Secretary Antony J. Blinken with Yonit Levy of Channel 12

Antony J. Blinken, Secretary of State

Jerusalem

David Citadel Hotel

QUESTION:  Secretary of State Antony Blinken, welcome.  Thank you very much for talking to us today.

SECRETARY BLINKEN:  Hi.  Good to be with you.

QUESTION:  This isn’t – you’re of course not a stranger to the region.  This is far from being your first time here, but it’s the first time as Secretary of State.  And I wanted to begin by asking you about the ceasefire.  I mean, you seem to be in this cycle of every couple of years having a short but devastating war between Israel and Hamas, and of course, the U.S. played a constructive role in bringing about a ceasefire.

(Interruption.)

I’m going to ask just part of that again.  The U.S. played a constructive role in bringing about a ceasefire, but many Israelis believe that this is just a countdown to the next conflict.  What can be done?  What is the way out?

SECRETARY BLINKEN:  I think we do have to try to break the cycle of violence, because if we don’t it will repeat itself.  And maybe it’s next month, maybe it’s next year, maybe it’s in five years, but I don’t think that’s in anyone’s interests.  It’s not in the interests of Israelis.  It’s not in the interests of Palestinians.  It’s not in the interests of the broader region.

So I think we have to all try to work on a few things.  First, of course, we need to deal with the urgent situation in Gaza itself – humanitarian assistance, water, electricity, sanitation – to respond to the immediate needs.  We need to work together to try and rebuild and create some prospects for a better life for people who live in Gaza.  But then I think it’s really incumbent on both sides to try to do something to take away some of the things that can spark the cycle of violence.  And ultimately, what that really comes down to is, at least in our judgment, doing everything possible to make sure that Israelis and Palestinians alike have in their lives equal measures of security, of opportunity, of dignity.  And that manifests itself in many different ways, but I think at heart, that’s what needs to happen.  And so we spent some time today talking to our allies here in Israel about how that might go forward and did the same with the Palestinians.

QUESTION:  Regarding the U.S.’s military assistance to Israel, during this operation in Gaza we heard mounting opposition from progressive lawmakers to the arms deal with Israel and trying to block it.  Is there any chance that the administration will reconsider the deal to supply Israel with precision-guided weapons?

SECRETARY BLINKEN:  President Biden has been absolutely clear, and he’s been clear on more than one occasion:  We are committed to Israel’s security, period.  We will make sure that Israel has the means to defend itself.  And particularly when we have something like what the Israelis experienced in the last couple of weeks, attacks from a terrorist group indiscriminately targeting civilians, we want to make sure that Israel has the means to deal with that.

At the same time, as a democracy, I think Israel has an extra burden, and we owe the same thing to make sure that when it is defending itself, defending its citizens, it is doing everything it possibly can to avoid civilian casualties, to minimize the harm that is done to those who can get caught in the crossfire.

QUESTION:  Do you believe that Israel did in this case?

SECRETARY BLINKEN:  I think Israel took very significant steps to do that, but we also know that on both sides men, women, and especially children were lost, and I think that’s deeply painful, and it’s a reminder that we throw around numbers, statistics, but these statistics, these numbers can’t hide the fact that we’re talking about real human beings.  And that’s important because I think it just reminds us about the need to make sure that we’re doing everything we can to avoid a repetition.

QUESTION:  Taking the opportunity to talk about the bigger picture, the relationship between Israel and Palestinians, will there be an attempt to reignite the Israel-Palestinian peace process?  You spoke in your confirmation hearings saying that a Palestinian state is realistically – it’s hard to see near-term prospects for moving forward.  Do you still think that?

SECRETARY BLINKEN:  Well, two things.  I think a lot of work needs to be redone to try to rebuild some confidence, to try to rebuild some trust, to try to build some conditions and an environment in which it might be possible to re-engage in a meaningful way on two states.  But equally important, we continue to believe very strongly that a two-state solution is not just the best way, but probably the only way to really assure that going forward, Israel has a future as a secure Jewish and democratic state, and the Palestinians have a state to which they’re entitled.

