Former Supplement Company Owner Pleads Guilty to Unlawful Distribution of Steroid-like Drugs

A New Jersey chiropractor pleaded guilty today to a felony charge relating to the distribution of steroid-like drugs in purported dietary supplements.

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    In U.S GAO News
    Why This Matters Research and development (R&D) projects in high-tech areas like cybersecurity and biotechnology can help the U.S. military reassert its technological edge. Contractors decide what independent R&D projects to conduct and the Department of Defense (DOD) reimburses them about $4 billion-$5 billion annually. More information about those projects could help DOD guide its own R&D investments. Key Takeaways DOD does not know how contractors’ independent R&D projects fit into the department’s technology goals. As a result, DOD risks making decisions about its multi-billion dollar science and tech investments that could duplicate work or miss opportunities to fill in gaps that the contributions of private industry do not cover. DOD has a database of independent R&D projects, but it is not very useful for informing investment decisions because DOD does not obtain information in these and other areas: Priority. Contractors do not identify whether a project aligns with any of 10 modernization priorities. The department uses those priorities to make decisions about R&D investments. Cost. The database does not capture a project’s complete cost, which could help DOD understand cost implications of future related work. Innovation. The database does not include whether a project is a lower-risk, incremental development or a more innovative “disruptive” technology. Disruptive projects carry higher risk of failure but offer possible significant rewards in the long term. While DOD is not required to review independent R&D projects to understand how they support DOD’s priorities, GAO analysis showed 38 percent of industry projects aligned with DOD’s priorities. To help DOD better understand the scope and nature of independent projects, we recommend DOD determine whether to require additional information in the project database and review projects annually as part of its strategic planning process. DOD agreed with both recommendations. How GAO Did This Study We categorized a sample of completed projects from 2014–2018 by innovation type and analyzed projects completed in 2018 for alignment with DOD's modernization priorities. We also reviewed DOD policies on independent R&D and interviewed representatives from 10 defense contractors. For more information, contact Timothy J. DiNapoli at (202) 512-4841 or dinapolit@gao.gov.
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  • Federal Real Property: Additional Documentation of Decision Making Could Improve Transparency of New Disposal Process
    In U.S GAO News
    In 2016, the Federal Assets Sale and Transfer Act (FASTA) created the independent Public Buildings Reform Board (the Board) to support a new, three-round process for disposing of unneeded federal real property. The first of these rounds required the Board to identify and recommend at least five high-value disposal candidates with a total market value between $500 and $750 million. To identify these properties, the General Services Administration (GSA) collected and evaluated agency recommendations; a GSA-hired contractor analyzed real property data; and the Board held public hearings, visited properties, and met with federal officials. This process resulted in identifying 44 properties. The Board then took various steps to evaluate the 44 properties and recommended 12 final disposal candidates that the Office of Management and Budget (OMB) approved in January 2020. (See figure.) However, the Board did not fully document the process used to evaluate these candidates. For example, the Board's rationales for why individual candidates were or were not recommended were vague or incomplete. Full documentation on the decision-making process would better position stakeholders, including members of Congress, to understand the Board's rationales, especially for decisions with financial implications. Process Used by Stakeholders for Identifying and Recommending High-Value Federal Real Property for Potential Disposal Candidates According to Board and selected federal agency officials, FASTA made it easier for agencies to pursue high-value property disposals due, in part, to exemptions from some requirements, such as having to first offer properties to federal, state, or local agencies. However, FASTA's effect on other long-standing challenges, including funding to prepare properties for disposal, is unclear. For example, FASTA created a dedicated funding source to implement Board recommendations including those related to covering disposal costs, such as relocating agency staff. However, officials expressed concern that access to these funds is not automatic and must go through the annual appropriations process, which rarely coincides with the timing of these projects. The administration proposed legislative language to make proceeds from the sale of assets in fiscal year 2021 available without additional actions by Congress. However, as of January 2021, legislation containing the proposed language had not been enacted. This report discusses elements Congress may wish to evaluate when determining whether to grant such budget-related flexibility. GAO designated federal real property management, including the disposal of properties, as a high-risk area in 2003. FASTA included a provision for GAO to review the recommendations and selection processes such as those used in the first round of identifying and recommending high-value properties as candidates for disposal. This report examines: (1) how stakeholders implemented FASTA to identify and evaluate high-value properties as potential disposal candidates and (2) stakeholder views on the extent to which FASTA helped agencies with the disposal of unneeded high-value properties and addressed long-standing challenges in disposing of federal properties. GAO reviewed FASTA and analyzed documents from the Board, OMB, GSA, and selected 14 federal agencies to examine the processes they used and the challenges they encountered under the FASTA process. Agencies were selected based on their recommendations of high-value properties and inclusion on the Board's final list, among other things. GAO also interviewed officials from the Board, OMB, GSA, and selected federal agencies. GAO is recommending that the Board fully document its process for recommending FASTA disposal candidates, including the rationales behind disposal decisions. The Board noted plans to develop more documentation of its future disposal decisions. For more information, contact David Trimble at (202) 512-2834 or trimbled@gao.gov.
