Department of Energy
Advanced Technology Vehicle Loan Program Needs Enhanced Oversight and Performance Measures Gao ID: GAO-11-745T June 9, 2011In the Energy Independence and Security Act of 2007, Congress mandated higher vehicle fuel economy by model year 2020 and established the Advanced Technology Vehicles Manufacturing (ATVM) loan program in the Department of Energy (DOE). ATVM is to provide up to $25 billion in loans for more fuel-efficient vehicles and components. Congress also provided $7.5 billion to pay the required credit subsidy costs--the government's estimated net long-term cost, in present value terms, of the loans. This testimony is based on GAO's February 2011 report on the ATVM loan program (GAO-11-145). It discusses (1) steps DOE has taken to implement the program, (2) progress in awarding loans, (3) how the program is overseeing the loans, and (4) the extent to which DOE can assess progress toward its goals.
DOE has taken several steps to implement the ATVM program. First, it set three program goals: increase the fuel economy of U.S. passenger vehicles as a whole, advance U.S. automotive technology, and protect taxpayers' financial interests. DOE also set technical, financial, and environmental eligibility requirements for applicants. In addition, DOE established criteria for judging the technical and financial merits of applicants and projects deemed eligible, and policy factors to consider, such as a project's potential for supporting jobs. DOE established procedures for ATVM staff, aided by experts from within and outside DOE, to score applicants and projects. Finally, the Credit Review Board, composed of senior DOE officials, uses the scores and other information to recommend loan decisions to the Secretary of Energy. The ATVM program, as of May 2011, had made $8.4 billion in loans that DOE expects to yield fuel economy improvements in the near term along with greater advances, through newer technologies, in years to come. Although the loans represent about a third of the $25 billion authorized by law, the program has used 44 percent of the $7.5 billion allocated to pay credit subsidy costs, which is more than was initially anticipated. These higher credit subsidy costs were, in part, a reflection of the risky financial situation of the automotive industry at the time the loans were made. As a result of the higher credit subsidy costs, the program may be unable to loan the full $25 billion allowed by statute. The ATVM program has set procedures for overseeing the financial and technical performance of borrowers and has begun oversight, but at the time of our February report it had not yet engaged engineering expertise needed for technical oversight as called for by its procedures. To oversee financial performance, staff review data submitted by borrowers on their financial health to identify challenges to repaying the loans. Staff also rely on outside auditors to confirm whether funds have been used for allowable expenses. To oversee technical performance, ATVM staff are to analyze information borrowers report on their technical progress and are to use outside engineering expertise to supplement their analysis, as needed. According to our review, projects needing additional technical oversight are under way, and the ATVM staff lack the engineering expertise called for by the program's procedures for adequately overseeing technical aspects of the projects. However, the program had not yet engaged such expertise. As a result, DOE cannot be adequately assured that the projects will be delivered as agreed. DOE has not developed sufficient performance measures that would enable it to fully assess progress toward achieving its three program goals. For example, DOE has a measure for assessing the fuel economy gains for the vehicles produced under the program, but the measure falls short because it does not account for, among other things, the fuel economy improvements that would have occurred if consumers purchased more fuel-efficient vehicles not covered by the program. Principles of good governance call for performance measures tied to goals as a means of assessing the extent to which goals have been achieved. GAO is making no new recommendations at this time. In the February report, GAO recommended that DOE (1) accelerate efforts to engage engineering expertise and (2) develop sufficient, quantifiable performance measures. DOE disagreed with the recommendations, stating that such expertise had not yet been needed and that performance measures would expand the scope of the program. GAO continues to believe that these recommendations are needed to help ensure that DOE is achieving its goals and is accountable to Congress.
GAO-11-745T, Department of Energy: Advanced Technology Vehicle Loan Program Needs Enhanced Oversight and Performance Measures
This is the accessible text file for GAO report number GAO-11-745T
entitled 'Department of Energy: Advanced Technology Vehicle Loan
Program Needs Enhanced Oversight and Performance Measures' which was
released on June 9, 2011.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as
part of a longer term project to improve GAO products' accessibility.