So I think we want to get to that.  But right now, the focus is on dealing with the aftermath, the recent violence, trying to build on the ceasefire, address the immediate needs and concerns, and then see if over time the conditions are such that there’s a better environment for trying to pursue a two-state solution.

QUESTION:  I want to move on to Iran.  Iranian President Hassan Rouhani said last Thursday that his country’s close to reaching a deal.  He said we have taken a big step and an agreement in principle has been achieved.  Is that true?  How close is the deal?

SECRETARY BLINKEN:  Well, I think that would be news to us, because we’re now, I think, in the fifth rounds of talks in Vienna.  These are – as I think you know – indirect talks.  We haven’t been talking directly to the Iranians.  It’s been through the European Union and our other partners.  I think we’ve clarified increasingly what each side would need to do to come back into compliance with the JCPOA, but it remains an unanswered question whether Iran is actually prepared to do what it needs to do to come back into compliance.  The jury is still out on that.

QUESTION:  Israeli prime minister has been quite clear in his opposition to the Iran deal.  Today during your joint statement, he said, “I hope the U.S. not to the old JCPOA.”  So let me ask you, Mr. Secretary, are the plans indeed to return to the same terms as the JCPOA or additional safeguards, for example to ensure that Iran – Iran’s compliance?

SECRETARY BLINKEN:  The United States and Israel are absolutely united in the proposition that Iran can never acquire a nuclear weapon.  We are joined in that goal and in that commitment.  It’s also no secret that over time we’ve had differences over the best way to get there, to make sure that Iran does not get a weapon.  From our perspective, the JCPOA did exactly what it set out to accomplish, which was to cut off all of the pathways that Iran had to producing fissile material for a nuclear weapon on short order.  And our experts verified that it was working, international experts verified that it was working, and it had the most intrusive inspections regime of any arms control agreement ever achieved.  And the result was that when the agreement was in force, Iran, had it decided to try to produce fissile material for a nuclear weapon, would have required at least a year to do so, which would have been plenty of time to see it and, if necessary, to do something about it.

But here’s what happened since.  Now that we’re out of the deal, Iran has started to ignore the constrains that the deal imposed.  And it is closer and closer and closer to being able to produce fissile material for a nuclear weapon on very short order.  And so far from getting less dangerous without the deal, it’s gotten more dangerous.  And I think there’s a certain amount of urgency to try to put Iran back into the nuclear box that the deal constructed.

So having said that, if – what we’ve said along is if we succeed in doing that, if Iran returns to compliance with the deal, we would do the same.  We would also seek to make it, as we say, longer and stronger.  And we’d also work hard to engage the other issues where Iran is a very dangerous and problematic actor for us and for Israel – destabilizing activities in the region, proliferation of weapons, support for terrorist groups, et cetera.  All of those things —

QUESTION:  So when you say “longer” does that mean the sunset clause is extended, for example?  It won’t end in 2031?

SECRETARY BLINKEN:  Yeah, I think this is important.  Of course, with the passage of time the different timelines have gotten shorter.  Having said that, the two most important timelines – the level at which Iran can enrich, 3.67 percent, the limits on the stockpile of enriched uranium to 300 kilograms – those don’t expire until 2030.  So if Iran were to come back into compliance, we would also have some time to seek to extend those deadlines and others.

QUESTION:  Sir, I think you spoke in your acceptance speech – you spoke about your stepfather Samuel being a Holocaust survivor.  I think that resonated with many Israelis.  And I wanted to ask you:  When we see this rise in anti-Semitic incidents in the U.S., could you tell us what that makes you feel not only on the national level as the Secretary of State, but on a personal level?

