems for day-to-day management. As discussed previously, such goals would encourage agencies to invest their resources in making lasting improvements to their financial systems. One way to do this is to establish performance goals for compliance with FFMIA requirements. Such efforts will inevitably assist the agencies’ overall performance measurement efforts.
There are other areas in which agencies and OMB could adopt financial management performance-improvement goals. For example, the FY 2001 PMOs target additional government-wide problem areas that implicate financial management such as improving information technology and security and verifying the accuracy of Federal benefit determinations. For the most part, however, these PMOs lack specific performance goals and measures that could be used to track progress toward solving the problems they address.
Disclosure of erroneous payments, coupled with error-reduction targets. A powerful line of attack against the massive overpayment problems that plague the Federal Government is to disclose overpayment levels in annual financial statements and combine that disclosure with performance goals to reduce them. GAO found that only a few agencies now disclose their overpayments. Thus, it recommended that OMB:
Develop and issue guidance to executive agencies to assist them in (1) developing and implementing a methodology for annually estimating and reporting improper payments for major Federal programs and (2) developing goals and strategies to address improper payments in their annual performance plans. 31


By a letter dated November 5, 1999, Chairman Thompson urged OMB Director Lew to implement these GAO recommendations. In his January 2000 response, Director Lew agreed to issue guidelines for estimating overpayments. OMB has yet to follow through on that commitment.
Experience with the Medicare program demonstrates the value of measuring overpayments and then setting specific targets to reduce them. Using these combined techniques, Medicare has shown a dramatic overall reduction in its overpayments in recent years, even though overpayments rose again in FY 1999. The incoming
Administration should ensure that OMB meets its commitment to require disclosure of major overpayment problems in annual financial statements. If OMB fails to do so, the new Congress should legislate such a requirement.
Improved data sharing among agencies. Of course, the best solution to erroneous payments is not to make them in the first place. According to a recent GAO report, 32 inadequate or incorrect information often leads agencies to make erroneous eligibility determinations under various Federal programs, thus resulting in erroneous payments. Improved data sharing between Federal agencies, or between Federal agencies and other parties such as State agencies, could enhance eligibility decisions and thus reduce improper payments. For example, GAO found that hundreds of millions of dollars in Supplemental Security Income payments and payments under the Temporary Assistance for Needy Children (TANF) program could have been avoided or detected more quickly through enhanced data sharing.
The GAO report makes a number of recommendations to the Congress and the Executive Branch on ways to enhance data sharing. 33 Some of these recommendations involve policy judgments that balance improved data sharing against privacy and other considerations. Other recommendations are aimed at improving data sharing that agencies already are authorized to conduct. One recommendation is that OMB lead an inter-agency effort to develop an overall strategy to improve data sharing operations across all Federal benefit and loan programs.
The new Administration and Congress should carefully review the GAO recommendations for improved data sharing. Agencies also should take steps to improve their internal coordination and use of eligibility information already available to them. In this regard, the IG at HHS found that HHS paid millions of dollars for equipment and services allegedly provided to Medicare beneficiaries after the agency’s own records indicated that the beneficiaries had died. 34
One very specific but long overdue action is resolving the impasse over implementation of the Education-IRS data verification provision in the Higher Education Act Amendments of 1998. As discussed previously, this provision has remained in limbo since its enactment 2 years ago. Education, Treasury, and OMB have yet to take action either to make use of the existing authority or to seek any legislative changes that they deem necessary.
Implementing GAO and IG recommendations. Myriad GAO and IG reports exist on virtually all aspects of agency financial management problems. Many of these reports analyze the causes of the problems and make recommendations for corrective action. These reports and recommendations provide a wealth of information and advice that agencies should use to the greatest extent possible. OMB’s guidance to Federal agencies states that each agency should establish systems to assure the prompt and proper resolution and implementation of audit recommendations. 35 In addition, agencies are required by law to report to Congress on their actions in response to GAO recommendations. 36
In August 1999 letters to the heads of the major agencies, Chairman Thompson stressed the need for agencies to resolve and implement audit recommendations related to their major management problems, including financial management. He noted that many agencies continued to have a number of unresolved audit recommendations.
On the basis of the written responses to the Chairman’s letters and subsequent Committee staff meetings with agency officials, it appears that most agencies have made some progress in dealing with the IG and GAO recommendations. Some agencies, such as Interior, have established specific performance goals related to implementing audit recommendations. 37 Other agencies need to do a better job.
Financial management best practices. GAO recently studied the financial management practices and improvement strategies of private sector firms and State governments that are leaders in financial management. 38 Based on this study, GAO issued an ‘‘executive guide’’ that contains many case examples and strategies that can benefit the Federal Government. 39 Just a few of the strategies are:
· Establish and monitor specific performance goals and measures that reflect the finance operation’s role in meeting mission objectives.
· Benchmark financial management practices and processes with recognized leaders in order to measure performance and identify best practices.
· Place more emphasis on providing reliable and timely data that directly support strategic decision making and improvements in overall agency performance.
· Identify high-volume accounting processes or transactions that do not directly support the agency’s mission (low-value, low risk) and consolidate, streamline, outsource, or eliminate them.
Resources and incentives. Agencies that have fully acknowledged their financial management problems and have developed credible remedial actions deserve the support necessary to implement those actions. Obviously, this includes providing necessary funding. Overhauling or replacing ineffective financial management systems can be expensive. However, making the necessary investments is well worth the cost. Conversely, failing to make needed investments is penny-wise and pound-foolish. For example, the Agriculture Department’s financial systems are chronically incapable of producing useful information. Yet, Department officials told the Committee staff that fixing the problems would cost less than the amount left over each year from the Department’s unobligated funds. In addition to funding remedial actions that are well thought out, Congress needs to impose real consequences for agencies that aren’t improving. For example, funds that are available for performance bonuses, travel, and other administrative costs of the agency (particularly perks for political appointees) might be ‘‘fenced off ’’ for use only to improve financial management.
Recovery auditing. ‘‘Recovery auditing’’ is a valuable tool to both recoup overpayments resulting from financial management weaknesses and provide resources to remedy those weaknesses. Recovery auditing is a technique employed by many private sector firms that utilizes computer software programs to analyze contract and payment records in order to identify discrepancies between what was owed and what was paid. It focuses on obvious but inadvertent errors, such as duplicate payments or failure to get credit for applicable discounts and allowances.
The preceding recommendations need serious consideration and deliberation by key decisionmakers in Washington. If implemented, these recommendations could demonstrate significant movement in addressing the financial management challenges that face the Federal Government.

ENDNOTES
1. Financial Management: Agencies Face Many Challenges in Meeting the Goals
of the Federal Financial Management Improvement Act, GAO/T–AIMD–00–178
(June 6, 2000), pp. 1–2.
2. Auditing the Nation’s Finances: Fiscal Year 1999 Results Continue to Highlight
Major Issues Needing Resolution, GAO/T–AIMD–00–137 (March 31, 2000), pp.
10–11.
3. Id., p. 3.
4. Financial Management: Federal Financial Management Improvement Act Results
for Fiscal Year 1999, GAO/AIMD–00–307 (September 2000), pp. 18–19.
5. Id., p. 42.
6. Financial Management: Financial Management Challenges Remain at the Department
of Education, GAO/T–AIMD–00–323 (September 19, 2000), pp. 6–11.
7. The only three agencies that passed muster were the Energy Department,
NASA, and the National Science Foundation.
8. Financial Management: Federal Financial Management Improvement Act Results
for Fiscal Year 1999, op. cit. note 5, p. 2.
9. Id., pp. 29–30.
10. Id., p. 30.
11. Financial Audit: IRS’ Fiscal Year 1999 Financial Statements, GAO/AIMD–00–
76 (February 2000), pp. 13–14, 28–29.
12. Department of Defense: Progress in Financial Management Reform, GAO/T–
AIMD/NSIAD–00–163 (May 9, 2000), p. 1 (Emphasis supplied).
13. Financial Management: Increased Attention Needed to Prevent Billions in Improper
Payments, GAO/AIMD–00–10 (October 1999).
14. Id., p. 6.
15. Governmental Affairs Committee Press Release: Thompson Details $220 Billion
in Government Waste (January 24, 2000).
16. Financial Management: Improper Payments Reported in Fiscal Year 1999 Financial
Statements, GAO/AIMD–00–261R (July 27, 2000).
17. Treasury Department IG for Tax Administration, Management Advisory Report:
Administration of the Earned Income Credit, Ref. No. 2000–40–160 (September
2000), p. iii.
18. Ibid.
19. See Statement of Susan Gaffney before the Subcommittee on Housing and
Transportation of the Senate Banking Committee on Management and Performance
Issues Facing HUD (September 26, 2000), pp. 10–11.
20. Government Executive Daily Briefing, Agency Overpayments Rise Above $20
Billion, September 13, 2000.
21. Department of Education Office of Inspector General, Semiannual Report to
Congress No. 40, October 1, 1999-March 31, 2000, p. 15.
VerDate 11-MAY-2000 11:11 Nov 27, 2000 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6602 67613.TXT SAFFAIRS PsN: SAFFAIRS
18
22. Financial Management: Education’s Financial Management Problems Persist,
GAO/T–AIMD–00–180 (May 24, 2000), pp. 1, 3.
23. Observations on the Department of Education’s Fiscal Year 1999 Performance
Report and Fiscal Year 2001 Performance Plan, GAO/HEHS–00–128R (June 30,
2000), p. 2.
24. Section 484(q) of the Higher Education Act, as amended, 20 U.S.C. § 1091(q).
25. Financial Management: Federal Financial Management Improvement Act Results
for Fiscal Year 1999, op cit. note 5, p. 42.
26. Reorganization Plan No. 2 of 1970, 31 U.S.C. § 501 note.
27. 31 U.S.C. § 502(c).
28. 136 Cong. Rec. 35767–68.
29. See generally, OMB’s Draft Strategic Plan for FY 2001–2005 and a letter from
Sally Katzen dated August 8, 2000, transmitting the Draft Plan to Chairman
Thompson.
30. See Budget of the U.S. Government, FY 2001, pp. 294–295.
31. Financial Management: Increased Attention Needed to Prevent Billions in Improper
Payments, op cit. note 14, p. 42.
32. Benefit and Loan Programs: Improved Data Sharing Could Enhance Program
Integrity, GAO/HEHS–00–119 (September 2000).
33. Id., pp. 43–44.
34. Governmental Affairs Committee Press Release: Medicare Paying for Health
Care for the Dead, March 13, 2000.
35. OMB Circular A–50.
36. 31 U.S.C. § 720.
37. See Department of the Interior Fiscal Year 2001 Annual Performance Plan, p.
101.
38. The private sector organizations were Boeing, the Chase Manhattan Bank,
General Electric, Hewlett-Packard, Owens Corning, and Pfizer. The State governments
were Massachusetts, Texas, and Virginia.
39. Executive Guide: Creating Value Through World-class Financial Management,
GAO/AIMD–00–134 (April 2000).


http://hsgac.senate.gov/_files/rptmanagechallenge.pdf

FRED THOMPSON CLIPS- SELECT ONE AND WATCH VIDEO

Loading...

Fred Thompson

Fred Thompson
Former U.S. Senator (R-TN)