Every attempt has been made to maintain the structural and data
integrity of the original printed product. Accessibility features,
such as text descriptions of tables, consecutively numbered footnotes
placed at the end of the file, and the text of agency comment letters,
are provided but may not exactly duplicate the presentation or format
of the printed version. The portable document format (PDF) file is an
exact electronic replica of the printed version. We welcome your
feedback. Please E-mail your comments regarding the contents or
accessibility features of this document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
United States Government Accountability Office:
GAO:
Testimony:
Before the Committee on Energy and Natural Resources, U.S. Senate:
For Release on Delivery:
Expected at 9:30 a.m. EDT:
Thursday, June 9, 2011:
Department of Energy:
Advanced Technology Vehicle Loan Program Needs Enhanced Oversight and
Performance Measures:
Statement of Frank Rusco, Director:
Natural Resources and Environment:
GAO-11-745T:
GAO Highlights:
Highlights of GAO-11-745T, a testimony before Committee on Energy and
Natural Resources, U.S. Senate.
Why GAO Did This Study:
In the Energy Independence and Security Act of 2007, Congress mandated
higher vehicle fuel economy by model year 2020 and established the
Advanced Technology Vehicles Manufacturing (ATVM) loan program in the
Department of Energy (DOE). ATVM is to provide up to $25 billion in
loans for more fuel-efficient vehicles and components. Congress also
provided $7.5 billion to pay the required credit subsidy costs”the
government‘s estimated net long-term cost, in present value terms, of
the loans.
This testimony is based on GAO‘s February 2011 report on the ATVM loan
program (GAO-11-145). It discusses (1) steps DOE has taken to
implement the program, (2) progress in awarding loans, (3) how the
program is overseeing the loans, and (4) the extent to which DOE can
assess progress toward its goals.
What GAO Found:
DOE has taken several steps to implement the ATVM program. First, it
set three program goals: increase the fuel economy of U.S. passenger
vehicles as a whole, advance U.S. automotive technology, and protect
taxpayers‘ financial interests. DOE also set technical, financial, and
environmental eligibility requirements for applicants. In addition,
DOE established criteria for judging the technical and financial
merits of applicants and projects deemed eligible, and policy factors
to consider, such as a project‘s potential for supporting jobs. DOE
established procedures for ATVM staff, aided by experts from within
and outside DOE, to score applicants and projects. Finally, the Credit
Review Board, composed of senior DOE officials, uses the scores and
other information to recommend loan decisions to the Secretary of
Energy.
The ATVM program, as of May 2011, had made $8.4 billion in loans that
DOE expects to yield fuel economy improvements in the near term along
with greater advances, through newer technologies, in years to come.
Although the loans represent about a third of the $25 billion
authorized by law, the program has used 44 percent of the $7.5 billion
allocated to pay credit subsidy costs, which is more than was
initially anticipated. These higher credit subsidy costs were, in
part, a reflection of the risky financial situation of the automotive
industry at the time the loans were made. As a result of the higher
credit subsidy costs, the program may be unable to loan the full $25
billion allowed by statute.
The ATVM program has set procedures for overseeing the financial and
technical performance of borrowers and has begun oversight, but at the
time of our February report it had not yet engaged engineering
expertise needed for technical oversight as called for by its
procedures. To oversee financial performance, staff review data
submitted by borrowers on their financial health to identify
challenges to repaying the loans. Staff also rely on outside auditors
to confirm whether funds have been used for allowable expenses. To
oversee technical performance, ATVM staff are to analyze information
borrowers report on their technical progress and are to use outside
engineering expertise to supplement their analysis, as needed.
According to our review, projects needing additional technical
oversight are under way, and the ATVM staff lack the engineering
expertise called for by the program‘s procedures for adequately
overseeing technical aspects of the projects. However, the program had
not yet engaged such expertise. As a result, DOE cannot be adequately
assured that the projects will be delivered as agreed.
DOE has not developed sufficient performance measures that would
enable it to fully assess progress toward achieving its three program
goals. For example, DOE has a measure for assessing the fuel economy
gains for the vehicles produced under the program, but the measure
falls short because it does not account for, among other things, the
fuel economy improvements that would have occurred if consumers
purchased more fuel-efficient vehicles not covered by the program.
Principles of good governance call for performance measures tied to
goals as a means of assessing the extent to which goals have been
achieved.