SECRETARY BLINKEN:  It’s profoundly, profoundly disturbing.  And we have seen, not just in the last week although we’ve seen – well, actually, we have seen a very disturbing eruption of anti-Semitic incidents.  But the truth of the matter is anti-Semitism’s been on the rise in the United States and around the world for the last several years.  And we know this from history.  It’s the canary in the coal mine because it’s almost inevitable that when you see anti-Semitism erupt and emerge, hatred directed at other groups almost is sure to follow.  And we’re seeing that in the United States now with hatred directed, for example, at Asian Americans.

And so when I see that I feel it both on a very personal level, but I also see it as a warning sign, a signal that there are – things are happening that we have to address.  Because if it’s allowed to fester, if it’s allowed to grow, if it’s allowed to go even further with impunity, you wind up having a conflagration that affects a lot of people.  So we’re taking this very, very seriously.  I think you heard President Biden’s speech just yesterday – the most recent incidents we’ve seen in the United States, he called them despicable.  And we’re determined to deal with that and put it to an end.

QUESTION:  The Israeli-Palestinian conflict obviously has been stoking anti-Semitic violence in Europe for years.  When we see, for example, known figures on the far left in the United States referring to Israel as an apartheid state, are you worried that this rhetoric could lead to more anti-Semitic incidents, instead of calming things down?

SECRETARY BLINKEN:  One of the – one of the great things about my job right now as Secretary of State is I don’t do politics, I just focus on policy.

QUESTION:  So I’m not going to ask you anything about Israeli politics either.  Don’t worry about it.

SECRETARY BLINKEN:  No, no – no Israeli politics, no American politics.  But look, I think we all have to be attentive.  And whether – when we see anti-Semitism emerge anywhere, whether it’s in the United States, whether it’s in this part of the world, whether it’s anywhere in the world, we have to take it seriously, we have to address it, we have to deal with it.

QUESTION:  Mr. Secretary, my final question:  President Biden, of course, has been here many times.  His famous story about as a young senator meeting Golda Meir, he’s been here as a senator and as a vice president.  Can you let us in on when his first visit as President will be to Israel?

SECRETARY BLINKEN:  I don’t have the time, I don’t have the date, but I can tell you I know that he very much looks forward to coming back.  And you’re right, he’s been engaged here for – ever since Golda Meir.  And as he’s often said, he’s worked with every Israeli prime minister since Golda Meir.  This is something that he feels deeply: the relationship with Israel, the commitment to Israel’s security.  That’s something that’s very deeply rooted in him.  And of course, as a true friend of Israel’s, he’s also fully prepared to say when he might disagree with something.

But that’s exactly the nature of our relationship, of our alliance, of our partnership.  We speak very directly, very frankly to each other, and ultimately we try to reason through problems together, right?  That was the nature of the conversations that I had today with the prime minister, with the foreign minister, with the defense minister, and so many others.  And I suspect that when the President does come here, he’ll pursue a long, longstanding conversation that he’s had going back a few years.

QUESTION:  Well, you still have a long schedule in front of you, so thank you so much, Mr. Secretary, for talking to us today.  We really appreciate it.  Thank you.

SECRETARY BLINKEN:  Great to be with you.  Thanks for having me.