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  • Puerto Rico: Efforts to Improve Competition for Medicaid Procurement
    In U.S GAO News
    What GAO Found Like other U.S. territories and states, Puerto Rico implements major functions of its Medicaid program by procuring services from contractors, such as the delivery of managed care services to Medicaid beneficiaries. In 2018, procurement costs represented $2.4 billion of Puerto Rico's $2.5 billion in total Medicaid expenditures. The Centers for Medicare & Medicaid Services (CMS)—the federal agency that oversees Medicaid—requires states and territories to use the same process for Medicaid procurements as they do for their non-federal procurements. However, in February 2021, GAO found that CMS has not taken steps to ensure Puerto Rico has met this requirement. Instead, CMS has relied on Puerto Rico to oversee the territory’s procurement process and to attest to its compliance. CMS officials told GAO that states and territories are in the best position to ensure compliance with their respective procurement laws. A 2019 federal indictment alleging Puerto Rico officials unlawfully steered Medicaid contracts to certain individuals has also raised questions about Puerto Rico's Medicaid procurement process, including whether this process helps ensure appropriate competition. The Further Consolidated Appropriations Act, 2020, directed Puerto Rico to publish a Medicaid procurement reform plan to combat fraud, waste, and abuse, which the territory provided to Congress in December 2020. In its procurement reform plan, Puerto Rico acknowledges the need to improve competition and outlines future initiatives and general timeframes to do so. For example, Puerto Rico notes that by August 2021, it will identify the circumstances under which the use of noncompetitive contracts is justified, as well as the factors it might consider in making this determination. By April 2021, Puerto Rico intends to identify procurement information it will make public as part of its competitive procurement process and will make such information public by the end of 2021. Such changes—if implemented as planned—could address some of the issues GAO identified in its review of eight selected Puerto Rico procurements. In its review, GAO found that Puerto Rico did not include important steps to promote competition and mitigate the risk for fraud, waste, and abuse, underscoring the need for federal oversight. GAO and others have found that competition is a cornerstone of procurement. Using competition can reduce costs, improve contractor performance, curb fraud, and promote accountability. As Puerto Rico continues to develop and carry out its planned reforms, implementing GAO’s recommendation for ongoing, risk-based oversight of Puerto Rico’s Medicaid procurement process could enable CMS to promote competition and efficiency while preventing fraud, waste, and abuse in the program. Why GAO Did This Study This testimony summarizes the information contained in GAO's February 2021 report, entitled Medicaid: CMS Needs to Implement Risk-Based Oversight of Puerto Rico’s Procurement Process (GAO-21-229). Specifically, the testimony discusses findings from the report as they relate to Puerto Rico’s Medicaid procurement reform plan.
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  • FY 2021 Local Jail Reporting Program (LJRP) Pilot Test
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  • Indian Education: Schools Need More Assistance to Provide Distance Learning
    In U.S GAO News
    What GAO Found The Bureau of Indian Education (BIE), within the Department of the Interior (Interior), has not provided BIE-funded schools with comprehensive guidance on distance learning during the COVID-19 pandemic. In March 2020, BIE issued a short memo directing schools to “deliver flexible instruction” and “teach content,” but did not offer specific guidance on how to do so. In July 2020, 13 of the 25 schools that responded to GAO's survey said they wanted BIE to provide information on developing and implementing distance learning programs. In addition, 12 schools responded that they wanted information on distance learning methods for areas without broadband internet access. In August 2020, after some schools had already begun the school year, BIE issued a re-opening guide for the 2020-2021 school year. BIE's guidance focused primarily on preparations for in-person instruction at schools, although nearly all schools provided distance learning during the fall of 2020. The guidance contained little information on distance learning. Providing schools with comprehensive distance learning guidance will help them better navigate the current pandemic as well as potential future emergencies that lead to school building closures. BIE helped improve internet access for students at BIE-operated schools during the pandemic, but many students had not received laptops to access online learning by the end of fall 2020. BIE and other Interior offices provided over 7,000 hotspots to students to improve home internet access, but they did not order laptops for most students until September 2020. Interior officials said a nationwide IT supply shortage contributed to the delayed order for about 10,000 laptops. GAO found, however, that delays were also caused in part by BIE not having complete and accurate information on schools' IT needs. Most schools received laptops from late October 2020 to early January 2021, although some laptops still had not been delivered as of late March 2021. Once laptops were delivered, however, schools also faced challenges configuring them, leading to further delays in distributing them to students. BIE officials told GAO that to address schools' challenges with configuring laptops, they are assessing schools' IT workforce needs. Most BIE students did not receive laptops until months after the school year began, according to GAO's analysis of Interior information. Specifically, none of the laptops Interior ordered in early September 2020 arrived in time to distribute to students by the start of the school year in mid-September; by the end of December 2020, schools had not distributed over 80 percent of the student laptops Interior ordered; and as of late March 2021, schools had not distributed about 20 percent of the student laptops Interior ordered. Without accurate, complete, and up-to-date information on schools' IT needs, BIE was unable to ensure that students received laptops when they needed them. Establishing policies and procedures for assessing schools' IT needs would help guide the agency's IT purchases now and in the future, and position schools to integrate technology into their everyday curricula. Why GAO Did This Study BIE's mission is to provide quality education to approximately 41,000 students at 183 schools it funds on or near Indian reservations in 23 states. About two-thirds of these schools are operated by tribes and the remaining third are operated by BIE. In March 2020, all BIE schools closed their buildings in response to the COVID-19 pandemic. GAO reviewed distance learning at BIE schools as part of its oversight responsibilities under the CARES Act. This testimony examines the extent to which (1) BIE has provided schools with guidance to develop and implement distance learning programs during the COVID-19 pandemic, and (2) students have had the technology they need to participate in such programs. GAO analyzed the guidance BIE provided to schools on distance learning, examined BIE's provision of technology to schools and students, surveyed a non-generalizable sample of 30 schools—including 19 operated by tribes and 11 operated by BIE— with 25 schools responding, selected for geographic diversity and level of community broadband access, among other criteria, reviewed relevant federal statutes, regulations, and agency documentation, and interviewed BIE and school officials.