What GAO Recommends:
GAO is making no new recommendations at this time. In the February
report, GAO recommended that DOE (1) accelerate efforts to engage
engineering expertise and (2) develop sufficient, quantifiable
performance measures. DOE disagreed with the recommendations, stating
that such expertise had not yet been needed and that performance
measures would expand the scope of the program. GAO continues to
believe that these recommendations are needed to help ensure that DOE
is achieving its goals and is accountable to Congress.
View [hyperlink, http://www.gao.gov/products/GAO-11-745T] or key
components. For more information, contact Frank Rusco at (202) 512-
3841 or ruscof@gao.gov.
[End of section]
Chairman Bingaman, Ranking Member Murkowski, and Members of the
Committee:
In recent years, questions have arisen about fluctuations in gasoline
prices and the environmental impact of petroleum use. In addition,
gasoline-fueled passenger vehicles are a major source of greenhouse
gas emissions. In 2007, Congress enacted the Energy Independence and
Security Act (EISA) which, among other things, increased corporate
average fuel economy (CAFE) standards, requiring that the nation's
automobile manufacturers' new vehicle fleets attain at least an
average of 35 miles per gallon by 2020. In May 2009 the Administration
announced its National Fuel Efficiency Policy, which, to implement the
increase in fuel economy required by EISA, called for higher CAFE
standards for model years 2012 through 2016 for passenger cars and
light-duty trucks--surpassing those standards EISA required by 2020.
On April 1, 2010, the National Highway Traffic Safety Administration
(NHTSA) and the Environmental Protection Agency (EPA) made final the
rule putting the more stringent CAFE standards in place.[Footnote 1]
In addition to increasing CAFE standards, EISA also authorized, but
did not provide funding for, the Advanced Technology Vehicles
Manufacturing (ATVM) loan program to provide up to $25 billion in
loans to support projects to produce more fuel-efficient passenger
vehicles and components. Loans made under the program are to, among
other things, have an interest rate equal to the government's cost of
funds[Footnote 2] and be in force for no more than 25 years.
In addition to the negative effect that rising fuel prices had on
domestic automobile sales, the economic recession that began in late
2007 particularly affected the three major domestic automakers--
Chrysler Group LLC, Ford Motor Company, and General Motors
Corporation, or the Detroit 3. Rising fuel prices had negatively
affected the sales of domestic automakers as consumers shifted to
smaller, more fuel-efficient vehicles and away from less fuel-
efficient light trucks and sport utility vehicles. At the end of 2008,
several economic indicators, including economic growth and the
unemployment rate, worsened while credit markets tightened and
dampened consumers' demands for new passenger vehicles. Sales of new
vehicles had been trending downward since 2006, but the decrease was
markedly sharper in 2008 and 2009. For example, U.S. sales for the
Detroit 3 dropped by 49 percent from February 2008 through February
2009, whereas U.S. sales for American Honda Motor Co., Inc.; Nissan
North America, Inc.; and Toyota Motor North America, Inc., dropped 39
percent during this period. Additionally, the Detroit 3 had been
losing U.S. market share to foreign automakers for several years. For
instance, General Motor's U.S. market share for total light vehicle
retail sales--including passenger cars and light-duty trucks--fell
from 27.2 percent in 2004 to 22.1 percent in 2008, while the market
share of Japanese auto manufacturers grew from 29.8 percent to 38.9
percent during the same period. Furthermore, since the 1980s, the
Detroit 3 have relied heavily on sales of light-duty trucks and sport
utility vehicles, which were more profitable than passenger cars but
had relatively low fuel economy ratings. As a result of this reliance,
the Detroit 3 faced more difficulty in achieving substantial
improvements in fuel economy than most foreign-based manufacturers,
which historically had produced and sold more fuel-efficient vehicles.
When proposing the new, more stringent CAFE standards, NHTSA estimated
that the Detroit 3 would face significantly higher costs to meet
revised standards than the major Japanese automakers.
In September of 2008, the Consolidated Security, Disaster Assistance,
and Continuing Appropriations Act provided $7.5 billion to DOE to pay
the credit subsidy costs of up to $25 billion in ATVM loans.[Footnote
3] Credit subsidy costs are the estimated net long-term costs to the
government, in present value terms, of loans over the entire period
the loans are outstanding.[Footnote 4] Congress also provided $10
million to DOE to administer the ATVM loan program and required that
DOE issue an interim final rule to establish regulations necessary to
implement the program. DOE issued an interim final rule for
implementing the program in November of 2008.