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    What GAO Found GAO's analysis of 2020 data found that, for 20 selected brand-name prescription drugs, estimated U.S. prices paid at the retail level by consumers and other payers (such as insurers) were more than two to four times higher than prices in three selected comparison countries. The U.S. prices GAO estimated for comparison reflect confidential rebates and other price concessions, which GAO refers to as net prices. Publicly available prices for the comparison countries were gross prices that did not reflect potential discounts. As a result, the actual differences between U.S. prices and those of the other countries were likely larger than GAO estimates. The price differences varied by drug. Specifically, while estimated U.S. net prices were mostly higher than the gross prices in other countries (by as much as 10 times), some were lower. The following figure illustrates comparisons for two of GAO's selected drugs. GAO found similar differences in estimated prices paid by final payers at the manufacturer level. Estimated U.S. Net Prices and Selected Comparison Countries' Gross Prices at the Retail Level for Two Selected Drugs and Package Sizes, 2020 GAO's analysis found consumers' out-of-pocket costs for prescription drugs varied across and within all four countries but likely more within the U.S. and Canada where multiple payers had a role setting prices and designing cost-sharing for consumers, and not all consumers had prescription drug coverage. In Australia and France, prescription drug pricing was nationally regulated and prescription drug coverage was universal; thus, consumers' out-of-pocket costs within these countries for each drug were generally less varied. For example, in Australia, consumers typically paid one of two amounts for prescription drugs—either about 5 or 28 U.S. dollars in 2020. In the U.S., potential out-of-pocket costs for consumers could have varied much more widely depending on the type of coverage they had. For example, for one drug in GAO's analysis, considering only a few coverage options, consumers' out-of-pocket costs in 2020 could have ranged from a low of about 22 to a high of 514 U.S. dollars. GAO provided a draft to the Department of Health and Human Services for review and incorporated the Department's technical comments as appropriate. Why GAO Did This Study While spending on prescription drugs continues to grow worldwide, studies indicate the U.S. spends more than other countries. However, various factors—such as country-specific pricing strategies, confidential rebates to payers, and other price concessions—may obscure the actual prices of prescription drugs. GAO was asked to review U.S. and international prescription drug prices. This report (1) examines how prices at the retail and manufacturer levels in the U.S. compare to prices in three selected comparison countries—Australia, Canada, and France, and (2) provides information on consumers' out-of-pocket costs for prescription drugs in these countries. GAO analyzed 2020 price data for a non-generalizable sample of 41 brand-name drugs among those with the highest expenditures and use in the U.S. Medicare Part D program in 2017. Twenty of these drugs had price data available in all four countries. For U.S. prices, GAO estimated the net prices paid using data from various sources, including estimates of Medicare Part D rebates and other price concessions, and commercially available data. Prices for the selected comparison countries were obtained from publicly available government sources. National prices were not available for Canada, so GAO used the prices from Ontario, Canada's most populous province, as a proxy for Canadian prices. GAO also reviewed country-specific guidance and other relevant information and interviewed researchers, manufacturers, and government officials. For more information, contact John E. Dicken at (202) 512-7114 or dickenj@gao.gov.
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  • K-12 Education: Observations on States’ School Improvement Efforts
    In U.S GAO News
    Many states use flexibilities in the Elementary and Secondary Education Act (ESEA), as amended, in identifying low-performing schools and student subgroups (e.g., students from major racial and ethnic groups and low-income students) that need support and improvement. For example, states must identify all public high schools failing to graduate at least one-third of their students. According to GAO's state plan analysis, four states used ESEA's flexibilities to set higher graduation rates (i.e., 70-86 percent) for purposes of state accountability. Similarly, while ESEA requires states to identify schools in which students in certain subgroups are consistently underperforming, 12 states assess the performance of additional student subgroups. Although states are generally required to set aside a portion of their federal education funding for school improvement activities (see figure), states have some discretion in how they allocate these funds to school districts. According to GAO's survey, 27 states use a formula to allocate funds. GAO also found that in at least 34 states, all school districts that applied for federal funds received them in school year 2018-2019, but states had discretion regarding which schools within those districts to fund and