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  • Commercial Shipping: Information on How Intermodal Chassis Are Made Available and the Federal Government’s Oversight Role
    In U.S GAO News
    What GAO Found Containerized shipping—performed by oceangoing vessels using standardized shipping containers—accounted for approximately 60 percent of all world seaborne trade, which was valued at approximately $12 trillion in 2017. At a port, shipping containers are placed on "intermodal chassis" (chassis), standardized trailers that carry shipping containers and attach to tractors for land transport. Multiple entities are involved in the movement of shipping containers, including intermodal equipment providers (IEP) (which own and provide chassis for a fee); ocean carriers (which transport cargo over water); and motor carriers (which transport shipping containers over land via chassis). Four distinct models are used in the U.S. to make chassis available to motor carriers (see table), each with benefits and drawbacks according to the entities GAO interviewed. While chassis are generally provided to motor carriers using one of these four models, more than one model may be available at a port. Chassis Provisioning Models Model 1: Single chassis provider An individual intermodal equipment provider (IEP) owns chassis that are directly provided to shippers or motor carriers. Model 2: Motor carrier-controlled A motor carrier owns or is responsible for a chassis that it has procured under a long-term lease. Model 3: Gray pool A single manager, often a third party, oversees the operations of a pool that is made up of chassis contributed by multiple IEPs. Model 4: Pool-of-pools Each IEP manages its respective chassis fleet, but each allow motor carriers to use any chassis among the fleets and to pick up and drop off chassis at any of the IEPs’ multiple locations. Source: GAO.  |  GAO-21-315R Entities GAO interviewed identified multiple benefits and drawbacks to each of the chassis provisioning models. Regarding benefits, for example, both the single chassis provider model and the motor carrier-controlled model allow IEPs and motor carriers to have direct control over the maintenance and repair of their chassis, something these entities potentially lose under other chassis provisioning models. Further, the gray pool and the pool-of-pools models can resolve many of the logistical concerns regarding the availability of chassis, leading to operational efficiencies for port operators and the ability of motor carriers to choose whatever chassis they wish. Regarding drawbacks, cost considerations were identified in some cases. For example, under the single chassis provider model, two IEPs told us that while an expected part of the business, repositioning chassis to ensure there is a sufficient supply of chassis where they are needed can be costly to the IEPs. The federal government provides oversight of chassis safety but has a limited economic oversight role regarding chassis. The Federal Motor Carrier Safety Administration (FMCSA) employs several inspection methods to help oversee chassis safety and compliance with regulations. For example, inspectors perform roadside inspections on commercial vehicles, including chassis, in operation. FMCSA also performs investigations of individual IEPs to oversee chassis safety. While one stakeholder GAO spoke with stated that FMCSA should consider maintaining safety ratings for IEPs—as is currently done for motor carriers—FMCSA officials told us that the current processes provide sufficient information to select IEPs for investigation. The Federal Maritime Commission (FMC) oversees ocean carriers that provide service to and from the U.S. and works to ensure a competitive and reliable ocean transportation supply system. Entities may file complaints with FMC to allege violations of the Shipping Act of 1984, as amended. One such complaint was filed in August 2020, in which the complainants allege, among other things, that although ocean carriers do not own chassis, they still control the operation of chassis pools at ports. An initial decision on this complaint is expected in August 2021. None of the entities GAO spoke with identified additional actions they would like for FMC to take regarding chassis. Why GAO Did This Study Senate Report 116-109—incorporated by reference into the explanatory statement accompanying the Further Consolidated Appropriations Act, 2020—contained a provision for GAO to study intermodal chassis. Within the U.S., some entities have expressed concerns about chassis, including limited availability of chassis in some circumstances, as well as the age and safety of chassis. This report describes selected stakeholders' views on: (1) the ways in which chassis are made available for the movement of shipping containers and the benefits and drawbacks of those models, and (2) the federal government's role in the chassis market. To address these objectives, GAO reviewed relevant reports on chassis provisioning and federal oversight. GAO interviewed representatives from FMC, FMCSA, five industry associations, and the three largest intermodal equipment providers. GAO also interviewed three ocean carriers, five port operators, and a motor carrier selected, in part, for their large number of container movements. The information obtained from these interviews provides a broad perspective of relevant issues but is not generalizable to all entities. For more information, contact Andrew Von Ah at (202) 512-2834 or vonaha@gao.gov.