In February 2011 we reported on DOE's implementation of the ATVM loan
program. My testimony today is based on that report,[Footnote 5]
updated with recent information from DOE on ATVM loans made,
additional loan amounts requested by applicants, and the subsidy costs
DOE expects to need in order to provide loans to those applicants. My
testimony addresses (1) the steps DOE has taken to implement the ATVM
loan program, (2) the ATVM loan program's progress in awarding loans,
(3) how the program is overseeing the loans, and (4) the extent to
which DOE can assess its progress toward meeting program goals. A
detailed description of our scope and methodology can be found in the
February report. We conducted this work in accordance with generally
accepted government auditing standards.
DOE Established Program Goals and Set Criteria for Applicant and
Project Eligibility and Merit:
DOE has taken several steps to implement the ATVM program. First, it
set three goals for the program: increase the fuel economy of U.S.
passenger vehicles as a whole, advance U.S. automotive technology, and
protect taxpayers' financial interests. In that regard, EISA calls for
the program to make loans to provide funding to automobile
manufacturers and component suppliers for projects that re-equip,
expand, or establish U.S. facilities that are to build more fuel-
efficient passenger cars and light-duty trucks. According to DOE, the
program's goals also support the agency's goals of building a
competitive, low-carbon economy by, among other things, funding
vehicles that reduce the use of petroleum-derived fuels and
accelerating growth in advanced automotive technology manufacturing,
and protecting U.S. taxpayers' financial interests.
DOE, in its interim final rule, also set technical, financial, and
environmental requirements that vehicle and components manufacturers
must meet to qualify to receive a loan under the program. For example,
an established vehicle manufacturer--one that was manufacturing
vehicles in 2005--must demonstrate that the adjusted average fuel
economy of the fleet of vehicles it produced in its most recent model
year was at least equal to that of the fleet of vehicles it produced
in model year 2005. Similarly, a manufacturer that was not producing
vehicles in 2005 must show that its proposed vehicles' adjusted
average fuel economy will at least equal that of established
manufacturers for a similar class of vehicles for model year 2005. For
applicants deemed eligible, DOE also uses statutorily based technical
criteria to determine which projects are eligible. For example,
proposed vehicles must achieve at least 125 percent of the average
fuel economy achieved by all manufacturers' vehicles with
substantially similar attributes in 2005.
In addition, DOE established criteria for ATVM staff, aided by experts
from within and outside DOE, to judge and score the technical and
financial merits of applicants and projects deemed eligible, along
with policy factors to consider, such as a project's potential for
supporting jobs and whether a project is likely to advance automotive
technology. Finally, the Credit Review Board, composed of senior DOE
officials, uses the merit scores and other information, including
Office of Management and Budget's approved subsidy cost estimates for
projects, to recommend loan decisions to the Secretary of Energy.
The ATVM Program Has Awarded $8.4 Billion in Loans that Largely
Enhance Conventional Vehicle Technology, but the Program May Be Unable
to Lend the Full Authorized Amount:
To date the ATVM program has made about $8.4 billion in loans: $5.9
billion to the Ford Motor Company; $1.4 billion to Nissan North
America; $529 million to Fisker Automotive, Inc.; $465 million to
Tesla Motors, Inc.; and $50 million to The Vehicle Production Group
LLC.[Footnote 6] About 62 percent of the funds loaned--$5.2 billion--
are for projects that largely enhance the technologies of conventional
vehicles powered by gasoline-fueled internal combustion engines. These
projects include such fuel-saving improvements as adding assisted
direct start technology to conventional vehicles, which reduces fuel
consumption by shutting off the engine when the vehicle is idling
(e.g., while at traffic lights) and automatically re-starting it with
direct fuel injection when the driver releases the brake. According to
DOE's analysis, the projects will result in vehicles with improved
fuel economy that will contribute in the near term to improving the
fuel economy of the passenger vehicles in use in the United States as
a whole because the conventional vehicles are to be produced on a
large scale relatively quickly and offered at a price that is
competitive with other vehicles being offered for sale.