at what level. Funding for School Improvement through the Elementary and Secondary Education Act (ESEA) Title I, Part A Note: For more details, see figure 2 in GAO-21-199. A majority of the 50 states and the District of Columbia responding to our survey reported having at least moderate capacity to support school districts' school improvement activities. Education provides various types of technical assistance to build local and state capacity such as webinars, in-person training, guidance, and peer networks. About one-half of states responding to GAO's survey sought at least one type of technical assistance from Education's program office and various initiatives, and almost all of those found it helpful. For example, Education's Regional Educational Laboratories (REL) help states use data and evidence, access high-quality research to inform decisions, identify opportunities to conduct original research, and track progress over time using high-quality data and methods. Several states most commonly reported finding the following assistance by RELs to be helpful: in-person training (26), webinars (28), and reviews of existing research studies to help select interventions (24). The Elementary and Secondary Education Act (ESEA) requires states to have statewide accountability systems to help provide all children significant opportunity to receive a fair, equitable, and high-quality education, and to close educational achievement gaps high-quality education. These systems must meet certain federal requirements, but states have some discretion in how they design them. For example, ESEA requires states to identify low-performing schools and student subgroups for support and improvement. Senate Report 115-289 accompanying the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Bill, 2019, includes a provision for GAO to review states' school improvement activities. This report addresses (1) how states identify and allocate funds for schools identified for support and improvement; and (2) the extent to which states have capacity to support districts' school improvement activities and how helpful states find Education's technical assistance. GAO analyzed the most current approved state accountability plans from all 50 states and the District of Columbia as of September 2020. The information in these plans predates the COVID-19 pandemic and represents a baseline from which to compare school improvement activities going forward. GAO also surveyed and received responses from all 50 states and the District of Columbia. GAO also conducted follow-up interviews with officials in three states selected based on variation in reported capacity and geographic diversity. For more information, contact Jacqueline M. Nowicki at (617) 788-0580 or nowickij@gao.gov.
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  • USDA Market Facilitation Program: Information on Payments for 2019
    In U.S GAO News
    The U.S. Department of Agriculture's (USDA) Farm Service Agency (FSA) distributed about $14.4 billion in 2019 Market Facilitation Program (MFP) payments to farming operations in all 50 states and Puerto Rico. According to USDA, these payments were intended to offset the effects of trade disruptions and tariffs targeting a variety of U.S. agricultural products. FSA distributed these payments to 643,965 farming operations. The average MFP payment per farming operation for 2019 was $22,312 but varied by county, ranging from $44 to $295,299. MFP payments for 2019 also varied by type of commodity. Three types of commodities were eligible for 2019 MFP payments: (1) nonspecialty crops (including grains and oilseeds, such as corn and soybeans); (2) specialty crops (including nuts and fruits, such as pecans and cranberries); and (3) dairy and hogs. Most of the 2019 MFP payments went to farming operations that produced nonspecialty crops. Less than 10 percent went to farming operations that produced specialty crops or dairy and hogs. USDA made approximately $519 million in additional MFP payments for 2019 compared with 2018 because of increases in payment limits—the cap on payments that members of farming operations can receive. FSA distributed these additional MFP payments to about 10,000 farming operations across 39 states. The amount of additional MFP payments that FSA distributed for 2019 varied by location. Farming operations in five states—Texas, Illinois, Iowa, Missouri, and Minnesota—received almost half of all additional payments. In May 2019, USDA announced it would distribute up to $14.5 billion in direct payments to farming operations that were affected by trade disruptions, following the approximately $8.6 billion USDA announced it had distributed for 2018. USDA referred to these 2018 and 2019 payments as the MFP. In comparison with 2018, USDA changed the 2019 payment structure for the three types of commodities that were eligible for payments. For example, USDA increased the payment limit for each of these three types. GAO was asked to review the distribution of MFP payments for 2019. This report examines, among other things, MFP payments for 2019 and how they varied by location, farming operation, and type of commodity, as well as additional MFP payments for 2019 compared with 2018 that resulted from increased payment limits. To accomplish these objectives, GAO analyzed data from USDA and interviewed agency officials knowledgeable about the data. For more information, contact Steve Morris at (202) 512-3841 or morriss@gao.gov.
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  • National Security: DOD and State Have Processes for Formal and Informal Challenges to the Classification of Information
    In U.S GAO News
    What GAO Found The Department of Defense (DOD) and the Department of State (State) have similar processes for formal challenges to the classification of information. For example, if there is reason to believe that information is improperly classified, authorized holders—including executive branch agency or contractor personnel with relevant clearances—can submit a formal classification challenge in writing (see figure). Officials will then review the classification challenge and make a determination. If a formal challenge is denied, the authorized holder can then appeal to senior officials within the agency, and if the agency denies the appeal, the authorized holder can appeal directly to the Interagency Security Classification Appeals Panel (ISCAP). ISCAP, established by Executive Order, then issues a decision that is final unless the head of the agency appeals ISCAP's decision to the President. Processes for Formal Challenges to the Classification of Information aIndividual refers to an authorized holder with access to classified information. Both DOD and State encourage authorized holders to resolve classification challenges informally before pursuing a formal classification challenge. According to DOD and State officials, informal challenges can be done in person, by phone, or by email. For example, officials told GAO that authorized holders can contact the relevant information security office about whether classified documents are marked properly. According to DOD and State officials, Members of Congress (Members) may use their existing processes to formally and informally challenge the classification of information. However, according to officials from the Information Security Oversight Office (ISOO), which provides support to ISCAP, Members cannot appeal a decision to ISCAP. Instead, Members can appeal to the Public Interest Declassification Board (PIDB), a statutory body that makes recommendations to the President in response to certain congressional requests to evaluate the proper classification of records. DOD officials stated that they do not have any knowledge of ever receiving a formal classification challenge from Members. State officials stated that they did not receive any formal classification challenges from Members in 2017 through 2020. ISOO officials also stated that the panel received its first formal classification challenge from a Member in 2020. ISCAP subsequently denied the challenge and directed the Member to the PIDB. Why GAO Did This Study Classified national security information is vital to U.S. national interests. The appropriate protection and handling of this information is a top priority for the executive branch and Congress. Based on guidance, such as Executive Order 13526, Classified National Security Information, authorized holders with access to classified information may submit a classification challenge if there are reasons to believe information is improperly classified. According to DOD and State officials, Members may also submit a classification challenge. GAO was asked to review the processes for challenging the classification of national security information. This report describes (1) the processes to challenge the classification of information at DOD and State; and (2) the processes that Members of Congress can use to challenge the classification of information at DOD and State. GAO reviewed applicable laws and regulations, and DOD, State, and other guidance related to the classification of information and classification challenge processes. GAO also interviewed DOD, State and ISOO officials. For more information, contact Joe Kirschbaum at (202) 512-9971 or Kirschbaumj@gao.gov.
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  • Offshore Oil and Gas: Updated Regulations Needed to Improve Pipeline Oversight and Decommissioning
    In U.S GAO News
    What GAO Found The Department of the Interior's (Interior) Bureau of Safety and Environmental Enforcement (BSEE) does not have a robust oversight process for ensuring the integrity of approximately 8,600 miles of active offshore oil and gas pipelines located on the seafloor of the Gulf of Mexico. Specifically, BSEE does not generally conduct or require any subsea inspections of active pipelines. Instead, the bureau relies on monthly surface observations and pressure sensors to detect leaks. However, officials told us that these methods and technologies are not always reliable for detecting ruptures. In response to a pair of significant oil leaks in 2016 and 2017, BSEE partnered with industry to improve subsea leak detection, but the technologies identified remain relatively new and cannot be retrofitted to a majority of pipelines. According to BSEE, the bureau's regulations are outdated and do not address how pipelines should be inspected, the complexities of deep water pipeline operations, and changes in technological standards. BSEE has long recognized the need to improve its pipeline regulations, and in 2007 issued a proposed rule that cited the need to enhance safety and protect the environment, but