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    In U.S GAO News
    The Federal Emergency Management Agency (FEMA) took steps prior to the 2018 disasters in the Commonwealth of the Northern Mariana Islands (CNMI), Guam, and Hawaii to facilitate response in the region, where time and distance from the continental United States create unique challenges. For instance, FEMA increased the capacity of two Pacific-area supply distribution centers and helped develop area specific disaster response plans. FEMA and its federal partners, such as the Department of Defense (DOD), had varied response roles, which local officials in the CNMI, Guam, and Hawaii considered effective. For example, DOD provided temporary roof repair for disaster survivors in the CNMI. Damage from Typhoon Yutu in the Commonwealth of the Northern Mariana Islands (left) and the Kilauea Volcano Eruption in Hawaii (right) As of October 2020, FEMA obligated $877 million—more than 70 percent of which was for Individual and Public Assistance missions—following the 2018 disasters and made progress addressing some region specific challenges. However, FEMA has not fully addressed housing assistance issues in the CNMI. For example, it experienced delays implementing its Permanent Housing Construction program in the CNMI due to contracting shortfalls and lack of experienced staff. As of October 2020, only about 30 percent of homes were completed and returned to survivors. GAO found that these housing assistance challenges are consistent with lessons learned from prior FEMA missions in other remote areas of the U.S. Developing guidance that addresses lessons learned in the Permanent Housing Construction program could help streamline assistance to disaster survivors. GAO also identified delays in FEMA's obligation of Public Assistance program funds—used to repair or replace disaster-damaged public infrastructure such as utilities, roads, and schools—in the CNMI, Guam, and Hawaii. Specifically, on average, it took over a year for FEMA to approve funds for projects awarded after the 2018 disasters. FEMA and local officials identified potential reasons for the delays, including cost estimation challenges. FEMA established cost factors in the CNMI to account for higher construction costs, and GAO found that FEMA collects some data on the timeliness of individual steps in the process. However, FEMA has not analyzed the data to help identify causes of the delays, which could allow it to target solutions to address them. The CNMI, Guam, and Hawaii experienced an unprecedented number of natural disasters in 2018—including typhoons, earthquakes, mudslides, and volcanic eruptions. FEMA is the lead federal agency responsible for helping states and territories prepare for, respond to, and recover from natural disasters. Due to the remoteness of Hawaii and the Pacific territories, disaster response and recovery can be challenging. Title IX of the Additional Supplemental Appropriations for Disaster Relief Act of 2019 includes a provision for GAO to review FEMA's response and recovery efforts for 2018 natural disasters, including those in the Pacific region. This report examines (1) how FEMA and its federal partners prepared for and responded to the 2018 disasters in the CNMI, Guam, and Hawaii; and (2) the extent to which FEMA assisted the CNMI, Guam, and Hawaii in recovering from the 2018 natural disasters. GAO analyzed program documents, response plans, and data on FEMA obligations, expenditures, and grant process steps as of October 2020; interviewed federal, state, territorial, and local officials; and visited disaster-damaged areas in Hawaii. GAO is making four recommendations, including that FEMA (1) incorporate lessons learned into Permanent Housing Construction guidance; and (2) use performance data to identify and address inefficiencies in the Public Assistance program. The Department of Homeland Security concurred, and FEMA is taking actions in response. For more information, contact Chris Currie at (404) 679-1875 or curriec@gao.gov.