DOE used data from the borrowers to estimate the fuel economy in miles
per gallon (mpg) of the enhanced conventional vehicles that were
considered for ATVM loans. According to our calculations using DOE's
estimates of fuel economy, these projects are expected to result in
vehicles with improved fuel economy that exceed both the program's
eligibility requirements and the CAFE targets that will be in place at
the time the vehicles are produced [Footnote 7]--by, on average, 14
and 21 percent, respectively.
The remaining 38 percent of the funds loaned--about $3.1 billion--
support projects for vehicles and components with newer technologies.
Fisker's loan is for two plug-in hybrid sedan projects--the Karma and
the Nina. Tesla's loan is for an all-electric sedan, the Model S, and
Nissan's loan is for the LEAF, an all-electric vehicle classified by
DOE as a small wagon. The Vehicle Production Group's loan is for a
wheelchair-accessible vehicle that will run on compressed natural gas.
Finally, a portion of the Ford loan supports projects for
manufacturing hybrid and all-electric vehicles. In addition, there are
two advanced technology components projects: Nissan's, to build a
manufacturing facility to produce batteries for the LEAF and
potentially other vehicles; and Tesla's, to build a manufacturing
facility to produce electric battery packs, electric motors, and
electric components for the Tesla Roadster and vehicles from other
manufacturers. In contrast to the projects supporting enhancements to
conventional vehicles, DOE's and the borrowers' analyses indicate that
the projects with newer technologies will result in vehicles with far
greater fuel economy gains per vehicle but that these vehicles will be
sold in smaller volumes, thereby having a less immediate impact on the
fuel economy of total U.S. passenger vehicles.
According to our calculations using DOE's fuel economy estimates, the
projects for vehicles with newer technologies, like the projects for
enhanced conventional vehicles, are expected to result in improved
fuel economy that exceeds both the program's eligibility requirements
and CAFE targets--by about 125 percent and about 161 percent
respectively.[Footnote 8]
The loans made to date represent about a third of the $25 billion
authorized by law, but the program has used 44 percent of the $7.5
billion allocated to pay credit subsidy costs, which is more than was
initially anticipated. The $7.5 billion Congress appropriated was
based on the Congressional Budget Office's September 2008 estimated
average credit subsidy rate of 30 percent per loan ($7.5 billion
divided by $25 billion equals 30 percent). However, the average credit
subsidy rate for the $8.4 billion in loans awarded to date is 39
percent--a total of roughly $3.3 billion in credit subsidy costs. At
this rate, the $4.2 billion remaining to be used to pay credit subsidy
costs will not be sufficient to enable DOE to loan the full $25
billion in loan authority. These higher credit subsidy costs were, in
part, a reflection of the risky financial situation of the automotive
industry at the time the loans were made. For DOE to make loans that
use all of the remaining $16.6 billion in loan authority, the credit
subsidy rate for the loans would have to average no more than 25
percent ($4.2 billion divided by $16.6 billion). As a result, the
program may be unable to loan the full $25 billion allowed by statute.
As of May 9, 2011, DOE reported that 16 projects seeking a total of
$9.3 billion in loans--representing $3.5 billion in credit subsidy
costs--were under consideration.
The ATVM Program Has Begun Overseeing Loans to Ensure Borrowers Comply
with Financial and Technical Requirements but Has Not Engaged
Engineering Expertise that Would Help Ensure that Projects Are
Delivered as Agreed:
The ATVM program has set procedures for overseeing the financial and
technical performance of borrowers and has begun oversight, but at the
time of our February report the agency had not yet engaged engineering
expertise for technical oversight as called for by the procedures. To
oversee financial performance, staff are to review data submitted by
borrowers on their financial health to identify challenges to repaying
the loans. Staff also rely on outside auditors to confirm whether
funds have been used for allowable expenses. As of February 2011, the
auditors had reported instances in which three of the four borrowers
did not spend funds as required. According to ATVM officials, these
instances were minor--the amounts were small relative to the total
value of the loans--and the inappropriate use of funds and the
borrowers' practices have been corrected.
