The topic of this episode is, “What does the U.S. Government Accountability Office do?”

To answer that question we have Gene Dodaro. He is the eighth Comptroller General of the United States—that means he is the head of the U.S. Government Accountability Office (GAO). He has held that position since December 2010. Prior to becoming the top dog at this government watchdog agency, Gene held other executive positions at GAO, including Chief Operating Officer. Remarkably, Gene has spent a half of a century at the agency. So, with all that experience I can think of nobody better to ask the question, “What does the Government Accountability Office do?”

Kevin Kosar:

Welcome to Understanding Congress, a podcast about the first branch of government. Congress is a notoriously complex institution and few Americans think well of it, but Congress is essential to our republic. It's a place where our pluralistic society is supposed to work out its differences and come to agreement about what our laws should be, and that is why we are here to discuss our national legislature and to think about ways to upgrade it so it can better serve our nation. I'm your host, Kevin Kosar, and I'm a resident scholar at the American Enterprise Institute, a think tank in Washington DC.

Gene, welcome to the program.

Gene Dodaro:

It's a pleasure to be with you, Kevin.

Kevin Kosar:

Let's start at the very beginning. GAO was created a century ago. Why

Gene Dodaro:

GAO was created in 1921—right after World War I. The government had created a large debt during that time in order to promulgate the war, and there was concern about having a better, more disciplined way to handle the federal government's budget process. In the same legislation in which we were created, the Bureau of the Budget—which is now known as the Office of Management Budget (OMB) in the executive office of the President—was also created, and the very first requirement was put in place for the President to submit a budget annually to the Congress. Then GAO was placed in the legislative branch in order to provide a check and balance on the receipts and expenditures of federal funds and the proper application of those funds to meet the intent of the appropriation legislation for the Congress. So it was an arrangement put in place to provide more fiscal discipline to the federal government's budget process and execution.

Kevin Kosar:

At that time, GAO had a different name, which to some degree reflected its more limited mission at the time. What was it called back then?

Gene Dodaro:

It was the General Accounting Office. That's what it was when I first joined GAO in 1973. But at that time even, we were doing more than accounting, but that was our original name—the General Accounting Office.

Kevin Kosar:

It seems that fundamentally GAO was initially established to deal with a basic kind of principle-agent problem that Congress faces, which is: Congress as the principle passes a law puts money towards achieving the objectives in the law, but then the job of actually spending the money and doing the execution is over in the executive branch.

In terms of visibility and understanding, “Is this money going where it should go? Is it being used improperly?”, how is Congress to figure that out other than by hauling executives over and asking them, in which case you're relying upon information they provide. So GAO has the ability to get into the books of agencies, and to follow the money.

Gene Dodaro:

Absolutely, Kevin. One of the roles of GAO is to make sure that the appropriation laws enacted by the Congress are properly implemented. We audit the federal government's consolidated financial statements every year, and we’ve worked to create an arrangement where the Inspectors General of each major department and agency audit or arrange for independent audits of the books of the financial operations of each federal agency across the federal government. And then we review that work. It's done of course with our methodology, and then we audit some agencies individually, like the IRS for example. We audit all the receipts that they collect for the federal government. We audit the Bureau of Public Debt, we audit the Federal Deposit Insurance Corporation, and then we review all these other audits across government and then issue our report on the government's consolidated financial statements. We also issue legal decisions that anyone has a question in Congress about the proper application of the funds and whether it was done in accordance with appropriation law.

So we're very much in the business of oversight. Congress is very resourced by the executive branch, and that's why they need a strong GAO in order to provide that oversight over them, so the system of checks and balances in our government work properly and that the executive branch properly executes the laws that are put in place for Congress. And we've grown over the years to not just on fiscal issues, but also looking at whether or not government programs and activities and everything the federal government does is accordance with the authorizing legislation of the federal government's activities.

Actually, only about 10% of what we do now is in the original role that we had back in 1921 in the financial management area. The vast majority is looking to see whether programs, policies, regulations, and other activities put in place by Congress are operating as intended, and to make sure the government is operating as efficiently and effectively in accordance with congressional direction as possible, or whether there's need to make refinements and regulations and to help Congress with their fundamental oversight functions as well as their appropriation and responsibilities.

Kevin Kosar:

So the listener who surfs over to gao.gov and starts scanning all the great stuff you have there, might see the term "bid protest" and say, "Huh, what is that about?" What is bid protest and what's GAO's role there?

Gene Dodaro:

We've had that role for decades through the Competition in Contracting Act (1984). Every year, the federal government spends $500 billion or more to procure certain services items, etc. If you're a contractor that bids on a government contract and you don't win and you're concerned that the federal agency or department didn't follow the laws or things weren't properly clear in their procurement process or you think you weren't treated fairly, you can come to GAO and file a bid protest and say you don't think this was followed for the following reasons. GAO will issue an opinion within 100 days as to whether or not we sustain the protest or deny the protest.

Sometimes the agencies—once the protest is made and understanding the concerns that are being had—will take immediate action to rectify the situation. And so we have a team of highly skilled procurement experts in law here at GAO in our Office of General Counsel. They'll hold hearings, they'll take documents from the protestors and agencies, and then eventually they'll render a decision. We probably get about well over 2,000 of these bid protests every year. Competition for federal contracts is key. And in some areas there's been consolidation in the industries, which makes the competition a little bit more intense.

Kevin Kosar:

So I want to talk a little more about something you alluded to already, which is that GAO had this more limited mission 100 years ago, and it's subsequently been expanded. And if memory serves, one of the first expansions occurred around 1974. This was a period when Congress as a whole had just decided to bulk up its power. It was tired of being pushed around by the executive, whether it was President Nixon or President Johnson, and it just started investing in itself. It created a Congressional Budget Office, it created a new <a href="https://www.govinfo.gov/link/statute/88/297?link-type=p