told the Senate Committee on Governmental Affairs and the House Committee on Government Operations that homeowners claims were now being fully reimbursed, and that the Department was negotiating with the American Institute of Architects for an independent third party review of rejected claims.

In Chicago, subsequent to our review, HUD reevaluated 2.912 homeowners' claims to assure that reimbursements had been made in accordance with prescribed HUD regulations. As a result. 397 Chicago homeowners were reimbursed additional amounts totaling $169,436.

Improved Accounting and Financial Reporting

Accurate accounting is necessary to control Government assets and to present fairly the financial position of the Government. The Department of Labor, the Department of the Treasury, and the General Services Administration materially misstated accounts receivable, thus precluding a fair presentation of these agencies' financial position at September 30, 1976.

In separate reports to these agencies, we recommended specific improvement. The agencies responded to our reports and stated that our recommendations to ensure more accurate accounting for and reporting of accounts receivable were implemented.

Improving Internal Audit

In our report on the Army Audit Agency we recommended that the Agency be placed at a higher level in the Army, not be restricted in the areas it was allowed to audit, make more effective use of its auditors, improve its report followup system, and appoint a civilian to head the agency.

The Army agreed and has or is in the process of complying with the recommendations which should sig. nificantly improve the operations of the Army Audit Agency.

Improvements in Defense Department Procedures to Evaluate and Select Energy Conservation Projects

In our review of the Defense Department's Energy Conservation Investment Program (ECIP) we found that proper economic analyses, consistent with the Office of Management and Budget (OMB) Circular A94, were not being used to evaluate and select projects and that sometimes projects were funded that saved very

FINANCIAL SAVINGS AND OTHER BENEATS

little energy. In addition, Government-owned, contractor-operated (GOCO) facilities were excluded from the program. FILE W

Based on our findings the Department then issued revised guidelines for ECIP which called for eonomic analyses for large projects and project priorization based on energy saving effectiveness.

In our report to the Secretary of Defense (EMD-78-15. January 18, 1978) we acknowledged the above improvements but pointed out that they did not go far enough. We recommended that an economic analysis consistent with OMB Circular A-94 be done for all projects and that GOCO facilities be included in ECIP.

Subsequent to our report. the Department again modified ECIP's guidelines to require economic analyses for all projects. And, in line with our recommendation to include GOCO facilities in the program, the Department established the Energy Conservation and Managment (ECAM) program as a counterpart to ECIP to fund energy conservation retrofit projects at GOCO facilities.

Strengthened Security Requirements for Nuclear Material Facilities

At the request of Congressman Timothy E. Wirth. we evaluated the status of actions by the Department of Energy (DOE), formerly the Energy Research and Development Administration (ERDA), to correct physical security deficiensies noted at the agency's special nuclear material facilities. While we found a general improvement in the physical security at the facilities visited, we noted that certain security requirements were vague and led to misinterpretation and inconsistent protection criteria. Consequently, we recommended that these requirements be strengthened to better assure consistent and adequate protective measures. On November 29, 1977. DOE responded to our recommendations and advised the House Committee on Government Operations that it (1) had issued a management directive to strengthen and clarify security requirements over the placement of nuclear material detectors and (2) was drafting for publication new physical security requirements for protecting less than strategic quantities of bomb-grade plutonium and highly enriched uranium. These actions should lead to added protection of these dangerous nuclear materials against theft and sabotage.

FINANCIAL SAVINGS AND OTHER BENEFITS

Improvements in the Department of Energy's Compliance Effort

As a result of our investigation and inquiries by Senator James J. McIntyre's staff, the Department of Energy expedited its compliance efforts and issued an order requiring a New England fuel oil firm to pay back to customers approximately $4.7 million plus interest for overcharges in residual fuel oil sales.

In our report (EMD-77-71, Nov. 7, 1977), we pointed out several factors contributing to the delay in the resolution of compliance cases and made recommendations for improvement. The Department of Energy agreed with our recommendations and stated that it would continue considering our recommendations in the reorganization of its Office of Enforcement. Actions taken included

-establishing goals to simplify and clarify existing regulations,

-formalizing procedures to expedite the resolution of outstanding regulatory issues, and -improving case processing procedures by increasing legal support on cases and streamlining internal reporting procedures.

Upgrading Internal Audit

We reported to the Congress (FOD-78-15, Oct. 25. 1977) that the Federal Home Loan Bank Board's internal audit organizational structure was not designed to insure maximum independence. We stated that because of organizational placement, the auditors assigned to internal reviews were in the tenuous position of reviewing and reporting on the activities and deficiencies of higher management within their own organizational structure. We also pointed out that the Board had advocated audit organizational independence for its other activities but not for its own organization and its present structure was not in line with the general Federal Government trend of making internal audit functions independent of the organizations being audited.

We recommend that the Chairman of the Board revise his internal audit organization so that maximum independence could be obtained.

On January 11, 1978, the Chairman of the Federal Home Loan Bank Board signed Order No. 400 which transferred all financial and internal audit and related personnel from their previous organizational structure

(Office of Management Systems and Administrative) to an Internal Review staff which is established in the Office of the Chairman.

The organizational change will make Internal Review more independent and, therefore, more effective.

Federal Bureau of Investigation Makes Information on Individuals More Accessible

Since the enactment of the Privacy Act of 1974, Federal agencies have been required to report in the Federal Register all their systems of records on individuals. The Federal Bureau of Investigation (FBI) reported 12 systems of record, with its main system being the Central Records System.

The publication in the Federal Register is required so (1) the public is informed of Government recordkeeping practices about individuals and (2) individuals are able to make reasonably informed decisions concerning the likelihood of the existence of records about themselves.

The FBI's Central Records System contains all investigative, personnel, applicant, administrative, and general files. In addition to the general index maintained at headquarters and at each field office and foreign liaison office, various indexes are used to facilitate the way investigations are handled. Primarily these indexes include index cards, photo albums, computer tapes, and computer printouts.

The notice in the Federal Register for the FBI's Central Records System itemized and explained several categories of individuals the system has records on. The notice did not list or mention by name specific indexes which the FBI uses in managing and conducting its day-to-day operations. We concluded that as long as the individuals and information contained in an index was retrievable through a published system of records, it was not necessary for the FBI to consider each index as a separate system of records that must be individually published as such in the Federal Register. However, 63 of the 239 indexes we identified as being maintained by FBI headquarters or field offices for investigative purposes were not fully retrievable through a published system of records.

Subsequent to our analysis, the FBI expanded its notice considerably in the Federal Register. Because of this expanded notice, the public is much more aware of what categories of people the FBI keeps records on and requesters are more assured that all the information the FBI has on them would be retrievable.

FINANCIAL SAVINGS AND OTHER BENEFITS

Procedures to Improve Telephone Assistance to Taxpayers

Our survey of the Internal Revenue Service (IRS) Taxpayer Service Telephone Assistance Program showed that when taxpayers' questions were referred to a technical backup person, they would receive correct answers to their questions about 79 percent of the time. We informed the IRS of our findings because it considers telephone referrals to be a critical factor in providing quality service to taxpayers.

On March 22, 1978. the Commissioner of Internal Revenue testified before the Subcommittee on Commerce, Consumer and Monetary Affairs. House Committee on Government Operations. He stated that the IRS would establish a mandatory review to identify error rates for referral assistors on a separate basis. The Assistant Commissioner for Accounts, Collection and Taxpayer Service sent a memorandum to all IRS regional commissioners emphasizing the importance of reviewing the quality of answers given by referral personnel. In addition. IRS has made changes in its Taxpayer Service Quality Review Handbook. The upgrading of the standards for the Taxpayer Service Telephone Assistance Program will help assure taxpavers they are receiving the correct answers to their more difficult questions.

Government-wide Procurement Policy To Prevent "Wage Busting"

In a report dated February 28. 1978 (HRD-78-49), we recommended that the Administrator for Federal Procurement Policy, the Office of Management and Budget, establish a Government-wide policy to discourage wage busting of professional employees working on Federal service contracts and require Federal agencies to include appropriate implementing language in their procurement regulations and service

contracts.

As a result of our recommendations, the Office of Federal Procurement Policy (OFPP), issued Policy Letter Number 78-2. "Preventing Wage Busting' for Professionals: Procedures for Evaluating Contractor Proposals for Service Contracts," which stated that it is the declared policy of the Federal Government that all service employees, including professional employees. employed by contractors providing services to the U.S. Government, be fairly and properly compensated. The policy letter said Federal procurement procedures shall be developed to assure equitable compensation for all

such employees. The letter also provides appropriate language for inclusion in all future solicitations whenever professional employees are expected to be needed to perform the services. The new policy, effective April 1. 1978, is to be implemented through regulatory guidance issued under both the Defense Acquisition Regulation and Federal Procurement Regulations.

Also as a result of our recommendations, the Department of Defense (DOD) advised us in June 1978 that the Air Force has been directed to develop guidance for DOD activities to discourage wage busting of professional service employees. In addition, the National Aeronautics and Space Administration in July 1978. amended its procurement regulation to include procedures to implement the requirements in OFPP Policy Letter Number 78-2.

Improve Nutrition Program for the Elderly

In our report to the Secretary of HEW on our review of the nutrition program for the elderly (HRD-78-38. February 23. 1978) we identified a number of areas where program administration and effectiveness could be improved. We discussed our report with officials of the Administration on Aging (AOA) in December 1977. We were informed that as a result of our report. AOA was undertaking a new initiative nationwide to improve administration of elderly nutrition program. Actions taken by AOA and the U.S. Department of Agriculture will increase the number of meals available to older persons by 12 percent or a total of 17 million additional meals by March 1979.

Greater Outreach Efforts by the Social Security Administration

We recommended in April 1977 that the Social Security Administration identify those individuals who were denied benefits because of excess personal resources and advise them they may now be eligible for Supplemental Security Income benefits because of a change in the law on home ownership. We also recommended that similiar outreach efforts be made in the future when legislative changes are made that effect previously denied applicants.

In January 1978. we were advised that Social Security will contact about 50.000 to 70.000 individuals previously denied benefits because of excess resources. We were also advised that similar outreach efforts will be made in the future when warranted.

FINANCIAL SAVINGS AND OTHER BENEFITS

Improved Control of U.S. Antarctic
Research Program Logistic Support Costs

In our report to the Chairman, Senate Committee on Foreign Relations, (ID-77-59, December 30, 1977) we reported that although the National Science Foundation is reimbursing the Navy for all major U.S. Antartic Research Program costs, costs are still being borne by the Navy. We recommended that the Secretary of Defense identify the logistic support for the program that is borne by the Department of Defense, establish procedures to accumulate or estimate costs, and that the Secretary and the Director of the National Science Foundation improve coordination of logistic support finances.

On February 6, 1978, the Department of Defense National Science Foundation memorandum of agreement was amended to provide for the National Science Foundation to reimburse the Navy for total cost of providing subsistence to Foundation-sponsored civilian personnel in Antarctica effective October 1. 1978. In addition, on January 12, 1978, the Comptroller of the Navy requested the Navy Auditor General to identify any remaining cost for logistic support of the program still being borne by the Department of Defense.

Strengthening Congressional Oversight of Foreign Assistance

The U.S. sells military equipment and supplies to certain African nations because these nations preceive military threats and also to balance growing Soviet influence and maintain specific interests.

Notwithstanding U.S. rationale for such sales, our review disclosed that Congress has not been adequately informed about some key aspects of foreign military sales programs in Africa. For example, executive branch notificationss on proposed sales do not clearly describe the nature and extent of U.S. equipment transfers and manpower committments. Also, Congress has not always been advised of long-range plans.

We recommended to the Secretaries of State and Defense (ID-7761, April 4, 1978) that congressional notifications about proposed sales of military equipment and services by the executive branch be more comprehensive including, “U.S. military survey team results and actions the U.S. Government will undertake to carry out the teams' recommendations."

Our recommendation and the State Department's response expressing their agreement were used by the Subcommittee on International Security and Scientific Affairs. House Committee on International Relations, to support their justification for an amendment to the

Foreign Assistance legislation for fiscal year 1979. In September 1978. Sec. 26, Chapter 2 of the Arms Export Control Act was amended to include ". . . (b) as part of the quarterly report required by section 36(a) of this act. the President shall include a list of all defense equipment surveys authorized during the preceding calendar quarter, specifying the country with respect to which the survey was or will be conducted, the purpose of the survey, and the number of United States Government personnel who participated or will participate in the survey. (c) Upon a request of the Chairman of the Committee on the International Relations of the House of Representatives or the Chairman of the Committee on Foreign Relations of the Senate, the President shall grant that Committee access to defense requirement survey conducted by United States Government personnel."

Improvements Made in Department of Agriculture's Upward Mobility Program

Responding to the recommendations in our March 1977 report. the Department of Agriculture initiated various actions to improve its upward mobility program. Skills surveys are being conducted to identify underutilized employees. Extensive changes have been made in the College Study Program including requiring participants to follow courses of study consistent with designated occupational areas, and the preparation of individual career development plans by all participants. In addition, application of the job element approach in the participant selection process has been limited to the specific position concerned. These actions, and others, should result in a more effective program.

Federal Upward Mobility Program Made More Effective

The Civil Service Commission has implemented a comprehensive action plan which should increase the effectiveness of the Federal upward mobility program. The plan, responding to the recommendations in our March 1977 report, provides for guidance to departments and agencies stressing the importance of work force assessments and detailing the techniques to be used in conducting skills surveys in support of training agreements: identifies information needed by the agencies to evaluate the effectiveness of their training agreements; ensures that the Commission's annual onsite personnel management and Equal Employment Opportunity evaluations include an analysis of the results of agencies' upward mobility program implemen

tation: and develops controls to ensure that program costs are reported accurately and completely.

Contractor Noncompliance Action

We reviewed the Government Printing Office's (GPO's) Central Office Printing Procurement Division and found GPO could exercise better management control to provide more timely service at lower costs. In our report to Congress ("Substantial Improvements Needed in the Government Printing Office's Service to Federal Departments and Agencies," LCD75-437. Dec. 29. 1975), we said that customer agencies had complained about the excessive time it took for GPO to procure printing services. One of our recommendations was that GPO should establish a consistent approach for handling those instances when the printers do not comply with the contract terms.

GPO has implemented our recommendation and improved reporting on contractor noncompliance. Compliance with scheduled delivery is now determined and verified by GPO. Compliance with quality is reported on an exception basis by the customer agency using GPO furnished "flashcards." Further. GPO has developed a "quality-by-attributes" system which reduces the judgmental aspects of determining compliance with quality requirements.

Sanctions against contractors such as cure notices. show cause letters, and declarations of nonresponsibility are now taken in the same sequence against all noncomplying contractors.

GPO reports show that this approach to contractor noncompliance has resulted in a steady reduction in the delinquent delivery rate from 17 percent at the time of our review to less than 8 percent in October 1977.

Small Arms Maintenance Facilities

Our letter report to the Secretary of Defense (LCD-76426. Mar. 31. 1976), pointed out that the Services small arms maintenance facilities were significantly underutilized. We also told the Secretary of Defense that a number of items were being repaired by more than one Service and that only 11 percent of the $5.5 million depot maintenance workload was accomplished through interservicing. We concluded that savings would be realized by performing this maintenance at fewer locations because this would permit increased utilization of equipment and facilities and possible spare parts and personnel reductions.

FINANCIAL SAVINGS AND OTHER BENEFITS

Our letter report was given to the Department of Defense Joint Logistics Commanders Small Arms Work Group, and we were informed that the Group had identified an additional $1.6 million of the small arms workload which will be accomplished by interservice support agreements.

Management of Cash Balances

In our June 1976 report ("Department of Defense Stock Funds' Declining Financial Position." LCD-76433). we reported that the Department of Defense (DOD) stock funds, cash and working capital balances had deteriorated because of inflation and management problems within the stock funds. An example of the management problems within the stock funds was the absence of any cash flow analyses so that as a result the cash problems became critical before management became aware of them.

To resolve the cash problems, DOD asked the Congress for an appropriation to fund a 15-percent surcharge on sales to stock fund customers. As part of the request, DOD said that a surcharge of 15 percent of sales would provide the cash necessary to bring working capital up to needed levels. Our review disclosed, however, that the Office of the Secretary of Defense officials did not make a satisfactory analysis of requirements and could not adequately support the amount of the request. One aspect of this was the need to analyze the cash requirements of each of the five service stock funds which we found had different cash needs.

We recommended several improvements in DOD's cash management and among those was a recommendation to tailor stock fund cash balances to the requirements of individual stock funds.

DOD agreed with our recommendations and as a part of the budget guidance, gave the services detailed guidance for analyzing cash requirements. As a result. cash management was improved to the extent that at the end of fiscal year 1977 actual cash on hand was within 3 percent of the budgeted amount.

Improved Procedures Concerning Noncompetitive Procurement

Formal advertising and negotiation are the basic methods by which the Government procures supplies and services. By law, agencies should formally advertise for bids whenever possible. The Congress has historically required that Government purchases of goods and services be accomplished using full and free competition to the maximum extent practicable.