The ATVM program's procedures also specify technical oversight duties,
a primary purpose of which is to confirm that borrowers have made
sufficient technical progress before the program disburses additional
funds. To oversee technical performance, ATVM staff are to analyze
information borrowers report on their technical progress and are to
use outside engineering expertise to supplement their analysis once
borrowers have begun constructing or retrofitting facilities or are
performing engineering integration--that is, designing and building
vehicle and component production lines. According to our review,
several projects needing additional technical oversight are under way
but the program, as of February of 2011, had not brought in additional
technical oversight expertise to supplement program staffs' oversight.
For example, ATVM officials identified one borrower with projects at a
stage requiring heightened technical monitoring; however, ATVM program
staff alone had monitored the technical progress of the project. ATVM
officials told us that the manufacturer has experience with bringing
vehicles from concept to production so additional technical oversight
expertise has not been needed, despite the procedures' calling for it.
Further, according to documents we reviewed, at the time of our
report, four borrowers--rather than the single one identified by ATVM--
had one or more projects that, according to the program's procedures,
had already reached the stage requiring heightened technical
monitoring. Because ATVM staff, whose expertise is largely financial
rather than technical, had so far provided technical oversight of the
loans without the assistance of independent engineering expertise, we
found that the program may be at risk of not identifying critical
deficiencies as they occur and DOE cannot be adequately assured that
the projects will be delivered as agreed. At the time of our report,
according to ATVM staff, they were in the process of evaluating one
consultant's proposal to provide engineering expertise and were
working with DOE's Loan Guarantee Program to make that program's
manufacturing consultants available to assist the ATVM program.
DOE Lacks the Performance Measures to Enable It to Fully Assess the
ATVM Program's Progress Toward Achieving Its Goals:
DOE has not developed sufficient performance measures that would
enable it to fully assess whether the ATVM program is achieving its
three goals. Principles of good governance indicate that agencies
should establish quantifiable performance measures to demonstrate how
they intend to achieve their program goals and measure the extent to
which they have done so.[Footnote 9] These performance measures should
allow agencies to compare their programs' actual results with desired
results and should be linked to program goals.
Although the ATVM program has established performance measures for
assessing the performance of ATVM-funded vehicles relative to the
performance of similar vehicles in model year 2005, the measures stop
short of enabling DOE to fully determine the extent to which it has
accomplished its overall goal of improving the fuel economy of all
passenger vehicles in use in the United States. The measures stop
short because they do not isolate the impact of the program on
improving U.S. fuel economy from fuel economy improvements that might
have occurred in the absence of the program--by consumers investing in
more fuel efficient vehicles not covered by the program in response to
high gasoline prices, for example. In addition, the ATVM program lacks
performance measures that will enable DOE to assess the extent to
which it has achieved the other two goals of the program--advancing
automotive technology and protecting taxpayers' financial interests.
In our February 2011 report, to help ensure the effectiveness and
accountability of the ATVM program, we recommended that the Secretary
of Energy direct the ATVM program to (1) accelerate efforts to engage
sufficient engineering expertise to verify that borrowers are
delivering projects as agreed and to (2) develop sufficient and
quantifiable performance measures for its three goals. DOE's Loan
Programs Executive Director disagreed with the first recommendation,
saying that the projects were in the very early stages of engineering
integration and such expertise had not yet been needed for monitoring.
However, at that time, three of the four loans had projects that had
been in engineering integration for at least 10 months, and the fourth
loan had at least one project that was under construction. We
maintained that DOE needed technical expertise engaged in monitoring
the loans so that it could become adequately informed about technical
progress of the projects. DOE's Loan Programs Executive Director also
disagreed with the second recommendation. He said that DOE would not
create new performance measures for the agency's three goals, saying
that performance measures would expand the program and did not appear
to be the intent of Congress. We maintained that by not setting
appropriate performance measures for its program goals, DOE was not
able to assess its progress in achieving what it set out to do through
the program; furthermore, it could not provide Congress with
information on whether the program was achieving its goals and
warranted continued support.
Chairman Bingaman, this concludes my prepared statement. I would be
pleased to answer any questions that you, Ranking Member Murkowski, or
other Members of the Committee may have at this time.