this effort stalled. The 2007 proposed rule addressed offshore pipeline integrity, including new requirements regarding pipeline inspection and subsea leak detection technologies. Since 2013, BSEE has noted plans to update its pipeline regulations but has made limited progress in the interim. Without taking actions to develop, finalize, and implement updated regulations to address identified oversight gaps, BSEE will continue to be limited in its ability to ensure the integrity of active pipelines. BSEE does not have a robust process to address the environmental and safety risks posed by leaving decommissioned pipelines in place on the seafloor due to the cumulative effects of oversight gaps before, during, and after the decommissioning process. First, BSEE does not thoroughly account for such risks during the review of decommissioning applications. This has contributed to BSEE and its predecessors authorizing industry to leave over 97 percent (about 18,000 miles) of all decommissioned pipeline mileage on the Gulf of Mexico seafloor since the 1960s. Generally, pipelines must be removed from the seafloor. BSEE, however, may allow pipelines to be decommissioned-in-place if certain criteria are met. Such a high rate of approval indicates that this is not an exception, however, but rather that decommissioning-in-place has been the norm for decades. Second, BSEE does not ensure that operators meet decommissioning standards, such as cleaning pipelines, because they do not observe any pipeline decommissioning activities, inspect pipelines after their decommissioning, or verify most of the pipeline decommissioning evidence submitted. Third, BSEE does not monitor the condition and location of pipelines following their decommissioning-in-place, which reduces its ability to mitigate any long-term risks, such as pipeline exposure or movement. Additionally, if pipelines decommissioned-in-place are later found to pose risks, there is no funding source for removal. As discussed above, BSEE has made limited progress in updating what it acknowledges are outdated pipeline regulations. Without taking actions to develop, finalize, and implement updated pipeline regulations, BSEE will continue to be limited in its ability to ensure that its pipeline decommissioning process addresses environmental and safety risks. Why GAO Did This Study The offshore oil and gas industry has installed approximately 40,000 miles of oil and gas pipelines in federal offshore waters since the 1940s. BSEE is responsible for enforcing standards and regulations for oil and gas operations—including the oversight of active pipelines and their decommissioning—to enhance environmental protection and safety. As pipelines age, they are more susceptible to damage from corrosion, mudslides, and seafloor erosion, which can result in leakage of oil and gas into the ocean. Additionally, hurricanes can move pipelines extensive distances, which may damage subsea habitat, impede access to sediment resources, and create navigational and trawling hazards. GAO was asked to review BSEE's management of offshore oil and gas pipelines. This report examines BSEE's processes for (1) ensuring active pipeline integrity and (2) addressing safety and environmental risks posed by decommissioning. GAO reviewed regulations, procedures, and other documents and data related to BSEE's pipeline management processes. GAO also interviewed BSEE officials and those from other agencies with offshore responsibilities.
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  • DOD Financial Management: Continued Efforts Needed to Correct Material Weaknesses Identified in Financial Statement Audits
    In U.S GAO News
    The Department of Defense (DOD) continues to face financial management issues and challenges that have prevented it from obtaining a clean audit opinion on the fair presentation of its financial statements. Specifically, financial statement auditors issued disclaimers of opinion on DOD's and the military services' fiscal year 2018 and 2019 financial statements. These disclaimers resulted from numerous material weaknesses based on thousands of notices of findings and recommendations (NFR) that the auditors issued. Of the 2,409 NFRs issued to DOD and its components in fiscal year 2018, DOD's auditors were able to close 623 (26 percent) in fiscal year 2019; the remaining 1,786 (74 percent) remained open. These results provide useful insights on DOD's remediation progress since beginning department-wide full audits in fiscal year 2018; it is important for DOD to equal or exceed this progress in the future. Financial statement audits have value beyond the audit opinion and can help management save resources and improve military readiness. DOD leadership identified a number of benefits that resulted from these financial statement audits. For example, the Navy identified a warehouse that was not in its property records that contained approximately $126 million in aircraft parts. The Navy was able to fill over $20 million in open orders for these parts. By using these parts, aircraft were repaired quicker and made available for use, which improved military readiness. To help guide and prioritize department-wide efforts, DOD identified eight audit remediation priority areas (four in 2019 and four in 2020), seven of which specifically related to material weaknesses that its auditor reported. The military services also developed methodologies to prioritize NFRs and determined that over half of their fiscal year 2018 NFRs are high priority and significant to their financial statement audits. DOD and its components have taken steps to develop corrective action plans (CAP) to address NFRs. However, most of the CAPs that GAO tested did not include at least one data element or evidence that a root-cause analysis was performed, as directed by Office of Management and Budget (OMB) and other related guidance, in part, because DOD guidance and monitoring efforts did not clearly identify the need for such documentation. As a result, DOD and its components may lack sufficient information and assurance that their remediation efforts will resolve the underlying causes associated with the NFRs and related material weaknesses. Based on these issues, DOD and its components are at increased risk that their actions may not effectively address identified deficiencies in a timely manner. DOD developed an NFR Database that contains useful information on deficiencies that financial auditors identified and actions to address them, which has improved its ability to monitor and report on audit remediation efforts using dashboard reports based on real-time data contained in the database. However, certain database information on which these reports are based may not be accurate, reliable, and complete. For example, although DOD reviews NFR Database information monthly, it does not follow up on instances of outdated information or other exceptions identified to ensure components resolve them timely. Without complete and reliable information on DOD's audit remediation efforts, internal and external stakeholders may not have quality information to effectively monitor and measure DOD's progress. DOD is responsible for about half of the federal government's discretionary spending, yet it remains the only major federal agency that has been unable to receive a clean audit opinion on its financial statements. After years of working toward financial statement audit readiness, DOD underwent full financial statement audits in fiscal years 2018 and 2019. This report, developed in connection with fulfilling GAO's mandate to audit the U.S. government's consolidated financial statements, examines the (1) actions taken by DOD and the military services to prioritize financial statement audit findings; (2) extent to which DOD and its components developed CAPs to address audit findings in accordance with OMB, DOD, and other guidance; and (3) extent to which DOD improved its ability to monitor and report on audit remediation efforts. GAO reviewed documentation and interviewed officials about DOD's and the military services' audit remediation prioritization, monitoring, and reporting. GAO selected a generalizable sample of 98 NFRs to determine whether CAPs to address them were developed according to established guidance. GAO is making five recommendations to DOD to improve the quality of CAPs to address audit findings and information in the NFR Database and related reports provided to internal and external stakeholders to monitor and assess audit remediation efforts. DOD concurred with three of GAO's recommendations, partially concurred with one recommendation, and disagreed with one recommendation. GAO continues to believe that all the recommendations are valid. For more information, contact Asif A. Khan at (202) 512-9869 or khana@gao.gov.
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    This 2020 Census was taken under extraordinary circumstances. In response to the Coronavirus Disease 2019 (COVID-19) pandemic and related executive branch decisions, the Bureau made a series of late changes to the design of the census. The report GAO is releasing today discusses a number of concerns regarding how late changes to the census design could affect data quality. The Bureau has numerous planned assessments and evaluations of operations which, in conjunction with its post-enumeration survey (PES)—a survey conducted independently of each census to determine how many people were missed or counted more than once—help determine the overall quality of the census and document lessons for future censuses. As the 2020 Census continues, GAO will continue to monitor the Bureau's response processing operations. GAO was asked to testify on the Census Bureau's progress to deliver apportionment counts for the 2020 Decennial Census. This testimony summarizes information contained in GAO's December 2020 report, entitled 2020 Census: Census Bureau Needs to Assess Data Quality Concerns Stemming from Recent Design Changes and discusses key quality indicators the Bureau can share, as it releases apportionment counts and redistricting data. These key indicators discussed are consistent with those recommended by the American Statistical Association and Census Scientific Advisory Committee for the Bureau. In the accompanying report being issued today, GAO is recommending that the Bureau update and implement its assessments to address data quality concerns identified in this report, as well as any operational benefits. In its comments, the Department of Commerce agreed with GAO's findings and recommendation. For more information, contact J. Christopher Mihm at (202) 512-6806 or mihmj@gao.gov.
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