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  • Natural Disasters: Economic Effects of Hurricanes Katrina, Sandy, Harvey, and Irma
    In U.S GAO News
    Between January 1980 and July 2020, the United States experienced 273 climate and weather disasters causing more than $1 billion in damages each, according to NOAA. The total cost of damages from these disasters exceeded $1.79 trillion, with hurricanes and tropical storms accounting for over 50 percent of these damages, according to NOAA. Across the regions affected by these hurricanes over the period from 2005 to 2015, CBO estimated that federal disaster assistance covered, on average, 62 percent of the damage costs. GAO has reported that the rising number of natural disasters and reliance on federal disaster assistance is a key source of federal fiscal exposure. GAO was asked to review the costs of natural disasters and their effects on communities. This report examines (1) estimates of the costs of damages caused by hurricanes and hurricanes' effects on overall economic activity and employment in the areas they affected, and (2) actions subsequently taken in those areas to improve resilience to future natural disasters. GAO conducted case studies of Hurricanes Katrina, Sandy, Harvey, and Irma, selected for two reasons. First, they were declared a major disaster by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, which establishes key programs through which the federal government provides disaster assistance, primarily through FEMA. Second, they had sizable effects on the 50 U.S. states and the District of Columbia during the period from 2004 through 2018. GAO analyzed federal agency and other data on costs, economic activity, employment, and recovery and mitigation projects in selected areas affected by these hurricanes. GAO also visited selected recovery and mitigation project sites; interviewed experts and federal, state, and local government officials; and reviewed federal, state, and local government reports and academic studies. Hurricanes Katrina, Sandy, Harvey, and Irma (selected hurricanes) caused costly damages and challenges for some populations in affected communities. In these communities, the National Oceanic and Atmospheric Administration (NOAA) estimated the cost of damages to be approximately $170 billion for Katrina, $74 billion for Sandy, $131 billion for Harvey, and $52 billion for Irma. These estimates include the value of damages to residential, commercial, and government or municipal buildings; material assets within the buildings; business interruption; vehicles and boats; offshore energy platforms; public infrastructure; and agricultural assets. These hurricanes were also costly to the federal government. For example, in 2016, the Congressional Budget Office (CBO) estimated that federal spending exceeded $110 billion in response to Katrina and $53 billion in response to Sandy. GAO analysis suggests that the selected hurricanes were associated with widely varying effects on overall economic activity and total employment in affected metropolitan areas and counties. Economic activity was lower than expected in the month of the hurricane or some of the three subsequent months in three of the affected metropolitan areas GAO analyzed. Within one year, average economic activity in these three metropolitan areas was similar to or greater than what it had been the year before the hurricane. Total employment was lower than expected in the month of the hurricane or some of the three subsequent months in 80 of the affected counties GAO analyzed. Total employment was higher than pre-hurricane employment on average in 47 of those counties within one year but remained below pre-hurricane employment on average in the other 33 counties for at least one year. Finally, state and local government officials said that the selected hurricanes had significant impacts on communities, local governments, households, and businesses with fewer resources and less expertise, and that challenges faced by households may have impacted local businesses. Communities affected by selected hurricanes have been taking actions to improve resilience, but multiple factors can affect their decisions. Actions taken after selected hurricanes include elevating, acquiring, and rehabilitating homes; flood-proofing public buildings; repairing and upgrading critical infrastructure; constructing flood barriers; and updating building codes. A community’s decision to take resilience actions can depend on the costs and benefits of those actions to the community. Multiple factors affect these costs and benefits, including the likelihood, severity, and location of future disasters, as well as the amount of federal assistance available after a disaster. Finally, vulnerabilities remain in areas affected by selected hurricanes. For example, state and local government officials indicated that many older homes in these areas do not meet current building codes. In reports to the Federal Emergency Management Agency (FEMA), states indicate they anticipate that the scope of damages via exposure to weather hazards, such as hurricanes, will likely remain high and could expand across regions affected by the selected hurricanes. In addition, some local governments have projected that population will grow in the regions affected by selected hurricanes. For more information, contact Oliver Richard at 202-512-8424 or richardo@gao.gov.
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  • Peter Fay, One of Three Judges in Florida Who Served 50 Years, Dies at 92
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    In U.S GAO News
    More than a year after the U.S. declared COVID-19 a public health emergency, the pandemic continues to result in catastrophic loss of life and substantial damage to the economy. It also continues to lay bare the fragmented nature of our public health sector, the fragility of the nation's medical supply chain, and longstanding disparities in health care access, treatment, and outcomes. GAO has made 44 recommendations to federal agencies. Of these recommendations, 16 relate to the following public health topics: COVID-19 Testing. GAO has made two recommendations to date to improve the federal government's efforts in diagnostic testing for COVID-19, critical to controlling the spread of the virus. In January 2021, GAO recommended that the Department of Health and Human Services (HHS) develop and make publicly available a comprehensive national COVID-19 testing strategy. Vaccines and Therapeutics. GAO has made two recommendations to improve transparency, communication, and coordination around the government's efforts to develop, manufacture, and distribute vaccines and therapeutics to prevent and treat COVID-19. For example, in September 2020, GAO recommended that HHS establish a time frame for a national vaccine distribution and administration plan that follows best practices, with federal and nonfederal coordination. Medical Supply Chain. GAO has made seven recommendations for the federal government to respond to vulnerabilities highlighted by the pandemic in the nation's medical supply chain, including limitations in personal protective equipment and other supplies necessary to treat individuals with COVID-19. In January 2021, GAO recommended that HHS establish a process for regularly engaging with Congress and nonfederal stakeholders as the agency refines and implements its supply chain strategy for pandemic preparedness, to include the role of the Strategic National Stockpile. COVID-19 Health Disparities. GAO has made three recommendations to improve COVID-19 data by race and ethnicity, as available data show communities of color bear a disproportionate burden of COVID-19 positive tests, cases, hospitalizations, and deaths. In September 2020, GAO recommended that the Centers for Disease Control and Prevention involve key stakeholders to help ensure the complete and consistent collection of demographic data. COVID-19 Data. GAO has made two recommendations to improve the collection of data needed to respond to COVID-19 and prepare for future pandemics. GAO recommended in January 2021 that HHS establish an expert committee to help systematically define and ensure the collection of standardized data across the relevant federal agencies and related stakeholders; the absence of such data hinders the ability of the government to respond to COVID-19, communicate the status of the pandemic with citizens, or prepare for future pandemics.  Although the responsible agencies generally agreed with the majority of the 16 recommendations, only one has been fully implemented. GAO maintains that implementing these recommendations will improve the federal government's public health response and ability to recover as a nation. As of February 17, 2021, the U.S. had about 27 million cumulative reported cases of COVID-19 and more than 486,000 reported deaths, according to the Centers for Disease Control and Prevention. The country also continues to experience serious economic repercussions. Five relief laws, including the CARES Act, have appropriated $3.1 trillion to address the public health and economic threats posed by COVID-19. The CARES Act also includes a provision for GAO to report on its ongoing monitoring and oversight efforts related to COVID-19. This testimony summarizes GAO's insights from its oversight of the federal government's pandemic response in a series of comprehensive reports issued from June 2020 through January 2021. In particular, the statement focuses on the public health response, including testing, vaccines and therapeutics, medical supply chain, health disparities, and health data. GAO reviewed data, documents, and guidance from federal agencies about their activities and interviewed federal and state officials and stakeholders for the series of reports on which this testimony is based. See https://www.gao.gov/coronavirus/. GAO has made 44 recommendations for agencies and four matters for congressional consideration in its comprehensive series of bimonthly reports on the federal response to COVID-19 over the last year. GAO will issue its next report in this series in March 2021. For more information, contact A. Nicole Clowers at (202) 512-7114 or clowersa@gao.gov.
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    What GAO Found GAO's prior work has shown that the financial services industry has made little or no progress in increasing diversity at the senior management level. The figure below shows the latest available data on diversity at senior levels. Race/Ethnicity and Gender Representation of Executive/Senior-Level Management in the Financial Services Industry, 2018 One common theme of GAO's recent reports on diversity in the financial services industry is the importance of using data to assess diversity and inclusion efforts. In 2017, GAO reported that financial services firms said it is important for firms to collect and analyze data to assess workforce diversity. Notably, all the financial services firms with which GAO spoke agreed on the importance of analyzing employee data. Some firm representatives noted that with such data, they can analyze the gender and racial/ethnic diversity of new hires, employees leaving the organization, and newly promoted staff and managers. In 2019 and 2020, GAO reported that the Federal Home Loan Banks (FHLBanks) and Fannie Mae and Freddie Mac (the enterprises) track diversity composition data on their workforce, recruitment, and hiring. The FHLBanks and the enterprises use these data to compare their performance against benchmarks, such as prior-year metrics and peer institutions, and set goals for future performance. They also incorporate diversity targets into their incentive compensation goals or performance competencies for management. The Federal Housing Finance Agency (FHFA) uses data to oversee the workforce diversity and inclusion efforts of the FHLBanks and the enterprises. As GAO reported in 2019 and 2020, FHFA collects and reviews quarterly and annual workforce diversity data from the FHLBanks and enterprises. For example, FHFA assesses each FHLBank's performance in workforce diversity using the quarterly data. In 2017, FHFA also began reviewing diversity and inclusion efforts as part of its annual examinations of the FHLBanks and the enterprises. Why GAO Did This Study The financial services industry provides services that help families build wealth and is essential to the economic growth of the country. For instance, the FHLBanks, Fannie Mae, and Freddie Mac play important roles in supporting the U.S. housing market. The FHLBanks include 11 federally chartered banks that provide liquidity for member institutions, such as commercial and community banks, to use in support of housing finance and community lending. Fannie Mae and Freddie Mac purchase single-family and multifamily mortgage loans that lenders already made to borrowers. Congressional members and others have highlighted the need for the financial services industry to create opportunities for all Americans, including supporting a diverse workforce. This statement discusses (1) how financial service firms use data to assess workforce diversity efforts; (2) how the FHLBanks and the enterprises use data to assess their diversity efforts; and (3) how FHFA oversees diversity efforts at the FHLBanks and the enterprises. This statement is primarily based on three GAO reports (GAO-18-64, GAO-19-589, and GAO-20-637) on diversity efforts in the financial services industry and at FHLBanks and the enterprises. For the reports, GAO reviewed relevant literature and data, and interviewed representatives of financial services firms and industry and diversity advocacy organizations. GAO also reviewed documents and interviewed officials from the FHLBanks, enterprises, and FHFA. For more information, contact Daniel Garcia-Diaz at (202) 512-8678 or GarciaDiazD@gao.gov.
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  • Weapon Systems Cybersecurity: Guidance Would Help DOD Programs Better Communicate Requirements to Contractors
    In U.S GAO News
    Since GAO's 2018 report, the Department of Defense (DOD) has taken action to make its network of high-tech weapon systems less vulnerable to cyberattacks. DOD and military service officials highlighted areas of progress, including increased access to expertise, enhanced cyber testing, and additional guidance. For example, GAO found that selected acquisition programs have conducted, or planned to conduct, more cybersecurity testing during development than past acquisition programs. It is important that DOD sustain its efforts as it works to improve weapon systems cybersecurity. Contracting for cybersecurity requirements is key. DOD guidance states that these requirements should be treated like other types of system requirements and, more simply, “if it is not in the contract, do not expect to get it.” Specifically, cybersecurity requirements should be defined in acquisition program contracts, and criteria should be established for accepting or rejecting the work and for how the government will verify that requirements have been met. However, GAO found examples of program contracts omitting cybersecurity requirements, acceptance criteria, or verification processes. For example, GAO found that contracts for three of the five programs did not include any cybersecurity requirements when they were awarded. A senior DOD official said standardizing cybersecurity requirements is difficult and the department needs to better communicate cybersecurity requirements and systems engineering to the users that will decide whether or not a cybersecurity risk is acceptable. Incorporating Cybersecurity in Contracts DOD and the military services have developed a range of policy and guidance documents to improve weapon systems cybersecurity, but the guidance usually does not specifically address how acquisition programs should include cybersecurity requirements, acceptance criteria, and verification processes in contracts. Among the four military services GAO reviewed, only the Air Force has issued service-wide guidance that details how acquisition programs should define cybersecurity requirements and incorporate those requirements in contracts. The other services could benefit from a similar approach in developing their own guidance that helps ensure that DOD appropriately addresses cybersecurity requirements in contracts. DOD's network of sophisticated, expensive weapon systems must work when needed, without being incapacitated by cyberattacks. However, GAO reported in 2018 that DOD was routinely finding cyber vulnerabilities late in its development process. A Senate report accompanying the National Defense Authorization Act for Fiscal Year 2020 included a provision for GAO to review DOD's implementation of cybersecurity for weapon systems in development. GAO's report addresses (1) the extent to which DOD has made progress in implementing cybersecurity for weapon systems during development, and (2) the extent to which DOD and the military services have developed guidance for incorporating weapon systems cybersecurity requirements into contracts. GAO reviewed DOD and service guidance and policies related to cybersecurity for weapon systems in development, interviewed DOD and program officials, and reviewed supporting documentation for five acquisition programs. GAO also interviewed defense contractors about their experiences with weapon systems cybersecurity. GAO is recommending that the Army, Navy, and Marine Corps provide guidance on how programs should incorporate tailored cybersecurity requirements into contracts. DOD concurred with two recommendations, and stated that the third—to the Marine Corps—should be merged with the one to the Navy. DOD's response aligns with the intent of the recommendation. For more information, contact W. William Russell at (202) 512-4841 or russellw@gao.gov.
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    In U.S GAO News
    What GAO Found The Protecting Access to Medicare Act of 2014 (PAMA) established the Certified Community Behavioral Health Clinics (CCBHC) demonstration and tasked the Department of Health and Human Services (HHS) with its implementation. CCBHCs aim to improve the behavioral health services they provide, particularly for Medicaid beneficiaries. Initially established for a 2-year period, the demonstration has been extended by law a number of times; most recently, it was extended to September 2023. States participating in the demonstration can receive Medicaid payments, consistent with federal requirements, for CCBHC services provided to beneficiaries. PAMA also required HHS to assess the effect of the demonstration on service access, costs, and quality. HHS's preliminary assessments of the demonstration in eight states, with 66 participating CCBHCs, found the following: Access. CCBHCs commonly added services related to mental and behavioral health, such as medication-assisted treatment, and took actions to provide services outside the clinic setting, such as through telehealth. Costs. States' average payments to CCBHCs typically exceeded CCBHC costs for the first 2 years of the demonstration. CCBHC payments and costs were more closely aligned in the second year for most states, better reflecting the payment methods prescribed under the demonstration. Quality. States and CCBHCs took steps, such as implementing electronic health records systems, to report performance on 21 quality measures. GAO found data limitations complicated—and will continue to affect—HHS's efforts to assess the effectiveness of the demonstration. For example: Lack of baseline data. PAMA requires HHS to assess the quality of services provided by CCBHCs compared with non-participating areas or states. The demonstration marked the first time these clinics reported performance on quality measures, so no historical baseline data exist. HHS officials noted that with time, additional data may provide insight on the quality of services. Lack of comparison groups. PAMA requires HHS to compare CCBHCs' efforts to increase access and improve quality with non-participating clinics and states. HHS was unable to identify comparable clinics or states due to significant differences among the communities. Lack of detail on Medicaid encounters. PAMA requires HHS to assess the effect of the demonstration on federal and state costs and on Medicaid beneficiaries' access to services. HHS plans to use Medicaid claims and encounter data to assess such changes. However, GAO has previously identified concerns with the accuracy and completeness of Medicaid data and has made numerous recommendations aimed at improving their quality. HHS's decisions in implementing the demonstration also complicated its assessment efforts. HHS allowed states to identify different program goals and target populations, and to cover different services. HHS also did not require states to use standard billing codes and billing code modifiers it developed. The lack of standardization across states limited HHS's ability to assess changes in a uniform way. Why GAO Did This Study Behavioral health conditions—mental health issues and substance use disorders—affect millions of people. HHS estimates that 61 million adults had at least one behavioral health condition in 2019—41 million of whom did not receive any related treatment in the prior year. Many individuals with behavioral health conditions rely on community mental health centers for treatment, but the scope and quality of these services vary. To improve community-based behavioral health services, PAMA created the CCBHC demonstration and provided HHS with $25 million to support its implementation. PAMA directed HHS to assess the demonstration and to provide recommendations for its continuation, modification, or termination. To date, HHS has issued three annual reports assessing the initial demonstration period, which ran from 2017 to 2019. HHS plans to issue a fourth annual report and a final report by December 2021. This report describes HHS's assessment of the demonstration regarding access, costs, and quality. Under the CARES Act, GAO is to issue another report on states' experiences by September 2021. GAO reviewed federal laws and regulations; HHS guidance; and HHS's assessments of the demonstration, including three issued reports, interim reports, and the analysis plan for future reports. GAO also interviewed HHS officials and officials from organizations familiar with community health clinics. HHS provided technical comments, which GAO incorporated as appropriate. For more information, contact Carolyn L. Yocom (202) 512-7114 or yocomc@gao.gov.
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    In U.S GAO News
    The COVID-19 pandemic has necessitated major federal spending to respond to the national public health emergency and resulting economic turmoil. This response and the severe economic contraction from the pandemic have led to increased federal debt. Once the COVID-19 pandemic abates and the economy has substantially recovered, Congress and the administration will need to address the federal government’s fiscal challenges. To help change the long-term fiscal path, in September 2020 GAO recommended that Congress consider establishing a long-term fiscal plan that includes fiscal rules and targets, such as a debt-to-gross domestic product (GDP) target. In this report, GAO analyzed the changes in spending and revenue needed to reach six potential debt-to-GDP targets at the end of a 30-year period (2020-2049). To reach any of the targets, policymakers will need to cut program spending, increase revenue, or, most likely, a combination of both (see table). Illustrative Examples of Changes Needed to Achieve Debt-to-GDP Targets Debt target, percent of GDP (end of 30 years) Spending and revenue: total change over 30 years Program spending alone: Immediate and permanent decrease needed in annual projected program spendinga Revenue alone: Immediate and permanent increase needed in annual projected revenue Percent Dollars, trillions Percent Percent 140 25.4 13.8 18.5 120 31.2 16.9 22.8 100 37 20 27 80 42.8 23.1 31.2 60 48.5 26.3 35.4 0 (paying off all debt) 65.9 35.7 48.1 Source: GAO simulation. | GAO-21-211. Note: The simulation used for this analysis generally reflect historical trends, such as the extension of tax provisions scheduled to expire. It does not account for potential macroeconomic effects of fiscal policy changes over time. aProgram spending consists of all spending except interest payments on debt held by the public. When considering the spending and revenue changes needed to achieve various debt-to-GDP targets, policymakers may also consider how changes in assumptions about key variables—such as discretionary spending, revenue, and GDP—affect these fiscal outcomes. For example, if GDP growth is greater than expected, policymakers may have to make smaller spending cuts or revenue increases to reach a selected debt-to-GDP target than those that would be needed based on GAO’s standard assumptions. GAO created an interactive web tool accompanying this report to allow users to enter different assumptions for each of these variables. This tool illustrates how these changes would affect the different debt-to-GDP targets over time, as well as the changes in spending and revenue needed to achieve various targets. This tool can be found at https://www.gao.gov/products/GAO-21-211. Even before the fiscal and economic effects resulting from COVID-19, an imbalance between federal revenue and spending that is built into current law and policy was contributing to the growing federal debt. The Congressional Budget Office projects that by 2023 federal debt held by the public will reach 107 percent of GDP, its highest point in U.S. history. This situation—in which federal debt grows faster than GDP—means that our nation is on an unsustainable fiscal path. GAO was asked to review issues related to fiscal rules and targets and the federal fiscal condition. In response to this request, in September 2020, GAO issued a report (GAO-20-561) on key considerations for the design, implementation, and enforcement of fiscal rules and targets. This report supplements that work and describes how changes in assumptions of future spending and revenue affect the federal government’s projected fiscal condition. GAO updated its long-term simulations of federal revenue and spending to (1) analyze six potential debt-to-GDP targets and (2) measure the fiscal gap—the policy change needed to reach a given debt-to-GDP fiscal target from the start to the end of 30-years. GAO also analyzed how changes in key variables affected the debt-to-GDP targets and the fiscal gap. For more information, contact Jeff Arkin at (202) 512-6806 or arkinj@gao.gov.
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