Contacts and Staff Acknowledgments:
For further information about this testimony, please contact Frank
Rusco at (202) 512-3841 or ruscof@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this statement. Karla Springer, Assistant Director;
Nancy Crothers; Carol Kolarik; Rebecca Makar; Mick Ray; Kiki
Theodoropoulous; Barbara Timmerman; and Jeremy Williams made key
contributions to this statement.
[End of section]
Footnotes:
[1] EPA is responsible for developing and executing CAFE testing and
calculation procedures. NHTSA uses EPA data to determine if a
manufacturer's fleet is in compliance for a given model year. The
final rule was published in the Federal Register on May 7, 2010.
[2] The government's cost of funds is the interest cost that the
federal government must pay for the use of the money it lends to ATVM
borrowers--that is, the interest rate on Treasury notes at the time
the funds are disbursed.
[3] The Federal Credit Reform Act of 1990 requires that the credit
subsidy costs of federal loan programs be paid; for the ATVM program,
they are paid by congressional appropriations.
[4] Credit subsidy costs exclude administrative costs and any
incidental effects on governmental receipts or outlays. Present value
is the worth of the future stream of returns or costs in terms of
money paid immediately. In calculating present value, prevailing
interest rates provide the basis for converting future amounts into
their "money now" equivalents.
[5] GAO, Department of Energy: Advanced Technology Vehicle Loan
Program Implementation Is Under Way, but Enhanced Technical Oversight
and Performance Measures Are Needed, [hyperlink,
http://www.gao.gov/products/GAO-11-145] (Washington, D.C., Feb. 28,
2011).
[6] Loan amounts awarded to each company do not add up to the total
loan amount the ATVM program has awarded to date because of rounding.
[7] The CAFE standards for 2012-2016 will subject passenger cars and
light trucks to target levels of fuel efficiency based on the
vehicles' "footprints." A vehicle's footprint is a measure of its size
calculated by multiplying its wheelbase (the distance from the center
of the front wheels to the center of the rear wheels) by its average
track width (the average of the width between the two front wheels and
the width between the two rear wheels). The vehicle-level mpg targets
generally become more stringent with each new model year.
[8] This does not include DOE's fuel economy estimates for the vehicle
to be produced under the loan to The Vehicle Production Group, which
was finalized after our February report.
[9] GAO, Agencies' Annual Performance Plans under the Results Act: An
Assessment Guide to Facilitate Congressional Decisionmaking,
[hyperlink, http://www.gao.gov/products/GAO/GGD/AIMD-10.1.18]
(Washington, D.C.: February 1998, ver. 1.) and GAO, The Results Act:
An Evaluator's Guide to Assessing Agency Annual Performance Plans,
[hyperlink, http://www.gao.gov/products/GAO/GGD-10.1.20] (Washington,
D.C.: April 1998, ver. 1).
[End of section]
GAO's Mission:
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people.
GAO examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance
to help Congress make informed oversight, policy, and funding
decisions. GAO's commitment to good government is reflected in its core
values of accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through GAO's Web site [hyperlink, http://www.gao.gov]. Each
weekday, GAO posts newly released reports, testimony, and
correspondence on its Web site. To have GAO e-mail you a list of newly
posted products every afternoon, go to [hyperlink, http://www.gao.gov]
and select "E-mail Updates."
Order by Phone:
The price of each GAO publication reflects GAO‘s actual cost of
production and distribution and depends on the number of pages in the
publication and whether the publication is printed in color or black and
white. Pricing and ordering information is posted on GAO‘s Web site,
[hyperlink, http://www.gao.gov/ordering.htm].
Place orders by calling (202) 512-6000, toll free (866) 801-7077, or
TDD (202) 512-2537.
Orders may be paid for using American Express, Discover Card,
MasterCard, Visa, check, or money order. Call for additional
information.
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]:
E-mail: fraudnet@gao.gov:
Automated answering system: (800) 424-5454 or (202) 512-7470:
Congressional Relations:
Ralph Dawn, Managing Director, dawnr@gao.gov:
(202) 512-4400:
U.S. Government Accountability Office:
441 G Street NW, Room 7125:
Washington, D.C. 20548:
Public Affairs:
Chuck Young, Managing Director, youngc1@gao.gov:
(202) 512-4800:
U.S. Government Accountability Office:
441 G Street NW, Room 7149:
Washington, D.C. 20548:
